Bill C-49 (Historical)

Transportation Modernization Act

An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts

This enactment amends the Canada Transportation Act in respect of air transportation and railway transportation.
With respect to air transportation, it amends the Canada Transportation Act to require the Canadian Transportation Agency to make regulations establishing a new air passenger rights regime and to authorize the Governor in Council to make regulations requiring air carriers and other persons providing services in relation to air transportation to report on different aspects of their performance with respect to passenger experience or quality of service. It amends the definition of Canadian in that Act in order to raise the threshold of voting interests in an air carrier that may be owned and controlled by non-Canadians while retaining its Canadian status, while also establishing specific limits related to such interests. It also amends that Act to create a new process for the review and authorization of arrangements involving two or more transportation undertakings providing air services to take into account considerations respecting competition and broader considerations respecting public interest.
With respect to railway transportation, it amends the Act to, among other things,
(a) provide that the Canadian Transportation Agency will offer information and informal dispute resolution services;
(b) expand the Governor in Council’s powers to make regulations requiring major railway companies to provide to the Minister of Transport and the Agency information relating to rates, service and performance;
(c) repeal provisions of the Act dealing with insolvent railway companies in order to allow the laws of general application respecting bankruptcy and insolvency to apply to those companies;
(d) clarify the factors that must be applied in determining whether railway companies are fulfilling their service obligations;
(e) shorten the period within which a level of service complaint is to be adjudicated by the Agency;
(f) enable shippers to obtain terms in their contracts dealing with amounts to be paid in relation to a failure to comply with conditions related to railway companies’ service obligations;
(g) require the Agency to set the interswitching rate annually;
(h) create a new remedy for shippers who have access to the lines of only one railway company at the point of origin or destination of the movement of traffic in circumstances where interswitching is not available;
(i) change the process for the transfer and discontinuance of railway lines to, among other things, require railway companies to make certain information available to the Minister and the public and establish a remedy for non-compliance with the process;
(j) change provisions respecting the maximum revenue entitlement for the movement of Western grain and require certain railway companies to provide to the Minister and the public information respecting the movement of grain; and
(k) change provisions respecting the final offer arbitration process by, among other things, increasing the maximum amount for the summary process to $2 million and by making a decision of an arbitrator applicable for a period requested by the shipper of up to two years.
It amends the CN Commercialization Act to increase the maximum proportion of voting shares of the Canadian National Railway Company that can be held by any one person to 25%.
It amends the Railway Safety Act to prohibit a railway company from operating railway equipment and a local railway company from operating railway equipment on a railway unless the equipment is fitted with the prescribed recording instruments and the company, in the prescribed manner and circumstances, records the prescribed information using those instruments, collects the information that it records and preserves the information that it collects. This enactment also specifies the circumstances in which the prescribed information that is recorded can be used and communicated by companies, the Minister of Transport and railway safety inspectors.
It amends the Canadian Transportation Accident Investigation and Safety Board Act to allow the use or communication of an on-board recording, as defined in subsection 28(1) of that Act, if that use or communication is expressly authorized under the Aeronautics Act, the National Energy Board Act, the Railway Safety Act or the Canada Shipping Act, 2001.
It amends the Canadian Air Transport Security Authority Act to authorize the Canadian Air Transport Security Authority to enter into agreements for the delivery of screening services on a cost-recovery basis.
It amends the Coasting Trade Act to enable repositioning of empty containers by ships registered in any register. These amendments are conditional on Bill C-30, introduced in the 1st session of the 42nd Parliament and entitled the Canada–European Union Comprehensive Economic and Trade Agreement Implementation Act, receiving royal assent and sections 91 to 94 of that Act coming into force.
It amends the Canada Marine Act to permit port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada Infrastructure Bank. These amendments are conditional on Bill C-44, introduced in the 1st session of the 42nd Parliament and entitled the Budget Implementation Act, 2017, No. 1, receiving royal assent.
Finally, it makes related and consequential amendments to the Bankruptcy and Insolvency Act, the Competition Act, the Companies’ Creditors Arrangement Act, the Air Canada Public Participation Act, the Budget Implementation Act, 2009 and the Fair Rail for Grain Farmers Act.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Exactly. He's going to get a chance to learn today how important Canada's energy future is to our generation, to his generation and to the generation that is going to follow after his and how our country is going to work.

It's an important opportunity for us to discuss the division of powers in this country as well, because Bill C-69, as the Supreme Court of Canada clearly ruled, has trampled all over that. That is why there is a priority and a precedence on our side to see that we deal with Bill C-49 first, because it directly quotes and references Bill C-69 no less than 33 times.

It is causing some grief for members on the other side that we keep talking about Bill C-69, but, because they are so incredibly linked together, we continue to hammer home this point. We want to make sure that people understand that, in order for us to properly get the best result for Canadians, we are going to start with Bill C-49, which means that we have to deal with Bill C-69 and, as the amendment that was moved states at the very end in point 2—it's a very simple line that we have at the bottom—we complete consideration of Bill C-49.

What that is doing is ordering Bill C-49 to be first. Deal with Bill C-69, as part of it ties in with Bill C-49, but we are going to complete deliberation on Bill C-49 and, at that point, at the end of the amendment, point number 3 would then be the a), b), c), d), e), f), g), h) and i) that was part of the original motion. It includes the original wording and lettering of the original motion, but it includes direction to have an order prioritizing Bill C-49 in advance. It's a very substantive amendment, and I really appreciate the wording that we have in it here, which we came up with to make sure that it was compliant and in order.

It might be worth going over that one more time. At the start of the motion, point 1 is going to be that first we undertake the study on Bill C-69. It references in the opening dialogue about the need to do Bill C-49. We're already establishing that those two bills are going to be part of the motion.

We're going to say that we first undertake the following study on Bill C-69:

1. First undertake the following study on Bill C-69: “Pursuant to Standing Order 108(2), the committee undertake a study of the Supreme Court of Canada’s ruling that Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, is unconstitutional; for the purposes of this study, the committee: (a) hold at least 5 meetings, (b) invite the Minister of Energy and Natural Resources and the Minister of the Environment and Climate Change to appear for one hour each, (c) report its findings and recommendations to the House and, (d) pursuant to Standing Order 109, request that the government table a comprehensive response to the report.”, then 2. Complete its consideration of Bill C-49.

That's effectively—if I'm allowed to use the term—killing two birds with one stone here, because, when we deal with Bill C-49, we have to deal with Bill C-69. We have to start with BIll C-69 to make sure that Bill C-49 is compliant with that law that is now in place. It has been largely unconstitutional since its implementation, which the government was warned about back then and continues to be warned about now.

This is why we want to prioritize the order of the bills that we have here in this amendment.

There are a few parts to Mr. Sorbara's motion that are still going to have to be addressed and dealt with, possibly in a subamendment.

Before we get to that, Mr. Chair, I think we need to really discuss the impacts that this will have if we don't deal with Bill C-69.

I have read a little bit about Saskatchewan and their response to the reference case and the importance of that. I'll just remind members that at no point in history has a government ignored a reference case. They've always acted upon it and prioritized it. Let's take Saskatchewan as an example. We hear a lot about the government doing consultations and how they've been very engaging with people. Well, only about 15% of Saskatchewanians have heard of the just transition. I would suspect that if the other 85% knew what was happening and what was going on, people would have a lot of concerns.

In particular, as we have seen and heard, the government's initial attempt at a just transition of coal workers substantively and spectacularly failed. I'll get to that in a bit. People have seen their energy prices already go up. That has already happened. At this point, the shuttering of our coal plants has not fully happened just yet, but we have seen energy prices increase as the government has implemented very strong anti-energy development legislation.

Take the cost of the carbon tax alone, for example, on energy production in Saskatchewan. I've heard workers at the coal station talk about how the carbon tax might put them out of a job far in advance of 2030. This is because of the excessive costs that will be associated with producing power as the power plant is phased out and winds down. That escalating cost gets thrown on top, onto the Crown corporation SaskPower.

Then you have the case of Swift Current, where I live. They buy the power from SaskPower. In a sense, you have a doubling of costs and regulation here that is causing this issue of affordability of energy for folks. We've heard the government's own regulations speak to the fact that the people who will be disproportionately impacted are seniors living on a fixed income and single mothers. That was right in the government's own regulations, and yet they are plowing ahead with this legislation that is problematic and causing massive cost overruns for people.

In fact, we just heard on Friday that the government is going to put a pause on the carbon tax in one area of the country because of the issue of cost, but yet we've constantly been told that people receive more than they pay, so therefore it shouldn't be a problem. Well, clearly it is. This is why people are concerned with Bill C-50, Bill C-49 and Bill C-69. This is why getting to Bill C-69 first will be of the utmost importance to people.

In Saskatchewan the working population is 598,000 people, give or take. There were over 43,000 construction jobs, 32,000 manufacturing jobs, and 25,800 agricultural jobs. In forestry, mining and gas there were 19,700 jobs, in utilities about 8,500, in wholesale and retail trade 98,000, and in transportation and warehousing about 30,000 jobs. The potential just transition job impacts are 10,432 direct jobs and 131,500 indirect jobs. A lot of that can be attributed and traced back to the ripple effect of Bill C-69.

[Dr. Gábor Lukács, President, Air Passenger Rights]

Mr. Chair and honourable members, Air Passenger Rights is Canada's independent, non-profit organization of volunteers devoted to empowering travellers. We have a track record of successfully predicting shortcomings and loopholes in legislation related to air passenger rights.

Five years ago, we testified before the House of Commons and the Senate respective committees and cautioned that the Transportation Modernization Act was inadequate. In 2019, we published a 52-page report with predictions of how airlines would likely exploit the air passenger protection regulations' shortcomings and loopholes. In December 2022, we cautioned that Canada's air passenger protection regime was broken, and we proposed specific legislative amendments as a solution. Mere days later, during the holiday season, Canadians witnessed a second meltdown of air travel that year, compounded by airlines' flagrant disregard for passenger rights under the APPR..

Our predictions are based on the experience of the passengers we help daily in their struggle to enforce their rights. They have been validated by the four years that have passed since the regulations came into force. Today, even the government acknowledges that our air passenger protection regime needs to be substantially strengthened. Unfortunately, the legislative amendments put forward in Bill C-47 have the opposite effect.

First, the government proposes to create a secretive, star chamber-like process for adjudicating consumer disputes between passengers and airlines with no right of appeal. The adjudication will be conducted on the basis of confidential information instead of evidence, with the exclusion of the public and the media. This is unheard of in consumer disputes.

Bill C-47 therefore violates Canadians' freedom of expression and the open court principle guaranteed by section 2(b) of the Charter, as well as the right to a fair hearing in accordance with the principles of fundamental justice, protected by section 2(e) of the Canadian Bill of Rights.

Second, proposed section 85.12 is effectively a Henry VIII clause that allows the Canadian Transportation Agency to change the law while bypassing the system of checks and balances set out in the Statutory Instruments Act. The agency will be able to make and modify guidelines affecting passengers' rights overnight without examination by the Clerk of the Privy Council and the deputy minister of justice, without publication in the Gazette and without scrutiny by Parliament's committees.

Third, Bill C-47 perpetuates existing loopholes and creates a new one. In spite of the government promise to the contrary, the bill retains the “required for safety purposes” excuse for airlines to avoid paying compensation and shunts that excuse into regulations. This made-in-Canada loophole has unnecessarily and disproportionately complicated adjudication of disputes between passengers and airlines.

Since evidence about the reasons for a flight disruption is in the airlines' exclusive control, passengers are at a great disadvantage in enforcing their rights to compensation. Bill C-47, however, shifts the burden of proof to the airlines in such disputes only if the passenger gives up their right to a fair and open hearing before an impartial judge and instead agrees to submit to the star chamber-like process.

Bill C-47 also creates a new loophole. Clauses 467 to 470 would allow airlines that sign a so-called compliance agreement to avoid paying penalties for violating passengers' rights.

To summarize, many of the government's proposed amendments to the Canada Transportation Act miss the mark, do the opposite of their stated purpose and will weaken not only air passenger protection but also fundamental rights in Canada.

We urge you lawmakers to amend division 23 and not to forgo this historic opportunity to create a robust air passenger protection regime in Canada. A suitable model for amending division 23 would be Bill C-327, a private member's bill to harmonize Canada's air passenger protection regime with the European Union's gold standard. Bill C-327 has been endorsed by Canada's leading consumer protection organizations, and it is what Canadians need.

Thank you.

Second Reading

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Madam Speaker, it is always a pleasure to speak in the House on behalf of the people of Calgary Midnapore.

It has been a month now that I have been in the role of shadow minister for the Treasury Board. I would like to once again thank the leader of the official opposition, the member for Carleton, for this role. It gives me an opportunity to work very closely with two of my favourite members of Parliament, the member for Leeds—Grenville—Thousand Islands and Rideau Lakes, the shadow minister for ethics, which we have been doing continuous work on ArriveCAN, and the member for Calgary Forest Lawn, who serves as our shadow minister for finance. It really is a pleasure to have this role.

I am sure members are aware of the crippling inflationary numbers in Canada, 6.9% in the most recent reports, down a slight bit from the 8.1% high we saw in June. Food, of course, is at a 40-year high.

I just came from the government operations committee, and the President of the Treasury Board was there on the supplementary estimates. I am sorry to report that the government has asked for another $21 billion, and I am not making that number up. We have a $36.4 billion deficit this year. That is because of $6.1 billion in new spending even though we are supposed to be moving past the pandemic now. One thing is clear about the Liberal government, and that is that it just does not get it.

As I said, inflation is at a 40-year high, and 1.5 million Canadians are using the food bank in a single month. In the GTA, pre-pandemic food bank usage was at 60,000 people per month. During the pandemic, it was at 120,000 people. Now, under the Liberal government, it is at 182,000 people per month.

Grocery prices are up 11%, the highest rate in 40 years. One in five Canadians are skipping meals and more than half of Canadians are living paycheque to paycheque. What is the Liberals' solution? It is to give up one's subscription to the Disney channel. As I have said, the Liberal government just does not get it.

Consumer insolvencies rose 22.5% compared with a year earlier. This is the largest percentage in 13 years. Small business insolvencies are on the rise. One in six businesses are considering closing their doors. This is very dear to me, since I come from a small business family.

The average credit card balance held by Canadians was at a record high of $2,121 at the end of September. The Royal Bank of Canada estimates that households will soon have to allocate 15% of their income to debt servicing alone. Nine in 10 Canadians are now tightening their household budgets, yet the Deputy Prime Minister is telling us not to worry, that Moody's gave us a AAA credit rating. Quite frankly, that will not put food on the table. The government just does not get it.

Mortgage interest rate costs rose by 11.4% on a year-over-year basis, the largest increase since February 1991. For those whose mortgages are up for renewal this year, they will pay $7,000 more compared to five years ago. Also, the average rent is now $2,000 a month. The average rent for a one bedroom in Toronto was $2,474 in September. In 2015, seven years ago, it was $1,100. In Vancouver, it is $2,300. In 2015, it was $1,079. Toronto has the worst housing bubble in the world and Vancouver is the sixth worst, according to UBS. However, the government is telling us not to worry, here is $500, when people need $2,474 for one month rent alone in Toronto. It just does not get it.

There has been a 32% increase in violent crime since 2015, which is 124,000 more violent crimes last year than in 2015. There were 778 homicides in Canada last year and 611 in 2015, a 29% increase. There has been a 92% increase in gang-related homicides since 2015 and a 61% increase in reported sexual assaults since 2015. Police-reported hate crimes have increased 72% over the last two years, yet the government pushes through Bill C-5, making it easier for offenders to stay home and play video games. The government just does not get it.

About 31,000 Canadians lost their lives to overdose between 2016 and 2022. There were 7,169 deaths from opioid overdose in Canada in 2021. Twenty-one people a day are dying from overdose, and before the pandemic it was 11. More than six million Canadians do not have access to a family doctor and, as brought to light by the member for Fort McMurray—Cold Lake, there has been a shortage of children's Tylenol and Advil. No other country anywhere in the globe is experiencing such shortages. However, people should not to worry, because if their child is sick, there is day care for $10 a day. The government just does not get it.

When it comes to immigration, there is a backlog of 2.6 million people. It has grown by 800,000 people under the current government. Fifty-seven per cent of the files in the system are beyond the processing timelines set by the government, and what is it doing? It is putting up incredible new targets that we know it will never achieve, which is not fair to the people who are applying or for the people who are backlogged in the system already. The government just does not get it.

Toronto's Pearson airport is ranked the most delayed airport in the world, with Montréal-Trudeau International Airport right behind it. We have seen how horrible it is to get a passport in recent days and how difficult it is for families who just want to get away on vacation after the difficult two years they have had. It has been impossible to get a passport. We know this, but what does the Minister of Transport say? He says it is Canadians' fault; they do not know how to travel anymore. The Liberal government just does not get it.

We have the second-slowest time for building permits of any country in the OECD. The average permit time is 250 days. In South Korea, it is 28 days, yet the government continues to shove money into the Canada Infrastructure Bank. It is millions of dollars after millions of dollars. The government just does not get it.

In 2015, there were 50 major LNG infrastructure projects under proposal, yet not a single one has been finished. It is the government that gave us Bill C-68, Bill C-49 and the carbon tax, bringing energy production to a halt in this nation at a time when we need it the most. The government just does not get it.

I will tell members what the Liberals do get. They know how to spend and they know how to tax. Under a Conservative government, there would be no new taxes. For every dollar of spending, we would find a dollar of savings. However, until that day, we are unfortunately stuck with the current government and the government just does not get it.

Rail Transportation

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

Mr. Speaker, stakeholders are calling out the Liberals on their failure to ensure adequate and reliable rail service for western agriculture products destined for markets around the world.

According to the executive director of the Western Grain Elevator Association, “We're right back to the same quagmire we were in before Bill C-49 was passed.”

Instead of wasting his energy maintaining vindictive travel bans for Canadians, when will the minister tackle actual transportation issues here in Canada?

[Annie Koutrakis, Liberal, Vimy, QC]

Thank you, Mr. Chair, and thank you to all our witnesses for appearing here this afternoon.

Mr. Bjornson, in your testimony you referenced Bill C-49, the Transportation Modernization Act. On May 24, 2018, there was a story on the GlobeNewswire:

“This day has been a long time coming for grain shippers and the farmers we serve,” said Executive Director of the WGEA, Wade Sobkowich. “Grain shippers extend our thanks to Transport Minister Marc Garneau and Agriculture Minister Lawrence MacAulay for their leadership in bringing the Bill through the parliamentary process with the provisions that are of critical importance to the grain sector.”

With that in mind and with the perspective of several years gone by, what is your view of these reforms, what worked, what didn't work, what remains to be done and how can we do better?

[David Montpetit, President and Chief Executive Officer, Western Canadian Shippers' Coalition]

Thank you very much.

Good morning, Mr. Chair and members of the standing committee.

On behalf of the Western Canadian Shippers' Coalition, WCSC, I would like to thank you for the invitation to participate in this session. My name is Dave. I am the president and CEO.

WCSC is based in western Canada and represents shippers from multiple resource commodity sectors, many of whom are completely dependent on one railway. Our membership includes some of the largest Canadian and North American shippers in these sectors. Collectively, members provide tens of thousands of direct and indirect jobs in communities across Canada, ship billions of dollars' worth of product annually, and spend over $3.5 billion on total transportation. The point of commonality for our members is a reliance on market-dominant providers of rail freight, truck and port transportation.

Shippers have faced significant supply chain disruptions since the fall of 2019, following CN Rail's strike and service issues related to unusual weather conditions. While shippers were in recovery mode in 2020, blockades disrupted railway lines across Canada; Transport Canada issued a slow order in response to a train derailment in Saskatchewan; and supply chains and operations began experiencing additional stress due to the COVID-19 pandemic. The downward spiral continued in 2021 with extreme heat, the B.C. wildfires and flooding, bringing the supply chain in some areas of western Canada to a standstill or a crawl. CP's labour disruption in March of this year and the effect of the war in Ukraine are further testing the resilience of an already strained supply chain. As a result, WCSC members are operating in a very challenging business environment.

Supply chain shortages in all modes—rail, trucking and containers at port—increased costs, scheduling issues and shipping delays have taken a toll. The driver shortage in the trucking industry is not a new phenomenon. Class I railways drastically reduced head counts and active equipment in 2020 and 2021, and they have been slow to bring people and equipment back. In many areas they are, again, stretched too thin to meet demand and they lack the resiliency to manage normal operating procedures. In fact, given the system-wide rail service issues resulting from a combination of weather-related crises, which are no fault of the railway at all—and I must commend them for a great job of bringing everything back—and a personnel and equipment deficit, some of our members have been forced to take temporary plant shutdowns and operate at reduced capacity for prolonged periods of time. In addition to the impact on the member companies, these pressures are damaging confidence in the reliability of Canada as a supplier of goods and resources. Canada's competitiveness and reputation as a trading nation depend on our ability to get products to market.

We need to look ahead. WCSC believes that a comprehensive supply chain review is necessary to determine precisely what Canada's major trade corridors will require in terms of maximizing performance of our roads, rails and ports. This includes determining current and future capacity, first- and last-mile efficiencies and bottlenecks in congested areas, such as the Vancouver Lower Mainland and northern Alberta.

Another area we suggest focusing on is contingency planning. The supply chain must be better prepared in 2022 to move forward through potential things such as climate events—like the ones we have already seen—and other disruptions, such as strikes, blockades, pandemics and now a war. WCSC recommends that regional, federal and provincial task forces be organized similar to those successfully put in place in 2021 during the B.C. flood.

Another area is resiliency. Trade corridors are under much strain and, in some regions, have begun to break down. A comprehensive review of all modes to fully identify these challenges is necessary, including looking at bottlenecks and underutilized corridors, and identifying opportunities to move national trade corridor funding and infrastructure focus accordingly.

There is also seasonal versus winter planning. The narrative and direction for planning need to shift, as what we currently rely on is not working. WCSC suggests that a combination of climate event planning, other trade corridor disruptions, as I described earlier on, and seasonal fluctuations in commodities and manufactured goods in the supply chain need to be considered. What we need is basically a road map.

Finally, we also suggest focusing on data and metrics. More regionally detailed real-time information is required. Capacity data is needed to provide a benchmark so that we can understand what the trade corridors can handle. Shippers are responsible for internally building chain visibility dashboards and need regionally detailed metrics to compare their performance and supply chain against.

We will also be looking at and prioritizing some future legislation moving forward, including reviewing what was put forward in Bill C-49 and looking at areas and recommendations that were not previously considered. We're also looking at the ports modernization review and things we can do, including mechanisms similar to what we have in place for rail, looking at excessive fees and charges, and perhaps looking at some changes to the act to include some mechanisms for shippers to respond to that.

Finally, we are looking at the Canada Transportation Act review and are wondering when the next review will be. We're going to be approaching 10 years since it was last launched. In fact, it's already been more than eight years since it was last launched, and it's something we should consider.

I want to thank everybody for their time, and I look forward to some questions coming up here in the future.

[Steve Pratte]

Well, certainly coming out of the shadows of Bill C-49, the Transportation Modernization Act, there's now bolstered communication between the railways and their grain shippers. Certainly, though, the railways consult. They put on paper their plans with the Ministry of Transport every year—their idea of what they are going to move for that year and the size of the actual crop to be hauled. There's nothing that holds them to that. What we saw this year was that we were going to do X but in reality Y has happened. There is some accountability within contractual arrangements, but it's not to the level that the grain shippers and grain industry would like to see.

Alleged Premature Disclosure of Contents of Bill C-10

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I am rising to respond to the question of privilege raised by the member for Louis-Saint-Laurent respecting the alleged premature disclosure of the contents of Bill C-10, an act respecting certain measures related to COVID-19.

On Monday, the Prime Minister made a general statement of the government's intention to introduce a bill to purchase rapid tests. The Prime Minister did not divulge the details of the bill, namely the amount of money for the purpose, nor the mechanism for purchasing and distributing these tests across Canada. This is a very short bill with two clauses: the amount, which is about $2.5 billion, and the mechanism for distributing these tests. As a result, I submit that speaking in very general terms about the bill does not meet the bar for a question of privilege respecting the divulgation of the contents of the bill during the notice period. Furthermore, as part of the government's consultation process, a draft legislative proposal on the statutory spending authority for rapid test procurement was shared with parties of the House last week before the bill was placed on notice.

On June 8, 2017, the Speaker ruled on a question of privilege related to the alleged premature disclosure of Bill C-49. He stated:

The right of the House to first access to legislation is one of our oldest conventions. It does and must, however, coexist with the need of governments to consult widely, with the public and stakeholders alike, on issues and policies in the preparation of legislation. Speaker Parent explained on February 21, 2000, at page 3767 of Debates:

Although the members of the House should always be the first ones to examine legislation after it has been introduced and read the first time, this rule must be balanced against the need for the government to consult both experts and the public when developing its legislative proposals.

Speaking in very general terms of the bill without divulging the specific details of it does not meet the threshold of a question of privilege. Any risk was further mitigated by the government sharing a draft bill with opposition parties four days prior to its introduction. This clearly satisfies our long-standing imperative that members of the House should always be the first ones to examine the legislation.

[Jacob Charbonneau, President and Chief Executive Officer, Late Flight Claim Canada Inc.]

Thank you, Mr. Chair.

I first want to thank the committee for inviting me to make a presentation.

Late Flight Claim is a business that helps airline passengers obtain—simply, quickly and without risk—financial compensation or a refund after a flight has been cancelled or is late.

Last time I had an opportunity to appear before a House of Commons committee was during the study on Bill C-49, aiming to implement a protection regime for airline passengers. We then critically assessed that bill's shortcomings. We raised the fact that a number of points benefited and protected airline companies more than consumers. The complexity of that piece of legislation and its regulations would open the door to a number of interpretations and encourage airline companies' refusal to provide compensation or a refund, although we had been promised a simple regime that would be ahead of various international programs.

The current crisis is unprecedented and has heavily impacted the aviation and tourism industry. It has highlighted the shortcomings of the current protection regime, the processes, the control measures and the organizations in charge of its proper operation.

The government and the Canada Transportation Agency have been slow in taking steps to protect consumers. Very early at the beginning of the crisis, the European Commission and the U.S. Department of Transportation stated that air carriers must reimburse consumers for unused flight portions. Not only was this not the case in Canada, but the CTA even encouraged consumers to settle for future travel credits and mentioned they should respect the fare rules in place.

In addition, while other countries were implementing clear directives forcing airlines to refund unused portions of tickets purchased, “the CTA quickly took [temporary] steps to address the significant impacts on the airline industry”. One of the things the agency did was apply a temporary exemption on the obligation to provide compensations or to provide new protection for passengers through other airlines.

The CTA additionally gave carriers a deadline extension to respond to passengers' compensation claims. Airline companies had until October 28, 2020, to respond to all compensation claims that had been backlogged since March 25, 2020, or that had been submitted between March 25 and September 29, 2020. That represents nearly a 700% extension of the deadlines.

The agency ordered that the processing of all requests for dispute resolution before the agency concerning airlines be suspended until June 30, 2020, including all requests received under the formal dispute settlement during the suspension period.

So the agency hurried up to implement measures to protect airline companies to the detriment of consumers. One has to wonder what the Canada Transportation Agency's role is and who benefits from it.

During his presentation, Mr. McNaney, from the National Airlines Council of Canada, mentioned that foreign companies that received support were starting to take parts of the market. However, Air Canada, which was in a good position in terms of cash flow at the beginning of the crisis and which has gained several billion dollars in cash flow since, in addition to the billions of dollars in non-refunded tickets, is probably better positioned than others to face this crisis, proportionally speaking.

Moreover, I am astounded when I see a company, on the one hand, asking for public assistance to survive and, on the other hand, offering a gold plated pension of several million dollars to its outgoing president.

And what if this was not just a matter of finances? Would it not be connected to the fact that clients are better protected and helped by different entities?

As you know, travellers expect a certain level of service, and I am not talking about a five-course meal served on board with nice plates. They just want to be able to talk to someone when they have a problem or to be reimbursed when services are not provided. Unfortunately, all too often, certain Canadian carriers have neglected their duty in both cases. The same goes for organizations in charge of regulating and protecting consumers. The situation was already noticeable well before this crisis began.

The longer we wait, the more consumers lose out, as do all other players in the value chain. This situation that has persisted puts undue pressure on service providers such as travel agencies and agents, insurance providers, as well as credit card companies. They should not have been paying for the lack of clear guidelines and airlines' inability to meet their commitment.

In closing, I would like to remind the committee of the fact that, before this crisis, when the airline industry was at its peak and had record sales and profits, a number of situations showed that short-term profit superseded services provided to consumers, who were all too often taken hostage through decisions related to business operations.

What will happen now, following cost and staff cuts, and with the two airlines about to be merged, which will result in less healthy market competition, which is already restricted in Canada, in addition to increasing a number of risk factors?

I have heard various stakeholders mention, at different meetings of this committee, to what extent the airline industry is Canada's economic backbone. Must we hit a wall to realize what consequences our decisions have, thereby jeopardizing an entire industry?

Thank you.

[David Montpetit, President and Chief Executive Officer, Western Canadian Shippers' Coalition]

Good morning, Madam Chair and honourable members of Parliament.

On behalf of Western Canadian Shippers’ Coalition, I would like to thank you for the invitation to participate in this session. My name is David Montpetit, and I am the president and CEO.

WCSC is a cross-commodity organization focused on the safe, efficient and competitive movement of goods while optimizing the transportation sector, which will ultimately benefit the Canadian economy. Our organization represents companies based in western Canada that collectively ship billions of dollars' worth of product annually to domestic and international customers and provide tens of thousands of direct and indirect jobs across Canada, including in many small communities where they are key employers.

Let me start by thanking the government for its efforts to minimize the impact of the COVID-19 pandemic on Canadians. This includes both bureaucratic and ministerial personnel at Natural Resources Canada and Transport Canada for being available and responsive to WCSC members through regular conference call meetings, and other MPs with the sitting government and the official opposition who have made themselves available to discuss our concerns. I also extend my appreciation to all shippers and supply chain partners for continuing to do their utmost to safely operate and deliver goods and services during this stressful, unpredictable period.

COVID-19 is only one of the challenges impacting Canada’s supply chain. There has been pressure on our national trade corridors for several years, which is why WCSC participated in the Canada Transportation Act review initiated by Transport Canada in 2014, provided recommendations in response to Bill C-49 and continues to represent members on follow-up initiatives related to the Transportation Modernization Act.

COVID-19 struck at a time when shippers were still recovering from recent disruptions to the supply chain, including: first, service issues resulting from the CN rail strike in November 2019 and the usual winter weather conditions; second, a slow order issued by Transport Canada in response to the February 6 train derailment in Saskatchewan; and, third, illegal blockades on rail lines across Canada that also began on February 6 and continued through March.

The impacts of the measures taken by industries and government in response to COVID-19 include scheduling issues, shipping delays and container shortages; increased transportation costs for trucking and vessels; labour capacity issues such as a workforce that is diminished or stretched to meet decreasing and increasing demand; a drop in imports and exports to Asia and Europe; and reduced demand for products, for example in the energy sector.

The rail blockades and the COVID-19 pandemic have not only demonstrated the importance of Canada's supply chain to average Canadians for basic necessities, they have also exposed its vulnerability.

As Canada emerges from the pressures of COVID-19, our key concern is the recovery plan, the ability of the supply chain to have adequate resources in place to ramp back up when businesses start to return to more normal operations. WCSC members will continue to collaborate with Transport Canada and NRCan regarding to this.

We have some recommendations, the first of which is that a comprehensive review is necessary to determine precisely what Canada’s major trade corridors will require in terms of maximizing the performance of our roads, rails and ports. This includes determining current and future capacity, first and last mile efficiencies, and bottlenecks in congested areas such as the Vancouver Lower Mainland and northern Alberta.

Second, we need a more robust data collection and analysis. The rail transportation system must become more transparent. In Bill C-49, government put in place transitional performance and service metrics reporting. Those metrics lack relevant context, in particular in relation to railway capacity. That has made the transitional provisions largely ineffective in promoting transparency and accountability.

Data that is aggregated and averaged over an entire country does not give a forest products mill in northern Alberta nor a mine in B.C. any actionable information. Shippers have taken a much more assertive role in developing their own internal, regional-specific railway performance metrics and require a benchmark from government to measure against.

We are extremely concerned about the damage to customer confidence in the reliability of Canada as a supplier of goods and resources resulting from the ongoing challenges in the supply chain. We will continue to work with government and other shipper organizations to seek solutions related to COVID-19, including, as I mentioned, the strategic recovery plan, a comprehensive supply chain review, and more robust data and metrics.

Thanks so much.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

That's a very big question. We could talk about that for quite a while. In some cases it does mean that certain shippers have access only to one railroad. That is one of the reasons I brought in Bill C-49; it was to provide the option of interswitching in a fair manner to shippers.

Teck Frontier Mine Project

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I rise this evening to participate in this timely emergency debate initiated by my colleague, the hon. member for Lakeland, on the cancellation of the Teck Frontier mine project, a project in northern Alberta, that if completed would have had the capacity to produce up to 260,000 barrels of bitumen a day, resulted in 2,500 construction jobs, 7,000 permanent jobs and $70 billion of new tax revenue. Not only that, it was a project that was supported by and would have been beneficial to the 14 affected indigenous and Métis communities. Here we are tonight, and all of that is gone. The project is cancelled. It is history and it is not coming back.

In the face of the cancellation of the project, what has been the Prime Minister's response? It was effectively to shrug off the cancellation and say it was merely a decision of Teck, nothing more and nothing less. The vast majority of my constituents and Albertans do not buy the Prime Minister's explanation. They know there is one person who bears considerable responsibility for the cancellation of Teck, and that is the Prime Minister.

Let us look at the facts. Teck went through all of the regulatory hurdles. The joint review panel gave it the green light all the way back in July of 2019. All that needed to be done was for the Prime Minister and his cabinet to give it the final approval. What did the Prime Minister and his cabinet do? They dithered and delayed month after month, undermining investor confidence. Then, more recently, they sent the signal that they were seriously contemplating killing the project altogether, a project that not only would have resulted in thousands of jobs but in billions of dollars of new tax revenue that would have gone some way to restoring investor confidence, which has been sorely lacking and undermined thanks to the policies of the Liberal government. They were contemplating killing a project that really sets the gold standard when it comes to clean emissions with respect to GHG intensity, which is roughly half that of the oil sands industry average, which was projected to be carbon neutral by 2050. It is indeed a project that the joint review panel noted might actually help reduce overall GHGs, not increase GHGs, having regard for alternate sources. For the Prime Minister, in the face of this devastating news for my province of Alberta, to simply shrug his shoulders and say that it was a decision of Teck truly requires a suspension of disbelief.

Make no mistake about it, the decision of Teck was not made in a vacuum; it was made within the context of regulatory uncertainty that arises from misguided policies on the part of the government that is literally killing Canada's energy sector. From the tanker ban off the northwest coast of British Columbia to changing the rules with respect to upstream and downstream emissions midway through the approval of energy east, ramming through Bill C-48 and Bill C-49 at the end of the last Parliament, and I could go on, the message collectively that the current government has sent is that Canada is not open for business, that Canada is not open to investment in the energy sector. The consequences have been devastating.

We have seen $200 billion in projects cancelled since the government came to office. We have seen the rig count cut in half, down 50%. Capital investment is fleeing. Indeed, capital investment is down more than 50%. There are 120,000 people out of work in the energy sector since the current government came to office.

We have seen, in terms of equity raised in 2018, a mere $650 million. Let us compare and contrast that to the United States. In 2018, equity and debt raised amounted to $19.4 billion. That is $19.4 billion in the United States and $650 million in Canada. In the United States, which is open to business and to investment in the energy industry, investment has skyrocketed, production has reached record levels, and for the first time in U.S. history, the United States is energy independent. So much for the sorry excuses across the way.

I heard one member say, “Industries could just move ahead with projects, but they are choosing not to.” It is not that they are choosing not to move ahead with projects; it is just that they are choosing to go elsewhere, to the United States and to other jurisdictions around the world that are saying they are open for business while the current government shuts down Canada's most vital sector of the economy. The number of companies that have divested from Canada in the energy sector, and are divesting from Canada as we speak, is too long to list.

In the face of that, what does the Prime Minister not get? How much is it going to take? How many more projects are going to be cancelled? How much more investment is going to flee this country? How many more people have to be laid off? How many more people have to give up hope because they have been unemployed for the last several years?

Let us talk about the social impact it has on families. They are devastated. The food bank in my constituency, each and every year that this Prime Minister has been in office, has reached a new record level, year after year, thanks to this Prime Minister. It is time that this Prime Minister woke up. It is time that he put Canada first, and as a starting point to do that, he ought to immediately reverse his failed and destructive policies.

Resumption of Debate on Address in Reply

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, I am going to share my time with the member for North Okanagan—Shuswap.

Though I rose briefly during Routine Proceedings last Friday, this is my first speech in the 43rd Parliament and I would like to take this occasion to give some additional words of thanks. As a temporary custodian of this seat in Parliament, I am deeply honoured to have the enormous responsibility of representing some 140,000 residents as part of a centuries-old tradition of protecting citizens by checking the otherwise unlimited power of the Crown. Parliaments exist in order to ensure that the Crown and its agent, the government, cannot impose itself on citizens without their consent. That consent is granted through votes in this incredible institution.

Once again, I thank the voters of Calgary Rocky Ridge for electing me to be their servant in the House. I also wish to thank the 270-odd volunteers who assisted my election campaign. I thank them for their support, for their commitment to their community and for their love of their country. I could not have done it without them. I would like to thank the other candidates who contested the election in Calgary Rocky Ridge for giving the voters choice, without which there is no democracy.

Finally, I wish to thank my family. My three daughters, it seems I began the last Parliament with three young girls who are now three young women. My loving wife, Kimberley, I thank for her love, her understanding, her patience, her unwavering support and for always keeping it real in the Kelly house. To my parents, Marnie and Duane Kelly, I thank them for their constant love and encouragement.

Today we are debating last Thursday's Speech from the Throne. My response to the Speech from the Throne is coloured by the recent experience of having knocked on a little under 30,000 doors with my re-election team. What I heard on the doorsteps is what informs my remarks and my impressions of the Speech from the Throne.

To be blunt, the government has virtually no support in my riding. That is simply a fact and it is supported by the election results. I knocked on doors in the communities of Calgary Rocky Ridge in every provincial and federal election over the last 30 years as an activist and in 2015 and 2019 as a candidate, and I have never experienced anything quite like it.

It was never easier. People have never been more forthright in coming forward and identifying themselves as Conservative supporters. However, at the same time, I have never had more difficult conversations on doorsteps than I did in this election with people who suggested that they intended to support me, my party and my leader.

For most candidates in most elections, conversations with our own supporters are the easy ones, but not in 2019 in Calgary Rocky Ridge. Some of the conversations I had with supporters were downright heartbreaking. I spoke with people who had not worked in years. I heard from people who told me that they were on the verge of losing their homes. I talked with people whose spouses were working in Texas and coming home for a couple of weekends a month or were working in the Middle East or other parts of the world and only coming home a few times over the course of a year.

I talked with a man who has lived in his neighbourhood for 20 years and he said that since 2015, seven previously stable families on his block had come apart in divorce. Economic stress and anxiety from unemployment and failing businesses have taken their toll on families, tearing apart the very fabric of our communities.

I spoke with people who openly and candidly expressed their despair, anger and incredulity over what they see as a failure of their country to respect their province. For decades, Alberta has welcomed Canadians from across Canada and indeed people from around the world to be a part of Alberta's economic opportunities. It has transferred much of that wealth back to other provinces and continues to do so despite a recession that has been going on for five years.

My constituents are demanding action. They cannot wait. They made it abundantly clear to me that regardless of which party was to form a government after the election, they would expect me to speak clearly and without ambiguity about just how devastating these past four years have been.

They expect me to be candid about just how upset they are with their federal government. They told me that they wanted the no-more-pipelines bill reversed. They told me they were stunned that a tanker ban on Alberta exports was brought in while tankers continued to bring in oil to eastern refineries from Saudi Arabia.

They told me that they could not understand why a government was running such large deficits at a time of economic expansion. They told me that they were appalled by the constant parade of ministers to the Ethics Commissioner, by a Prime Minister prepared to bully his own cabinet and break the law just to get his own way, and by the way the Prime Minister's personal conduct never matches his moral preening.

They told me, at door after door, that the Prime Minister is a constant source of embarrassment on the world stage, and that they do not believe that he is up to the diplomatic challenges of our times, because they believe that he is fundamentally an unserious person.

With the campaign behind us, with the country's divisions laid bare in a minority Parliament, last week the Prime Minister had an opportunity to acknowledge the failings of the last Parliament, which cost him seats and votes in every region of the country.

He had an opportunity to chart a new course to address the concerns of Canadians who rejected his government's track record. Instead, he delivered a speech full of the same flowery language and grand aspirations that we heard throughout the last Parliament with only a few inadequate words for my constituents in a partial sentence, kind of as an afterthought, where he claimed that the government would “also work just as hard to get Canadian resources to new markets and offer unwavering support to the hard-working men and women in Canada's natural resources sectors, many of whom have faced tough times recently”.

Really? “Unwavering support” and “have faced tough times recently”, is that it? Since 2015, hundreds of thousands of energy workers have lost their jobs. Over 100,000 of them are out of work in Alberta right now. There is $100 billion in energy investment that has left Canada since the Liberal government took office.

Encana, which was once Canada's largest company, and TransCanada PipeLines are changing their names to remove “Canada” from their business names and relocating to the United States because that is where the work is. However, all the Prime Minister had to say in his Speech from the Throne was “unwavering support” and “tough times recently”?

The Prime Minister has been unwavering in his stated desire to phase out the natural resources sector, and he is succeeding. One incredibly insulting sentence that contained a flagrant untruth was all the Prime Minister had to say about this in his entire speech.

If the Prime Minister meant what he said about getting Canadian resources to market, it would require him to undo much of the work of the last Parliament. It would require him to repeal Bill C-69 or implement every single one of the Senate amendments that were rejected last spring.

It would require him to repeal Bill C-48. It would require him to champion Canada as a reliable source of ethically extracted resources and to disown his own prior anti-Canadian-energy rhetoric. It would require him to actually take concrete steps to ensure Trans Mountain could be completed. It would require him to apologize for chasing its private sector proponent out of Canada and for having to send $4.5 billion to Texas so they could compete with us by building pipelines elsewhere.

The Liberals think they deserve some kind of credit for buying a pipeline that should never have been for sale in the first place. I can assure them that not one single person I met in my riding, where pipelines are a huge issue, thought that buying it was anything other than a last-ditch solution to a problem 100% of the Liberals' own making.

To sum up, the throne speech contains nothing for my constituents. I received a strong mandate from the people of Calgary Rocky Ridge, and I expect them to hold me to a high standard. My constituents expect nothing less.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

One of our objectives is to reduce costs for passengers. Of course, costs must be incurred for security measures. Users pay for their security, that is to say those who buy airline tickets, but we do not want the cost to be higher than needed.

For airports that are not served by a system such as CATSA, as mentioned in Bill C-49, the modernization of the Canada Transportation Act, airports have access to this system, but at their own expense. It is possible that, in the future, we will review the designated airports, but we don't expect that by June.

[Luc Berthold, Mégantic—L'Érable, CPC]

Thank you very much, Mr. Chair.

First, I want to thank the members of the committee very much for being here. Indeed, the canola issue does not affect only the west, it affects all of Canada as well. Thank you, Mr. Chair, for mentioning that fact.

I also want to thank the members of the committee for having given me some time today as opposition critic for agriculture and agri-food.

This matter is extremely important. As my colleague Mr. Maguire mentioned a few minutes ago, the Barton Report indicates that Canadian exports are expected to increase to $85 billion by 2025. It is clear that stakeholders in the agricultural sector and international trade will have to work hand in hand in the future.

Unfortunately, the Minister of Agriculture and Agri-Food who has been in the position for three years has not taken part in the discussions on international trade. I wanted to mention that, because it is important for agricultural representatives, farmers and Canadian producers to know that the Minister of Agriculture and Agri-Food is an active participant in important activities like international negotiations. When the previous government was in power, the Minister of Agriculture and Agri-Food took part in these international negotiations. Unfortunately, since 2015, no place is being set for this minister at the negotiation tables.

I wanted to mention that fact to the committee because it is important. I strongly encourage you to ask the government to see to it that the Minister of Agriculture and Agri-Food take an active part in the various international negotiations, especially when agriculture is being discussed.

As you mentioned, Mr. Chair, canola is an important part of Canada's agricultural exports. Forty per cent of Canada's canola exports are sent to China. In 2017, this amounted to about $3.6 billion. This is a major crisis, and that is why the members on this side of the table requested emergency meetings. We also asked the Standing Committee on Agriculture and Agri-Food to hold a meeting on this subject, but unfortunately, for all kinds of reasons, our NDP colleague could not approve such an emergency meeting.

I commend the decision of the Standing Committee on International Trade to hold this meeting, because it is very important to show Canadian canola producers as well as all other Canadian agricultural producers that their government, their Parliament and their MPs are concerned and are focusing on what is happening to relations between Canada and China.

What is at stake is maintaining the trust of buyers and of producers who export their products, as well as the agreements that were established. Unfortunately, doors are closing. Companies have stopped buying and producers are stuck with their products. We absolutely have to head off this situation, all the more so since there are already issues with grain transport to the west despite the adoption of Bill C-49. We thought that this project would miraculously solve everything and allow the export of Canadian products. We thought it was a panacea and that everything would be settled as if by magic. This year we can already see that that is not the case. We are going to have to be even more vigilant in the future.

The trust of producers and buyers is at stake. Buyers have to know that Canadian producers can provide the merchandise. Without going into all of the details of the context and of China's claims, it's important to know the political response of the Canadian government to this situation.

That is why I unreservedly support the motion that this committee to simultaneously invite the Minister of Agriculture and Agri-Food, the Minister of International Trade Diversification , and the Minister of Foreign Affairs. This is a political crisis, and we have to obtain answers from the people who are politically responsible for the current situation.

More than half of the agri-food products grown in Canada are exported, which makes agriculture highly dependent on exports and international markets. We can't simply observe this crisis and expect it to magically resolve itself.

I strongly urge the members of the committee to hold this meeting with the three ministers as soon as possible. This crisis urgently needs to be resolved. We cannot wait for other productions to be threatened or for the advent of new obstacles to the Chinese market. We must react as quickly as possible.

I know that the budget will be tabled this week, but I think that nothing prevents the members of the committee from showing good faith. We can hold a meeting with the ministers as early as this week, at any time of the day or night. We are here today on a Sunday, which proves that we are willing to travel at any time. We are ready to receive the ministers and you will have the full support of the opposition if you decide to hold this meeting this week at any time of the day. We are available.

The members of the committee are ready to hold this meeting to shed light on this topic and obtain answers to the questions of Canadian canola producers with regard to the current crisis.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

I guess one of the things that we should find out is just where the regs are, as far as Bill C-49 is concerned. That's always an issue. In order for this to work well, we have to make sure that we recognize that's part of the system as well, the process of making sure those regs are done.

Just quickly perhaps, David, could you talk about the corridors? Where I am, I know that when CN and CP want to ship a lot of grain, they'll take it all out of our spot, which is great, but there are a lot of places in Saskatchewan and northern Alberta that have problems.

[Steve Pratte]

I'll speak quickly to your question. We all know this, but we just need to remain cognizant that we're still in the early shadows and aftermath of Bill C-49. It only received royal assent on May 23. August 1 is the start of the grain year that all of the planning and reporting goes into. We're still just several months out from that, so I think we need to give that a little bit of time to see the true effects of some of those commercial tools, as the shippers and railways try to either negotiate under that new framework or use some of the mechanisms that are at the shippers' disposal.

As far as the grain transportation system goes, and not to belabour the point, I think we're at a new equilibrium, if you will, on the communications side of things. Part of that is dictated by Bill C-49, and part of that is just all parties getting their acts together and increasing communication over what we've seen in the last several years.

Again, we need to let some time elapse, so that we can give more of a critical analysis of what we've been able to do as an end-to-end supply chain.

[David Bishop]

At the moment, to my knowledge, nobody has applied for interswitching. The railways could answer that better than I could.

As long as shipping is good, I don't think you'll see it used. I think if there comes a time when there is a delay for some reason, especially in the southern Prairies, the interswitching will likely be used. That's one of the things we're waiting to see with Bill C-49—all this stuff that's been implemented.

I appreciate the Senate amendments. They were really needed and I congratulate you guys on getting that all done.

Everything is going pretty well right now. In my mind, we'll see how good the bill really is when we have something go wrong

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Bishop, when Jeff Nielsen was here in March, he had been in the room listening to CN and CP Rail's plans at the time. I had asked him at the time if he felt very optimistic. In summary, he basically said no, and then underlined that Bill C-49 was really needed.

We did make an attempt to get the railway provisions of that bill sped through as quickly as possible. That being said, it's all done and dusted now.

With respect to the interswitching provisions, have you noticed any improvements or is it too early to tell?

[Steve Pratte]

That is one of the positive silver linings of 2013-14 and the Bill C-30, the Bill C-49. I think the kind of communication and information sharing is on a new level, a new playing field, but certainly there's always room for incremental improvement.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thanks, Mr. Bishop and Mr. Pratte, for appearing today. I'm already noticing a bit of a contrast from testimony we heard in March. It seems to be a little bit more hopeful and optimistic, with the caveat that we still have the majority of winter coming our way.

Mr. Pratte, in your opening remarks you noted that the reporting that is now mandated under Bill C-49 could use further refinement.

Mr. Bishop, you also mentioned that you needed to see more details from railways on their planned minimums. Are these two related in terms of the more data you'd like to see?

[David Bishop]

I'm encouraged by the wording in the bill and that, but our worry is what will happen when this actually, one day, does happen. Hopefully it never will, but if it does happen, we're wondering how this is going to work through the bill. How does it apply and who does it? There are a lot of questions on my mind as a producer on how Bill C-49 is going to work when something does go sideways.

[Steve Pratte]

I will take that one first.

On reciprocal penalties, I think there are two things to think about. For instance, the railways will say that a very high percentage of the current traffic falls under reciprocal penalties. They are talking about a per car debit/credit.

I'm not speaking for the grain companies, obviously, but I think their conception is bigger. We're not concerned about $200 per car here and there. We're talking about the value of that being $1 million. Let's have something with a bit more skin in the game and on the table.

To my understanding, under the amended process for the arbitrated SLAs under Bill C-49, encouraging.... I'm not aware—that would be commercially confidential—if anyone has stepped up to try to use that new tool in the tool box, but certainly as a concept with a legal backing, it is something I know that the shippers of grain are happy about and pleased with. Again, you might need to talk to them about more of the detailed nuances of it and whether they have started to use it.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, and it is giving Tuesday. I have to think of how I can reciprocate.

Bill C-49 introduced the idea of reciprocal penalties so that when there's a surge of demand and the grain elevators aren't able to access cars, there are penalties. It seems to me that would be a flag where, if there was a reciprocal penalty demanded, there would be a root-cause investigation to see why we had to go through this.

Has your association discussed, I guess, the opportunity or challenge those reciprocal penalties provide when we see a surge in demand?

[David Bishop, Executive Committee Member, Board of Directors, Grain Growers of Canada]

Good morning, and thank you for inviting me to present on this important issue. I'm glad to be here representing the Grain Growers of Canada, 65,000 grain farmers from coast to coast.

My name is David Bishop, and my wife, Mary, and I farm in Barons, Alberta. We produce cereals, oilseeds and pulses on 3,500 acres, including 640 acres of irrigation. My family's farming history in Canada dates back to 1910, and I began farming with Mary's parents in 1986. Currently, I'm also vice-chair of Alberta Barley, and I am past-president of the Alberta Seed Processors. I am proud of my involvement in commodity organizations and feel it is important for farmers to come to Ottawa to speak to you directly on these issues.

I would like to start by thanking this committee for the work you have done and continue to do on transportation. Transportation is an important issue for farmers across the country, and your past hearings, including the special hearing you held in March, helped to shed light on the challenges we have faced and has helped ensure the right solutions are put in place.

As this committee is aware, prairie grain farmers are almost entirely dependent on the rail transportation system to get our products to market in a timely manner. The unfortunate reality is that poor railway performance has prevented that from happening on almost regular five-year intervals. It is my hope that actions over the last year will help break the vicious cycle that has left farmers in a critical situation where we can't move our grain. As you know, when we can't move our grain, we don't get paid.

While my grain is moving well right now, the delayed harvest means that this year has not been without challenges. I experienced a five-week delay and a reduction in grain quality due to the bad harvest conditions and will now be counting on reliable grain service to move what I did get off.

The passage of Bill C-49 is a significant achievement for the rail shipping industry in Canada. It brings in measures long called for and rebalances the competitive environment. I appreciated the comments from CN and CP in the first hour of this meeting and would like to recognize that both railways have been reaching out to engage our group, the Grain Growers of Canada, and other groups to build strong relationships. Such outreach gave me hope for the future, and I look forward to continuing this relationship.

We've also been pleased to welcome investments in the new infrastructure, including the ordering of new hopper cars by both CN and CP. These critical investments are a clear indication that the bill has provided security of return on investment that the industry needs. Infrastructure has been degrading for many years, and it will take a significant injection of funds to ensure that the rail system can meet the needs of the industry as we continue to grow and meet the government's export goals. We hope to see many such announcements in the future.

I would like to take a minute to address the reports that have been released by the two railways. The new grain report and winter report are steps in the right direction. It is promising that they have been accompanied by an increase in engagement between the government, railways and the grain value chain. However, improvements are needed to get to the point where grain farmers can be confident that Bill C-49 will deliver transparency and collaboration that works.

A significant challenge with the plans that have been released is that the railways only commit to targets or maximum movement levels. They provide no indication of a minimum amount, and as such the railways could move substantially less grain and still declare it a success. Grain farmers need the railways to provide details on their planned minimums, and that information needs to be provided by corridor.

As I said earlier, grain farmers welcome the important investments being made by railways in new high-capacity hopper cars. However, the plans released by the railways continue to provide movement targets in line with historical averages. Given the continued growth that is expected in the grain sector, the reports provide little evidence of how the railways plan on meeting that increased demand. It is also worth noting that while the reports released to date speak to the apparent uncertainty in the supply chain, what is certain is that grain farmers need grain shippers and railways to move as much grain as possible between October and March when demand for Canadian grain is at its highest. This is essential for supporting a profitable farm gate.

What has become increasingly clear over the last five years is that we need ongoing oversight and engagement from this committee, the government and the Canadian Transportation Agency to hold all members of the supply chain to account to get the rail freight service that grain farmers need. It remains crucial that the government continues to closely monitor performance by the railways and is prepared to enforce the new regulations as necessary.

We are a mere 15 weeks into the new crop year, and we're just now moving into the critical time where performance typically will start to degrade, if it is going to. Around this time last year my industry was trying to raise alarm bells for what was to become a severe grain shipping backlog. These alarms fell on deaf ears, and these things are too important to be left to chance.

As all farmers say, winter happens every year. Time will tell if the plans the railways put forward will be up to the challenge of keeping grain moving across the Prairies and out to port. From what I hear, grain is moving pretty well and that is great news, but it needs to be sustainable.

Thank you for this. I look forward to your questions.

[Steve Pratte, Policy Manager, Canadian Canola Growers Association]

Good morning, Chair, and members of the committee. I'm Steve Pratte, Policy Manager at the Canadian Canola Growers Association.

Thank you for inviting the CCGA here this morning to discuss our perspective on grain movement this year. The Canadian Canola Growers Association is a national association governed by a board of farmer directors. It represents Canada's 43,000 canola farmers from Ontario west to British Columbia. As members well know, grain farmers critically rely on transportation to move our products to continental customers and to terminal position for export to our global customers.

In terms of canola, Canadian farmers grow a truly global crop. We are the world's largest exporter of this highly valued oilseed, and in any given year, over 90% of Canadian canola, in the form of raw seed or the processed products of canola oil or meal, is ultimately destined for export markets in more than 50 countries. In 2007 this amounted to $11.4 billion in sales.

Turning specifically to the movement of grain in this 2018-19 crop year, we have been very pleased with the recent aggregate performance of the grain supply chain. As we heard this morning, by various measures railway performance in the grain sector has been very strong, not only in total volume moved in the first 16 weeks of the crop year but also in terms of the various week-to-week performance metrics such as railway hopper cars supplied against shipper demand.

With any complex system, aggregate performance can mask specific issues, which in the grain supply chain often occur within the first and last miles of the movement and are very often specific to location or facility. Despite farmers' overcoming a challenging and late grain harvest in many areas of western Canada, the total system's performance has supported the relatively free flow of farmer grain deliveries into the country elevator and domestic processing streams, and the export of products continentally and abroad.

This is a good-news story—on balance. The grain supply chain to date has been relatively fluid. The performance of the railways in their service to our shippers, being the critical link between the elevator and terminal, is to be noted and given credit.

That stated, in western Canada we are now entering the annual period of lowering temperatures that will bring sustained system operational challenges and complexities, particularly, as we heard again this morning, for the railways. We encourage all supply chain partners to continue to work together to mitigate supply chain risks and swiftly deal with emergent issues.

To that end, it is worth making very brief mention of some of the early effects of recent changes to the legislative framework governing rail transportation in Canada that directly and indirectly impact winter railway operations.

Firstly, Bill C-49, the Transportation Modernization Act, contained a new feature aimed at enhancing annual communication and coordination of grain stakeholders: the annual publication of the August 1 grain report and the October 1 winter contingency report. The railways were given latitude in the preparation of these reports, and they did interact with grain shippers and stakeholders in the development of their inaugural publications. The grain sector is of the opinion that these reports are a good first step and that they could use some further refinement in the future.

Through this process and other corporate actions undertaken by the companies, the railways have certainly introduced a greater degree of communication and information sharing with the broader grain sector than existed even five years ago. I'll tip my hat to them for that.

In any year there will no doubt be specific or localized issues that arise, such as major line interruptions, and sometimes these will produce knock-on effects impacting a larger geographical region and extending deeper into the supply chain, essentially creating backlogs. Thankfully, this has not occurred to date, and hopefully it won't this year.

The real effect of these backlogs is that they negatively impact the farmers' ability to satisfy existing contract obligations with their grain buyers or their ability to sell into buoyant markets to receive payment to support their businesses, and ultimately, their families. In short, as members on this committee would know, if there's no grain delivery, there's no farmer payment.

If and when disruptions do occur, hopefully the suite of measures communicated to government and stakeholders in the railway winter contingency plan will suffice to bring a return to normal operations in quick order.

Secondly, Bill C-49 appears to have effectively dealt with the policy issue of the aging grain hopper car fleet. By amending several details in the calculation of the maximum revenue entitlement formula, the bill has had the intended effect of unleashing investment by both railways in the new generation of hopper cars, with announcements emerging from both companies immediately following the bill's receiving royal assent.

It should be noted, though, that farmers are ultimately paying for this railway investment through the structure of the maximum revenue entitlement, but it is a critical investment required to modernize the rolling stock. As the railways begin taking ownership in the coming months and continued fleet renewal occurs over the next several years, this is expected to produce significant increases in the efficiency of our grain supply chain when coupled with shortening cycle times and new train configurations, essentially allowing the system to move more with less.

Although the impact on this winter's movement may be negligible, moving forward, this will have a welcome and positive effect as the cars have a 50-year service life, and this will literally have positive impacts for more than a generation.

Finally, Canada has an aggressive trade agenda supported by recent trade agreements, and the agricultural sector plays a major role. Canada's canola sector and broader agri-food sector are focused on sustained, long-term growth, and this has been identified as a near-term driver of the Canadian economy.

The recent report of the economic strategy table challenged the agri-food sector with an ambitious target of $85 billion in annual exports by 2025. The service provided by our two major railways will play a major part of supporting the sector's realization of this goal, as will the port of Vancouver.

CCGA encourages members to consider the critical infrastructure issues in the port of Vancouver and what the role of government, be it policy, programs or investment, could be. It is time to ensure that long-term capacity is in place to sustain this national economic activity, and this may require some bold approaches to the regulatory and investment environment. In particular, the critical last mile of the grain supply chain into the port of Vancouver should be assessed and addressed.

In closing, this year we are heading into the winter optimistic but realistic about the railways ability to sustain their service to the grain sector and, more broadly, all commodity shippers.

Thank you for the opportunity to be here this morning.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, and thanks to both companies for coming in to give us an update.

As you know, at the beginning of last year, we had an emergency meeting to talk about the dire situation we were facing. It looks like we've had some progress. I know we've had some progress legislatively through Bill C-49.

Part of Bill C-49 talked about data sharing and transparency between the networks. How is that going between CN and CP, in terms of transparency of capacity, data sharing between the rail lines, and interchanging opportunities because of that?

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

Thank you very much, Mr. Chair.

Mr. Finn and Mr. Cory, thank you very much for coming and being with us today.

Good morning, Ms. Hardy.

Since last year, a lot of work has been done by both companies. You didn't wait for Bill C-49 to pass to adopt measures and try to correct a situation that was of great concern to farmers and grain producers.

You have already admitted that there are significant challenges this year due to the late grain harvest. What makes a railway company give priority to one customer over another? That's the question I get asked the most. You said there was an increase in demand in all sectors. What guides a railway company in its decision to move grain or oil?

Mr. Finn can answer first, then Ms. Hardy.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

If you had looked in detail at the measures in Bill C-49, which we're very proud of, you would have seen that there were several measures to increase competition. Competition, I think you would agree, has the potential to lower costs. One of the significant measures that we took was to increase foreign ownership in Canadian airlines from the 25% limit that used to exist to 49%. This allows for more foreign investment, up to 49%, in Canadian airlines, and this can generate new, ultra-low-cost carriers, which can help competition, lower prices and offer new destinations.

That's one part of it that we announced in Bill C-49. We also had some other measures dealing with joint ventures.

We think that we're doing good things to increase competition.

[Sean Finn, Executive Vice President Corporate Services and Chief Legal Officer, Canadian National Railway Company]

Thank you, Mr. Chair.

I would like to thank you very much for giving me the opportunity to testify before the committee this morning.

There have been several positive developments in the past nine months, since we last appeared before you in March. We value the fact that you have invited us to present to you the implementation of our western Canadian grain plan for the 2018-19 crop year.

Let me say at the outset that we believe the current crop year to be pivotal. The issue is clear. We must overcome the challenges the grain-handling system faced in the previous crop year. To meet the needs of western producers and all our customers, CN is in the midst of an unparalleled $3.5-billion capital investment in our infrastructure and human capital. That is up $700 million from last year and represents 25% of our gross revenues. For every dollar we earn, 25¢ goes back into the properties to improve our capability of delivering our customers' goods over a long period of time.

On July 31, we tabled, pursuant to Bill C-49, a copy of the grain plan—you have a copy in your material—that sets out how CN intends to move the grain crop through the grain year 2018-19. Pursuant to Bill C-49, on October 1 we filed a winter plan that sets out in detail how the railway will move the grain crop with other commodities through the more challenging winter period.

As part of Bill C-49, we were able to consult our stakeholders in detail. We didn't just prepare a plan for grain transportation and a winter operating plan. We took the time to meet with our customers, shippers and the entire western Canadian agricultural community. The idea was to consult them before tabling the plan on July 31. We were very pleased with this opportunity to table the plan, but more importantly to consult with stakeholders in the agriculture industry and western Canadian grain producers.

On that note, it's my great pleasure to introduce my colleague Mike Cory, EVP, chief operating officer, to update you on the movement of grain this year.

Mike.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I think the changes made through Bill C-49 in the modernization of the Canada Transportation Act went in the right direction. That was to try to optimize the movement of commodities. We happen to be at a time when there is a very strong demand for moving goods in this country. You're right to point out that it is the movement of grain, but it is also the movement of many other commodities. I hear regularly from the mining community, from the forestry community, from the potash community. These are important commodities that are headed for our ports. Of course, right now there's an increased demand for shipping oil by rail as well.

The railways know that there is a strong demand, because they're receiving it. At the same time, we have to ensure that there is not a focus that advantages one commodity versus other commodities. That is essentially the situation you have to deal with when the economy is running strongly, as it is at the moment, and there is enormous demand for Canadian products.

Postal Services Resumption and Continuation Act

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I rise today to speak to this motion.

We have certainly heard from both sides of the floor different points of view. However, my NDP colleague put it quite profoundly. She took my opening line about talking through both sides of their mouths.

In the minister's presentation today, we heard the reasons for tabling this motion on back-to-work legislation for Canada Post. She said that small businesses across Canada are facing a crisis. She even talked about specific business owners who have reached out to her office saying that they are in jeopardy of closing their doors if they cannot have a dependable postal service. She talked about how important it is to address the issues business owners across Canada are facing, and that is the reason she is taking this step today.

However, at the same time, she said, in response to my question, that they are going to do everything they can to ensure that they come to some sort of agreement. She did not finish that sentence. The end of that sentence is, “small business be damned, regardless of the consequences this is going to have.”

Small-business owners have raised the alarm bells on some very real concerns, as we head into their busiest time of the season, that if they do not make the revenue during the holiday season, it impacts the rest of their year. I certainly have had those conversations with small-business owners in my riding. They make sometimes 60% to 70% of their revenue during the holiday season, and a lot of that business is through online sales.

I will name a couple of examples. Frontier Western Shop, in Claresholm, was a very small western wear business that grew over the last decade into an international success story. It sells its wares across the world. Who would have known that people in Europe want belt buckles and cowboy boots? They do. It has grown into an extremely successful business, built on an online platform. The same can be said for Flys Etc., in High River. It was a very small business that started as a one-man shop, but because of his success in selling reels and rods and his handmade flies online around the world, this small High River business has grown into a great success story.

We can talk about the big businesses that are going to be impacted, but the messages we are getting from our constituents is that the very small rural businesses are the ones being impacted as well. The minister said in her presentation that she has heard stories from business owners who have asked her to take definitive action to get Canada Post back to work. Today the minister said, yes, she has heard their stories, but she is just going to put a motion on the table to talk about it. She is not taking definitive action. She just wants to talk about this some more, while each minute and each hour this goes on, small businesses across the country are suffering.

This is a bigger trend we have seen from the Liberal government. It is its inability to take action when it is needed. There is that desire to stand on both sides of the fence, and we all know what happens when people sit on the fence for two long. They get slivers, very painful slivers. Unfortunately, our small businesses are the ones who are feeling the consequences and the pain of that.

We have seen this story many times during the Liberals' three-year mandate. Let us go back a bit to the grain backlog. We had grain farmers across the country, specifically in western Canada, talking about the pain they were going through not being able to get their commodities to market. We encouraged the Liberal government for months to take action on this issue. It had definitive tools in its tool box to force the railways to start hauling more grain. This started last fall. We went through the winter. Every single time we brought this up to the Liberal government, the response was, “We really trust the railways to resolve this on their own. We are not going to get involved. They are meeting their targets. This is all going to resolve itself.” Meeting their targets meant sometimes meeting six per cent of the contracts they had signed. Six per cent is certainly not what I would say is meeting their obligations. We then went through the spring seeding period, and still no resolution. Finally, the summer came, and the Liberals tabled Bill C-49, the transportation bill, which we asked them to do eight or nine months earlier. If they had taken the legislation the previous Conservative government had done and put it forward, we would have resolved that grain backlog when it still could have made a difference to Canadian grain farmers. However, the Liberals wait until we are in crisis mode.

That is exactly what the minister said today in her presentation, that our small businesses are facing a crisis. What are the Liberals going to do about it? They are going to do almost something, but not quite anything. We are going to come here and debate it a little more and once again try to walk the fence. Our grain farmers in western Canada sure felt the ramifications of that. Even with Bill C-49, it does not force the railways to haul grain. There is no accountability in that bill. Again, it is window dressing so that Liberals can say eventually, when it really does not matter any more and it is way too late, they did something. Really, Bill C-49 does not address anything and hopefully this fall and winter as we go through the harvest once again, we will see what kind of an impact Bill C-49 will have on our grain producers.

Let us also go back to the Phoenix pay system, something that we have all dealt with. The Liberals like to pass the buck onto somebody else. They were told when they won the election that the Phoenix pay system was not ready to go. They needed to take some definitive action to address this situation, which would have impacts on federal employees across the country. Again, they did not take definitive action. They did not address the situation. They just pressed the green button and hoped for the best because hope and hard work solves all one's problems apparently. We have seen the consequences of that inaction. Federal employees across the country can certainly share that information and the impact this has had on their livelihood. Some of them have been overpaid and then been asked to reimburse the federal government. Some of them have not been paid at all. Again, we hear from the minister that they are taking definitive action and are fully aware of the crisis situation. Then what are the Liberals doing? Nothing or very little.

It is unfortunate, because our small business owners are now put in the crosshairs because of the labour disruption with Canada Post. As I said in my question to the minister, in 2011 when the Conservative government took similar steps to address the Canada Post work stoppage, we were criticized severely by the Liberal third party opposition members that we were being overly aggressive, that it was not something we should be doing. How interesting that the tables have turned just a few years later and now the Liberals are in the situation. They think this is something they should do, but they want to go halfway all the time. There is no ability to make a tough decision and follow through on that decision, to remedy the situation for businesses across Canada.

I want to bring some examples in the trend we have seen with the Liberal government over the last few years. One would be the outcry from Canadians, especially in Ontario and Quebec, with the illegal migrants coming across the border. This is a crisis. There is no question about it. We have seen the numbers increase over the last few years. Liberals like to take little snapshots to say in this week of July the numbers went down between two and four o'clock in the afternoon, so they have a handle on the illegal migrant crisis. If we look at the numbers in a broader vision, the numbers have continued to go up.

That is certainly not the impression that Canadians have of the situation, and this would resonate with my colleagues in southern Ontario, Quebec and Manitoba. The situation is not in control. Building permanent housing with tents and trailers along the border is not what I would consider a long-term solution to an illegal migrant crisis. Again, the Liberals do not want to do anything about it except talk about it. They say they are putting things in place. The Minister of Border Security, the minister with no portfolio really, has said ad nauseam that they have the numbers under control. However, in every statistic, in every media report and certainly when we talk to people on the ground, that is certainly not the case. Again, we see this inability to take definitive action when definitive action is needed.

I compare that to the situation we are in now. Canadian businesses across the country are saying that the crisis they are facing now is real. As we get into this holiday season, we have seen the stats, and I think the minister even mentioned them today, that the rotating postal strikes are costing small businesses an average of $3,000 a month. That includes not only lost sales, but also receivables that are not getting to those businesses.

Let us talk about what that impact would be at $3,000 a month. That is two employees who would now have to be laid off. However, if they had that $3,000 over the holiday season, then a couple of employees could be hired to help through this very busy season. The Liberal minister talked about how much of a crisis this is for businesses. There is a ripple-down effect to this inaction.

I have a 20-year-old daughter who is looking for some part-time work over the holiday season. She has gone to some of the retailers for work during the holidays, but a lot of them have said that they are not hiring until they know what is going on with the labour dispute. They do not know if they can afford to hire those additional part-time workers over the holiday season.

A lot of Canadians rely on that extra income. It helps them pay for their own Christmas presents and holiday celebrations. University and college students over the Christmas break absolutely rely on that additional revenue to help them pay for their tuition and school books, which have become more expensive. On a side note, the Liberals felt that tax credits for tuition and school books were not really necessary and that university and college students were too wealthy to qualify for these tax credits. Unfortunately, because of that, they are now having to rely on those part-time jobs over the Christmas holidays; part-time jobs that are not going to be there, because these small businesses are losing up to $3,000 a month due to the disruption in Canada Post services.

My Liberal colleagues were demeaning this by saying that the contrast between the Conservative action and the Liberal action when it comes to these types of situations is that the Conservatives acted quickly but the Liberals took their time with it. I am very proud of the fact that we acted quickly and took definitive action when it was needed, which ensured that our small businesses and companies across the country knew that the government was standing behind them and ensuring they had the tools they needed to be successful. What is frustrating them right now is a government that is taking no action, allowing them to suffer, and would rather stand on the sidelines and let these two groups come to an agreement, which they have obviously been unable to do.

I appreciate the union's position on some of the things it is trying to address, but it is clear that they have not been able to come to an agreement. We understand the situation before us with a very busy holiday season. Therefore, I think it behooves the government to take some definitive action to ensure that our small businesses are not going to be suffering through their busiest season. This is when they make their gravy. This is when businesses make the revenue that keeps them up and running for the rest of the year. There is no question about that. As I said, a lot them make 70% of their revenue during this time of year.

I have certainly heard over the last couple of weeks the frustration from small business owners who do not understand why the Liberal government does not have their backs. We can go back to last fall when the Liberals brought forward these small business tax changes. These were going to be imposed on small businesses across the country that would have been devastated by these tax changes. If not for this tax revolt from our farmers, ranchers and small business owners, there is no question the Liberal government would have gone ahead with these changes. We heard from our farmers that it would be the end of the family farm, because they would not be able to pass their farms on to the next generation. This was shocking, but it was fact. The Liberals do not dispute that fact, because it was true. Even though we were able to get the Liberals to walk back on some of these changes, the changes to passive income are still there.

There are still some challenges for our small business owners. The Liberals hiked CPP and EI taxes on paycheques, which again impacts business owners as well as their employees. The government is going to impose a federal carbon tax and add a tax on the GST and the HST. For whatever reason, the Liberals do not understand that all of these things are devastating our Canadian small businesses.

These small businesses are the ones that create jobs, as much as the Liberal government would like to take credit for that. Governments do not create jobs. Let us get that on the table. Governments can put policies in place that encourage businesses to grow and create jobs, but governments do not create jobs, unless they hire a lot of public sector workers, which is a subject we can save for another day. That is one way the Liberals are creating jobs.

More than 90% of jobs in Canada are created by our small and medium-sized enterprises, SMEs. They are successful because they are entrepreneurs, willing to take the risks. We have to ensure that they have the tools to take those risks, to be comfortable to hire new employees, to expand their business and invest in new equipment, new technology and new innovation. One of those tools is a reliable postal service.

As we go through the past three years of the Liberal government's mandate, it seems that one by one, it is removing every single tool that our small and medium-sized enterprises need to be successful, whether it is by increasing taxes or creating additional carbon taxes or additional regulatory and red tape regimes.

I would like to touch briefly on yesterday's fall economic statement. From my perspective, there was nothing in that presentation that addressed the crisis that we are facing in Alberta. We have a massive differential in oil prices. The Liberals think we are talking about big international businesses, and we are, because they are being impacted also, but all the junior and middle companies that rely on those big businesses are being impacted and rural communities in Alberta are being devastated. They feel everywhere they turn they are being punched.

Three of the biggest companies in the world, Trans Canada, Enbridge and Kinder Morgan, were ready to put private dollars into three major energy infrastructure projects at the start of the Liberals' mandate, and all three have now gone. Unless they hit the ground in Alberta, people cannot understand the impact that has had. Investment has gone. Companies are leaving and jobs are going with them. The impact has been devastating.

My Alberta colleagues and I talk about this a great deal. We cannot understand why the Liberals refuse to see it, why they refuse to understand the impact this is having on Alberta's economy and its small rural communities.

Christmas is coming, and more than 100,000 energy workers are out of work. Some of them have been out of work for more than two years now. They were looking at Christmas as an opportunity to have a small celebration with friends and family but they will not be able to have that either, because small businesses in these rural communities are suffering because of their inability to access their customers and get their receivables.

This is just another hit by a Liberal government that does not seem to understand the importance of small business and how much our rural communities depend on these small businesses and our postal service. These communities are sometimes very secluded.

I understand that email and the Internet are an easy way to do these things, but that cannot be done if there is no postal service, and that is very frustrating. We want to see the Liberals take definitive action on this. We do not want them to just talk about it, but to do something about it.

I have talked a lot about our rural communities and our small towns, but this also has international implications. We have heard now from the United Kingdom, the United States and several of our large partners and allies, many of which are countries our new Canadians and immigrants have come from, that Canada Post has now told them not to send parcels or mail as we are not going to be able to handle it.

That is pretty tough for a trading partner that these businesses, which have operations in other parts of the world, now cannot do business with one another because they are unable to access reliable mail service. This will impact the more than 100 countries who are members of the Universal Postal Union, and the other United Nations agencies this is going to impact. Again, it shows that the Liberal government is not protecting our export markets, our global economy, and the ability of Canadian companies to expand and operate outside our own borders. This has far-reaching impacts on our economy, not just here at home but certainly around the world.

The Liberals, I hope, over the course of the next couple of days will understand that Canada Post is an essential service for rural Canadians in our small towns, who rely on it to do their business and pay their bills. I hope they will hear that message today. I am sure they are going to hear the message loud and clear from my NDP colleagues that they take the situation seriously. They should not just talk about it, but take definitive action. They should not think small businesses are not suffering and can wait. They cannot wait. They need action today.

Grain Transportation

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

Mr. Speaker, the Liberals waited so long to pass Bill C-49 that it may not even have an effect this year.

Yesterday, the Liberal government proved once again that it has absolutely no understanding of the realities faced by supply-managed farmers.

How can the Minister of Agriculture and Agri-Food justify the fact that the USMCA was signed a month ago, yet farmers are still in the dark?

Yesterday, the minister had a chance to announce how much money is available and how it will be distributed, but no, he is still figuring out how to set up two working groups.

Should he not have set up these working groups before he sacrificed our farmers?

[Brendan Marshall]

Sure. I have just a couple of quick remarks on mining and rail generally. Too frequently, and recently especially, rail issues in this country have been falsely characterized as a dichotomy between grain shippers and the railways, and I think we need to move past that. The reality is that non-agricultural resources, minerals and metals specifically, represent over half of the total rail freight revenue, so if we see a precipitous decline in the volume of minerals and metals shipped, then the railways system itself will start to suffer. You would not be able to ship grain at the discounted rate at which it currently is shipped with the MRE without having a robust demand for traffic from other products, so we need to change that channel. That's the first thing I would say.

The second thing I would say is that there is an imbalance between shippers and railways in the rail freight market. I think that's a challenge with respect to the way in which some decision-makers approach addressing the issue. What I mean by that is this. Shippers are at an imbalance relative to the position that railways have in the rail freight market, so when you approach a piece of legislation to address an imbalance, you cannot take a balanced approach to the legislation.

I think in recent years, not just with respect to Bill C-49 but also with respect to previous attempts by the former government to address this issue, there has been this tendency that if we're going to do something for shippers, we also need to do something for railways, and if we're going to do something for shippers in this respect, then we need to make sure we have a balanced outcome. If you have a balanced bill, you will persist in reinforcing the imbalance between shippers and railways in their relative positions in the rail freight market. In this respect, I think what is really needed to address this imbalance is a greater level of political will and courage. I think that's a really important piece.

You asked me for a bit of information about the data regime. You will hear shippers and railways make a great number of claims. Shippers will say that they are not getting the service they need and that they are consistently being dismissed. If they're a captive shipper, they will say their service is such.

The reality is that we don't have any means of assessing the veracity of those claims. Railways consistently year over year come out and say they are spending 20% or 22% of their revenue. Do you know if that's enough for those companies? Should it be more? Does the system demand, based on traffic requirements, a greater level of investment?

The reality is you don't know. We don't know. Transport Canada doesn't know either. The only way we are ever going to get a clear assessment of what's actually happening in the rail freight market is if we get a really robust data transparency regime that allows us to understand where the traffic is moving, at what time, and with what commodities; where the investments are going, and whether they are going into the U.S., into Canada, into new developments, or just into maintaining existing infrastructure. None of these questions will we be able to answer until we get a very clear, data-driven picture of what's actually happening in the rail freight market. That picture would inform decision-makers such as you with a greater ability to delve into specific solutions where they're needed.

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

Thank you very much, Madam Chair.

I want to welcome our witnesses here this morning.

I would also like to join our chair in welcoming the students who are here from the master's program in political management at Carleton University, as well as Professor Azzi. Thank you so much for joining us today. I hope you enjoy our deliberations this morning.

Mr. Marshall, thank you so much for joining us today. I appreciated your testimony. We had the opportunity of attending the Van Horne Institute Rail to Ports Conference last week, so many of the things that you have said this morning come as no surprise to me because I think we heard the same comments last Friday at the conference.

Before I ask my questions, I would like to also welcome our witnesses from the Montreal Port Authority. You have a champion at this table in Mr. Iacono. He has been urging us as a committee to get to the Port of Montreal to see your operations. It is my hope that we do manage to get there sometime during our study of the transportation logistics strategy.

Mr. Marshall, I want to give you just a little more time to talk about the impact of Bill C-49 on the mining industry in particular. You referenced two amendments that you had hoped would have been passed during our deliberations of Bill C-49, which we all know was a 10-year statutory review. Hearing what you've had to say is deeply concerning as we may not review that legislation for another 10 years if we follow the statutory cycle.

I'm wondering if you could provide us just a little more insight on that, and the robust, leading-edge data collection regime that you mentioned in your last statement. Perhaps, if you have some time, you could comment on Bill C-69 and the impact on the mining industry.

Thank you.

[Brendan Marshall]

It costs two to two and a half times more to build the same base or precious metal mine off-grid in the north compared to the south. Seventy per cent of this northern cost premium is directly related to the regional infrastructure deficit.

To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridors initiative and the investing in Canada plan have been welcome, though the need is far greater than the funds allocated. MAC is aware the northern allocation or $400 million under the TTCI was oversubscribed by greater than five times. Also concerning is that the Canada Infrastructure Bank may not recognize remote and northern realities, potentially limiting the utility of this institution to address northern priorities.

Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation and climate change agendas, and the northern infrastructure deficit is the single largest barrier to mining development in the region. To address this, government should, as an immediate action, renew the TTCI in budget 2019, including the $400-million northern allocation, and as a long-term dedicated solution, establish a unique stand-alone Arctic infrastructure investment fund based on the Alaska Industrial Development and Export Authority that recognizes Arctic realities.

Let's move on to the second recommendation, which is to rebalance the relationship between Canada's railways and its customers. Trade begins at home, and Canada's ability to compete against other countries requires a reliable and cost-effective transportation system to get our goods to market. As the largest corporate customer group of Canada's class I railways, accounting for more than 50% of rail freight revenue in 2017, mining is a major stakeholder to transportation policy.

Canada's rail freight system operates primarily as a dual monopoly, shared by CN and CP, Canada's only class I railways. Communities and businesses are often captive, served by only one of these companies, which gives rail customers little or no competitive choice, and the railways market power over their customers. At core, this market power creates an imbalance between shippers and railways in the rail freight market, which contributes to the ongoing protracted relationship between shippers and railways.

The number of rail service-related consultations and legislative measures in recent years reflect the persisting challenges that rail customers face, as well as the failure of these legislative attempts to curtail railway market power. Most recently, Bill C-49, the Transportation Modernization Act, the third legislative attempt to address reoccurring rail freight service challenges in six years, was enacted. While the package of reforms went further than those of Minister Garneau's predecessors, like them, Bill C-49 fell short of rebalancing the position of railways and customers in the rail freight market.

On the backdrop of a costly and reputationally damaging supply chain disruption in winter 2018, the second such disruption in four years, MAC, in partnership with seven other resource shipping associations, advanced two recommendations to improve the bill. The first is agency own-motion powers, and the second is a shipper right to a costing assessment during the final offer arbitration process. One of those recommendations was watered down, and the second was rejected, and this despite the sober second thought of the Senate, twice over.

As of Friday of last week, I can report that none of the new bill's tools have been used since Bill C-49's enactment, despite their having been lauded by decision-makers as key solutions to the challenges that shippers face. Meanwhile, service challenges have been mounting in recent weeks, and shippers across the supply chain are growing increasingly concerned that costly and reputationally damaging supply chain disruption could occur again this winter, as occurred last.

[Ray Orb]

That's a good question. We've actually been working with the short line association and we have demonstrated that by taking several trucks off our highways and road systems and putting it on a rail car, we're actually reducing greenhouse gas emissions. We should actually be credited for that. We're hoping that the federal government takes it into account when they finally realize that this carbon tax is actually wrong.

I just wanted to mention that the short lines in Saskatchewan are an integral part of moving grain. We have more short-line railroads in Saskatchewan than there are in the rest of the country. They provide a valuable service. They often don't get good service, so we're looking at this legislation. Even though the short lines are regulated in Saskatchewan, we're hoping that the new Bill C-49 actually takes into account the carriers and makes them more accountable, because in the end it's mostly CP Rail that picks up the cars and takes them away.

[Ray Orb]

We are certainly hoping that's the case. I can tell you that since Bill C-49 was passed, the two major carriers, CN Rail and CP Rail, have been a lot more apt to sit down with organizations like ours. In fact, I'm scheduled to have a meeting with CP Rail next week in Saskatoon.

They have come forward with their plans. They've also come forward now with their winter plans, which obviously we're facing. I think they are being scrutinized a lot more. This year might actually put them to the test. Although it might not be the volume, we have other issues to deal with right off the bat, including the weather.

Thank you.

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

Do you think this shipping year would be a good benchmark to assess whether the changes to the Canada Transportation Act in Bill C-49 will have a meaningful impact for farmers and shippers?

[Ray Orb, President, Saskatchewan Association of Rural Municipalities]

Yes, I will. Thank you.

First of all, I'd like to thank the committee for allowing me to appear this morning. My name is Ray Orb, and I am the president of the Saskatchewan Association of Rural Municipalities, which is known as SARM. We were incorporated in 1905 and have been the voice of agriculture and rural Saskatchewan for over 100 years. We work on behalf of our members to identify solutions and challenges in rural Saskatchewan.

As an association, we are mandated to work in agriculture, which is an important sector in our province. Saskatchewan is a key producer of Canada's wheat, oats, flaxseed and barley, and we are proud to be home to many farms, cattle ranches and dairy operations.

Our agriculture industry relies on the ability to move product efficiently and cost-effectively. An adequate and efficient transportation system is imperative for producers to move their product across the province and across the country.

Saskatchewan, Canada and North America rely on the rural municipal primary weight infrastructure in Saskatchewan to connect to the provincial network to move goods and services in a reliable, timely and safe manner. Our province boasts the largest provincial road network in Canada. Provincial highways contribute 26,000 kilometres, while rural municipal roadways contribute 162,000 kilometres.

The Saskatchewan Ministry of Highways provides funding to SARM to manage a primary weight network grant-funding program for rural municipalities to maintain rural roads at a primary weight. These primary weight corridors enable the seamless transportation of goods and services throughout the province and the country, while protecting the aging provincial system. The program has proven to be very successful, as there are currently 6,500 kilometres of “clearing the path” primary weight corridors in the province.

We also rely on the rail system to ship grain and agricultural products, and SARM has been really vocal about the rail level of service since 2009.

More recently, we provided comments on Bill C-49. We supported the bill, as it provides legislation for increased data reporting. More data means that producers in the supply chain can make better decisions that are based on good information. We also believe that the federal railways should be required to produce plans that detail how they'll deal with demands resulting from the upcoming crop year.

We're pleased to see reciprocal penalties and the provision for informal dispute resolution services included in Bill C-49. It's important that disputes be resolved quickly so that producers aren't faced with additional penalties or delays.

It is also important that the Transportation Modernization Act and related regulations ensure that the Canadian Transportation Agency and Transport Canada have adequate mechanisms to keep railways accountable. SARM believes that the federal government needs the ability to act if it deems a railway's grain plan to be insufficient. Without adequate enforcement options, Bill C-49 would not bring about meaningful change.

Although rail transportation has primarily been an issue for grain producers in western Canada, the increase of oil by rail causes additional concerns. Thousands of barrels of oil on the track not only cause capacity issues for grain but also pose a threat to the environment.

Pipelines are an environmentally favourable alternative to road and rail transportation and should be used where possible to reduce the risks associated with moving dangerous goods by rail. Pipeline development will also take oil cars off the rail tracks and free up cars for the movement of grain.

My last comment is related to the important role that ports play in our rural economies. Since the port of Churchill stopped operations in 2016, SARM has been closely monitoring the situation and advocating for a solution. The port provided an important export point for producers, and its restoration would help move the grain backlog in the Prairies.

Last year, SARM had the opportunity to meet with officials from the port of Vancouver. We have seen first-hand some of the logistical issues and how the port authority hopes to bring about further efficiencies.

The rural landscape has changed over the course of the last century. Demands on infrastructure have increased and will continue to increase. The report “How to Feed the World in 2050” indicates that by that time the world's population will reach 9.1 billion. Food production must increase by 70%. Annual cereal production will need to reach three billion tonnes, and annual meat production will need to increase by over 200 million tonnes. It is imperative that we have a transportation system that enables producers in rural Saskatchewan to do their part in feeding the world.

On behalf of Saskatchewan's rural municipalities, I would like to thank the committee for the opportunity to lend our voice to this important conversation.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

You also mentioned the transportation problems. Earlier this year we had CN and CP Rail before the committee to explain the problems they are experiencing getting our crops to market. I'm from Vancouver Island. We can see the problems all the way down the line.

We have freighters parked in anchorages everywhere. Port infrastructure is simply not capable of handling what we want to do to export to the Asian market. The railways gave their assurances that they have a plan and that they're working on it, but all the subsequent witnesses who represented farm groups did not believe them. Now that we're half a year forward, is there anything that gives you hope from your point of view? Is there anything more we can do? I know we passed Bill C-49, but is there light on the horizon in this particular area?

[Greg Northey]

We very much supported that provision, but one thing we always have to keep in mind is that if the agency needs to investigate, it means it's too late. The failure has probably happened.

If they have the proper data, they can start to see when the supply chain starts to become an issue and they can maybe step in and smooth it out so it's not so bad, but we need to have that kind of insight. We need to have that information to know that this week, we're starting to see red flags around what's happening in the rail network and we need to do something. We need to be able to go to the railways and we need the rails to speak to the customers so they can start to plan: “Okay, we're going to have a problem in the next couple of months.” That did not happen last year.

If they need to investigate a catastrophe or a crisis, it's too late for us. We need to avoid the crisis in the first place. We need to be forward-thinking. We need to be thinking about how we prevent this. Data is a huge example of how we can do it. The U.S. has their data, but I think we can be much better in Canada. We can be much, much better. We don't have to look to them for an example of it. We can set our own regime now. Bill C-49 gave us the ability to do that.

[Joel Neuheimer]

I can start on this one. Thanks for the question.

Actually, this goes back to an ask that a number of the railway's customers made, going back to Bill C-49, which was for for the agency to go out and investigate these types of matters independently. Minister Garneau put some conditions on it. He made it conditional on his approving an investigation and reserving the right to impose certain criteria for how the investigation is conducted. What we think would be even better would be to give the watchdog the power to go out and investigate things that need investigation on its own, without these special limitations.

It's Transport Canada that sets transportation policy in Canada; there should be no fear that the agency is all of a sudden going to make policy. The agency's job is to go out and investigate situations when things are not working the way they're supposed to. I would very much appreciate having the agency act more independently in the scenarios that you're talking about, Mr. Aubin.

[Greg Northey]

So far in the grain year, service has been quite good from the railways, as you'd expect, because it's very good railroading weather. The crop has been a bit slow to come off. We've had some issues with weather and some stalls in harvest.

The railways are now meant to publish plans on how they plan to move the crop each year. It came out in Bill C-49. Their plans indicate that there is no increase in capacity. They haven't planned for an increase in capacity. When it's really going to matter for us is when we start to get into winter and start to see how they're able to respond and the kind of flexibility they have to be responsive to shippers' needs.

The investments may work, and we may have a great year—

[Greg Northey]

I can start.

On your last point, one of the items that came out of the process of Bill C-49 was that Transport Canada started a collaborative forward planning exercise. They worked through on the quantity supply chain table. They are trying to wrestle to the ground some of these points as a larger group, so that includes the railways and the shippers.

[Greg Northey]

Agriculture is a bit unique, because we have what's called the maximum revenue entitlement, the MRE. Essentially, it's an entitlement for the railways on the revenue they can make for moving grain. It guarantees them a 20% rate of return or whatever on grain, but prevents them from charging monopoly prices, because they have the entitlements.

Cost is still an issue, at least for our members. Containerized movement has been pulled from the maximum revenue entitlement. That's one of the changes made in Bill C-49. We have seen some increases in rates for moving containerized grain as a result, because it's not protected under the maximum revenue entitlement.

Service in general for agriculture will be the number one issue, as opposed to rates. In the event the MRE disappears, we—

[Joel Neuheimer]

Thanks so much for the question.

For us, costs and service are both concerns. We actually asked for the same thing that Michael outlined in his presentation to be in Bill C-49, but the amendments we were asking for did not come through.

I'll let you know that right now, in our operations across Canada, northern Alberta is one of the biggest pain points. They're having a lot of trouble moving stuff by rail from places like Edmonton to Winnipeg. It's been that way for a number of months now, and we're not even into the serious winter conditions yet. What's going to happen in January and February? That makes us extremely anxious about how bad it might be again this winter.

Prince Rupert is definitely an option. We have members who ship through Prince Rupert already. Of course, CN is the only one that's there. It would help us if both railways were using the port.

I think it is a bit of a game of who is going to move first. Are terminals going to build up there to bring in more traffic, or are the railways going to invest there first? We need somebody to show some leadership there and make a move so that we can—

[Joel Neuheimer, Vice-President, International Trade and Transportation, Forest Products Association of Canada]

Good afternoon, Madam Chair and members of the committee. Thanks very much for having me here on behalf of the members of the Forest Products Association of Canada, or FPAC.

FPAC is the voice of Canadian wood, pulp and paper producers nationally and internationally. The forest products industry generates $69 billion annually and contributes $21 billion to Canada's GDP. The industry is one of Canada's largest employers, operating in over 600 forest-dependent communities from coast to coast, and directly employing 230,000 Canadians across the country.

In 2017, our industry exported over $35 billion worth of goods to 180 countries. We heavily rely on Canada's supply chain to get our goods to market. We are the second-largest user of the rail system, transporting over 31 million tonnes by rail in 2017. We transport over 74.2 million tonnes by truck each year, which makes us one of the largest users of this system. Through ports, we ship approximately 31.2 million tonnes overseas.

The forest products industry is facing several challenges right now. Most importantly, the lack of reliable infrastructure to support our transportation system is estimated to cost our industry over $500 million a year.

Minister Garneau's 2030 transportation strategic plan is a step in the right direction, to help ensure that Canada has a long-term vision of what our transportation and infrastructure systems must look like. However, 2030 is fast approaching, and while some of the investments may well help in the future, forest products are still feeling the effects of the 2017-18 freight rail crisis, and we fear the same will happen this year. Months after the crisis, fulfillment levels are still low in our sector. With winter fast approaching, our members are concerned that they will have to shut down mills.

I would like to acknowledge the work that the Canadian railways have done in recent months to add more capacity to the system. Unfortunately, there is still great concern across Canada in our business that it will not be enough.

We need to revitalize the Pacific gateway initiative, and FPAC looks forward to seeing the benefits of the investments made through the trade corridors fund. FPAC also looks forward to the quick implementation of the comprehensive and progressive trans-Pacific partnership.

Canada needs to avoid taking sector-specific approaches to transportation usage. We know that Minister Garneau recently met with representatives of the grain and agriculture sector, and FPAC believes these types of meetings should be held with all sectors together.

With the implementation of Bill C-49, Canada has an opportunity to strengthen its legislation and regulations to make rail rates and service more competitive for railway customers.

FPAC hopes that with the new own-motion power granted to the Canadian Transportation Agency, or CTA, through Bill C-49, more investigations into rail issues will be done, with the support of Minister Garneau.

Rail, however, is not the only mode that currently has negative effects on the Canadian transportation system. For the past couple of years, Canada has faced and continues to face a severe truck driver shortage, which has caused the cost of this mode to rise dramatically. With the rail issue already prominent, the need for trucks is higher than ever, yet most times our members cannot get the service they need.

Federal and provincial governments need to do more to ease the truck driver shortage, for example via immigration and training. To help ease the truck driver shortage crisis in Canada and the U.S., FPAC recommends harmonizing weights and dimensions across Canada and eliminating cabotage rules.

In the final point of the supply chain, current congestion and bottlenecks at ports are increasing delivery times and costs for the forest products industry, specifically at places such as the port of Vancouver. Our second-largest market is China; therefore, the industry heavily relies on this port to get our product to Asia. Enhanced performance metrics, expanding B.C. ports and other opportunities along the B.C. coast, including the implementation of short-sea shipping where needed, will help with these challenges.

On dangerous goods, we need to maintain a risk-based approach.

FPAC also believes it is important for the federal government to provide a mandate for safety-sensitive workplaces, such as the transportation sector and ours, to be able to test employees in relation to the legalization of cannabis.

Finally, labour stoppages are an issue over which our members have to be extremely vigilant in order to prepare for delays and added costs. FPAC asks the government to include railways and ports as an essential service, ensuring that service will continue even during a strike.

In conclusion, we need to do more and have a better-defined vision of the infrastructure we need going forward, now and for the future.

Recently, the Minister of Innovation, Science and Economic Development Innovation, Navdeep Bains, announced a report called “Resources of the Future”. Within this report, it is recommended that Canada have a 50-year Canadian strategic infrastructure plan.

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

Thank you very much, committee, for the opportunity to speak to you today.

Pulse Canada is the national industry association that represents over 35,000 growers and 132 processors and exporters of peas, lentils, beans and chickpeas. Canada is the world's largest producer and exporter of peas and lentils, accounting for over one third of global pulse trade. Approximately 80% of Canadian pulse production is exported to over 100 markets, and the value of the industry's exports exceeded $3.5 billion in 2017.

The Canadian pulse industry has set ambitious growth targets that focus on the incremental use of 25% of production, so about two million tonnes, in new markets or for new uses by 2025. Referred to as “25 by 2025”, this target will seek to capture the significant volume opportunities for pulses that exist in the food industries around the world, particularly North America, western Europe and China. Capturing these markets will be essential if we are to retain our standing as a world-leading producer. The significant economic, employment and processing innovation benefits that the industry brings also rely on capturing these markets.

Improving supply chain efficiency and performance is a key pillar of the sector's long-term strategy, as effective transportation is a significant determinant of export competitiveness in global markets. As noted in the 2015 CTA review report, “In a world of massive and complex webs of interconnectedness, the quality of transportation and logistics systems may be the single greatest contributor to a country’s economic performance.”

The pulse and special crops sector is particularly sensitive to this sentiment, as we are the most multimodal grain crop in western Canada, with product moving in box cars, hopper cars, intermodal vans and marine containers. In fact, 40% of our exports through Vancouver are containerized. When supply chains fail and logistics, reliability and predictability disappear, as we saw this past winter and in 2013-14, transportation costs increase, suboptimal economic decisions become the norm, and stable, long-term growth opportunities with international customers become difficult.

According to the World Bank, Canada ranks 20th on the 2018 global logistics performance index, a tool that was created to help countries identify the challenges and opportunities they face in the performance on trade logistics. Canada has dropped eight spots since 2014. On key indicators such as quality of infrastructure, timeliness of shipments, and the ability to track and trace consignments, Canada falls out of the top 20 countries. There is clearly room for improvement for Canada, which demonstrates that this committee's study on the Canadian transportation and logistics strategy is both timely and essential. Improving transportation and logistics is a tremendous opportunity to improve competitiveness for our sector and the Canadian economy as a whole. If effective, the strategy can set Canada down the path to become a world leader in logistics performance and infrastructure excellence, and our goal should be to become a top performer on the World Bank logistics performance index.

As you've heard from several witnesses today, a data-driven approach for any strategy will be essential. For our sector, the logistics system required to get pulse from the field to international markets, to customers and the store shelves, has a wide array of challenges, not the least of which is how to ensure complete visibility in the performance of these complex supply chains. Within months, the regulatory process required by Bill C-49 will begin to identify the service and performance metrics to be collected on the freight rail supply chain.

By establishing the right outcomes for this study, the committee can help guide Transport Canada and all stakeholders to ensure that these new regulations place Canada at the forefront of digital data management and real-time supply chain visibility that supports the competitiveness of Canadian exporters. We have to move beyond reviews of the Canada Transportation Act every eight to 10 years and legislative interventions when the system is in crisis. To do that, we need a data-driven supply chain that improves logistics and guides infrastructure spending continuously. This is by far the best way to do this, as it supports both commercial interaction between supply chain players and legislative efforts from government.

I'll leave it there. Thanks.

[Michael O'Shaughnessy]

I just won't look at you, then.

Madam Chair, members of the committee and fellow witnesses, good afternoon, and thank you for inviting Teck to participate.

My name is Mike O'Shaughnessy, and I'm the director of logistics for Teck Resources, headquartered in Vancouver. Teck is here to address concerns over Canadian competitiveness in reaching export markets.

Teck is a Canadian diversified resource company that exports steelmaking coal, copper, zinc and energy. We employ nearly 8,000 people across the country. We are Canada's single-largest rail user, spending over $600 million annually. We're Canadian Pacific Railway's biggest customer, and a leading exporter to key markets, particularly Asia.

Over the last five years, Teck has exported over $20 billion in products from our Canadian operations to China, Japan, South Korea, India and other Pacific markets. With improved transportation and logistics infrastructure, Teck's export potential also improves, and that supports jobs for Canadians and generates economic activity where we operate.

I would now like to highlight additional steps to improve Canada's rail freight competitiveness and ensure the competitiveness of Pacific coast ports.

Our primary rail recommendation relates to shipper remedies and the need for a sufficient rail data regime that would empower the Canadian Transportation Agency to effectively deliver costing determinations under final offer arbitration. With the recent changes to the Canada Transportation Act, we understand that the agency's mandate requires it to request information in order to conduct costing determinations.

We recommend that the agency clearly confirm that it does in fact receive non-aggregated costing information, and that it does so without being impaired by any public body within the Government of Canada, the railways, or any other person.

Also, we have ongoing transparency concerns that the amended Canada Transportation Act does not compel the agency to disclose details around its costing model or information regarding its processes or methodology for regulatory costing. Simply put, there is no transparency on how the agency determines costs. This contrasts sharply with the regulatory system in the United States.

The U.S. Surface Transportation Board publishes details online respecting the uniform rail costing system, its system for determining railroad costs. We recommend that the government consider adopting a similar data transparency mechanism so that the Canadian Transportation Agency is required to make its costing model processes and methodologies publicly available.

Last, on rail issues, we remain concerned about whether railways are fulfilling their service obligations by taking into account the railway company and the shippers' operational requirements and restrictions. The language that became law under Bill C-49 does not reflect the reality that in connection with the service that a railway may offer, it is the railway that decides the resources it will provide. Those decisions include the purchasing of assets, the hiring of labour and the building of infrastructure. Any of those decisions could result in one or more restrictions. As those restrictions are determined unilaterally by the railway, it is not appropriate that they be used as a goalpost in an agency determination. As such, we recommend making the restrictions themselves subject to review.

The second area I will highlight relates to Canada's support for infrastructure competitiveness. Similar to rail monopolies in Canada, I have serious concerns about the non-competitive business environment of Canadian ports. On Canada's Pacific coast, there are only two publicly accessible major export points for steelmaking coal: Westshore Terminals, located here, and the federally owned Ridley Terminals, in Prince Rupert.

With the potential divestiture of Ridley Terminals, we are concerned about the possibility that both Pacific coast terminals would be owned or operated by a single entity. If both Pacific coast terminals were to fall into the same hands, our cost competitiveness, service levels and reputation would erode even further. We recommend a sale process that is fair, competitive and transparent, and that results in reasonable rates, service levels and open access.

I would like to thank the committee once again for the opportunity to appear before you today and for undertaking this important study. Given the limited time for my remarks, I invite you to read Teck's written brief, which outlines our position in much greater detail.

Thank you. I look forward to the questions.

[Andy Gibbons]

There's a big educational component about ultra low-cost carriers, too, because it is new to Canada. It is something the government sought in Bill C-49. The government sought to bring in foreign investors to fill that market need. We have filled that market need. We'll just leave that to the side.

Swoop is not integrated with the WestJet network. It is point to point. It's a separate reservation system. You don't buy a Swoop ticket from Abbotsford to Hamilton and then connect on to the WestJet mainline to Halifax.

There was an experience of another Canadian carrier around the new carrier they created, so I think some lessons were learned by us there, but it is a very precise, very specific model, and it's new to Canada.

[Andy Gibbons]

That's a very good question. There are a few different parts there.

With respect to security funding, we have always advocated that the money collected from the air travellers security charge be directly allocated to screening services at Canada's airports. That doesn't currently happen. That money does go to other places. The vast majority does go to screening. I don't want to give the wrong impression, but there is an element that does not. We have requested that it be directly tied, given that it is the user-pay model.

On the issue of cost recovery for CATSA services, there were two elements in Bill C-49. One allowed larger airports to top up, and the other allowed smaller airports to basically purchase those services. Until we fix the element that I discussed first, we don't like that trend line. If there are services the government provides to other sectors that are from the public purse, the trend line of cost recovery is a concerning one, and it should be particularly concerning when it comes to regional travel.

Your third part was about regional travel in Quebec. That's been challenging for us. We recently announced that we were ceasing service between Montreal and Quebec City. That is not typical for our company. Typically, when we launch regional service, the fares come down up to 50% and the overall market stimulates up to 70%. That has been true in most of the country. It was not true for that route. We also discontinued another one. The expansion there did not go so well. We never want to do that, but it is a very challenging market for our company.

[James Given]

When you look at the differences, the Great Lakes are the greatest difference. It's the confined waters, the spaces that we operate in, and then if you look at the Arctic, it's the harsh conditions that our seafarers would work in there. The United States is different in that they have the Jones Act, which is the gold standard in cabotage.

In Canada now, with our cabotage regime, and coming through some of the issues with Bill C-49 and making sure that we have everything in place to maintain our cabotage, we've launched an initiative of over $2 million to train our seafarers to make sure that they are the best in the world and that they operate within the confined waters of Canada to the best of their ability.

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

Thank you, Madam Chair.

I have a few questions for Mr. Hamilton.

Since the passage of Bill C-49, port authorities can receive funding from the Bank of Canada, but for projects over $100 million, if my memory serves me well. I have two questions about this.

Is funding from the Canada Infrastructure Bank a good approach for ports?

Isn't there a risk of a two-tier system? Not all ports are of the same importance or budget. Some can fund projects worth more than $100 million, but others have smaller, but equally important projects.

[Sandra LaFortune]

I'll begin by making a few opening remarks. In the time remaining, we all would be pleased to answer any questions you may have. I should note as well that we have provided four background documents, as per your request, to support your study.

Minister Garneau's transportation 2030 vision is a good starting point for our discussion. With transportation 2030, the minister is delivering on his commitment to create a safe, secure, green, innovative and integrated transportation system that supports trade and economic growth, a cleaner environment and the well-being of Canadians and their families. Transportation 2030 sets out the government's strategic plan for the future of transportation in Canada and is a reflection of what we heard directly from Canadians during extensive cross-Canada consultations.

In moving forward with this strategic plan, we are seeking to identify opportunities to enhance the traveller experience; remain vigilant to our fundamental responsibility to ensure a safe and secure transportation system; use innovative technologies to reduce the system's environmental impacts and build the transportation system of the future; protect our waterways, coasts and northern areas and build our reputation as a world-leading maritime and Arctic nation; and ensure that the transportation system enables Canada's trade and economic objectives. You'll note in the background information circulated that these goals align with the five core themes of transportation 2030.

The government is taking action on a number of fronts to help bring the transportation 2030 vision to fruition. For example, in May 2018, the Transportation Modernization Act—formerly Bill C-49—was approved by Parliament, and the implementation of initiatives like the oceans protection plan and the port modernization review continues. Together, these and related initiatives aim to address the needs for the future of transportation in Canada. In the context of our appearance before you today, we know that these needs include cost-effective, reliable and timely transportation access to global markets so as to enhance our trade competitiveness and ultimately grow Canada's economy.

Making strategic and cost-shared investments in trade-related transportation infrastructure has been central in our efforts to achieve this goal over the last 10 years. A key distinction of Canada's approach, which has since been emulated by other countries, is that it is multimodal and based on systems rather than on the performance or capacity of individual modes of transportation separately.

This approach mirrors the way in which businesses approach the physical movement of imports and exports from their starting points to their ultimate destinations. It also recognizes that changes or improvements at one point within our integrated transportation network can have far-reaching impacts on the performance and capacity of the system overall.

Being strategic, we aim to align our investments to improve access to priority and high-growth markets. The background information concerning the Asia-Pacific gateway and corridor transportation infrastructure fund highlights some of the progress we have achieved in western Canada over the last decade. The update on the trade and transportation corridors initiative, or the TTCI, outlines how we are building on our best practices and lessons learned over the past decade to address the needs for the future of the trade-related transportation system in Canada.

Rather than repeat all the details included in the TTCI reference document that we prepared, it may be more useful to briefly provide you with a sense of where we are today. In the context of the national trade corridors fund, which is the core of the trade and transportation corridors initiative, Minister Garneau and the Government of Canada have so far announced federal investments of nearly $760 million in trade and transportation infrastructure projects across the country. These are cost-shared with other levels of government and the private sector.

The reference document provides examples of projects that support import and export flows with established and high-growth markets, recognize the need to strengthen the climate resilience of transportation infrastructure and support the unique transportation needs of Canada's territories, support safety and improved traffic flow for both cargo and residents—particularly around Canada's largest ports—and are based on collaboration with and among infrastructure owners, authorities and other levels of government to help maximize the scale, scope and impact of our investments.

While collaboration with stakeholders provides valuable insight into where public and private infrastructure needs or bottlenecks exist, Transport Canada has also invested significantly to establish an objective evidence base to help inform and quantify trade-related transportation infrastructure issues. This past year, the department, in collaboration with Statistics Canada, established the Canadian centre on transportation data, an open portal for multimodal transportation data and performance measures. The trade and transportation corridors initiative background document provides more details on future plans in this area.

Innovation and new technologies will continue to shape transportation infrastructure needs and uses. Within the context of the TTCI, Transport Canada is undertaking targeted actions in the areas of connected and automated vehicles, and unmanned aerial vehicles or remotely piloted aircraft systems. A central goal of this work is to ensure their safe deployment and use. In the context of transportation infrastructure, for example, future uses could include long-range infrastructure inspections and, over the long term, perhaps even carrying cargo and passengers. From a road transportation perspective, the uses of connected and automated vehicles are both promising and likely disruptive.

I will conclude my remarks at this point. We would be pleased to respond to any questions you may have, and we look forward to a more interactive discussion.

Thank you.

Impact Assessment Act

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Madam Speaker, Bill C-69, in front of us today, has a lot of different changes to current acts of Parliament, but also introduces new acts of Parliament. While I support one of the principles in the bill, which is the “one project, one assessment” process for major natural resource projects, there are too many problems with this bill for me to support it.

In particular, I want to focus on the new impact assessment act that the bill creates. First and foremost, the bill will not streamline, and make quicker, assessments for projects designated to be included in the project list. While the government says that the proposed impact assessment act would reduce the current legislated timelines for reviewing projects from 365 days to a maximum of 300 days for assessments led by the new review agency, and from 720 days to a maximum of 600 days for assessments led by a review panel, it is failing to acknowledge that while these timelines are shorter, the new legislation also introduces a planning phase ahead of an assessment led by either the review agency or the review panel. That planning phase can last up to 180 days.

In fact, this legislation will actually increase the amount of time that it takes for major natural resource projects to be reviewed under a federal environmental assessment. Furthermore, while the timelines put in place for the actual impact assessment are shorter, the timelines in the current legislation in front of the House can be extended by the Minister of Environment and by the cabinet, repeatedly.

There is nothing in this legislation to suggest that the process by which we review proposed projects will be shorter, in fact it suggests that it is actually going to be longer. The legislation in front of us will not actually lead to more efficient and less costly assessments for companies looking to invest in Canada's natural resource sector. In fact, the evidence in the bill is that it is going to be much more expensive for companies to make these applications, because the government has proposed to substantially expand the number of criteria that the review agency or review panel has to take into consideration when it is assessing a project. It does not just have to take into account environmental factors. It now also has to take into account health, social, and economic impacts, as well as impacts on other issues, and these impacts over the long term.

When we take into account this vastly expanded criteria and that it is vastly expanded over the long term, it is clear that companies are going to have to spend a lot more money preparing for these applications and working through the application process.

Proposed subsection 22 of the impact assessment act lists more than 20 factors that have to be considered in assessing the impact of a designated project. For example, there is a reference to sustainability and to the intersection of sex and gender with other identity factors. These are just some of the added criteria that the government has added to the process, which is just going to increase the cost and complexity for proponents. It is not only going to be a much longer process for proponents to go through; it is also going to be a much costlier process.

This is a big problem, because we have a problem in Canada with attracting, not just domestic but foreign investment for natural resource projects. In fact, Statistics Canada recently, this past spring, highlighted that there has been the biggest drop in foreign direct investment into this country in eight years. Last year saw the deepest plunge in foreign investment in this country since the deep, dark days of 2010, when we were just coming out of the recession of 2009 caused by the global financial crisis of 2008.

We have seen a massive plunge in foreign direct investment, a massive drop in investors willing to invest in Canadian companies. In fact, last year, for the second year in a row, we saw more foreign selling of Canadian companies than purchasing of Canadian companies. This has led to a drop in investments, particularly in the oil sector, with the commensurate drop in jobs and growth.

However, there is another problem with the bill that I want to highlight, which has to do with the designated project list. In other words, there is a problem in how certain projects get designated for an environmental assessment and how other projects do not. It remains to be seen with the proposed legislation whether or not the government will get it right in regulation.

Earlier this year, the government announced that it was going to undertake consultations with a view to help revise the regulations concerning the designated projects list. The Liberals said they would be coming forward with new regulations under the proposed act, and I hope they read the Hansard transcript tonight of the debates here in the House of Commons to ensure that our input is incorporated if the bill does pass in these new regulations.

The problem is one of inequity and unfairness from a whole range of perspectives. If a mine is proposed in western Canada, let us say in Alberta, under both the pre-2012 rules and the current 2012 rules, and potentially under the proposed legislation, it would undergo a federal environmental assessment. However, if that same mine was proposed in southern Ontario, mines that we often call “gravel pits” or “quarries”, it would not undergo a federal environmental assessment.

I will give members an example of this. In 2011, a mega-quarry was proposed in southern Ontario by an American company that had acquired over 2,500 acres of prime farmland in Dufferin County. That American company had acquired the equivalent of 10 square kilometres of land to build an open pit mine. Under the pre-2012 rules and the 2012 rules, and potentially under this proposed legislation, the federal government said that it did not require a federal environmental assessment, yet if that same 10 square kilometre mine was proposed in Alberta, let us say an open pit bitumen mine, a federal environmental assessment most certainly would have been required. This is an example of the unfairness of the current and potentially the proposed system the federal government has.

If one builds a mine to extract iron ore or bitumen in western Canada, one would undergo a federal environmental assessment, but if the same mine is proposed in southern Ontario, then do not worry, the government will turn a blind eye and not have it undergo that federal environmental assessment. Therefore, it is not just treating one sector of the economy different from another, the oil and gas sector, or the iron ore sector compared with the aggregate sector, but it is also treating one region of the country differently from another, and that is not fair. I hope that the government, in undertaking these consultations, takes that into account.

It is also not fair to the environment when a 10 square kilometre open pit mega-quarry is proposed for southern Ontario, which would have plunged 200 feet deep and pumped 600 million litres of fresh water out of the pit each and every day. It should undergo the same federal environmental assessment that a mine of similar size would undergo in western Canada. It should undergo that, because in southern Ontario we have the most dense biosphere in the entire country. There is all the more need to protect this dense biosphere, which is under greater threat than any other part of the country largely due to the growing urban populations we see in the Montreal, Quebec City, Ottawa, Windsor, and Toronto corridor.

I hope the government's yet to be created project list, whether it is based on the current legislation or the proposed legislation, treats all sectors of the economy and all regions of the country fairly, and I hope the department is incorporating this input as it comes forward with new regulations.

There is yet another problem with the proposed legislation before the House, and it plays into a broader pattern of the government, and that is of political interference. As the member for St. Albert—Edmonton just pointed out, the proposed legislation would allow the minister a veto power over natural resource project applications. This is unprecedented in this country. Until the Liberal government came to power, not a single natural resource project had been rejected or approved by the federal cabinet before the federal environmental assessment process had been completed, and not a single federal environmental assessment process had been overruled by federal cabinet.

In other words, up until this government, the federal cabinet accepted every single recommendation coming out of a federal environmental review process over the many decades that it was in place. The current government's rejection of the northern gateway pipeline was the first time the federal cabinet had stopped the process for the review of a major natural resource project before allowing that process to be completed and before allowing the cabinet to accept fully the recommendations of that process.

Here, in this legislation, we see a repeat of that pattern. They are proposing to give the minister a veto power. Before an impact assessment can begin, the minister will have the power not to conduct an assessment if the minister believes the proposed project would cause unacceptable effects. That is so broad a criteria that a person could drive a Mack truck through that. There again we see the politicization of processes that were once arm's length, quasi-judicial, and left to the professional public service.

Another example of this politicization of what was once performed by the professional public service, by quasi-judicial entities is Bill C-49. Bill C-49 gives the Minister of Transport a political veto over a review of joint ventures by an airline. Up to Bill C-49, and for many years, any airline that wanted to enter into a joint venture had to undergo a review by one of the premier law enforcement agencies in the world, the Competition Bureau, to ensure that there were no anti-competitive results from a joint venture. In fact, when Air Canada proposed a joint venture with United Airlines some years ago, the Competition Bureau said no to the original proposal for that joint venture and said they had to pull out of that joint venture a number of cross-border routes because they would be deleterious to competition, and because it would increase prices for consumers and for businesses across Canada.

What the current government has done through Bill C-49, which it rammed through the House and Senate, is it has given the Minister of Transport the ability to veto that process through a broad definition of public interest to bypass the Competition Bureau's review of a joint venture, and to rubber-stamp a joint venture in the interests of the airline and against the competition interests of consumers in this country. With the recent passage of Bill C-49, Air Canada has announced a joint venture with Air China. I do not think that is any coincidence.

Thus, there are just a few examples of how the government is politicizing the process for law enforcement of our competition laws for the review of major natural resource projects that no previous government has ever done.

Finally, I want to critique the Liberal government's general approach to environmental issues. The Liberals have created a climate of uncertainty. On pipeline approvals, they have created uncertainty. That is why Kinder Morgan has announced that it is pulling out of Canada and why it sold its assets to the Government of Canada. They have created a climate of uncertainty in the business community. That is why, as I previously mentioned, Statistics Canada, this spring, reported that foreign investment into Canada plunged last year to its lowest level in eight years. There has been an exodus of capital from the country's oil and gas sector. Statistics Canada reports that capital flows dropped for a second year in a row last year, and are down by more than half since 2015. Net foreign purchases by foreign businesses of Canadian businesses are now less than sales by those foreign businesses, meaning that foreign companies sold more Canadian businesses than they bought.

On climate change, they have created a great deal of uncertainty.

The Liberals came with big fanfare with their price on carbon, but they have only priced it out to $50 per tonne to 2022. They have not announced what happens after 2022. We are four short years away from 2022, and businesses and consumers need the certainty of what happens after 2022.

Furthermore, the Liberals have created uncertainty because $50 per tonne does not get us to our Paris accord targets. In fact, last autumn the Auditor General came forward with a report saying that Canada will not meet its Paris accord targets of a 30% reduction in greenhouse gas emissions from 2005 levels by 2030 with the $50-per-tonne target. He estimated that we are some 45 megatonnes short of the target.

The Liberals have created uncertainty with their climate change policy because they have been inconsistent on climate change policy. They are inconsistent with how they treat one sector of the economy versus another. For example, they demand that projects in the oil and gas sector take into account both upstream and downstream emissions, while not requiring projects in other sectors of the economy to do the same.

They are inconsistent with climate change policy in the way they treat one region of the country versus another. The Auditor General's report from a week ago, report 4, highlights the inconsistency in the way they treat central Canadians versus the way they treat westerners.

For example, the Liberals tell western Canadian oil and gas producers that climate change impacts need to be part of the approval process of any major natural resource project, and yet they turn around and one of the first decisions they make as a government is to waive the tolls on the new federal bridge in Montreal, a $4-billion-plus bridge. The Auditor General reported, in report 4 last week, that waiving the tolls will result in a 20% increase in vehicular traffic over that bridge, from 50 million to 60 million cars and trucks a year, an additional 10 million vehicles crossing that bridge every year, with the attendant greenhouse gases and pollution that this entails.

The Liberals tell companies and Canadians on one side of the country that they have to take into account greenhouse gas emissions when they propose a new project in the oil and gas sector, but when the government builds a brand new federal bridge in Montreal for $4 billion-plus, it is not going to take into account those greenhouse gas emissions. In fact, it will waive the tolls, which is going to lead to a 20% jump in traffic, with the attendant greenhouse gas emissions that this entails.

Finally, the Liberals have created a climate of uncertainty by their failure to realize that our income taxes are too high. The government talks a good game about the environment and the economy, but the facts speak otherwise. They blew a once-in-a-lifetime opportunity to reduce corporate and personal income taxes. They failed to seize the opportunity of using the revenues generated by the price of carbon to drive down our high corporate and personal income taxes. They also failed to seize the opportunity to reform our income tax system to reduce its complexity and its distortive nature.

Our system was reformed in 1971 by the government of Pierre Trudeau. It was reformed again in 1986 by the government of Brian Mulroney. It has been over 30 years since we have had any significant income tax reform to our personal income tax system or our corporate income tax system, and the Liberals blew the chance to do it, even though they promised to take a look at tax reform in their very first budget.

The government talks a good game on the environment and the economy, but the facts say otherwise. It is a story of a missed opportunity, and that is why I cannot support this bill.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I am pleased to rise to speak to Bill C-69. I want to take a moment to talk specifically about some of the deficiencies of the bill. Then I would like to talk a bit more about a general pattern of behaviour that the bill fits into, which is problematic in and of itself.

With respect to the bill, Canadians were upset with the previous government and its approach to environmental assessment, if we can call it that. The previous government really gutted the existing environmental assessment process. The key feature of that gutting in my opinion and the opinion of many Canadians across the country was that the Harper government essentially made the final approval of large natural resource projects a political decision at the cabinet table. It became a decision that was not inherently tied to evidence, to science, to predictable impacts with respect to the effect of these projects on the climate. It was not tied to the rights of indigenous peoples to have a say over what happens on their own land. It was simply a political decision to be taken by cabinet. Therefore, one would think that a party that ran against the Harper Conservatives, in part because the latter had gutted environmental assessments and the Liberals committed to Canadians in the election that they would fix that, would have to address the issue of that approval becoming essentially just a prerogative of the government to make according to its own reasons.

The problem with Bill C-69 is that after waiting well over two years for the government to present its fix to the Harper approach to approving these projects, the bill does not in fact do that. It maintains the absolute prerogative of the government to plow ahead, irrespective of the facts, the science on a particular project, or the views of many first nations that may be affected by a particular project. To me, that is a clear and obvious deficiency in the legislation. It does not meet the commitment the Liberals made in the last election to Canadians who are really concerned about this issue. One of the clearest and most obvious things those Canadians wanted was to try to depoliticize the approval process for many of these projects and to have decisions based on science and evidence. It was not to allow the government a choice as to whether or not to go along with the science and the evidence, but to bake it into the process so that the government would not have a choice other than make decisions based on that evidence, or to have an independent body make that decision based on that evidence and science. That is a clear deficiency with the bill, and one that is very disappointing.

With regard to the rights of indigenous people being respected in the approval of these kinds of projects, my colleague, the member for Edmonton Strathcona, presented a number of amendments that would not have put that commitment in the preamble alone, which is what the government ultimately decided to do. The government's decision to put that commitment in the preamble gives us a measure of how strong its commitment to the United Nations Declaration on the Rights of Indigenous Peoples really is, because the preamble is non-binding. That, of course, is the kind of commitment that Liberals seem to prefer, the non-binding ones. That was evidenced in their rejection of a number of amendments that would have given UNDRIP real force and effect in the environmental review process. Putting that commitment in the preamble does not give UNDRIP real effect. They are nice words, but they do not get the job done when we have a government that is not interested in respecting the rights of indigenous people. What indigenous people needed was something with the force of law that they could take to court when the government trampled on their rights. The Liberals opted not to do that, and it really does not do it a service to say that it was a missed opportunity.

It is wrong for them not to have done that. It is wrong in principle, but it is also wrong in light of the commitment they just made in voting in support of Bill C-262 last week, which is essentially all about trying to implement UNDRIP within Canadian law. It is wrong, according to the claims of the Prime Minister, who often says that the nation-to-nation relationship is one of the most important relationships.

In light of all those things, it was clearly wrong for the government to do that.

It is part of a theme on a number of files within the government, where the attitude is that we should just trust the government. The government admits there is a lot of discretion, but it says discretion allows it to do the right thing, and it wants to do the right thing. It does not think it has to put the right thing in law or require itself to do the right thing, because it really wants to do it, so we should just take its word for it. That is what is happening with Bill C-69. That is what it means to maintain ministerial prerogative to decide on a project regardless of the evidence.

We heard the minister say something to that effect in the debate on time allocation earlier, when she said that the government cares about science and evidence and therefore it does not need to put a requirement in the law to make decisions based on science and evidence. She said that if we wait and look at the decisions the government makes, we will see, in hindsight, that they were based on science and evidence.

I do not think that this is what Canadians were asking for when they elected a government that said it was going to create a new process based on science and evidence. It is a bad way of making law. It means that a future government that comes in will not be required to do that, just as the current government is not.

Frankly, I do not think the Liberals are really committed, in many cases, to evidence-based decision-making. They would not have bought a 65-year-old leaky pipeline for far more than it is worth if they were actually serious about making information-based decisions. We could go down that road, but even if we do not, it is very clear that if one's commitment is to build a good process, this process should not rely on the goodwill of the government of the day. It should be a process that requires the government of the day to do the right thing, notwithstanding who is in power. This bill obviously fails that test.

We saw something similar with Bill C-49 with respect to voice and video recording devices in locomotives. The government said that we need not worry because it has no interest in invading the privacy rights of workers, and that it would look after it, but without putting it into law; it would just put it in regulations. The government asked us, when voting on the legislation, to trust that it would do the right thing later in regulation.

Never mind the fact that even if the current government does the right thing, and we have not seen that yet, it is still up to some future government to simply change the regulations by order in council without coming to Parliament, because it is not in the law. I do not think the government has done any great favour to workers in that industry by setting up a law that could be so easily abused.

We have seen a similar thing from the government when it comes to approving funding for all its new budget initiatives for 2018-19. It is asking for approval of over $7 billion up front. Department officials and ministers have been very clear in committee that they do not actually have a plan for the money yet. They do not know what they are going to do with that money yet. They have not designed the program, and it has not been to the Treasury Board. They do not know how many people they are going to hire. They do not know whether they will build a building, rent an office, or use existing space. They do not know if they will be travelling across the country. The government does not know what it is going to be spending the money on, but its answer is clear: We should just trust it that things are going to work out and that everything will be okay.

Canadians are looking to the government for leadership on a number of issues, whether it be fiscal responsibility, or being open and accountable, or the very important issues that Bill C-69 is at least nominally meant to address. I have given some indication that I am not convinced it actually addresses those issues.

Regardless of the issue, when Canadians are looking for leadership, they are looking for legislation that holds the government to account. If the government of the day is sincere in giving its word, it should not mind being held to a higher standard, allowing Canadians to test that in court if they have to. Hopefully it will not come to that and the government will keep its word, which remains to be seen.

Canadians deserve to have the tools to hold the government to its word. They also deserve to have future governments bound by those things. At the very least, if a future government wants to change that, it should have to come to Parliament to make the case to Canada's elected representatives, instead of being able to do it fly-by-night through regulation. That is the problem with Bill C-69.

Rail Transportation

[Kamal Khera, Liberal, Brampton West, ON]

Mr. Speaker, let me tell the hon. member that we get it. On this side of the House, our government listened to Canadian farmers. Our government continues to support Canadian farmers through Bill C-49, which my hon. colleague voted against.

We have taken action for our farmers and for all rail users. The new and updated measures provide shippers across the country with tools that will lead to a more effective, reliable, and transparent rail transportation system for the benefit of all users. These changes are not just about today and tomorrow. They are about a long-term vision for Canada, one that moves our goods to market effectively and efficiently to support jobs, trade, and economic growth.

[Kamal Khera, Liberal, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, our government recognizes the rail transportation challenges faced this year by farmers and shippers of multiple commodities, including grain. That is why we took action to ensure that railways had a plan in place to recover their service levels and to get grain flowing to market. We wrote to the railways, requesting their plans for restoring service levels, and we have since sustained improvements in the system. We continue to monitor rail performance to ensure that service improvements continue and are sustained over the long term and that the farmers and shippers are able to get their goods to their consumers.

Last year we introduced Bill C-49, because our government is taking action to resolve systematic challenges, not just for this year but for the decades to come. Unlike the Band-Aid solution put in place by the Harper Conservatives, which had an expiry date, we put in place long-term solutions to address challenges facing the freight-rail transportation system and its users. We held extensive consultation with stakeholders from a variety of industries across Canada, including the grain sector. We listened to stakeholders, we heard their concerns, and we came up with a bill that responds to the needs of rail system users across the country. The new and updated measures in Bill C-49 would provide important tools for the grain sector and rail shippers. These include the ability to apply penalties to railway companies who do not fulfill their engagements. The bill also introduces long-haul interswitching, a measure that would increase access to rail services, increase competition among rail companies, and provide more shipping options for grain farmers.

With all these good measures that would directly help our grain farmers, I was disappointed to see that the Harper Conservatives, including the member opposite, voted against this bill. I hope that in future they will put aside their partisan games and work with us to better our transportation system for all our farmers.

Report Stage

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, here we are in the House, on Wednesday, May 30, at 8:45. I should mention that that is 8:45 p.m., for the many residents of Beauport—Limoilou who I am sure are tuning in. To all my constituents, good evening.

We are debating this evening because the Liberal government tabled very few significant government bills over the winter. Instead, they tabled an astounding number of private members' bills on things like swallows' day and beauty month. Sometimes my colleagues and I can hardly help laughing at this pile of utterly trivial bills. I also think that this process of randomly selecting the members who get to table bills is a bit past its prime. Maybe it should be reviewed. At the same time, I understand that it is up to each member to decide what kind of bill is important to him or her.

The reason we have had to sit until midnight for two days now is that, as my colleague from Perth—Wellington said, the government has been acting like a typical university student over the past three months. That comparison is a bit ridiculous, but it is true. The government is behaving like those students who wait until the last minute to do their assignments and are still working on them at 3 a.m. the day before they are due because they were too busy partying all semester. Members know what I mean, even though that paints a rather stereotypical picture of students; most of them do not do things like that.

In short, we have a government that, at the end of the session, has realized that time is running out and that it only has three weeks left to pass some of its legislative measures, some of which are rather lengthy bills that are key to the government's legislative agenda. One has to wonder about that.

The Liberals believe these bills to be important. However, because of their lack of responsibility over the past three months, we were unable to debate these major bills that will make significant changes to our society. Take for example, Bill C-76, which has to do with the electoral reforms that the Liberals want to make to the voting system, the way we vote, protection of the vote, and identification. There is also Bill C-49 on transportation in Canada, a very lengthy bill that we have not had time to examine properly.

Today we are debating Bill C-57 on sustainable development. This is an important topic, but for the past three years I have been getting sick and tired of seeing the Liberal government act as though it has a monopoly on environmental righteousness. I searched online to get an accurate picture of the record of Mr. Harper's Conservative government from 2006 to 2015, and I came across some fascinating results. I want to share this information very honestly with the House and my Liberal colleagues so that they understand that even though we did not talk incessantly about the environment, we achieved some excellent concrete results.

I want to read a quote from www.mediaterre.org, a perfectly legitimate site:

Stephen Harper's Canadian government released its 2007 budget on March 19. The budget allocated $4.5 billion in new investments to some 20 environmental projects. These measures include a $2,000 rebate for all electronic-vehicle or alternative-fuel purchases, and the creation of a $1.5-billion EcoTrust program to help provinces reduce greenhouse gas emissions.

The Liberals often criticize us for talking about the environment, but we did take action. For example, we set targets. We proposed reducing emissions to 30% below 2005 levels by 2030. The Liberals even retained these same targets as part of the Paris agreement.

They said we had targets, but no plan. That is not true. Not only did we have the $1.5-billion ecotrust program, but we also had a plan that involved federal co-operation.

Allow me to quote the premier of Quebec at the time, Jean Charest, who was praising the plan that was going to help Quebec—his province, my province—meet its greenhouse gas emissions targets. Jean Charest and Mr. Harper issued a joint press release.

Mr. Harper said, “Canada's New Government is investing to protect Canadians from the consequences of climate change, air pollution and greenhouse gas emissions.” He was already recognizing it in 2007.

Mr. Charest said, “In June 2006, our government adopted its plan to combat climate change. This plan has been hailed as one of the finest in North America. With Ottawa contributing financially to this Quebec initiative, we will be able to achieve our objectives.”

It was Mr. Charest who said that in 2007, at a press conference with the prime minister.

I will continue to read the joint press release from the two governments, “As a result of this federal funding, the Government of Quebec has indicated that it will be able to reduce greenhouse gas emissions by 13.8 million tonnes of carbon dioxide or equivalent below its anticipated 2012 level.”

What is more, the $1.5-billion ecotrust that was supposed to be allocated and was allocated to every province provided $339 million to Quebec alone. That was going to allow Quebec to engage in the following: investments to improve access to new technologies for the trucking sector; a program to develop renewable energy sources in rural regions; a pilot plant for production of cellulosic ethanol; promotion of geothermal heat pumps in the residential sector; support for technological research and innovation for the reduction and sequestration of greenhouse gases. This is probably one of those programs that is helping us make our oil sands increasingly environmentally friendly by allowing us to capture the carbon that comes from converting the sands to oil. There are also measures for the capture of biogas from landfill sites, for waste treatment and energy recovery, and finally for Canada ecotrust.

I invite our Liberal colleagues to listen to what I am going to say. In 2007, Steven Guilbeault of Greenpeace said the following: “We are pleased to see that after negotiating for more than a year, Quebec has finally obtained the money it needs to move towards meeting the Kyoto targets.”

Who made it possible for Quebec to move towards meeting its Kyoto objectives? It was the Harper government, a Conservative government, which established the $1.5-billion ecotrust fund in 2007 with monies from the budget surplus.

Not only did we have a plan to meet the targets we proposed, but this was also a plan that could only be implemented if the provinces agreed to the targets. It was a plan that was funded through the budget surplus, that did not further tax Canadians, and that provided money directly, without any conditions, other than the fundamental requirement that it had to help reduce climate change, which was philosophically important. Any and all measures taken to reach that goal were left entirely to the discretion of the provinces.

Mr. Harper, like a good Conservative who supported decentralization and like a true federalist leader, said that he was giving $400 million to each province so it could move forward with its plan.

By 2015, after 10 years of Conservative government, the country had not only weathered the worst economic crisis, the worst recession in history since the 1930s, but it had also reduced greenhouse gas emissions by 2% and increased the gross domestic product for all Canadians while lopping three points off the GST and lowering income taxes for families with two children by an average of $2,000 per year.

If that is not co-operative federalism, if those are not real results, if that is not a concrete environmental plan, then I do not know what is. Add to that the fact that we achieved royal assent for no less than 25 to 35 bills every session.

In contrast, during this session, in between being forced to grapple with scandals involving the carbon tax, illegal border crossings, and the Trans Mountain project, this government has barely managed to come up with four genuinely important bills.

By contrast, we expanded parks and protected Canada's wetlands. Our environmental record is exceptional.

Furthermore, we allowed debate. For example, we debated Bill C-23 on electoral reform for four days. The Liberals' electoral reform was debated for two hours.

I am sad, but I am happy to debate until midnight because debating is my passion.

[Michael Keenan]

I would add one small comment before I turn it over to my colleague from the Canadian Transportation Agency.

Very shortly after Bill C-49 received royal assent, Minister Garneau and the CEO of the Canadian Transportation Agency launched consultations on the details for the regulations that are now possible because of the legislative framework put in the bill.

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

Thank you, Madam Chair.

I'll try to be very quick, because I know my time is brief.

On Monday, May 28, the Canadian Transportation Agency's CEO, Mr. Streiner, announced that a comprehensive consultation process would start on the new passenger bill of rights.

After the Emerson report, after consultations on those consultations, the consultation that would have taken place before Bill C-49 was introduced, after this committee reviewed Bill C-49, after the Senate reviewed Bill C-49 and gave it the same scrutiny, and after the attempts by both members on this side of the table and in the Senate to amend Bill C-49 to put some sort of frame to the bill of rights, we're now conducting consultations once again on a passenger bill of rights.

I just want to know if anybody could tell me how much this consultation is going to cost the taxpayers.

[Sean Fraser, Liberal, Central Nova, NS]

Thank you very much.

Minister, it's good to have you here once again. Just when I thought we were done with Bill C-49, I'm going to breathe some life back into it.

Long-haul interswitching was a major piece of this marquee legislation for your department. One of the issues I discussed during debate in the House and at length at committee with some of my colleagues from different parties was the need to ensure that long-haul interswitching allows for more effective and efficient transport between different regions and different industries. I saw that members of the opposition actually wrote a letter to the editor in one of my local papers, suggesting that the Maritimes were in fact being discriminated against because of certain remedies not being available for that part of the region. I don't believe that to be the case, seeing as how there are actually no class I railways in Nova Scotia, P.E.I., or Newfoundland, though, with respect to New Brunswick, at least one shipper has raised this potential issue.

I'm curious; can you reassure those watching back home that in fact this is not some slap against Atlantic Canada, and on the importance of making sure that products are moving in different regions of the country—not just western Canadian grain, for example?

Air Transportation

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, every Canadian knows that buying an airline ticket entitles the purchaser to a certain level of treatment. That is why we are very proud of bringing in air passenger rights.

They were announced in Bill C-49 and we also announced that we were going to consult Canadians. Some 13 million Canadians travel by plane. It is the right thing to do and the Canadian Transportation Agency initiated the process yesterday.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

In the 2018-19 main estimates, I think there was some mention of some of the business risk initiatives getting an increase in funding. I just want to put this in the context of what our grain producers just went through with their transportation problems. Did you see a spike in demand? Is our current suite of programs adequate? Did we meet the demand for the crisis that just occurred?

I know that Bill C-49 has just passed, but I just want to ensure that we're actually there for our producers. We've heard a lot of very gut-wrenching testimony, that they were in a pretty bad spot.

[Lawrence MacAulay, Liberal, Cardigan, PE]

—but you can answer for that in the next election. We feel that Bill C-49 was vital to the agricultural sector.

[Lawrence MacAulay, Liberal, Cardigan, PE]

You know what took place before Bill C-49 came into play.

[Lawrence MacAulay, Liberal, Cardigan, PE]

I was very polite when you were speaking, even though I mightn't have agreed with all you had to say.

What I had to do as Minister of Agriculture and Agri-Food was to make sure the issues for the nation were addressed. When you look at what took place and all the amendments and all the issues that were involved in Bill C-49 and all we did to make sure that everything was addressed and the grain moved, I'm sure you fully agree that reciprocal penalties are vitally important. I never dreamed the likes of that would happen when I wasn't Minister of Agriculture and Agri-Food. It's so important to the farmer, not that it's unfair to the railways, but it's just fair both ways.

Making sure that soybean was under the maximum revenue entitlement, I'm sure you agree with that, even though you might have voted against it and that was vitally important.

[Lawrence MacAulay, Liberal, Cardigan, PE]

It's also important, John, when you're putting a bill together, that you put the proper transportation system in place for the country. I think you're fully aware of what took place with Bill C-49 and all the investments that have been made.

You know the difficulties that we had over the years, when your government was in power and grain was not moving in the west. When we got elected—

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair, and my thanks to the minister for being here.

Before I ask my first question, I wanted to correct the record a little bit on some of the comments you've made so far. You talked about the investments you've had in CFIA, especially in the food safety program. Maybe you're not aware, but you're actually reducing the funding to the food safety program by close to $100 million and you're reducing the staff by close to 700 employees in the food safety program at CFIA. That's one.

You talked about front-of-pack labelling and you wanted to make sure the labels weren't criticizing the ingredients in those products. That's exactly what the front-of-pack labelling does. You're criticizing Canadian wholesome products like milk, meat, and yogourt. Those are some of the concerns we have with those projects.

My first question is about Bill C-49, and I appreciate your taking a lot of credit for the work that was done on Bill C-49, but you also talked about being a farmer in P.E.I. and the importance of that bill. You also know that Atlantic Canada is exempt from some of the elements of that bill, including long-haul interswitching, which ensures that farmers in Atlantic Canada are still captive to one shipper. Also, farmers are asking for own-motion powers for the Canadian Transportation Agency, which is not in there.

I quote Jeff Nielsen, president of Grain Growers, who said, “Everything would have been nice. All the amendments the Senate came back with would have made the bill that much better.”

Minister, why weren't you fighting for those very critical amendments that our farmers wanted? Why weren't you fighting for some additional accountability in Bill C-49 to ensure that in the event of another grain backlog there would be elements in place for the Canadian Transportation Agency to take action against the rail lines without having to go through the minister?

[Lawrence MacAulay, Liberal, Cardigan, PE]

I agree completely. Of course we don't want to take cars from somewhere else. What we want to do is to make sure there are enough cars to move the products. Without any question, the 1,000 hopper cars for CN alone is a big issue, but it's much more than that. I've indicated it won't all be solved the day after we sign Bill C-49, and farmers are fully aware of that. There could be double-tracking in areas, the bottleneck in Vancouver, all of this stuff, though I agree the bottleneck in Vancouver was not the problem this year. It is a problem sometimes, though, and that has to be addressed too. Down the road, it gives us, the government and the railways, an opportunity to put a proper system in place.

Lloyd, you're fully aware, and everybody at this table is fully aware, that if we do not put a proper system in place and do not deliver the product on time, somebody else will—

[Lawrence MacAulay, Liberal, Cardigan, PE]

I have to say that everybody, all the grain sectors represented there, seemed to be pleased. I had Ralph Eichler, the Progressive Conservative minister, and me. The railways were not there, but I understand they're quite pleased too. You kind of wonder what's going on when everybody's pleased.

You mentioned about CN ordering new cars. That's just one part of what's taking place, the new hopper cars that will carry 10% or more product more efficiently. That's so vitally important.

Being a farmer, having grown potatoes on Prince Edward Island, having been involved in demurrage, and what takes place if the car comes in and you have some kind of a problem and can't fill the car or cars, I know that what you do is pay. Now it's reciprocal penalties. I never expected I would be Minister of Agriculture and somewhat responsible for that part of the legislation. I found it truly unbelievable. I think it's great for the grain farmers right across the country and for anybody else who is shipping. That was one thing. When it was mentioned to me first, of course I pushed, like everybody does, and you push as hard as you can for agriculture, no matter where you are. I might have indicated that it was a big request, and I might have also indicated that it was probably not possible, but here it is and I think people are so pleased.

To get soybean under the maximum revenue entitlement, that's only a matter of fairness, in my opinion. It's a very important sector. The soybean is grown right across this country. What it does is give them more protection. It's obvious that the change that has taken place with the legislation in general gives the railways the opportunity to invest in more infrastructure to move agricultural products, and many other products, too.

There's an awful lot more to Bill C-49, but I know, Lloyd, you want to ask me something else.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks. Mr. Chair.

Mr. Minister, it's great to see you here. I saw you in Toronto last Friday. You were coming back from an announcement in Winnipeg on Bill C-49 being successfully put through the House, on both sides. It's a terrific piece of legislation that's going to help our farmers. There was great reception in the room. Could you comment on what you saw in terms of the reception in Winnipeg? You could save that one.

In the context of a tour our committee did, where we went across western Canada in the last few weeks, we went to GrainsConnect, in Maymont, and we saw a new superterminal that is processing shipments. The loop system they're using is out of this world. They're filling a hundred cars in one shift. Incredible technology is being used in Saskatchewan.

During our tour of the Vancouver harbour, we looked at the expansion of the G3 Terminal there. We looked at Richardson's completed expansion, and we looked at the Viterra expansion from a few years back. CN is now purchasing 1,000 new hopper cars. They're current to customer demand for the last month or so. We have capacity in the network. We have a transportation bill that's gone through, Bill C-49. What are they thinking in Winnipeg? What's the current climate in the agriculture sector, as you're seeing it, around our transportation and getting grain to market?

[Lawrence MacAulay, Liberal, Minister of Agriculture and Agri-Food]

Thank you very much, Chair.

Good afternoon, everyone.

I'm pleased to be back before the committee. Of course, I have my wingers here, which will be very helpful for information.

I want to thank the committee for its outstanding support for the Canadian agriculture and agri-food sector. The members of the committee are working together and across party lines to address some pressing priorities for Canadian farmers, and I want to thank the committee for its work on climate change issues in agriculture, advancements of technology and research in the agricultural industry to support Canadian exports, and the grain transportation backlog.

In particular, I want to thank the committee for its upcoming study on the mental health challenges faced by our farmers. This is a very serious issue, both on and off the farm. Mental health is a high priority for our government. My deputy minister has made it a high priority for the department, and our colleague, Mr. Jean-Claude Poissant, has been a champion for mental health on the farm, both in his riding and across the country.

My message to you today is that our government will continue to work with you to grow the Canadian agriculture and agri-food sector. I would like to touch on three areas: the main estimates, progress and priorities, and challenges and opportunities for the sector.

As you can see, the main estimates show a total budget of over $2.5 billion for 2018-19. That represents an increase of $260 million compared with last year. The two main reasons for this increase are the forecast increase of $150 million in business risk management spending based on market conditions, and $96 million for new programs to help dairy producers and processors stay on the cutting edge.

Across Canada we're rolling out our investments under the $350-million program for dairy processors and producers. These dollars are helping the industry boost production and efficiency through investments in equipment and systems for milking robots and processing technologies.

The main estimates also reflect great work done with the Canadian agricultural partnership. That includes grants and contributions of $105 million for the coming year for federal programs supporting research and innovation, market development, public trust, business risk, and diversity. The estimates also include over $200 million in cost-shared programs with the provinces and territories. It all adds up to a major investment in the agriculture and agri-food industry.

We've reached a couple of milestones since we last met. On May 23, Bill C-49 received royal assent. This is tremendous news for the grain industry. We proposed key amendments that responded to the needs of the industry. Demand for our great Canadian wheat and interest in grains continue to grow. The legislation will help to ensure our farmers can meet these demands with an efficient and reliable rail service. We want a world-class transportation system, not just for this year or next year but for many years down the road.

April 1 marked the launch of the new $3-billion, five-year Canadian agricultural partnership. The industry was very clear on the need for a smooth transition from the previous framework, and we were able to do that. We have completed almost all the bilateral agreements with the provinces and territories, covering shared funding of $2 billion over five years. The Canadian agricultural partnership also includes $1 billion over five years for federal activities and programs.

In February, as I mentioned earlier, we launched six federal programs to help the sector reach new heights. We also continue to support the great work of our agricultural scientists across the country. Agricultural and agri-food scientists continue to make groundbreaking discoveries that help our farmers increase production, cut costs, and boost the bottom line.

Over the next five years, the Canadian agricultural partnership will help Canadian farmers and processors grow their markets, innovate, and protect our environment. It will also help farmers manage their business risk while strengthening public trust in their products. The partnership will help bring more young farmers, women, and indigenous people into leadership roles in the sector.

Investments over the past three budgets are building on a strong agricultural agenda.

Agri-food has been selected as one of the five groups to receive funding under the $950-million supercluster initiative, budgeted in 2017. Protein Industries Canada will make our country a global leader in sustainable plant protein. It will help to open new markets for our pulse growers.

Budget 2018 builds on this work with the single largest investment in fundamental research in Canadian history. That's an investment of nearly $4 billion in Canada's research system to support the next generation of researchers, while upgrading the tools they need to do the job.

We're also investing $75 million to grow our trade in China and across key Asian markets for Canadian farmers. Trade continues to be a strong focus for our government.

We're aiming to increase our agricultural exports to $75 billion by 2025. On March 8, Canada signed the CPTPP. For the agricultural sector, that means tariffs will be eliminated on Canadian meat, grains, and horticultural and processed foods. The access could mean $1 billion per year of new sales for beef and pork producers.

When you combine these benefits with the benefits under our trade agreement with the EU and other trade agreements, Canadian farmers will have a competitive edge in about two-thirds of the global economy. That's good news because it helps us diversify our trade.

Asia is a new frontier for our farmers and food processors. In March, I led a trade mission to Japan and Korea, and earlier this month I was in China, which has a growing middle-class population that's looking for the food that our farmers and ranchers can produce. The mission was a great opportunity to showcase Canada's high-quality food and seafood, and to strengthen our ties.

We're also working with our partners in North America to update, modernize, and improve NAFTA. Right across North America, farmers are united in their support of NAFTA. On Thursday, I will be in Dallas to address the World Meat Congress, and I will deliver Canada's message for a strong, modern, and progressive NAFTA.

The bottom line is that Canada's farmers are ready to feed the world, and the Government of Canada stands ready to support them in these efforts. Of course, challenges remain and always will. We're working to resolve the situation in India affecting our pulse exports.

There will always be challenges in agriculture, whether it's tough competition on the global stage, protectionism, or changing consumer demands.

When I look ahead at the prospects for our great industry, I see a great promise. Canada's agriculture and agri-food industry continues to grow. Last year, the industry generated $111 billion of our GDP, according to our recent financial outlook. The average farm net worth will hit a new record in 2018, and Canada's net farm income will be the second highest on record. Last year, our agriculture food and seafood exports hit an all-time record of over $64 billion, moving us closer to that $75 billion target.

Demand for our food continues to grow, and Canada has a competitive edge to meet that demand. We are blessed with an abundance of farmland and water, the best farmers and ranchers in the world, and a government that's reinvesting in agriculture.

The time is right for the Canadian agriculture and food industry to increase its presence on the global stage. Through smart investment and continued collaboration, I'm confident that we can meet the challenges that lie ahead.

I want to thank you again for your attention.

Thank you, everyone.

[Kathleen Fox]

Bill C-49 contained provisions with respect to the mandatory installation of locomotive voice and videos in all leading locomotive cabs on main track. That has recently passed. We're very pleased that finally, after many years of calling for voice and video recorders, they will be installed in lead locomotives on main track.

That being said, there's still a lot of work to be done. The regulations have to be developed that enshrine the balance between privacy and safety. We also have to examine our business processes in terms of sharing that data going forward.

[The Speaker, Liberal, Geoff Regan]

I have the honour to inform the House that a communication has been received, as follows:

Rideau Hall

Ottawa

May 23, 2018

Mr. Speaker,

I have the honour to inform you that the Right Honourable Julie Payette, Governor General of Canada, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 23rd day of May, 2018, at 14:12 p.m.

Yours sincerely,

Assunta Di Lorenzo

The bills assented to were Bill S-5, An Act to amend the Tobacco Act and the Non-smokers’ Health Act and to make consequential amendments to other Acts—Chapter 9, and 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—Chapter 10.

Transportation Modernization Act

[The Speaker, Liberal, Geoff Regan]

Pursuant to order made on Friday, May 11, the House will now proceed to the taking of the deferred recorded division on the motion to concur in the Senate amendments to Bill C-49.

Grain Transportation

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, Bill C-49 is a very well balanced bill. If the members look at it and understand it in detail, 90% of the measures are to give shippers an advantage. This is very clear.

The Harper Conservatives obviously have not taken the time to read the bill in detail. If they did, they would also know that Canadian shippers and grain shippers fully understand the value of the bill, which will change things that should have been done decades ago.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, I really cannot believe what I just heard from the Harper Conservatives who for 10 years did not do a single thing to modernize freight rail legislation to allow our grain to move far more effectively. In fact, they have voted against Bill C-49 on every possible occasion, and have caused an additional 11-day delay because they did not want to let it pass on May 11.

The Conservatives call themselves friends of the farmers. It is total hypocrisy.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, Canadian farmers want to know why the Liberals forced them to suffer through a debilitating grain backlog. For more than a year, the Conservatives offered options to get grain moving, but the only action the Liberals took was to delay their own bill.

Now the agriculture minister has admitted that Bill C-49 will not solve all the problems our farmers are facing, no own motion powers and no true extended interswitching.

Why is the Minister of Agriculture not fighting for the provisions in Bill C-49 that our farmers are asking for so they do not have to face this crisis again?

Transportation Modernization Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I rise on a point of order. I move:

That, notwithstanding any Standing Order or usual practice of the House, the recorded division on Bill C-49, transportation modernization act, consideration of a motion respecting Senate amendments, be deferred until Tuesday, May 22, at the expiry of the time provided for oral questions.

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

Mr. Speaker, as I said at the beginning of my speech, I do not want to use all of my speaking time, for the sake of consistency and for symbolic reasons. I believe that the debate on Bill C-49 has gone on long enough. It is perfectly clear that the Liberal government is sticking to its guns and showing no signs of openness. It even disapproved of the motion we wanted to move this morning to agree with the two small amendments from the Senate.

I will stop here, even though I know you are not asking me to. Getting a parliamentarian to stop talking is no small feat. I will therefore do it myself for the sake of consistency. I am at the House's disposal to answer any questions about Bill C-49. If there are no questions after my speech, we will show to all those on the ground who are waiting for this bill to be passed and receive royal assent that we, on this side, are doing everything we can to be consistent, while considering both the urgent need to pass this bill and the conditions that need to be put in place for this legislation to receive royal assent as soon as possible.

The House resumed consideration of the motion that 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 read the second time and referred to a committee.

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

Mr. Speaker, thank you for that information.

I would like to begin by saying that I am not a big fan of the Winnipeg Jets, unlike my colleague who spoke before me. I must admit, however, that after their win last night, knowing they are the only Canadian team still left in the running for the Stanley Cup, I was actually happy for them. It would be great to bring the Stanley Cup back to Canada, hockey being our national sport and all. That is the end of my comments on hockey. Let us get back to Bill C-49.

Mr. Speaker, you said I will not have my entire speaking time before question period. I want you to know right away that I have deliberately chosen not to use all of my time, if only for the sake of consistency when we are talking about the urgent need for action, while the Liberals insist on just talking.

This is about consistency, and I hope there is also some symbolic value here, since one cannot speak from both sides of one's mouth at the same time. One cannot suggest, as I did with my motion here this morning, to return Bill C-49 for royal assent as soon as possible by accepting the two minor amendments that remained out of the ones proposed by the Senate and, at the same time, launch into these endless, long-winded speeches on a bill that will have a real impact on the ground for those who are waiting for this to be resolved, one way or another.

I would like the Hansard to reflect the reasons why senators are insisting on these two amendments to which the Liberal government has unfortunately closed the door.

The message is that the House respectfully refuses the amendments, but I fail to see any respect in all this, except perhaps for the wording of the message. What did the senators send us as justification for insisting on these two small amendments?

I will read their reasoning, not only because I agree with it, but also because I believe that it is important to put it on the record. Why was the Senate so emphatic about its amendment? Let me quote the Senate:

That the reasons for the Senate’s insistence on its amendment 7(c) be:

“because all regions of Canada should be treated equally, with fairness and respect. ...because shippers in the Maritimes will continue to have access to other shipper remedies in the Act. As the proposer of the Senate amendment pointed out in committee, this is unfair for the maritime region, since there are roads and therefore other modes of transportation in areas like Prince Rupert and northern Quebec where an exemption is provided.”

The House no doubt knows that NDP members are not huge fans of the Senate, and especially an unelected Senate, but since this is the way things are for now, I must recognize a job well done.

It is not true that the only job of an opposition party or member is to oppose everything, all the time. I remind members that an opposition member's job is not to oppose everything, but to point out things that could be improved in a bill, to make it as close to perfect as possible. Every bill can be improved upon, and the government that sets the legislative agenda should be open to amendments that make sense. These amendments did not pop up out of nowhere. They are the result of discussions with experts in House committees and parliamentary committees.

I want to talk about another reason why the Senate asked and insisted that its amendment no. 8 be recognized, and I say “asked” because we now know that this request has been denied. I want to share the following quote from the Senate:

That the reasons for the Senate’s insistence on its amendment 8 be:

“because this amendment entitles a shipper to obtain a determination of the railway’s cost of transporting its goods to assist an arbitrator in final offer arbitration to determine whether to select the offer of the carrier or the shipper. By declaring that final offer arbitration is a commercially based process and not cost-based, the House of Commons has removed that entitlement from the shipper;”.

That explanation is as clear as can be, and it is indisputable. Anyone who has negotiated a contract or a collective agreement under arbitration knows that the parties are more likely to reach a fair agreement when there is a balance of power. If Bill C-49 makes that impossible, it is obvious which party stands to benefit the most. The purpose of the amendment was to restore a level playing field and ensure that the arbitrator making the final decision will have the tools to make an informed decision in the event that the process does come to fruition. Even that idea was rejected by the Liberal government.

In light of this morning's decision to reject the amendments, it is once again very clear that the Liberal government is always trying to cozy up to big business, which I imagine can be very generous when it is time to fill the campaign coffers. I suppose I could be wrong, but I will leave it up to everyone to observe the political game-playing. Later today, we will be debating Bill C-76, which is about new election rules. There again we will see how the Liberals want voters to make decisions based on money instead of the various parties' development philosophies. I will have more to say about Bill C-76 later. I will leave it at that for now.

I quoted the Senate's explanations so that they appear in the Hansard, but since I have a few minutes left, I would like to point out everything that this bill does not do. The matter of contracts is urgent, but so is the development of a passengers' bill of rights, which air travellers have been waiting for for years. In the previous Parliament, the NDP tabled a document—it was not even a bill—that sought to examine the possibility of putting regulations in place before the next election as the minister saw fit, but I would be willing to bet that the Liberals will wait until just a few months before the 2019 election is called to introduce the passengers' bill of rights.

It is clear that this government is not here to serve its constituents but to further its election strategy. Meanwhile, all this time, Canadians have been waiting for a real passengers' bill of rights that would ensure that they are compensated in situations like the one we saw here in Ottawa with Air Transat only a year ago. The passengers' bill of rights is also long overdue. When Bill C-49 finally receives royal assent, we will still not have a passengers' bill of rights. All we will have is the first step in a process to develop a bill of rights in the future.

Bill C-49 is absolutely unbelievable. If the Liberals wanted to take quick action on grain transportation, they could have done so. Let us remember that, at the beginning of the process, we proposed dividing Bill C-49 to quickly examine the aspects that addressed grain transportation, but this government refused to do that. We also proposed to extend the measures taken by the previous Conservative government so that farmers would not be left in limbo when the temporary measures ended and before Bill C-49 came into effect.

There are many causes for concern with this bill, and we cannot understand why the Liberal government is not more open to the amendments that are being proposed.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I really appreciated listening to the member for Bow River and his rational, reasonable, common-sense question of why in the world we are where we are today, when this issue could have been dealt with months ago.

On behalf of stakeholders across my riding and across Canada, we asked the government to please take out the portion with regard to freight and deal with it separately, deal with it quickly, because we all know how important this is to agriculture, mining, and manufacturing.

The Fair Rail for Grain Farmers Act had been put in place to deal with an issue and look further down the road to see how well it worked. It worked so well that, right across the country, there was an ask for a buy-in so that all these shippers would be able to use that same type of process. However, the current government absolutely refused to go in that direction. As a result, the Liberals have delayed the shipping of products for our economy to our coasts over and over again by removing amendments, not working with the committee, and not working with the Senate.

The Liberals are claiming that they want the bill to pass quickly, but their actions absolutely have not matched their words. By opposing the Senate amendments, they are ignoring our stakeholders and delaying the passage of their own bill, Bill C-49.

Why are the Liberals delaying the passage of their own bill?

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, it would be remiss of me not to mention the great hockey win last night by the Winnipeg Jets. It is good to see that team move on. Las Vegas will be an interesting challenge.

In recognition also of today, I dug deeply into my closet and found my railroad tie, which I am proud to wear today. My closet of ties is very extensive.

I rise today to speak to the government's second motion regarding the Senate's amendments to Bill C-49, the transportation modernization act.

It has frankly taken too long. It is ridiculous that the Liberal government has taken so long to pass the bill. Just like the first response by the government to the Senate's amendments, this second motion by the government will further delay the bill's passage.

It might be a little strange for me, a Conservative opposition MP, to say I want the government to pass its own bill, but that is exactly the case. The Liberals had another opportunity to do it this morning. It is the Liberals who are delaying the passage of Bill C-49, as they voted against doing it this morning.

This message that the Liberals are delaying the passage of Bill C-49 is going to be the theme of my speech this morning, because it is the truth.

I would like to go back in time to September 2017. I had the opportunity to join the House of Commons transportation infrastructure and communities committee for a number of full days of witness testimony on Bill C-49 in the week prior to the House returning for our fall session. During the days of witness testimony, we heard from many witnesses that the bill needed amending. These calls for amendments were frequent and, in many cases, repetitive among certain stakeholder groups.

My Conservative colleagues on the transportation committee and my NDP friend the member for Trois-Rivières heard these calls and put forward a number of small reasonable amendments as called for by the stakeholders, whose industries and businesses represent billions of dollars to the Canadian economy. Had the Liberals not been so politically stubborn, they might have accepted those amendments that my Conservative and NDP colleagues put forward at that committee.

They would have been better off to do so because once the bill made its way to the Senate transportation and communications committee, many of those same amendments were introduced at the Senate committee. It is worth noting that many of these amendments were supported by senators of all political stripes, including hon. senators from the recently formed independent senators group.

The first delay of Bill C-49 by the Liberals was the rejection of the very reasonable opposition amendments at the House of Commons committee, recommended by the many witnesses.

The second delay by the Liberals to Bill C-49 was how long they took to decide what they would do with the Senate's amendments. The Senate sent its message to the House of Commons on April 16. Farmers, agriculture groups, as has been mentioned by the parliamentary secretary, and Canada's manufacturing, mining, and forest industries had to wait two weeks to find out what the government would do with these amendments. For two whole weeks it dithered on what to do.

The third way the government delayed passage of the bill was by rejecting many of the Senate's amendments. When the government finally revealed its position on the Senate's amendments, shippers in these important industries were very disappointed with what they saw, not just because the government weakened or rejected amendments they felt were important but because they knew this move by the government would cause further delays to the passage of Bill C-49.

Instead of agreeing with all the Senate's amendments, which would have resulted in quickly sending the bill off for royal assent, the government chose to do a mixture of accepting a few amendments, amending a few others, and rejecting the majority of them.

My colleague the member for Carlton Trail—Eagle Creek, who is doing an excellent job of holding the transport minister to account, proposed an amendment to the government's motion to accept all the Senate's amendments. Had the House adopted my colleague's amendment, the bill would have gone immediately for royal assent thereby speeding up the passage of Bill C-49. However, shock of all shocks, the Liberals delayed their own bill one more time and voted against my colleague's amendment.

I think that brings it to four times that the Liberals have delayed the passage of Bill C-49 in the last six months. Should I say that the Liberals are not done? Here we are again. The Senate has dealt expeditiously with the government's motion, and members of the other place have voted to insist on two of their amendments, which the government previously rejected. Today, we are debating a motion by the Liberal government to once again reject amendments that the Senate has been insisting on.

Who is causing the delay in passing Bill C-49? It is the Liberals. If they would simply accept these two Senate amendments, we could pass this bill today and send it for royal assent, as was proposed earlier in this session. However, that is not going to happen, because of the Liberals. Bill C-49 will have to go back to the Senate, and we do not know what is going to happen in that other place. This situation is entirely the Liberals' own fault. It is the Liberals who are causing the delays in the passage of Bill C-49.

The delays to the passage of Bill C-49 that I just highlighted are only the ones that have happened since September 2017. For a minute or two, I would like to jump back further in time and briefly discuss the delays caused by the Liberal government that started years ago. Conservatives know that the rail transportation system is vital to the economic well-being of our country's economy, and one of the founding principles that got Confederation to work. However, the Prime Minister and the Minister of Transport have been dragging their heels in addressing the serious needs of our country's economy.

Back in 2014, then minister of transport, the member for Milton, launched a statutory review of the Canada Transportation Act, a year early, following what was a very trying year for Canada's shippers, particularly in the Prairies. The report that came from this review is known as the Emerson report, after David Emerson, the head of the commission. Mr. Emerson spent over a year consulting with industry stakeholders before writing his report, which is a lot of consultation. After the Emerson report was presented to the current Minister of Transport in December 2015, the minister took an additional year to consult on the consultations before finally introducing Bill C-49 in May 2017, over 14 months later. From the very start of the Liberal government, the transportation needs of our country have not been a priority.

At this time, I would like to switch my focus and talk about the substance of the two amendments being rejected by the Liberal government.

The first amendment I would like to discuss is the Senate's amendment regarding final offer arbitration. The laws and regulations governing the relationship between the railway and the rail shipper are quite complex, so I would like to quote from an analysis prepared for the Mining Association of Canada with respect to the final offer arbitration amendment. This analysis was done after the government unveiled its first motion regarding the Senate's amendments, but the points it makes are just as valid now, as we are dealing with the same amendment.

It states:

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 are already 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.

That is strange. What a process this is.

Thousands of Canadian jobs rely on the mining sector. The mining sector relies on a stable, reliable transportation system to get its products to the customers or to the coast.

I could include other quotes from experts and stakeholders regarding the importance of this amendment, but for the sake of time I have left them out.

Canada needs a fair and balanced relationship between its rail shippers and its class I railways. It is sad that the government is deaf to calls for a better balance in this important relationship.

I would also like to take a minute to talk about the second amendment the Senate is insisting on. This amendment would allow captive shippers in the Maritimes access to the long-haul interswitching remedy that this bill would make available to shippers in other parts of Canada.

Why are the Maritimes being excluded? If this remedy is needed in other parts of Canada, as the government insists, why is it not needed in the Maritimes? To phrase the question another way, why must captive Maritime shippers be forced to pay higher shipping costs? Treating Maritimers as unequal partners may be the Prime Minister's definition of co-operative federalism, but it is not ours.

I hope that some of my hon. colleagues on the other side of the House who come from the Maritimes will ask the Minister of Transport why their constituents and the industries that support their communities are not worthy of this same remedy.

I will close by reiterating a point I made earlier in my speech.

The Conservatives know that the rail transportation system is absolutely vital to the well-being of Canada's economy, and that it is these two rails of steel that hook our country together and have made our economy strong. Regrettably, I am not sure the Liberals do. Despite what the Liberals say, their actions do not match their words.

Stakeholders we are hearing from are not pleased with this bill. Some stakeholders say that this bill would make things even worse. Others say it would make things a little better, but it could have been much better.

This morning, we are discussing a government motion to reject reasonable Senate amendments to Bill C-49. This move by the government is delaying the passage of its own bill one more time, as it did this morning.

In 2019, Canadians will have the opportunity to judge the Liberal government and replace it with a Conservative government that will listen to stakeholders and respect the important role transportation plays in the Canadian economy.

[Karen McCrimmon, Liberal, Kanata—Carleton, ON]

Mr. Speaker, it is quite clear when we listen to the many stakeholders who have been very vocal about this. Alberta wheat, Alberta barley, the grain growers, and Cereals Canada have all expressed, very clearly, how important it is to get Bill C-49 passed as soon as possible.

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

Mr. Speaker, it is rather odd that the rush to pass Bill C-49, which I can easily understand, given how many people are waiting for it on the ground, is being hampered by the Liberal government's lack of openness. Instead of accepting a unanimous motion that sought to recognize the senators' work and approve these two amendments, they are making us go back to debate.

If that is what they want, then let us go back to debate. I will repeat my question, focusing on just one of the two amendments proposed by the Senate. History buffs may recall that it must be 12 years or so since we last saw amendments ping-ponging like this between the Senate and the House.

Why are the Liberals refusing to treat all regions of Canada equally, which is the very essence of the Senate's amendment 7(c)?

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, it is my pleasure to rise today to once again speak to the several benefits to shippers this historic piece of legislation would provide. Bill C-49 represents a watershed moment for Canada's freight rail sector. It would put in place the right conditions over the long term for a safe, fair, efficient, and transparent freight rail transportation system, for the benefit of all users.

We understand the concerns of captive rail shippers in the Maritimes, but it is critical that we ensure the continued viability and fluidity of the eastern rail network, including through the Montreal area. The proposed amendments from the other place would apply to a significant portion of the tonnage moving on CN's network in New Brunswick and Nova Scotia. Subjecting this traffic to long-haul interswitching, LHI, could impact the future viability of CN's rail services in eastern Canada, particularly on the northernmost branch line in New Brunswick, where line abandonment has been threatened in the past.

While LHI will not be expanded to allow captive shippers in the Maritimes to access the remedy in Montreal, the bill would make significant improvements to existing remedies that would benefit these same shippers. Shippers in the Maritimes would continue to have access to other shipper remedies contained in the act, many of which would be improved by the bill, including a definition of adequate and suitable rail service; the ability of shippers to seek reciprocal financial penalties in their service agreements; final offer arbitration, FOA; and a new, anonymous dispute resolution service.

Despite the many benefits this bill would provide, some continue to push for further amendments to the final offer arbitration process, a process that is already highly valued by shippers in its current form. However, FOA would already be strengthened under Bill C-49 by allowing shippers to pursue FOA to extend the applicability of an arbitrator's decision from one to two years and by raising the financial threshold for pursuing this streamlined summary FOA process for rate disputes from $750,000 to $2 million, therefore allowing more small and medium-size shippers to use this option.

Bill C-49 would also require railways to provide significant new data and performance metrics, including on rates, things that have never been available before. This would improve transparency, which would help shippers in their negotiations with railways.

Under the existing legislation, an arbitrator is already allowed to request technical assistance, including costing and legal assistance. There is nothing in the act that obligates the arbitrator to seek the consent of railways for such assistance, and the arbitrator can hold any failure to disclose information against a railway when coming to a decision.

Bill C-49 would benefit shippers in a variety of ways. In particular, it would enable shippers to seek reciprocal financial penalties; shorten the process for level of service from 120 to 90 days; allow a shipper to extend FOA decisions from one to two years; change the financial threshold for participating in a streamlined arbitration process; make certain temporary agency authorities permanent; recognize the agency's informal dispute resolute authority; and require railways to provide significant new data and performance metrics, including new data on rates. It would also provide agency “own motion” powers to investigate service-level issues in the freight rail system.

Passage of the bill is of the utmost urgency. Grain farmers and shippers are depending on the bill to prepare for the coming harvest season. Many stakeholders, including the likes of the Alberta Wheat Commission, Alberta Barley, the Grain Growers of Canada, and Cereals Canada, have stressed the need for Bill C-49 to be passed before the summer recess. These groups represent hard-working Canadians who are urging parliamentarians to pass the bill expeditiously, and in turn, to fight for them and their livelihoods.

The government and minister have carefully considered the risks, benefits, balance, and impacts of the policies in this bill. The bill has been thoroughly studied and debated for more than a year now in the two chambers. Prior to this, issues were studied by the Canadian transportation review panel, chaired by the hon. David Emerson. There has been an extensive series of additional round tables and consultations. All the input provided by stakeholders and witnesses was shared with the respective panels and committees.

It is clear that the other place wants the same as the government: an effective, efficient, and balanced rail system for the long term. The essential nature of the whole transportation system requires extensive study before changes are made to ensure that we do not end up with unintended consequences that put our system at risk. This study has taken place, and the government has produced a bill that best serves Canadians over the long term. There are many Canadians who will benefit from this bill, and they are eager to see it passed. It is now time to move forward.

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

Thank you, Mr. Speaker.

I will be brief. I want us to do the reasonable thing here. I do not see how we can respectfully tell the Senate we reject its amendments without providing an explanation.

That is why I am about to seek the unanimous consent of the House to move a motion recognizing that, for the months—years almost—that we have been debating Bill C-49 here, grain producers and transporters on the ground have been waiting for an answer. That is just to address this aspect of rail transportation. Bill C-49 has quite a few other things going on too, of course.

I am seeking the unanimous consent of the House for the Senate's amendments 7(c) and 8 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, to be now read a second time and concurred in.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, this afternoon we will begin debate on Bill C-76, the elections modernization act. This debate will continue tomorrow, and the following week will be a constituency week.

However, if we receive a message from the Senate this afternoon about Bill C-49, the transportation modernization act, this bill will get priority.

Upon our return following the constituency week, we will resume debate on Bill C-76 on Tuesday.

On Wednesday, we will start debate at report stage and third reading of Bill C-57, an act to amend the Federal Sustainable Development Act.

On Thursday, we will begin debate on Bill C-75, the justice modernization act.

Finally, pursuant to Standing Order 81(4), I would like to designate Tuesday, May 22, for consideration in committee of the whole of the main estimates for the Department of Finance, and Thursday, May 24, for the Department of Citizenship and Immigration.

Rail Transportation

[Adam Vaughan, Liberal, Parliamentary Secretary to the Minister of Families]

Madam Speaker, our government understands the challenges faced by our farmers every day. We are committed to ensuring that they have access to freight rail systems that effectively move their goods to market. That is why we introduced Bill C- 49, the transportation modernization act, which would put in place the right conditions, over the long term, for a safe, efficient, effective, and transparent freight rail system, which would benefit all rail users right across the country.

We are delighted that this bill, which both the member opposite and I voted for today, would provide robust, long-term solutions for many of the challenges facing our freight rail transportation system and its users. It would provide for enhanced accountability through reciprocal financial penalties between shippers and railways. It would improve transparency through increased reporting from railways, and it would provide captive shippers with a way of accessing an alternate rail carrier through long-haul interswitching. It would encourage investments in hopper cars through changes to the maximum revenue entitlement process, which would be retained for the benefit of the grain sector. In short, it would help avoid the kind of situation we are witnessing now. It would also provide the Canadian Transportation Agency with the powers it needs to investigate systemic issues of its own motion.

We understand that rail service this year has not lived up to expectations, both for grain and other commodities. That is why our government continues to work with railways to ensure that they are taking the necessary steps to improve service and to move grain and other commodities to market. Railways have provided us with their plans for relieving the backlog, and we will continue to keep a watchful eye on their performance to ensure that these plans have the desired effect.

What our government has not done is introduce a short-term approach, like minimum grain volume requirements, which could risk negative consequences for farmers, grain shippers, and shippers of other commodities. Minimum grain volumes could result in preferential treatment of some corridors, even within the grain sector. As a result, they are not a silver bullet. Their benefits are not felt evenly, and they can have real implications for shippers in the grain sector and for other commodities.

As to the particular question the member opposite raised about nationalizing the rail system, I am pretty certain that this is not in our government's forecast in terms of potential legislation that may be introduced. However, I will note that in the city I come from, one of the greatest inhibitors of stronger passenger rail movement is the conflict between rail that is carrying cargo and passenger movement, in particular commuters in the GTA.

There is a missing segment of the rail lines between Sudbury and Ottawa and down towards the east coast, which was given away and abandoned by rail companies. If used properly, it could reroute some of that cargo and free up rail capacity for commuters, which would take cars off the road. Switching away from cargo on the rail and getting passengers is one priority, but the other option is to make sure that other commodities that can move by different methods do not plug up the rail system as well.

Therefore, realigning, reassessing, and recommitting ourselves to a long-term rail strategy in this country is one of our government's priorities. The member can see that in budget 2018, with the significant investment we have made in modernizing VIA to get it back into a position where it can start to grow its customer base and move people more effectively, and in environmentally clever ways, so that we can make our strategic investments in infrastructure and also reduce greenhouse gases.

As for grain, I am glad that the bill has come through the vote today. It is progress. We continue to move forward to make sure that grain shippers get the service they need from this government.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, it is an honour to rise tonight at adjournment proceedings to pursue a question I asked. I am really pleased to bring it up when not too much time has passed since the question was raised. It was toward the end of March this year, when we were seeing Prairie grain shipments almost at a standstill when the shippers, CN and CP, were unable to bring forward enough railcars to move the grain. It was of crisis proportions, but it was not the first time this had happened.

I will briefly review the question I asked, which was to point out that millions of tons of grain were stuck on Prairie farms and in grain elevators. However, it was connected to a problem we were also experiencing on the coast of British Columbia, where freighters and container ships waiting to pick up that grain in the port of Vancouver were backed up and using the waters of the Salish Sea essentially as a free parking lot. The port of Vancouver was backed up, so as the container ships were waiting to go in and out of the port of Vancouver, which could each have three and four different containers within them, they would go back to collect grain and then go back to sit off Plumper Sound in the Salish Sea in my riding waiting to know if the grain had been delivered.

The knock-on effects of poor service by CN and CP are real pain and economic trouble for the Prairie grain farmers, an inefficient port of Vancouver, and a significant cost in quality of life to people living in Saanich—Gulf Islands and Nanaimo—Ladysmith, where these container ships were sitting off of Gabriola Island.

Members will be surprised to know that these anchorages for container ships off Saanich—Gulf Islands and Nanaimo—Ladysmith are available legally, but in that sense are largely unregulated, and there are no fees paid for sitting in the waters off Ganges, Plumper Sound, or Pender Island.

These enormous factory ships often have lights on through the night. I have talked to constituents who said that after they turn off all the lights in their house, they can still read a book because of the lights from the ships stuck there waiting.

It is a real cost in quality of life that we do not have an efficient rail service to deliver grain on time. It costs money to the shippers, the farmers, and those buying the grain. There needs to be a whole-of-government approach. A the t least, Transport Canada needs to start figuring out how we make sure we move goods quickly and effectively. Perhaps through a computerized system, the port of Vancouver could tell the grain farmers when to move the grain.

By the way, we used to have a better system when we had the Wheat Board. The Wheat Board did a better job in synchronizing shipments, and this problem did not come up. However, we had a crisis in 2014. On Vancouver Island, we were two days away from livestock operations not being able to get any feed because none of the mills that process the grain into livestock feed had any grain. The farmers had to band together and hire trucks. Again it was a big cost and poor service.

I know that Bill C-49, which we just voted on in the House, would help. There would be penalties for the shippers. From 1918 until 1995, this railway was a crown corporation, and it worked much better. What do we do to get goods moving in this country? Do we need to make it a crown corporation again?

Transportation Modernization Act

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, we have spent a great deal of time on questions in this debate about the role of Bill C-30 versus the long-haul interswitching included in Bill C-49. Bill C-30 provided a short-term solution to respond to an immediate need, but it did not solve the long-term problem of the transportation of western Canadian grain. It also did not provide any solution for the rest of the country in different industries and different regions.

Although I lived in Alberta for about five years, I am proudly Nova Scotian. I am curious if the hon. member could offer some thoughts on the importance of extending efficiencies in our transportation system to different sectors of the economy and to different regions, to make sure that our transportation system works for everyone and brings the greatest growth to the Canadian economy.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, what a privilege it is to stand in my place today to talk about a fantastic piece of legislation.

I thought the minister really paid tribute to a lot of the fine work that was done, from first reading of the legislation to second reading debate to the standing committee debate, listening to what had taken place in the standing committees, then coming back to the House and going to the Senate, which has proposed amendments. I highlight that for a couple of reasons.

First and foremost, let us acknowledge that when the legislation was brought in, it was long overdue. The minister has taken the approach of making fairly comprehensive changes to our transportation industry. He recognizes how valuable that industry is to our country. The fact that he invited and welcomed input and in many ways accepted many different changes speaks volumes with respect to the degree in which the minister, working with cabinet and all members of this chamber, has seen this legislation get to where it is today. This is positive legislation.

When I was on the opposition benches, we would talk about government legislation and how the Harper government was never really open to opposition ideas when the legislation came before a standing committee. In this case, the members of the standing committee worked exceptionally well together. They came together on a number of different ideas, some Conservative, some the Liberal, some New Democrat. These individuals were prepared to put their party politics aside to try to improve the legislation. As a direct result, many amendments were passed, virtually through a consensus that was quickly evolving. From what I understand, originators of some of those amendments crossed party lines.

It then went to the Senate. As the minister mentioned, the Senate scrutinized the bill quite extensively. The senators met with many different stakeholders and came up with a series of amendments. The minister and the department, after doing some further consultations with others, decided the government was prepared to accept some amendments in order to further advance Bill C-49. A very open and transparent process has led us to what we are debating today.

I was provided some quotes to reinforce what I just said. If we look to the Grain Growers of Canada, grain farmers from across Canada are praising the decision by the Minister of Transport to accept the recommendations and amendments put forward with respect to Bill C-49, the transportation modernization act announced on April 27. It says that the decision demonstrates the government is listening to farmers in their calls for a balanced and accountable rail transport system.

Mr. Nielsen of the Grain Growers of Canada said:

We need the legislation in place well in advance of August 1, 2018 to ensure hard working middle class farmers don’t have to suffer through another grain shipping season with terrible rail service...“Accepting these amendments demonstrates that [the ministers of agriculture and transport] are working for the growth of the rural economy. Bill C-49 is key to the long term success of my industry and key to reaching the goal of $75 billion in agri-food exports by 2025. We urge parliament to pass it now.”

The fine work parliamentarians have done in both Houses has been recognized, but we are now being called upon to pass the legislation.

There are a number of things we have talked a great deal about. In listening to the debate today and at second reading, there is a very interesting and important point. I use this as an example. We hear a lot about air passengers and the grain industry, which I will provide comments on shortly. However, I always thought there was something quite interesting within the legislation that I have not really heard, and it was just recently pointed out to me. It comes from the Transportation Safety Board, where an idea has been talked about, a recommendation, for years now. I would have thought this was something that could and should have been acted on relatively quickly. The idea is to have cameras in locomotives. It is very much a safety issue. Even though we spend a lot of time listening to the debate and comments from across the way, whether it is now or at second reading, I cannot recall hearing that particular comment.

The bill is a fairly significant change from what we have had in the past. We would have to go many years before we would see the types of changes we have seen in this legislation. We have a minister, working with others, who has really advanced a major piece of legislation that is going to a profound positive impact on several sectors, on passengers, shippers, farmers, the rail industry as a whole. These are significant changes. We have a minister who has been able to pull all this together in a relatively short period of time.

I remember sitting in the opposition benches, and this is something I have made reference to in the past, and asking Stephen Harper directly about the piles of grain on the Prairies. The grain was not in storage bins. It was in the fields. There was the threat that some of that grain was starting to rot, while in the Pacific Ocean there were ships anchored and unable to come into port to be loaded because the grain was not at the port. The grain could not be exported.

Canada is a trading nation. We need trade. Trade is what allows us to grow our middle class, fuel our economy, and provide the types of jobs that are so very important. When we think of the example I raised back then, we get a sense of the frustration. Imagine the frustration for farmers, whose crops are literally sitting in the fields and they want to get it to market.

I am listening to the debate this morning, and Conservative members have a great deal of criticism toward this legislation. They were in government for many years and had the opportunity to bring forward this kind of legislation. They had many years to do it, but it has taken this government to ultimately get the job done. Now, it is not complete yet, and we very much appreciate all the fine work that has been done by members of all political entities in the House and the Senate.

We also recognize and acknowledge the immense amount of work done by the stakeholders. It is the stakeholders who continued to lobby year after year for the types of changes we are witnessing today. That is why people should not be surprised at the pressure on all of us to get this piece of legislation passed.

There is another interesting quote that was provided to me. I will mention this because I come from the Prairies and we are talking about the importance of wheat. The following is a quote from the Alberta Wheat Commission and Alberta Barley:

The Alberta Wheat Commission (AWC) and Alberta Barley say that [the] Federal Transport Minister[...]’s move to endorse key amendments to Bill C-49 in the House of Commons, as recommended by the Commissions, is good news for farmers.

They go on to say:

“We see the news from [the] Minister...as an excellent show of support for the agriculture industry and for farmers,” said Kevin Bender, AWC Chair. “

This is why it is so important that we advance this legislation.

I will give a real example of the type of frustration farmers have. Let us imagine a farmer has a contract with the rail company, and the farmer says he will deliver x amount of wheat on x date to the rail line. If that farmer does not fulfill the contract as he had committed to the rail line, the rail line could take action against the farmer, such as fines and so forth. The farmer would suffer penalties. That is the way it is and the way it was, yet it was never reciprocal. The farmer felt helpless. What about the railway company? If the farmer delivers the product on time to where it is supposed to be, should there not be any sort of obligation for the rail line? This legislation actually takes that into consideration so that it would be reciprocal. Not only would the rail line ensure more accountability for farmers, but, for the first time, it would be reciprocal, and farmers could look for some sort of justice if the rail line does not meet its obligation.

We can call it prairie frustration, but I want to ensure that products coming from the prairie provinces get to market. The same principle would apply for all regions of our country, but right now I am focused in particular on prairie farmers, because our wheat needs to get to market. We want rail line companies to work with us.

I was very happy when the Minister of Transport made the calls necessary to move additional grain. It was the Minister of Agriculture, working with the Minister of Transport, who corresponded with the rail lines to try to get more grain cars to the Prairies and out to our markets. It has improved a great deal over the last number of weeks, but there are a lot of advocacy groups and individual farmers who are still very much concerned about getting their product on the rails. It is not as though there is that much of a choice.

Winnipeg North, the area I represent, probably has the highest number of long-haul truck drivers and trucks per capita. Commodities can only go so far by long-haul trucking. We need an effective, efficient rail line, a rail line that is going to be accountable to producers and manufacturers. Whether it is a widget or a commodity, we need to be able to get them to market. We are talking about billions of dollars and millions of jobs which are affected by our transportation industry. That is why it is so critically important.

I want to also provide some comments in regard to our airline industry. Members of Parliament do a great deal of travelling. A number of us share some of the concerns that we hear from our constituents on a fairly regular basis, some of the frustrations that they face.

People can be on a flight scheduled for five o'clock and after they board the plane, the plane sits on the tarmac for what seems to be an endless amount of time. There are no requirements for the airline to serve its passengers. If passengers are left waiting on the tarmac for an extended period of time, one would like to think that some basics, such as water or food, would be available to them, but there is no guarantee of that. That is absolutely critical.

If members of Parliament were asked what kind of problems they have encountered, we would hear things such as sitting on the tarmac and lost luggage, which is fairly common. What about passengers who arrive at the airport to find that their flight has been cancelled? What about overbooking? All of these things take place and every airline has a different procedure to follow. This legislation takes a unifying approach. Every airline would be obligated to do certain things with respect to those situations I have mentioned.

Consultation does not stop there. If we pass this legislation, the regulations will follow. It is through those regulations that we will get the details as to what the consequences will be. This is something all of our constituents want to see.

I debated a bill on air passenger rights when I was in opposition. All of us are very sympathetic to this issue. We want to see this advance. It would be great to have more details, and a lot of those details will come in the form of regulations. Those regulations will be worked on proactively. The purpose of the legislation is to establish a framework that would provide good regulations. Our constituents have been calling for this for many years. They want some protection against the airlines.

That is the reason I started off by saying that this is a great piece of legislation. It is comprehensive. Those that were involved in putting it together, the average Canadian, stakeholders, members of Parliament, senators, staff within the minister's office, have come together to provide a comprehensive piece of legislation. Now we are at the final stages.

It is a good day when we see this kind of legislation move forward.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I want to thank our shadow minister for transportation for all the incredible work she has done on what is an ominous and very difficult bill to try to wade through.

She is exactly right. We cannot underestimate the financial impact of inaction on Bill C-49. We went through this in 2013-14 and the impact on the Canadian economy was in excess of $8 billion. That is why we put forward Bill C-30 to ensure we would never have those types of issues again.

We are certainly hearing from our stakeholders that this has not only impacted this year's harvest, but will very likely impact next year's harvest. They have nowhere to store their product. Their bins are full now. Until things start moving, there is not going to be anywhere to store their products.

Nutrien in Saskatchewan has shut down an entire potash mine because it cannot move product. There is no demand for those inputs because farmers are at a loss as to what to plant this year, or if they will be able to plant. They have full bins and road bans are in place. This has caused such stress among our agriculture sector. I really want to highlight the fact that the implication this has had is not simply a matter of frustration. It has really impacted people on the ground and their families.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, this will be wait and see. I am going to challenge my colleague. If we have another larger than average harvest this fall, I would like to see if Bill C-49 does what she says it will do. I do not think it will. Our stakeholders have raised the alarm bells on that.

She spoke about some of the submissions. They were not saying that they were necessarily satisfied with Bill C-49. Their message is to get this through and let us move on. I think they understand, just as we do, that to say Bill C-49 will be the solution to everything is disingenuous.

She should really talk to her Minister of Transportation and Minister of Agriculture who admitted in the last two weeks that Bill C-49 would not address all of the issues that had been brought forward.

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I would like to reassure the member that Bill C-49 really is about a long-term, sustainable solution that will actually provide the kind of predictability needed for us to grow a more prosperous future. Getting that long-term solution did take a little longer, but I think it will pay off in the end.

The Agricultural Producers Association of Saskatchewan, Alberta Wheat Commission, Alberta Barley, Grain Growers of Canada, and I have more pages, are happy with what Bill C-49 manages to accomplish. We just need to work together to get it passed.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, it is pleasure to rise today and speak to Bill C-49 and the motion put forward by the government.

The message I want to get forward today is really about what brought us here and whether Canadian agriculture had to go through all this pain and suffering when we really did not achieve much at the end. What is disingenuous with the entire process is that over the last several months the Minister of Transport and the Minister of Agriculture were telling our producers, stakeholders, and shippers to hang on and be patient, that once Bill C-49 was passed it was going to resolve all of their problems and we would not have a grain backlog in the future.

I am going to speak more on the agriculture side than I will on some of the other elements of Bill C-49.

The inaction by the ministers and the government on this issue for almost a year has been mind-boggling. Last June my colleague, the shadow minister for transportation, put forward a list of amendments that would have addressed many of these problems we are facing, but they were turned down. Now we have them back on the table from the Senate. They went through the Standing Committee on Transport, Infrastructure and Communities and again through the Senate. Now they are here, and the Liberal government is saying it will be supporting a number of those amendments. I am not sure what changed over those 10 months; the Liberals could have supported those amendments last June, but they did not.

It was the start of time after time when the Liberals were given numerous options to get Bill C-49 through the process as quickly as possible, as well as to address many of the problems that our grain farmers across western Canada have been facing. Every time the Liberals were given an option to address the situation, which became a crisis in January and February, they did nothing.

Last summer, we encouraged the government to extend the provisions of Bill C-30, the Fair Rail for Grain Farmers Act, which extended interswitching and mandatory minimum volumes, a process that we had in place in 2013-14 when we went through the previous grain backlog. This addressed many of those problems. Our stakeholders, producers, grain terminals, and shippers were satisfied. They were quite pleased with that process. It gave the rail lines some accountability to ensure that they were able to move grain as well as other products, whether it was lumber, mining, or oil and gas. We want to make sure that all our producers have an opportunity to get their commodities to market.

In the fall, when Bill C-49 was first brought to the House, we saw that it was a massive document and that it was going to be extremely difficult to get any sort of consensus on a bill that dealt with everything from video recorders and locomotives to an air passenger bill of rights to interswitching. How were we possibly going to be able to find some sort of satisfaction among all stakeholders and within all the different points of view in our industries, let alone here in the House of Commons or in the Senate?

At that time we saw that this was going to be an issue. With the size and the scope that Bill C-49 entailed, we knew that getting it through that process with any sort of expediency was going to be nearly impossible. Once again we provided what I thought was a thoughtful resolution to the Liberal government, which was to split Bill C-49 into two bills. We would take many of the aspects of the bill that had to do with grain and grain transportation through the process as quickly as possible. Some of the other contentious issues that had to do with airline rights and other issues would take longer to go through the process, but we knew there was no time crunch or time sensitivity of the kind that there was on the grain side.

Last fall, with a larger-than-average harvest and the challenges CN and CP were facing in terms of meeting the contracts, we saw the rail line numbers dipping with each weekly report that was coming out.

We raised the alarm bells last fall that this was going to be a problem. We encouraged the government to split Bill C-49. I recall being in this House last October making almost the same argument that we were not going to get Bill C-49 through this process in a timely fashion to prevent another grain backlog. Again, it fell on deaf ears.

The result of that inaction last October, before we got to this point, was rail service that put us in a grain crisis. It is a crisis that still exists today. I do not think we can miss that point. Although we are here now, no problem has been resolved. We have road bans across the western provinces. We have more than 30 transport ships off the coast of British Columbia waiting for product. Those demurrage costs of $10,000 a day and up are now being passed on to the producers. Who will pay those additional costs that are now being passed on to our farmers across western Canada?

We have to keep that in mind as we have this discussion and this debate today. The crisis our farmers have been facing since last fall is still there, and it is not going away anytime soon. It is going to impact their fall season. They cannot move grain right now. Many of them are finally in the fields seeding. Road bans are in place in many of the western provinces, inhibiting their ability to actually transport grain to the terminal.

They are watching us today with a lot of focus on the decision we will be making in this House. How are we going to address the problems they are facing? The crisis has become so bad that our most recent report says that almost half a billion dollars' worth of grain is sitting in storage bins across western Canada. That is grain that our producers and our farmers cannot sell. They are unable to sell their product and get it to the terminal and then to the coast.

These same farmers who are unable to sell their product still have bills coming in. There are mortgage payments, lease payments on land, equipment purchases, and input costs as they try to get ready to start seeding. There are programs in place through Farm Credit Canada and the advanced payments program, essential programs that are in place to help in these times of extenuating circumstances.

I know that our producers do not want to have to rely on those assistance programs for a product they work hard all year to plant and harvest and are now trying to sell, but are unable to because of logistics.

As my colleague from Guelph said, we had an emergency meeting of the agriculture committee. I want to commend my colleagues on that committee for agreeing to have that emergency meeting with many of our stakeholders.

One of our witnesses at that meeting was a young farmer from Saskatchewan. I thought he put it quite well. He said, “We have to face so many uncertainties when we are in agriculture: uncertain weather, uncertain input costs, uncertainty when it comes to the commodity prices. The one thing we should be able to rely on is a reliable transportation system, which we do not have right now.”

One of the key issues with Bill C-49 is that it does not resolve those problems. We have gone through this entire process. As I said earlier, the Liberal government, the Minister of Transport, and the Minister of Agriculture and Agri-Food, through this entire process, have said that we should be patient, because Bill C-49 would address all the problems. Then just a few weeks ago, we had both ministers admit publicly that Bill C-49, indeed, will not resolve a lot of the problems that have been raised.

The government is asking our producers to suffer through yet another grain backlog, which should never have happened. The government had all the tools in place to address this problem, yet it did nothing. I can understand the frustration of our producers across the western provinces. They are looking at us today to take action to ensure that they never have to face this sort of issue again.

We have had many of our grain, barley, and pulse growers here over the last couple of weeks as they have had their days on the Hill. They have raised some other points that I do not think we have talked enough about as we have gone through this process. Not only is this grain backlog causing them to suffer because they are not able to sell their product, it is tarnishing our reputation as a reliable trading partner around the world. A lot of our producers are not getting a premium price for their product, because for all intents and purposes, Canada does not have a reputation for being able to get their contracts out in a timely fashion. We cannot meet our commitments to other countries. When prices are high in the fall, in October, November, and December, we should be selling our crops. We are not getting them to market, to the terminals, and to the west coast until the spring, sometimes a year later, so we are missing out on those premium prices, because we have an inept logistical system and an inept transportation system, a transportation system that has very little to no accountability.

Earlier today, the Minister of Transport was talking about one of the amendments the Senate had brought forward, which I think is critical. It is on “own motion powers” for the Canadian Transportation Agency. That was an amendment brought forward at the standing committee for transportation. It was an amendment brought forward by many of our stakeholders. They want accountability for the rail lines. If there are issues, and our stakeholders see issues, the Canadian Transportation Agency, once it receives a complaint, or even if it does not receive a complaint, can take action to try to address some of those key issues. It is a key part of Bill C-49.

The Minister of Transport earlier today spoke very highly about this part of the bill when he said that we are giving the CTA its own motion powers, which will make such a critical difference for our producers. In fact, in the amendment the Liberal government has put forward, there are no own motion powers. It states in the amendment that the authorization goes to the Minister of Transport. He will be the one who decides if the CTA can take action and put forward some guidelines, a template, on what action can be taken.

Let us put that into a perspective that I think all of us in the House today can understand. That is like my parents saying, “You know what, son? You can do whatever you want with your life, as long as it's okay with mum and dad”. That is what the Liberal government's own motion powers are in Bill C-49. Who is going to give that any credence? There is supposed to be some accountability in Bill C-49 for our shippers. However, this only comes into effect if it is okay with the Minister of Transport. It is okay for people to make their own decisions, but they have to ask the minister first. That has nothing to do with own motion powers. It is really quite hollow hearing that this is going to be a critical part of the bill, because it is taking the arms of the CTA and tying them behind its back.

As we have gone through this process, every step of the way we have offered the Liberal government a solution. My colleague, the shadow minister for transportation, has offered another solution today. She has brought forward an amendment that will concurred the Senate amendments to get this bill passed as quickly as possible.

We are not saying that we agree with every aspect of Bill C-49. In fact, I think we have heard in the debate today that there are still some significant issues with the bill. We also listened to our stakeholders. They need something that will give them some piece of mind that there is going to be some sort of legislation in place to help them address some of the problems they are facing.

We have had stakeholders like the CFA. They represent 200,000 farm families. The Grain Growers represent 50,000 active producers, and they are asking for no further delays on Bill C-49. They want it passed immediately. That is what my colleague's motion today will do.

We want to ensure that we can get this bill passed as quickly as possible. Again, every time we have offered an option or a solution to get this bill through the process, the Liberals have put in yet another step and delay.

They are saying today that if they do not support our motion, and they want our support to pass their amendments and the minister's motion, this all of a sudden will be a quick process. That is simply not the case. If the Liberals do not accept our motion and they pass theirs, Bill C-49 will go back to the Senate, and the Senate will have to agree to the Liberals' amendments. It is yet another obstacle to keep Bill C-49 from passing. This is going to be a ping-pong ball that will go back and forth, or maybe not. Maybe the Senate will agree to the Liberal amendments, but we do not have any assurance of that.

There are amendments they could have passed almost a year ago. There have been opportunities put forward to pass Bill C-49, or, what preferably would have been the case last fall, to extend Bill C-30, and we would never have faced any of these issues.

I am really encouraging our colleagues across the floor to support our motion today, pass the Senate amendments, go right to royal assent, and give our stakeholders the assurances they are looking for to ensure that they can get their job done. What this comes down to is our stakeholders' inability to get their products to market. We have a great deal of concern that this will spill into the fall as farmers get ready for next year's harvest. That has been the disconcerting part of it all.

I think my colleague across the way can understand the comments we heard at our emergency meeting last month on the grain backlog. Many of those witnesses came forward and said that they have given up on it this year. They know that they are not going to get their grain to market and are hoping that this does not impact next year's harvest and next year's shipping season.

I want to highlight that this bill is certainly not perfect. There are lots of concerns about what is in Bill C-49. I want to read some comments from the Premier of Saskatchewan, who has been extremely vocal in his concern about Bill C-49 and the problems it has caused in Saskatchewan. We have seen that Nutrien has just announced that it has laid off or is laying off more than 600 employees, which is going to impact maybe up to 1,300 employees in rural Saskatchewan. The Saskatchewan Premier said, “This is a direct result of the federal government not taking action where there is a huge problem, and they have the clear authority to fix it.”

What have the Liberals done in response to that? They have done nothing. Once again, they want to put this bill back to the Senate, which would delay this process even further.

We have to highlight the financial impact these delays have had. Again, $500 million in grain is sitting in storage bins across western Canada, not getting to market. We have now seen the job layoffs in Saskatchewan at Nutrien, and that is just one company, one potash company. Certainly there will be others that will be facing similar problems.

This is having implications for rural communities. If farmers cannot sell their grain, and they cannot get it to market, it means they do not have money in their pockets to spend in our small communities. That is grocery stores, gas stations, and little movie theatres. That is charities, ball teams, and fundraisers. Those are the things that are suffering because our farmers do not have money in their pockets. They cannot get their grain to market, and that is a direct result of the inaction of the Liberal government when it comes to this grain backlog.

The Liberals could have stopped it a year ago. They could have stopped it in the fall. They could have taken action with an order in council in January or February. Every single time, they have stuck up for the rail duopoly.

With Bill C-49, there is no accountability. Why have the Liberals made our grain farmers suffer through yet another grain backlog? When it comes down to it, they have really done nothing.

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

Mr. Speaker, I thank my colleague for her kind words. I agree that the work in committee was collaborative. Why can this collaboration not continue?

My second issue is with her comment that their approach to the passenger bill of rights or the proposal is in alignment with the European model, which, as I said earlier, serves as a model for a number of legislative measures. We all agree. Why not include it, then? Why prolong the suspense, why drag things out, when hundreds of thousands of passengers are waiting for clear rules across the board? The government could have drawn upon these rules, or even amended them to reflect the Canadian reality. We are stuck in a vacuum with Bill C-49. The government wants to start consultations when everyone seems to agree that the European model is the one to follow.

Could the government pick up the pace and introduce an actual bill of rights?

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I would like to begin by thanking my hon. colleague for all his work on this issue. The work was done in a very collaborative way, and we appreciate that.

I want to reassure him that the approach we have undertaken with respect to the passenger bill of rights is in alignment with the European approach, in that Bill C-49 is the legislative framework for the passenger bill of rights and is equal to the European treaty article 79(2), which is the European legislative framework. Out of that flows the regulatory work, which in the European model is derived into flight compensation regulation 261/2004. Right now this is the legislative piece, and the regulatory piece will follow.

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

Mr. Speaker, I would qualify that by saying that Bill C-49 will ultimately address a number of issues that have been facing farmers for months now. I would like to add that we are extremely sensitive to that and remind my hon. colleague that we proposed taking action much sooner to prevent these problems from happening in the first place, to ensure that the measures set out by the previous government would be extended beyond August 1, 2017, and finally, to ensure that the measures dealing with transporting western grain would be separated out of Bill C-49 so that they could be incorporated into the rest of the procedures as quickly as possible. I realize that we both share the same concern. I would advise my colleague to initiate a serious discussion within his own caucus to ask why they refused to fast-track that process.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, Bill C-49 is an important piece of legislation, important enough that amendments were put forward by both the official opposition and the NDP at committee. These amendments were rejected by the Liberal majority on committee. The bill went back to the Senate, and the Senate came back with almost exactly the same amendments. I think that is a reflection of what Canadians would like to see in this legislation.

My hon. colleague spoke about these amendments. Why does he think that the Liberal government is not accepting the amendments that were made not just by the opposition and the NDP but by the chamber of sober second thought, the Senate?

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

Mr. Speaker, I thank my colleague for his question.

Although we often disagree, I must say that I really enjoy working with all members of the Standing Committee on Transport, Infrastructure and Communities. The simple answer to his question is no.

I must once again point out the irony of the fact that, although my Liberal colleagues seem to have very specific opinions on what the passengers' bill of rights should contain and why, they are refusing to include those measures in Bill C-49. It seems to me that they are talking out of both sides of their mouths if they refuse to budge on their proposal. Once again, we can compare this to the bills of rights in other countries and on other continents in order to compare apples to apples and ensure that a concrete plan is proposed rather than conducting yet another study.

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

Mr. Speaker, as I rise to speak to Bill C-49, I cannot look past the magnificent bouquet of flowers and the hockey jersey that I see in front me, a painful reminder that a member of our family has left us far too soon. I would personally like to extend my heartfelt condolences to his wife and their entire family. I take solace in knowing that their Conservative family will rally around them to provide comfort and support.

On another topic, it goes without saying that yesterday's sad news eclipsed an event that is a little more positive. Yesterday was the seventh anniversary of all the members elected to the House for the first time on May 2, 2011. I wish each and every one of them a happy anniversary. I would once again like to thank the people of Trois-Rivières who have placed their trust in me since then. I want them to know that in everything I do, and not just here in the House, I am always thinking about how I can do them proud and live up to their expectations.

I will now turn to the subject at hand, the debate on Bill C-49 that got off to a very strange start. The minister said it is not an omnibus bill because, for the most part, it is about just one act. However, there is so much going on in this bill that it is not at all clear how any of this can be rushed through. I do not think the word “rush” even applies in this case because we have been working on it and waiting on some of this legislation for two years now. For example, what of the air passengers' bill of rights that the NDP introduced in the previous Parliament? It was not a bill to study ways to create or implement regulations that could someday be included in a bill of rights. The NDP introduced a bill that contained a bill of rights with answers to all of the usual questions on the subject. At the time, the Liberals voted in favour of the NDP bill, even acknowledging the relevance of what we had done. Why reinvent the wheel when the MP became Minister of Transport in this government? That makes no sense. As I said earlier, there is an expression about biting off more than one can chew that seems very fitting in this case. What we are seeing here is an excellent example of that.

We have made tremendous efforts to speed up the process, because we know that there are many stakeholders in the various sectors affected by Bill C-49 who are waiting for a problematic situation to be resolved or a new procedure to be recommended.

To speed things up, the Standing Committee on Transport agreed to hold an intensive series of meetings in early September, a full week before the House of Commons reconvened. This morning, we agreed to cut our debate short so that we can proceed to a vote as quickly as possible at noon and give Bill C-49 the best possible chance of getting off the ground and solving some problems.

We could have done a much better job in a much shorter timeframe had the bill been split from the outset, when all the parties agreed on the grain transport measures. We could have dealt with that side of things quickly, taken appropriate measures, and prevented a great many farmers from being adversely affected by long, legislative delays.

However, the government's bills have a habit of favouring big corporations' bottom lines over workers' rights and consumers' best interests. Bill C-49 is no exception, hence the lack of meaningful protections for air passengers, its dubious worker surveillance measures, and the powers it grants the Commissioner of Competition.

Those are the main thrusts of my presentation; they are a clear indication of how we will be voting. Members will have no doubt understood. It goes without saying that the NDP has always fought for the interests of consumers and workers and that any bill that fails to defend those interests may not meet with its approval.

I am going to discuss Bill C-49 by putting its various elements into four main groups because I only have about twenty minutes to go over this bill, and a couple of them have already gone by.

With regard to grain transportation by rail, as I was saying, although the measures are late in coming, we should not reject everything outright, far from it. I am referring to the main measures concerning grain transportation.

Grain producers following the debate have experienced economic uncertainty since August 1, 2017, upon the expiry of measures meant to help producers and shippers negotiate better shipping rates.

We had already proposed not only that the bill be split, but also that we bring back the temporary measures created by the previous government while waiting for Bill C-49 to cross the finish line. That was rejected.

In the absence of safeguards to improve competition, producers must accept the rates imposed by two railway companies, Canadian National and Canadian Pacific. Some might think that with two railroads there would be competition, everything would be going well, and that producers could find the best deal for the services they want. However, everyone knows very well that we are dealing with a duopoly. That is why the NDP twice proposed that the bill be split. I will move on because I have already spoken enough about that and time is flying by.

Although we voted against omnibus Bill C-49, we have always supported measures that affect the rail transportation of grain. We support the Senate's amendments on this issue and many others. We do so for the sake of consistency. Strangely enough, many of the amendments proposed in the Senate were almost exactly the same, give or take a comma, as those proposed by the Conservatives and the NDP when this bill was examined in committee. The party in power did not accept those amendments. It agreed to a few of them, after similar amendments were proposed by the Senate, but it rejected most of them.

As I said earlier, members of the opposition are not mandated by the public to systematically oppose everything the government does. The role of the opposition, which does not control the legislative agenda, is to point out that the party in power may not know everything about the bill it has introduced on a certain subject and that perhaps we could find ways to improve it if we worked together. That is why the opposition is trying to find solutions. Need I remind the government that 61% of voters voted for opposition members from various parties in the last election? I believe that those voices must be heard. Unfortunately, our democratic system falls a bit short in that regard. The sooner we implement the electoral reform proposed by a number of parties during the last election campaign the better. Unfortunately, the Liberals did not keep their promise in that regard.

I want to come back to the Senate amendments. We welcome the amendment that gives the Canadian Transportation Agency the authority to conduct proactive investigations into rail transportation of grain. I almost feel like applauding but I will restrain myself, and hon. members will quickly see why. In fact, we are at the same time disappointed in the government's position to make this Canadian Transportation Agency initiative conditional on the minister's approval.

Once again we are seeing the centralization of powers into the hands of a single person who holds the title of Minister of Transport. Imagine how independent a Canadian Transportation Agency investigation will be if the agency has to first justify the ins and outs of that investigation to the minister. There is a good chance that the agency will be told “no” or “yes, on condition that... by focusing the investigation on...”. This inconsistency and ministerial intrusion is totally unacceptable. This completely changes the nature of the proposed amendment.

Next, I would like to talk briefly about voice and video recorders. Bill C-49 requires railway companies to install voice and video recorders in locomotives. We strongly oppose this provision, unless these recorders provide for better safety systems and prevent potential rail accidents by providing information. We had said that we would agree to installing these recorders if the recordings were used exclusively by the Transportation Safety Board to analyze a situation and look at all potential findings, which would help us improve how things are done. We refused to allow these recorders to be used to provide information on workers, even randomly. We initially thought this would be appropriate. However, this change could violate section 8 of the Canadian Charter of Rights and Freedoms. Furthermore, as I was saying, companies could end up using these recordings to monitor employees or take disciplinary action, which we believe is completely unacceptable.

Often a train conductor spends more than 12 hours in his cabin. Can you imagine being in front of the cameras for 12 hours? That is our reality here in the House, but rarely for 12 hours in a row. What is more, we are not alone and we do parliamentary work. When a conductor is alone in a locomotive, he might end up talking to himself. If he gets a text message that puts him in a bad mood, he might make an inappropriate comment that could be used against him later. That is unacceptable to us. A bipartisan committee made up of representatives from Transport Canada and the major unions found that this was not the solution and that it was intrusive. The proposed installation of these voice and video recorders is therefore problematic.

I would also like to talk about the passenger bill of rights because it is truly hogwash. Everyone is talking about it, including the media. This is a critical topic that affects the vast majority of people watching us, since most of them travel by air for business or pleasure, for vacation or recreation. At some point, we have all had an unpleasant experience that made us wonder what recourse we had.

Bill C-49 almost entirely overlooks this very important matter. What it does say is that once the bill receives royal assent, extensive consultations will be held to establish regulations, which will be approved, amended or rejected by the Minister of Finance and that will lead to the creation of a passenger bill of rights. Even if Bill C-49 were to receive royal assent before we rise for the summer, we would still be without the long awaited passengers' bill of rights.

I gave the minister the benefit of the doubt. I said to myself that he believes the consultation is necessary because he does not yet know what position to take on some of the elements of this bill of rights and because he wants as much information as possible. He already has all the information he will get. I am familiar with the minister's reading and comprehension skills, and I know that he has the file well in hand.

This morning, I asked a question about a specific amendment the Senate proposed to reduce tarmac delays from three hours to 90 minutes before disembarking passengers. I am sure we all remember what happened to those Air Transat passengers just a few months ago. I think examples like that show that the Senate's amendment makes sense.

I asked the minister if he was rejecting the amendment because he is fundamentally opposed to it for clear, compelling, obscure reasons, or if he was rejecting it because it would be the subject of future consultations and regulations that will be proposed at some point. The minister rose and gave me a very eloquent explanation of why he was fundamentally opposed to the 90 minutes and in favour of the three hours. That made it abundantly clear to me that the minister has already made up his mind about what the Canadian Transportation Agency is going to suggest in terms of regulations. How many months are we going to have to wait for those suggestions? That is another unanswered question.

If his mind is already made up, why not put the bill of rights directly into Bill C-49? That would give us a chance to vote on a bill of rights, rather than on a process that will lead to a consultation that may eventually, by the next election, allow him to again campaign on the promise of a passenger bill of rights. People have been waiting far too long. They want answers.

For example, the bill of rights that the NDP proposed in the last Parliament was largely based on the European charter. According to many of the witnesses who testified during our studies, the European model is the gold standard. With regard to flights that are subject to the European regulations, the regulations need to be invoked in 0.4% of cases because of excessive wait times. However, that figure is four times higher for flights subject to Canadian regulations, for this metric alone.

I would like to quickly move on to my fourth point, namely measures concerning joint ventures. I think they provide a crystal clear demonstration of a slippery slope. If memory serves, Air Canada and Delta Air Lines have proposed a joint venture. Essentially, a joint venture proposal should be favourable. Two companies decide to pool their equipment, airlines, and services in order to offer passengers the best service at the lowest price. However, if a joint venture between two industry giants creates fierce or unfair competition for smaller industry partners, there is a fundamental problem that may completely undermine the level playing field we are aiming for.

Thank goodness for the competition commissioner, who used to be able to reject a proposed joint venture on the grounds that it did not foster healthy competition. However, Bill C-49 takes that authority away from the competition commissioner and gives it to the minister. For the sake of national interest, a very broad and often abused concept, the minister alone will be able to approve joint ventures, even if they go against the competition commissioner's recommendations, because making recommendations is all the commissioner will have the power to do from now on. I think that is completely unacceptable. It goes against the initial goal, which is to provide Canadians with better services and better fares.

I am out of time, so I will stop there. Perhaps I will have the opportunity to elaborate on some aspects of my speech when answering my colleagues' questions.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, I thank my hon. colleague for her work as shadow minister for transportation.

One of the major issues within Bill C-49 is the passenger bill of rights. Of course, the Minister of Transport stood in the House and said that there were going to be stricter rules placed on airlines with respect to a passenger bill of rights. He appeared before the Senate committee and said, in fact, that he never said that there would be stricter rules, and we have the Senate now coming back with proposed amendments that would see stricter rules with respect to a passenger bill of rights. Based on the thousands of petitions that have been received and the signatures that are on those petitions, I would suggest that there is a very real appetite within this country to see a strict passenger bill of rights.

I would ask my hon. colleague to comment on that issue and on why the government is not accepting the proposed amendments from the Senate.

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

Mr. Speaker, I thank my hon. colleague for the question and recognize that we have been serving on the committee together since just after the election. We have done a lot of good work, I believe.

Stakeholders do want to see the bill passed, but what I have been hearing is that they want to see the bill passed as amended by the Senate. In a news release, the Grain Growers of Canada say, “We urge parliament to pass it now”, referring to Bill C-49. Again, I believe it wants to see an amended version of Bill C-49 passed.

In regard to the member's question about addressing the desire of stakeholders to see the bill passed, I have just introduced an amendment to the minister's motion that would see the bill go directly for royal assent. I cannot see any quicker route than the one that I have proposed.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, I too have been sitting on the Standing Committee on Transport, Infrastructure and Communities with the member, and I thank her for the fine work she and the rest of the members have done to bring this bill forward. Coming back to the House a week early in September was a priority for the minister, and therefore a priority for the committee, as was coming forward with this legislation. This measure has become an enabler that aligns with our trade quota strategy and numerous trade deals to bring product expeditiously across country lines and out to the global market.

My question is with respect to a comment made by the Agricultural Producers Association of Saskatchewan. Todd Lewis, APAS president, stated:

Producers often feel we are very distant from the decision-makers in Ottawa, and that our concerns often go unheard.

He further stated:

With C-49, we believe that the minister, MPs, and senators have all paid attention and worked hard to address long-standing problems in grain transportation.

We look forward to quick passage of this legislation to ensure that we can plan for moving the crop that we are seeding this spring.

With that said, is the Conservative Party of Canada prepared to vote in support of Bill C-49 for its quick passage once we finish debate here today?

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

Mr. Speaker, if I understand the question, I agree with him that it is the duty of members of Her Majesty's Loyal Opposition and other opposition parties to take a look at legislation, bills, that are introduced by the government with a view to ensuring we are bringing amendments to the table that we truly believe would improve a bill.

The last time we were debating Bill C-49, I think I asked if a bill could ever be perfect without having objective third groups taking a look at it and perhaps seeing things that were not caught in its original drafting, and certainly as it goes to the other place.

We came to the process around Bill C-49 in good faith, understanding the importance of this bill to our transportation systems and the economy as a whole. I believe the amendments we brought forward in the House committee are amendments we thought were absolutely necessary to improve the bill and address the concerns raised to us by witnesses.

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

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.

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

Mr. Speaker, I listen carefully every time the Minister of Transport speaks, even though, unfortunately, I often disagree with him about Bill C-49's approach, among other things. We know that it is an omnibus bill on transportation and that the minister has bitten off more than he can chew. We have had clear proof of that since we began working on this bill.

I would like to come back and try to clarify one aspect of the passenger's bill of rights, which is not included in Bill C-49. We really wish it was included. I would like the minister to explain why he rejected the Senate's amendment that would reduce the wait time on the tarmac from three hours to 90 minutes.

Is it because he basically does not agree with the amendment, or is it because this issue will be dealt with later through regulations? We know that the passage of Bill C-49 will signal the beginning of a new process, not the implementation of a bill of rights.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, what I could do is quote a comment about Bill C-49, which we worked very hard to put in place.

President Todd Lewis of the Agricultural Producers Association of Saskatchewan said:

Producers often feel that we are very distant from decision-makers in Ottawa and that our concerns often go unheard. With C-49, we believe that the Minister, MPs and Senators have all paid attention, and worked hard to address long standing problems in grain transportation. We look forward to quick passage of this legislation to ensure that we can plan for moving the crop that we are seeding this spring.

I could not be more delighted. I have many other quotes.

We are approaching the end, I hope, and the bill will soon have royal assent so that our farmers can properly plan the coming year with many more tools at their disposal than they have had in the past.

[Randy Hoback, Conservative, Prince Albert, SK]

If there's one thing that really frustrates Saskatchewan farmers right now it's that they have been sequestering carbon for years and nobody is willing to give them credit for it. Then they want to throw on a carbon tax, which is actually going to increase our farmers' costs and make them uncompetitive in the global marketplace because countries they compete against don't necessarily have the same costs of the carbon taxes and things such as that, which we're putting on here in Canada. It's concerning.

Now, you talked about Bill C-49. I assume you're talking about the bill with the amendments that were made in the Senate. I assume that all those farm groups are basically saying they needed the amendments to actually make Bill C-49 work for them moving forward. Do you not agree?

[Brian Innes]

When we look at our strategic plan for the industry, we're looking to have stable and open trade. In terms of the mandate of this committee, we're looking to improve productivity through sustainable production and we're looking at making sure we maximize the value of what we produce. Internally, here in Canada, there are many things that the industry is doing for the three pillars of the stool, and government also has a role when it comes to things such as infrastructure and the transportation system we have for rail. I'll repeat that Bill C-49 is an incredible move forward to help us have better rail service, and we hope that bill passes as soon as possible.

When we look at other things that help us grow, as well as barriers that we see here in Canada, it has to do with the limited regulatory capacity we have to enable our exports globally. We need our scientists to be able to work with other scientists in other countries. That means that regulatory agencies such as the Canadian Food Inspection Agency and the Pest Management Regulatory Agency need to have the mandate and the resources to be able to have science-based rules that help us to trade.

Those are some of the main ones we face. Certainly when we look at how we adapt to climate change, we need to do so in a way that maintains our competitiveness as well. Our industry is working very collaboratively with jurisdictions to get frameworks in place that help our processing plants and our growers do that.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, we are here today to discuss Bill C-49, the transportation modernization act, which was passed by the Senate, with amendments, on March 29, 2018. I would like to thank the Standing Senate Committee on Transport and Communications for its dedicated study and thorough review of the bill, which led to a total of 27 amendments being proposed, of which 18 were carried.

The committee heard important testimonials from over 70 witnesses during 23 hours of hearings. The committee also received valued submissions from many other stakeholders during its diligent study of the bill. While there have been some differences of opinion, we have also heard how important this bill, as a whole, is to our economy, to the transportation system, and to Canadians. The government wishes to thank all stakeholders who actively contributed to the study of Bill C-49 and helped to highlight its benefits and importance to the Canadian transportation system.

Many groups spoke in support of this legislation, including but not limited to the Chemistry Industry Association of Canada, which testified to how pleased it was with Bill C-49, including its transparency and fair access provisions; the Canadian Association of Railway Suppliers, which stated during its testimony that it believes Bill C-49 would encourage investment in the grain handling system; the Alberta Wheat Commission, which elaborated on the strong support Bill C-49 has among its 14,000 members; the Public Interest Advocacy Centre, which explained that the bill outlines clear and consistent standards of treatment and compensation for all air carriers; Metrolinx, which explained, on the subject of LVVR, that the bill strikes a balance between privacy and safety; and others, such as Alberta Wheat, Alberta Barley, the Canadian Federation of Agriculture, Grain Growers of Canada, Cereals Canada, and Soy Canada. Views such as these contribute to making Bill C-49 a transformational piece of legislation that strengthens Canada's transportation system.

The Senate's amendments touch on the different areas of the bill, and the government has taken the time to carefully review each proposed amendment.

The government supports the following two amendments. The first has to do with loosening foreign ownership restrictions and the reference to interests owned directly or indirectly. One of the bill's main objectives is to clarify things for air carriers and passengers. That is why we support the Bill C-49 amendment about foreign ownership of air carriers. The proposed amendment clarifies restrictions on foreign ownership of Canadian air carriers by individuals or international air carriers.

The second amendment we support has to do with locomotive voice and video recorders and adding the notion of destruction. Although the notion of destruction of information is implicit in the notion of preservation as set out in this clause, the amendment would further clarify the regulatory authority. This will address any concerns about making sure the regulations provide for the destruction of information once companies are no longer required to preserve it. This amendment is acceptable as passed because it makes the clause clearer.

The government also supports, with amendments, three other amendments.

The first is called “own motion”. It is important to recognize that the freight rail measures in Bill C-49 currently strike a delicate balance between the needs of shippers and those of railways. Any changes must be carefully considered in order to ensure that this balance, and the long-term economic viability of the rail network, is maintained. That said, we have heard the calls from shippers of different commodities across the country about the need for the Canadian Transportation Agency to be able to conduct investigations into rail service issues on its own motion.

That is why we are proposing an amendment that would expand the agency's existing complaint-based authority to investigate rail service issues by providing it with a new authority to investigate systemic rail service issues without a formal complaint, subject to the authorization of the Minister of Transport. This would give the agency new powers to investigate and address service issues for multiple shippers at once, while retaining an appropriate level of oversight by the government.

The second Senate amendment we accept, with amendment, is the direction of traffic for long-haul interswitching. The government recognizes that the efficiency of shipments by rail is critical to bringing grains and all other commodities and goods to market. In recognition of the specific needs of captive shippers, such as those in the mining sector, Bill C-49 includes a new remedy, long-haul interswitching, which was designed specifically to provide them with competitive alternatives and better rates and service.

LHI, as we call it, would provide captive shippers with access to an alternative carrier, with the rate for the regulated movement, of up to 1,200 kilometres, being determined by the Canadian Transportation Agency, based on comparable traffic. This new remedy would be efficient and effective, with the agency conducting all the necessary work and analysis and issuing a decision within 30 business days. This remedy would help ensure that captive Canadian shippers continue to be globally competitive, with access to competitive rail services at the lowest freight rates in the world.

To further improve this remedy, the government is accepting the Senate amendment concerning the direction of traffic for long-haul interswitching movements, with minor changes. These amendments would help ensure that shippers located within 30 kilometres of an interchange or served by another railway are not excluded from accessing LHI if the railway or interchange is not in the reasonable direction of the movement of their traffic.

Not only is this bill supported by a wide array of stakeholders, but it would offer many benefits for all rail shippers, including those that are captive. We are committed to working with all shippers to ensure that these benefits are properly understood by all, and that they are used to the fullest extent possible in order to strengthen their negotiation leverage with the railways and hold them fully accountable for the quality of the service they provide.

Third, there is the addition of soybeans to the MRE, or maximum revenue entitlement. As another example of our government's continued support for Canadian farmers, and the agricultural sector more generally, we are accepting, with some modifications, the Senate's amendment of adding soybeans to the maximum revenue entitlement. The modifications would ensure that soybeans and their related by-products would benefit from the advantages of moving under the maximum revenue entitlement.

Recognizing the importance of ensuring that this bill strikes the right balance, the government is unable to support the remaining amendments proposed by the Senate.

In the area of freight rail, the first is long-haul interswitching in the Maritimes. While we understand the concerns of captive shippers in the Maritimes, we must also ensure the continued viability of the eastern rail network and fluidity through the Montreal area. While we do not intend to expand LHI to enable captive shippers in the Maritimes to access the remedy in Montreal, this bill would make significant improvements to existing remedies that would benefit these shippers.

In addition, Bill C-49 contains a number of other measures affecting marine transportation that should be particularly helpful for shippers in Atlantic Canada, including the liberalization of the rules regarding the repositioning of empty shipping containers, as well as amendments to the Canada Marine Act to permit port authorities and their wholly owned subsidiaries to receive loans and loan guarantees from the Canada Infrastructure Bank.

As well, we could not accept final offer arbitration based on cost. This bill seeks to strike a careful and effective balance between the interests of railways and those of shippers, and we believe it does just that. The existing Canada Transportation Act provides shippers with a commercially based final offer arbitration process to settle a dispute during a negotiation of a confidential commercial contract with a railway.

FOA is intended to establish a market-based rather than a cost-based rate. As part of this process, an arbitrator is already allowed to request technical assistance, including costing and legal assistance, from the Canadian Transportation Agency. There is nothing in the act that obligates the arbitrator to seek the consent of railways for such assistance. The arbitrator can hold any failure on the part of the railways to disclose information against the railway when making a final decision.

Bill C-49 benefits shippers in many ways, including enabling the minister to publicize aggregated freight rail information that will help shippers in their commercial negotiations with the railways, and lessening the need to access remedies such as the FOA. Through this bill, shippers, including captive shippers, are offered many alternative remedies such as LHI, reciprocal financial penalties, shortened timelines for agency decisions, and access to improved informal dispute resolution mechanisms. All of these will respond to shipper needs and concerns for greater access, more transparency, and increased accountability.

In the airline sector, with respect to the amendments relating to the provisions of the bill on air transportation, we do not agree with the amendment to the provision relating to people affected and air passenger rights.

The government does not support the amendments proposed to the provision relating to passengers likely to file a complaint if they feel that an airline has not properly taken their rights into account. These passengers are designated by the expression “person affected” in the bill. Although Bill C-49 refers to the fact that only a person affected may file a complaint, I would like to point out that this does not prevent the passenger from asking for assistance from third party advocates to support his or her complaint.

Furthermore, organizations that represent Canadians or promote improved air service on their behalf will still be able to play that role, by challenging the contents of tariffs they find unreasonable.

On issues relating to the transportation of human remains, the government does not support the amendment aimed at developing airline policies concerning the transportation of human remains. Given that this information is already included in an airline's tariff, such a provision would be redundant.

industryThe government developed a proposal to address tarmac delays that takes into account international best practices and the industry's operational realities. By “industry”, I mean airports and air carriers. Our approach not only sets clear, standardized requirements for all air carriers, but it will also apply specific standards of treatment to tarmac delays, regardless of the length of delay, and will require that passengers be disembarked following a three-hour delay.

Furthermore, there is no need to provide for a review of the passenger rights in this bill after three years. The bill already includes provisions requiring that the Canadian Transportation Agency produce an annual report on the number of complaints received, as well as performance indicators to assess how air carriers are complying with the passenger rights regime.

The Official Languages Act regulates compliance with official language obligations, and this act is the responsibility of Canadian Heritage and the Treasury Board Secretariat.

Naturally, Transport Canada continues to support Canada's two official languages, and this includes requiring that the regulations of Bill C-49 and all announcements regarding aircraft safety be in both official languages, but the scope of the proposed amendment exceeds the scope of the authorities in this act.

With regard to joint ventures, we think that Bill C-49's approach to the voluntary joint venture approval process strikes a fair balance between competitiveness and the public interest. I would like to remind my colleagues in the House that we agreed to an amendment proposed by the House of Commons Standing Committee on Transport, Infrastructure and Communities following its in-depth study of the bill. That amendment deals with the publication of the transport minister's decisions regarding implementation. The amendment already guarantees that the process will be transparent. Similarly, the Senate amendment providing that a review of joint ventures must be conducted every two years, creates an overlap because the minister already has the authority to review joint ventures as he or she sees fit. Moreover, it is not necessary to define the concept of public interest because, under Bill C-49, guidelines that set out the factors to be considered must be developed jointly with the Competition Bureau.

With regard to voice and video recorders on locomotives, the government does not support the proposed amendment to prevent companies from proactively using the data from these recorders. The central purpose of the recorder regime is safety. The amendment in question would considerably reduce the safety benefits of recorders. A 2016 report from the Transportation Safety Board showed the benefits of using data from recorders to proactively identify and mitigate risks.

Finally, while the government cannot support these amendments, we recognize the thoroughness of the review of the bill conducted by the Senate, and the special care that senators took in proposing these amendments. I would like to thank the Senate and the many witnesses who took the time to prepare submissions or to appear before the Senate committee for their valuable contribution to the legislative process.

The performance of Canada's transportation system is critical to the overall well-being of Canadians and our trade-dependent economy. We need to help to ensure that the system is best positioned to meet the demands of the economy so we can keep Canada's travellers and trade moving efficiently and safely today and in the future. This is precisely what we are proposing to do with Bill C-49.

To further strengthen this bill, the government is proposing to accept five well-articulated Senate amendments which would significantly reinforce the objectives of this bill. I mentioned that this is in addition to the nine very good amendments that came to us from the House Standing Committee on Transport, Infrastructure and Communities. The robust due diligence and hard work of senators and members of Parliament will help to ensure the continued viability, efficiency, and safety of the Canadian transportation system.

Most important, as requested by a large number of Canadian shippers, the passage of this legislation would establish new “own motion” powers for the Canadian Transportation Agency, ensuring that shippers will be able to benefit from a stronger, more accountable freight rail transportation legislative framework. In terms of rail freight, the swift passage of this bill would enable much needed contingency planning, more comprehensive data, and new powerful remedies for the sector, helping to avoid a repeat of the issues experienced this year.

This bill would also increase the safety of the transportation system, as well as ensure the security of all those who utilize it. This bill would additionally ensure the implementation of world-leading passenger rights for air travellers, bringing Canadian transportation into the 21st century.

The resulting legislative package has been carefully crafted to achieve a fair, balanced, and safe transportation system that will establish the conditions for the success of the many players involved, while supporting a strong and prosperous economy.

The testimony heard from witnesses from all over Canada made one thing very clear, that the passage of this legislation must be a top priority for the government.

I am seeking the support of the House to vote in favour of this government motion. This will, in turn, expedite the passage of the bill to the Senate once again for its consideration and approval.

[Brian Innes]

Thank you for your question.

When we look at our capacity to export, it's not a limitation on our capacity to produce. There are some limitations on our transportation network, as the committee heard from the previous witness. Our industry has been very vocal about the importance of passing Bill C-49 without delay because that does set us up for a stronger framework in the future to get our products from where they're produced to tidewater. There are also other limitations when it comes to infrastructure. In the Port of Vancouver, for example, we look for investment in infrastructure broadly to enable our product to get from where it's produced to export. The investments in infrastructure, both in transportation and at port, are all important for our sector.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, there have been discussion among the parties, and if you seek it I think you will find unanimous consent for the following motion.

I move:

That, notwithstanding any Standing Order or usual practice of the House, when no Member rises to speak on the motion relating to Senate amendments 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, or at 1pm this day, whichever comes first, every question necessary to dispose of the said stage of the said Bill shall be deemed put, and a recorded division deemed requested and that the division not be deferred.

[Brendan Marshall]

Bill C-49 that is before the House, in our view, is a lost opportunity to support—as Mr. Sinclair says—local Canadian businesses to take advantage of that type of market share.

Rail Transportation

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, I certainly hope that with the co-operation of the Harper Conservatives, we are going to be able to do it as quickly as possible. Unfortunately, they do not know whether they are coming or going. Last November they actually voted against Bill C-49. For 10 long years they had a chance to demonstrate initiative by modernizing freight rail legislation. Did they do it? No, they were totally absent.

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

Mr. Speaker, delays in passing legislative changes to improve the rail transportation system are entirely of the Liberals' own making. They wasted over a year between receiving the Emerson report and introducing Bill C-49. Now the Liberals are rejecting the simple amendments that would improve the legislation for grain shippers.

Mr. Speaker, this may well be the strangest question you will hear today, but when will the government stop messing around and pass its own bill?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

For the moment, then, what's conceived for the rail industry in Bill C-49 is different from what obtains...in the airline industry.

[Kathleen Fox]

First of all, we've been long-standing vocal about requiring recorders on board all modes of transportation to help us in our investigations, but we also believe firmly that those recordings can be very useful to operators in order to investigate incidents and accidents that we don't investigate and also for proactive safety management purposes—provided they remain protected, which they will, under our act, and provided the appropriate safeguards are embedded in regulations.

It's part of Bill C-49 because it's part of the overall requirement for voice and video recorders. It helps provide a greater safety benefit to the operators if they can have access to this information. In the long term, it remains to be seen whether that will be expanded to other modes. It's certainly something that the International Civil Aviation Organization is looking at for recorders on airplanes, about potentially expanding that use to operators.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

On the question of voice and video recording on trains—this is an item in Bill C-49—the government is proposing to treat the railway industry differently from the aviation industry. My understanding is that on planes, while you have recording devices, the information is made available to the Transportation Safety Board in the event they're investigating, but the information is not made available willy-nilly, if you will, to the companies.

In your view, is there a reason for treating rail differently from the aviation industry with respect to access to the recorded data that's granted to companies?

National Grain Week

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, our farmers have much of which to be proud: a tireless work ethic, an unwavering commitment to our rural communities, and a passion for the land passed on from generation to generation.

I invite Canadians across the country to join me in celebrating the inaugural National Grain Week. Through innovation, determination, and environmental stewardship, our Canadian farmers grow the highest-quality grain in the world.

To continue to be successful, our farmers must get their products to market, and they must have an efficient regulatory regime. We have much work to do, and time is of the essence. Amendments to Bill C-49 would bring much-needed accountability to our transportation system, preventing future crippling grain backlogs.

The trans-Pacific partnership provides access to lucrative new markets, ensuring long-term stability for Canadian grain growers. We must work together in the House to pass Bill C-49 as amended and ratify the TPP before the summer recess.

As Conservatives, we are committed to getting this done. In the spirit of National Grain Week, I ask everyone to join us.

Agriculture and Agri-Food

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

Mr. Speaker, farmers and manufacturers employ millions of Canadians and contribute billions of dollars to our economy. Due to the Liberal government's weak response to the current rail transportation crisis and the many flaws in Bill C-49, our farmers and shippers will continue to suffer. This morning I met with a manufacturer who has already lost $40 million this year due to shipping issues.

When will the Minister of Transport stop ignoring the plight of our farmers, shippers, and manufacturers, and do his job?

Trans Mountain Expansion Project

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, we are here today for one reason and one reason only, and that is we are in a crisis, a crisis of confidence. We have investors who, whether they are foreign or domestic, lack the confidence in Canada as a place to invest, as their confidence in the government to create an environment for them to invest in and protect their investment has gone sideways.

It has gone that way because if the Prime Minister's contradictory messages or comments, policies, and inaction on core projects. This has absolutely rocked the investor community. As a matter of fact, at the COFI conference which I was at just last week, as was the Minister of Transport, we heard very soundly from economists who stood on the stage and said that investor confidence in Canada is at an all-time low.

Investment is flowing out of Canada at record levels, levels that have not been seen in over 70 years. Why is that? As mentioned, it is due to legislation such as Bill C-69, Bill C-49, a tanker moratorium, and the Prime Minister killing energy east at the eleventh hour by introducing new rules. Let us not forget northern gateway, a project that was approved. It was a project that underwent rigorous environmental standards and testing, a project that had indigenous equity partners. As the Prime Minister and the government came to power, the rug was pulled out from underneath the project.

I remind this House that it was just over a year ago when the Prime Minister said that he was phasing out the oil sands. I will also remind my colleagues that one of the very first statements the Prime Minister made on the world stage after gaining power was that Canada will become known more for its resourcefulness than its resources. That is shocking.

On Trans Mountain, the reason we are here tonight, the Prime Minister has failed to deliver a clear action plan from the very beginning. Truthfully, I do not believe for a moment he ever wanted this project to go forward. He will stall while saying those words with his hand on his heart, that he and his cabinet are seized with this project and that it is their intention to have it go through. We have seen a few ministers today and over the last couple of weeks state that this project will go through, yet it has taken over a year for them to even come to the province of British Columbia, my beautiful province, to actually say those same strong words. Where have the 18 MPs from B.C. been? They have been silent on this issue.

I will go as far as saying that I put the blame squarely on the shoulders of the Prime Minister and his 18 Liberal MPs from the province of British Columbia for the situation we are currently in provincially. They failed to stand up for the Trans Mountain pipeline. That was a major issue in the provincial election last summer when the NDP and the Green Party campaigned that this project will never go through under their watch. The B.C. Liberals were fighting it out and doing their very best to try to win back our province. What we saw was essentially a deadlock. Then there was a coalition with the NDP and the Green Party. Premier Horgan might be in a little trouble because if he supports the pipeline, what will happen to his majority? He is going to have a bit of an issue in terms of how he can hang on to power.

Domestic and foreign investors looking at Canada and British Columbia as places to invest are comparing the ease of doing business and returns on capital that can be achieved here with those in other jurisdictions around the world.

We have to remember that investors have choices. What we do as a government or as a parliament, or what the Liberals do as government, can have a significant impact on investor confidence. That is what we are seeing currently. Under the current government, investors in Canada have been besieged by significant federal and provincial tax increases, which taken with the recent substantial tax reductions in the United States and the ever-increasing protectionist government, as well as the opportunities they are seeing south of the border, underscores that Canada's small, open trade-exposed economy is no longer competitive.

Economists are speaking out. Dave McKay, president and CEO of RBC, raised a concern about investment capital leaving Canada in real time, noting that a significant exodus of capital from Canada to the United States is well under way and that we should be worried.

These comments have been echoed by John Manley, president and CEO of the Business Council of Canada, who stated recently that real issues of competitiveness are absent from the federal government's thinking, noting that Canada is, “always in this difficult competition to attract investment and to retain investment — and it's not be taken lightly because investment can move quickly.”

We even have the Suncor president and CEO Steve Williams saying that his company, Canada's largest integrated oil firm, will not embark on new major projects in our country because of the burdensome regulations and uncompetitive tax rates.

Finally, late last year, the TransCanada Corporation, after spending over a billion dollars, cancelled its proposed $17-billion energy east pipeline project out of frustration with the government and the project approval process.

These and other examples across the country demonstrate that policy-makers have a definite impact on our economy. That is what we are seeing with Justin Trudeau's failure to get this job done and creating burdensome regulations on investors. We must always remember that investors have choices.

I want to touch on the indigenous partners aspect, because this has been brought up time and time again. I will relate it to a story in my own riding, the Mount Polley disaster, which I have brought up before. There are no two ways about it, it was a disaster. However, the proponent, the company, and our indigenous first nations partners within our riding, as well as our communities, banded together and got the job done with respect to mitigating the disaster.

We had protesters out there day in and day out. When a card check was done on those people, it was shocking to find that most of the protesters were not from our region, and some of them were not even from Canada. However, they were there making sure that Canadian businesses had every roadblock put in front of them. There is a lot to be said in the media about how our indigenous partners and indigenous communities are tired of being pawns for environmental groups, of being trucked out in the media and being used as pawns in this. Our indigenous communities only want an opportunity to be self-sufficient and to be partners in these programs. In the Trans Mountain pipeline, over 43 indigenous communities are equity partners in this project.

In the seconds that I have left, I want to read this. It states, “A Conference Board of Canada report has determined the combined government revenue impact for construction in the first 20 years of expanded operations is $46.7 billion, including federal and provincial taxes...for public services such as health care and education.”

It also notes that B.C. alone would receive $5.7 billion, Alberta would receive $19.4 billion, and the rest of Canada would share $21.6 billion because of this project.

If there is a project that has national interest, this is the one. Unfortunately, through delay tactics and confusing comments, the Prime Minister has shaken investor confidence, and that is unacceptable.

Rail Transportation

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

Mr. Speaker, the Liberals have said again and again that Bill C-49 will resolve the rail backlog. They refuse to divide Bill C-49. They refuse to use an order in council to force the railway companies to move our farmers' grain to market.

The Minister of Agriculture and Agri-Food finally unveiled the truth in Winnipeg recently, saying that “if Bill C-49 passes, it won't solve the issue right away”.

How will he respond to the amendments to Bill C-49? Will it be another refusal to act for farmers?

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, as you know, I have written to both railways to get grain moving faster, and considerable progress has been made since that time. We will continue to work on this.

As for the amendments proposed in the Senate regarding Bill C-49, we received all of them. We are studying them carefully and will share our position with the House very soon, I hope. I hope to have the Conservatives' support so that we can get this legislation through as soon as possible.

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

Mr. Speaker, this is national grain week, and many farmers from western Canada will be in Ottawa this week. The grain transportation crisis will definitely be on the agenda. By failing to take action, the Prime Minister and Minister of Agriculture and Agri-Food have cost farmers and the Canadian economy billions of dollars. Waiting for crises to resolve themselves has become the trademark of the Liberal government. The Prime Minister has tarnished Canada's reputation when it comes to grain exports.

Can the Minister of Agriculture and Agri-Food inform the members of the House of the government's intentions regarding the proposed amendments to Bill C-49?

Air Transportation

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

Mr. Speaker, the stranded Air Transat passengers have not forgotten that the minister promised them a speedy resolution by adopting a passenger bill of rights. It has been a year since the incident and two and a half years since this government was elected, but there is still nothing, and the bill could double the amount of time that passengers have to wait on the tarmac before they get assistance. The Liberal government obviously does not have the guts to deal with the airlines.

Could the minister tell us whether he is going to show some courage and eliminate the provision doubling the tarmac time limit in his Bill C-49?

Public Services and Procurement

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I rise on a point of order because in a moment I will be seeking unanimous consent for a motion that will address the ongoing grain crisis in the Prairies. On Monday, the Standing Committee on Agriculture and Agri-Food heard from witness after witness who said the situation is decidedly unsatisfactory.

That is why I am very hopeful that, if you seek it, you will find unanimous consent for the following urgent motion that, in light of the acute crisis within the grain transport industry, a message be sent to the Senate calling on their honours to divide 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, into two bills in order to create a new bill comprised of clauses 2 to 13 and clauses 20 to 59, as well as related transitory, consequential, and coming-into-force provisions respecting transportation of grain; and that the House implore their honours to pass the new bill at the earliest opportunity.

Rail Transportation

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, we are taking measures to accelerate the flow of grain for our western farmers to get it to world markets. At the same time, I have been urging the other chamber to move as quickly as possible in the adoption of Bill C-49.

Unlike the Harper government, which had 10 years to try to modernize the movement of freight rail and did not do anything except come up with a band-aid bill, we are actually putting in place something that will allow us to deal with the movement of freight rail, including grain, efficiently once that bill is passed.

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

Mr. Speaker, almost a year ago, the Liberals refused to listen to the NDP and remove the section on grain transportation from their omnibus transportation bill. As a result, the bill is still being studied in the Senate and our grain producers are still being held hostage by CN and CP. It is time for the Senate to fix the Liberal government's botched job and remove the section on grain transportation from Bill C-49.

Will the government commit to supporting our motion today formally asking the Senate to expedite the passage of these provisions, and help the crisis facing grain farmers out west?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Well, to some extent it's speculative, but there's no question that one of the major accomplishments of Bill C-49 is that it will provide more options to shippers—who, in some cases, are in the situation of being located where there's only a single railway—and ultimately to the farmers who supply them, because they will have reciprocal penalties in place.

There's a new definition of “adequate and suitable service”, and there are a number of other measures. You have seen it yourself, because you received the testimony during 30 hours in September from a whole bunch of people who provided you with input.

The feedback I've received from many of them is that this was a bill that tried to achieve that balance in terms of not only addressing long-standing shipper grievances but also ensuring that we still had the capability for our railways to be able to continue as businesses. They need to invest in new infrastructure. They need to continue to provide service for the movement of all those goods across the country. I think we ended up with a bill coming out of this committee that was a really well-balanced bill, and I hope that will be the case when it comes out of the Senate.

[Sean Fraser, Liberal, Central Nova, NS]

Should you find yourself in Nova Scotia again this summer, I'll take you down to the wharf. Perhaps you can sample a bite yourself.

There's another issue I wanted to tackle. On Bill C-49, you're right: we did come back early and as a committee found quite a bit of common ground on a number of issues. One of the issues we tackled was the air passenger bill of rights. In my mind, we landed on a bill that is going to enhance the passenger experience without compromising the efficiency of the transportation sector.

One of the great frustrations I have, being new to politics, is that sometimes when we get outside of the parliamentary bubble, we're dealing in a post-fact world. I've seen some news stories floating around suggesting that the bill is actually going to double the amount of time that passengers have to wait on the tarmac. The understanding I had when our committee dealt with this was that some airlines have a voluntary program to ensure that passengers don't wait beyond 90 minutes, but that there are many ways for airlines to get out of that voluntary obligation, so to speak.

Can you commit to us that the intention and the effect of this legislation will not double the amount of time that passengers are going to be waiting on the tarmac, but ensure they have a remedy when they are there for an unacceptable period of time?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I'll start by thanking this committee for looking at Bill C-49 so expeditiously last fall. That was very much appreciated. Now I am hoping that this bill will get through the Senate in the most expeditious manner possible.

I would also remind my colleague that despite everything she has said about Bill C-49, she and her party actually voted against Bill C-49 when it came for third reading, which is still a surprise to me.

With respect to the movement of grain, I have been in touch with the railways. I did so at the beginning of the month. This was just after a conversation I had with the Minister of Agriculture and the Minister of Transportation from Saskatchewan, the two of them together. I'm very much aware of the situation, which I follow on a weekly basis, and now on a daily basis.

I told both CN and CP that the movement of grain was unacceptably slow in this very busy season. Notwithstanding a very difficult February because of weather, the movement of grain was not at an acceptable level. In fact, they have come back with a plan. I told them that I wanted to see a plan by March 15, which they both provided. They have significantly increased the resources, both in terms of equipment—I'm talking about hopper cars and more locomotives—and more personnel, as well as prioritizing the movement of grain.

I am now seeing an accelerated movement of grain, which, by the way is about 25% above the levels that existed in 2013-14 when we had that very bad season under the previous government. It is moving very efficiently at this point. I will make sure that it continues to move efficiently, because there is a very large backlog and I want to get western farmers' grain to market as quickly as possible.

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

Thank you very much, Madam Chair.

I would like to thank the minister for joining us today, as well as all of the departmental officials. I know you do very good work on behalf of Canadians and I appreciate your joining us today. My question, obviously, will be for the minister.

For weeks, Minister Garneau, farmers and the Province of Saskatchewan have all been asking you to support an order in council to force the railways to clear the rail backlog that has plagued Canada's rail system this winter, yet you have refused to do so.

To be clear, this is not the first time you have refused to act in the interests of our farmers and shippers. When you introduced Bill C-49, Conservative members requested that the bill be split so that the rail measures in the bill could be studied in an expeditious manner. When you refused, we then called upon you to extend Bill C-30 to ensure that there would be no legislative gap, and again you refused. Finally, when the opposition members proposed reasonable technical amendments to Bill C-49 to address the concerns raised by numerous witnesses, again the Liberal members did not support them.

My question to you, sir, is this: how much more funding would the Department of Transport have needed to request in the supplementary estimates (C) in order to draft, execute, and implement an order in council as requested by numerous farm organizations and provincial governments?

[Marc Garneau, Liberal, Minister of Transport]

Thank you, Madam Chair.

Since you have made all the introductions, I can skip over the first part of my statement.

Innovation and modernization present important challenges for the transportation sector. The funds we are seeking would help support modernization that is important to the success of our economy, and to the safety and security of Canadians. Canada must have the infrastructure and services in place to move goods and people to where they need to go, for years to come.

As was outlined in Transportation 2030, my long-term strategy for transportation in Canada, our legislation and regulations must aligned with global standards, and with rapid and complex changes taking place in the transportation sector.

Changes in the transportation sector must be implemented safely—without endangering Canadians or harming our environment—while supporting and strengthening our economy. We must be in step with the sector's fast-moving evolution, or—even better—a step or two ahead.

That means fostering research and innovation, in partnership with stakeholders, other governments, indigenous peoples, academia and others. Adapting to change is not easy, but everyone at Transport Canada, and the crown corporations in my portfolio, embraces the challenges before us.

We have taken already some important steps toward the future. This includes Bill C-49, the transportation modernization act, which is the first major step on the Transportation 2030 path.

The transportation modernization act would amend the Canada Transportation Act and other legislation governing the air, rail, and marine sectors, helping to modernize Canada's transportation system. Through the oceans protection plan, the largest-ever investment to protect Canada's coasts and waterways, we are building a world-leading marine safety system while preserving ecosystems, forging stronger partnerships with indigenous peoples, and engaging coastal communities, industry, and other stakeholders—all with a view to learning more about our oceans.

The proposed Canadian navigable waters act includes robust powers to enforce safeguards and protect the public's right to navigation. The Canadian navigable waters act would provide extra oversight where it's needed most, on navigable waters of greatest importance to Canadians and to indigenous peoples. It would provide more transparency for projects such as dams, mines, and bridges. We welcome the challenges before us and we look forward to the exciting changes the future promises.

In the supplementary estimates before you today, Transport Canada is requesting $755,900 in new funding and $122,400 in statutory forecasts for employee benefits plan costs.

However, most of that is offset by transfers to other government departments, for a small net increase of $175,700. The majority of that offset is a transfer to the Federal Bridge Corporation Limited, which is seeking an increase of $698,500 through these supplementary estimates, to conduct a feasibility and design study for the Cornwall port of entry in Cornwall, Ontario.

In the interim estimates before you today, Transport Canada is seeking $322.8 million in interim supply, to continue providing a safe and secure, efficient and environmentally responsible transportation system.

The Canadian Air Transport Security Authority is seeking $244.2 million to continue protecting the public through effective and efficient screening of air travellers and their baggage.

VIA Rail is seeking $134.5 million to continue providing safe, reliable and efficient passenger rail service.

Marine Atlantic is seeking $37.8 million to continue providing safe, environmentally responsible, and reliable ferry services.

The Federal Bridge Corporation Limited is seeking $900,000 to upgrade the roadway connecting the north and south channel Seaway International Bridges at Cornwall.

The Canadian Transportation Agency is seeking $9.4 million to continue its work as an economic regulator that administers relevant transportation legislation.

Madam Chair, Transport Canada, the crown corporations in my portfolio, and I are committed to sound fiscal management and stewardship of government resources on behalf of Canadian taxpayers. The financial resources sought through these supplementary and interim estimates would help ensure our transportation system continues to serve Canadian needs, as I mentioned earlier, to move goods and people to where they need to go safely and securely for years to come.

I'd be very happy now to answer any questions.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you, John.

Again, as we've heard so many times, getting Bill C-49 passed with the amendments is the critical aspect of it; otherwise, we'll be coming back to deal with this again later on.

One of the things we talked about earlier was the APP and whether it should be raised from $400,000 to $800,000 and so on. All of those things don't help unless you know exactly when you want to use that tool, because if all you're doing is punting it down the road because you've lost all of the contract opportunities and your marketing....

That can work, and you can use it, but you better know that the year before, rather than trying to deal with it on an ad hoc basis.

Of course, the other aspect of it is trade, which is what we really are missing throughout. I was just in Southeast Asia a couple of weeks ago, talking on trade issues. We tried to say that we'll be able to market these products and that they should look at the great things they'll get if they have our Canadian grain or our beef and so on, but they look at it and say that right now they know they can get it from Australia, and there are no issues there. I know we're losing all of these opportunities because of the way people look at it.

That's one of the aspects that we have to recognize. The railways forecast a 2% or 3% increase and say they'll just do it as the economy looks, but as farmers we are increasing the volumes immensely because we have the skills and the tools and we are going from there. The key concern I have is how we keep this pressure on throughout the summer so that they are ready on August 1, when week one shows up, to handle the issues we always face.

[Dan Mazier]

They didn't talk about grain at all in their replies, so it was basically business as usual. This is how they were reacting to it. It was not specific to agriculture or grain, which is.... I think they missed the mark on it.

To answer your question, when we get Bill C-49 passed—not “if” we get it passed—it will enable a lot of us to do a lot more things to the railways to hold them accountable. That's why we need it passed.

[John Barlow, Conservative, Foothills, AB]

Thank you very much, Mr. Chair. I'll split some of my time with Mr. Dreeshen.

It's frustrating that we're dealing with this, and it's sad to see or hear from our producers today that they have pretty much resigned themselves to the fact that this is a lost season. It's especially frustrating when, as Mr. Fransoo said, action could have been taken weeks or months ago to address the season, regardless of what happens with Bill C-49.

This is no fault of my colleagues across the way, because we do work fairly well together. Many of the amendments that are being discussed right now that you have all talked about today were brought up at the transport committee by the Conservatives, and the Liberals voted them down at the transport committee.

We're already talking about dealing with things next year, the consequences of this year. This should never have happened if we had acted quickly on the advice from stakeholders and members who went through this before in 2013-14. I'm just shaking my head that while we're having to deal with this situation, we're already talking about how to deal with the consequences.

Mr. Mazier, you talked about CN getting through this before somehow despite massive cuts. It was because nothing was being transported in the energy sector that they managed to get through that, but it's a little different this time around. You're right that they made massive cuts to their staff and their equipment, and now they're trying to scramble to get it back.

Ian Boxall brought it up before, when he talked about how he pays $360,000 a year in freight alone. The cost to the industry of that last crisis in 2013-14 was $8 billion. Do you have any idea what this is costing you this time around, and have you recovered financially from 2013-14?

[Dan Mazier]

There is no silver bullet. It will go a long way in fixing a lot of things, modern-day things.

We've dismantled the Wheat Board. In some way they did control the flow of grain. They bought it differently, as Mr. Ritz alluded to earlier today. Things flowed differently in Canada.

We have a new market, called Japan, all of a sudden coming into the west coast. Things have changed in Canada. A modern-day Bill C-49 will bring us up to date to at least address these problems.

The problem is that part of the act needs updating. We've transformed as a country and we just haven't been able to adapt in a regulatory sense to make it happen for everybody.

[Jean-Claude Poissant, Liberal, La Prairie, QC]

We know that Bill C-49 is supposed to solve much of the problem, but do you think this bill and the amendments will meet all the needs?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I want to focus on the long term, but as a member of Parliament, I'm not yet convinced.... I know Bill C-49 will answer a lot of questions, but I've spoken to a lot of your members and a lot of farmers about capacity, and they're saying that they're getting a lot more efficient on the farm and can produce a lot more in the same acreage of land, so that obviously means production is going to increase.

Mr. Mazier, are you having that conversation with the rail companies about long-term capacity? What's the five-year or 10-year output? Are we ramping up capacity? Even if Bill C-49 is there, we will be back here in four years if we don't have that capacity. If we don't ramp up capacity, it will happen again.

[Daryl Fransoo]

They definitely missed the ball on forecasting this time, but there's no incentive for them to spend money on capacity like that when we can't hit their bottom line. That's what some of Bill C-49 will do. We'll be able to hit them where it hurts, and maybe they will spend more money on forecasting or maybe they won't be so long to acquire resources, because they'll know there is some loss to be had.

I definitely agree that we have to move all commodities. Our economy depends on all of them. As I said, that includes getting pipelines built. I think that will take some capacity off the rail line, which could then be used for grain.

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

I am shocked.

I'm angry, really angry about that, because we told them to act. We told them a lot of times, over and over. This season is failing because of the lack of action by the Liberals. I don't want ask you to be political; I can't. I'll do it.

We told them in June of last year to split the bill, to pass just some amendments that you require. The Liberals defeated all the amendments we proposed. Now you are asking them again to make these amendments to Bill C-49. I hope that this time they will accept, if we want to fix the problem for the long term. I think you should work a lot with the Liberals and try to convince them to accept those amendments, because otherwise you will have another bad season next year.

What is happening is offensive. We asked for an emergency meeting three weeks ago. You are saying we might have been able to change the course of things three weeks ago. Mr. Sekulic, you might have been spared one of the many delays you mentioned. Unfortunately, someone said it was not a rush and that we would have the meeting on March 19.

We have to send a very clear message right away. We have to stop playing games with western grain producers. We have to work to make sure the grain gets to market. It is the government's responsibility. It is our responsibility as a committee to demand that the government ensure that the farmers' grain gets moving so they can be paid. We are playing games with Canada's reputation and with the farmers' reputation.

Mr. Sekulic, how does it feel as a young farmer to see your debts mounting while you are unable to sell your crops? How do you deal with that, in your family? How do you feel?

[Dan Mazier, President, Keystone Agricultural Producers]

Thank you, Mr. Chair and members of the committee, for having me here today to speak about this important issue in the grain transportation system.

My name is Dan Mazier. I'm the President of Keystone Agriculture Producers, which is Manitoba's general farm policy organization representing over 7,000 farm families. I'm also a grains and oilseeds farmer northeast of Brandon, Manitoba.

In 2013-14, Canada suffered from a grain transportation crisis that is estimated to have cost western Canadian farmers approximately $6.5 billion. When shippers—my grain buyers—are unable to readily move their commodities to port, they will begin offering farmers lower cash bids or no cash bids for their products, so although farmers are not the actual shippers ordering the railcars, they are the ones who end up bearing the costs of the poor rail service.

The Government of Canada responded to the 2013-14 crisis in several ways, including an order in council that penalized the railways for missing grain movement targets and an accelerated schedule for the statutory review of the Canada Transportation Act. Out of that review came several recommendations that were incorporated into Bill C-49, which passed in the House of Commons and presently sits before the Senate, as you know.

In 2013-14, the magnitude of the crisis caught many in government and industry off guard. This time around, we became aware much earlier of the challenges that railways have been having in moving our grain this year, largely because we now collect information on grain car orders and deliveries. This is done by a group called the Ag Transport Coalition, which reports weekly data on the number of grain cars ordered by shippers compared to the number of cars actually delivered by each railway.

According to Ag Transport Coalition data for Manitoba, six weeks ago, at the beginning of February, CP supplied 74% of cars ordered. So far, so good.

CN delivered 14%.

Things only got worse from there. In CP's worst week in February, they only managed to deliver 17% of ordered cars. In CN's worst week, they delivered 0% of their orders. On average, combined, the railways delivered only 29% of the cars that were supplied on the want week for the month of February, which created a backlog of 28,000 cars, or approximately 35,000 trucks, leaving more than 30 ships waiting for grain off the coast at the port of Vancouver.

How do we move forward and fix this problem before permanent damage to our country's reputation as a reliable shipper of grain is done again?

A good first step is to come up with a plan to get the grain moving. As the committee knows, a co-signed letter went out to the railways from Ministers Garneau and MacAulay requesting such a plan and a report back by March 15. I also understand that CN has taken a proactive approach in communicating with shippers with how they want to move forward. It all boils down to more people, more locomotives, and more products. I would encourage this committee to monitor and support the ministers, using all the tools possible, so that we can all keep pressure on the railways to keep the backlog cleared.

The elephant in the room is that we need to have Bill C-49 strengthened and passed as quickly as possible. As you know, it is presently before the Senate. Along with other farm stakeholders, I have given presentations with amendments that we argue will create a policy environment whereby the railways are held more accountable for their service failures and the impact they have on shippers.

I would like to point out that the current design on the long-haul interswitching option in Bill C-49 is being viewed as overly restrictive in terms of which shippers are eligible to apply for it. We are recommending clarifying the existing language for interswitching to ensure that it is as effective as possible for shippers to access this program.

The most impactful amendment we are recommending is to empower the Canadian Transportation Agency to initiate investigations into service issues when it becomes aware of them and to mandate solutions when necessary. Presently, the agency's ability to act under most provisions of the Canada Transportation Act is triggered by an application or a complaint.

For instance, although the agency is allowed to act on its own motion with respect to air carrier tariffs for international services, it can only examine and potentially correct issues with domestic tariff provisions in cases where an application has been received. Similarly, under section 116 of the Canada Transportation Act, the agency's power to order measures to address rail level-of-service issues is conditional upon receipt of complaint. An extension of the agency's own-motion authority would allow for a proactive initiative of inquiries when there is evidence that a problem might exist.

This may include statistical evidence, a pattern of complaints, or consistent credible media reports regarding the transportation service providers' financial difficulties or service failings. The authority would be particularly relevant to matters affecting more than one transportation service provider or user, for which the existing complaint-based process is not particularly well suited.

This measure was one of the recommendations made by David Emerson in 2016 in the report to the Government of Canada that Ron Bonnett alluded to earlier this afternoon. We agree that these measures are necessary to help resolve service-related challenges that appear to be inherent in a monopoly marketplace such as Canada's grain transportation system.

In addition to these service-related measures, we are requesting that soybeans and related products be added to the schedule 2 list of grains that are eligible to be covered under the maximum revenue entitlement. In Manitoba, with more than two million acres planted in 2017, soybeans represent our third-largest crop by area. Currently the transportation costs for soybeans are as much as 40% higher per car than the MRE-covered grains, with no promise of getting these cars. They are charging more, but we're still not getting those cars in the first place. There is no reason that the farmers, who have innovated and adapted to changing conditions, should be denied the same protection from price exploitation by an monopoly industry that other crops receive.

To conclude my remarks, I would like to make one point very clear.

It is critical that Bill C-49 pass with these amendments before the House rises in June. This way shippers and carriers will know what their obligations are under the law. They will make the needed investments to ensure that the 2018 crop is delivered to customers on time and that we do not suffer the same economic hardships as a country that we have now suffered twice in less than half a decade. The railways must face repercussions if they fail to meet acceptable service standards. They must not be allowed to gouge captive shippers of soybeans. Their performance must continue to be carefully monitored and action must be taken when they fail.

In Canada our growing season is very short. Our seeding and harvest windows are narrow and it is difficult to predict how long they will last. To deal with this challenge, we invest more in equipment than nearly any other farmer in the world, and when the conditions are right, we work all day and all night to get the crop off the field and into the bin. I fully expect the railways to make investments necessary to get the job done, and if it requires senators and members of Parliament to work all day and night to get Bill C-49 strengthened and passed into law, then I expect that of you as well.

Canada's economic well-being is critically tied to rail transportation. Do not shy away from your responsibility to ensure that the Canada Transportation Act addresses the challenges we face and ensures that Canada's economy can grow to its full potential.

Thank you very much for your time and attention. I look forward to your questions.

[Daryl Fransoo, Director, Western Canadian Wheat Growers Association]

Thanks for that story, Warren. I've heard from farmer after farmer after farmer that we can't get our grain to the ports and we can't get paid. That's kind of the big thing.

Mr. Chair and members of the committee, on behalf of the Western Canadian Wheat Growers, thank you for holding this meeting. I'm glad this issue is getting the attention it needs, although I am saddened that we have to be holding this meeting at all.

As a grain farmer, I can state without hesitation that when our rail lines are only hauling 50% at most, a lot of people and a lot of farmers are hurting.

Unfortunately, one of the reasons these statistics have risen in the last couple of weeks is that carriers are running more trains on main lines, and many farmers and terminals on the side branch lines are still woefully short of rail stock. In addition, we are now facing spring breakup in many parts of the country, so road restrictions are coming into place. Then we have planting season. We can ill afford to have these kinds of rail backlogs in the future.

As I stated, I personally know of many grain farmers who are having the same problems as Warren. One in particular has a barley contract worth three-quarters of a million dollars that is three or four months behind. He's a good-sized farmer, but that's a lot of money to be waiting on.

When grain is sitting in a farmer's bin, of course we aren't getting paid. We can't pay our bills, and the domino effect rolls out across all the towns and across the Prairies. On top of the immediate financial problems, farmers are attempting to make decisions for the looming crop year. When cash flow has all but stopped for many farmers, the future looks bleak.

I'd like to remind the committee—and Ian did it earlier—that in 2014 this not only affected grain but also the fertilizer coming up from the Mississippi. It ultimately made it here, but it gave input companies a reason to jack the prices, and farmers had to pay for that in the end. Truthfully, it shouldn't be this way and it doesn't need to be this way.

I'm glad that CN acknowledged they had made mistakes. This is a good start, but good intentions do not resolve the problem that grain farmers are facing.

I recognize that we can't discount weather, because it is an obvious safety issue. With that said, rail has run in Canada for over a hundred years. Cold temperatures and snow in July shouldn't be a surprise, and we need better planning for that. CN and CP need to be better prepared. They need to not get rid of power and have more front-line manpower. Obviously their forecasting was poor, so I suggest maybe they spend some money on that.

Although Bill C-49 isn't a perfect bill, it does give shippers some clout and does put some of the onus back on the rail companies. We need to pass this bill, with some of the proposed amendments, sooner rather than later so that farmers have that much-needed protection.

The government has stressed this year that agriculture will play a major role in strengthening our GDP and the middle class. We grain farmers are up to the task. We are among some of the most productive grain growers on the planet. Unfortunately, with the current grain transportation problems, we won't be able to easily meet these objectives. There are tens of thousands of farmers and hundreds of thousands of middle-class people who are negatively affected by backlogs like this.

We need an efficient transportation system. We need to be able to move all commodities to market: grain, minerals, raw resources, and finished goods. We need to be able to meet our customers' expectations. We need good rail lines that meet timelines, and we need pipelines for oil. The Western Canadian Wheat Growers believe this is a non-partisan issue. Ships are waiting in Vancouver. Farmers have the grain that needs to be exported on these ships. Farmers and grain shippers want to work with you, the governments, and we want to work with the rail companies. Let's collectively solve this problem.

In closing, Mr. Chair, Bill C-49 needs to be passed as soon as possible. We need long-term solutions to the problems we are facing today, but first and foremost we have to get this bill through. Get it done before the summer comes along so that we can work with some of these clauses in there and make sure they work.

Mr. Chair, I thank the committee for meeting today. Let's make certain that we, collectively, are not just talking. We need to be doing, and starting today, we need to fix this problem for the long term.

I look forward to answering your questions.

[Warren Sekulic]

Our priority is to ensure the ultimate passage of Bill C-49 in order to help correct the imbalance between the market power of the railways and shippers, and we would strongly advocate for the deficiencies in long-haul interswitching to be addressed.

[Warren Sekulic, Director, Alberta Wheat Commission]

Mr. Chair and members of the committee, thank you for the invitation to appear today.

My name is Warren Sekulic. I'm a director with the Alberta Wheat Commission. I'm a fourth-generation farmer in northern Alberta, and we will actually celebrate 90 years next year.

I am here today because the current grain transport backlog continues to impact my operation and the operations of farmers across western Canada. In addition to sharing my specific experiences, I also offer the strong support of our 14,000 farmer members for the amendment and passage of Bill C-49, the transportation modernization act, as a means of addressing the systemic issues in our freight rail system.

My farm is located 70 kilometres north of Grande Prairie, Alberta, which is over 1,200 kilometres from the nearest port, and we are totally dependent on the one railway that services this line of four inland terminals. With our limited access to processing facilities, market alternatives, or other methods of transportation, almost 100% of the grain and the crops I grow are destined for the export markets and dependent on a single railway.

As with all businesses, planning is an essential part of my operation. Each year, much work goes into planning—planning what crops I'll plant; the amount of inputs, such as the fertilizer and seed I'll need; when those inputs will be delivered; and the timing of the contracts that I will negotiate to sell my grain. Those contracts are usually aligned with when I pay my bills.

As an example, on my farm in 2013-14, as a sound farm management practice, I had all of my forward contracts in place to sell my grain to the local terminal. I had a prudent plan to deliver my grain in a timely manner so that I could pay my land rent and input costs, such as fertilizer and seed. The rent is typically due in the fall. I even had allowed a buffer for rail delays, given that they are commonplace, especially up north.

When the railway failed to deliver in 2013-14, it put my farm business and my livelihood in jeopardy. I'm contractually obligated to pay my rent, regardless of whether or not I deliver my grain. Like most young farmers, I'm cash strapped as I build equity in my business, and because of long delays that year, I needed to secure a bridge line of financing in order to ensure that I could retain my land, pay my debts, and see my operation succeed into the next year.

I am here today, at what is one of the busiest times of the year for my operation, because as I head into the 2018 planting season, we are once again experiencing a backlog in the freight rail system which is impacting my operation and farming operations across western Canada that are reliant on the freight rail system.

When it comes to rail transportation in Canada, the agricultural sector has always operated in a monopolistic environment. Each year, our farmer members grow millions of tonnes of wheat, other grains, and oilseeds. We rely almost entirely on rail transportation to ship our products from the Prairies to port terminal facilities on the west coast and to Thunder Bay and south of the border into the U.S.

Costs associated with railway failures, such as demurrage fees and lost sales, are ultimately passed down the supply chain to me, the producer. As the price-taker, I'm dependent on the price the market dictates. I cannot adjust my price, the price of the products, so ultimately these increased costs reduce my profitability.

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

Passage of this bill is imperative, especially in light of poor rail service that shippers have been experiencing in western Canada this year, with the poorest period of car order fulfillment dropping as low as a combined 32% between CN and CP, reaching the levels experienced during during the 2013-14 crisis. In any other business, this lack of performance would be unacceptable, but in the grain sector, these service levels are all too common.

Because of this poor service level, currently I am left with a significant amount of grain on my farm, grain that was all contracted for delivery in October, November, and December. This type of backlog causes a cascading effect, not only on my operation but across the entire system. For instance, I had peas contracted for delivery in November, and when railcars didn't arrive to take my peas as scheduled, I had to bear the cost and resources of bagging my peas and leaving them on the ground in temporary storage, pending the availability of railcars to make up this shipment.

As the snow starts to melt now and the railway has still not fulfilled my delivery, I have to now use further resources to move the peas from bags to bins so that my product doesn't get damaged.

I, like most farmers, have contracts scheduled with terminals on a fairly ongoing basis, so when cars eventually do arrive for my peas contracted in November, the contracts that I have in place for March delivery of my canola get pushed into April. April contracts get pushed into May, May into June, and on and on. This is further complicated by spring conditions in which road bans are instituted, making it almost impossible to deliver my grain if delayed trains do arrive. This is not a fictitious backlog; this is reality.

As I and other farmers ramp up our operations to prepare to get our seed in the ground for this growing season, we are feeling the impacts of the current backlogs in the system. Farmers who haven't had the opportunity to deliver their grain in as long as six months are strapped for cash flow to buy inputs for this year's crop, and systemic rail failures often cause delays in receiving inputs, such as my fertilizer, which has actually been delayed since December.

In January I was in Ottawa to deliver this same message to the Standing Senate Committee on Transport and Communications. Now it's March, and while I have moved some of my grain, I am still significantly behind. From all indications, between the backlog and the spring conditions, as well as my focus on getting the crop in for next year, I will likely not deliver my grain until we're into April or May. For some of my contracts, that's almost eight months later than what the contract stipulated, which is eight months of not getting paid.

For these reasons, I am advocating for the amendment and passage of Bill C-49, the transportation modernization act, as a long-term solution to addressing the ongoing freight rail failures.

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

We were recently made aware that CN Rail has included a form of reciprocal penalties in their service level agreements. On the surface, this seems like good news, but these penalties are still extremely one-sided. As an example, they give CN the ability to spot cars at any time in a period of more than a week, while grain companies are still required to load these cars within 24 hours or face penalties. Bill C-49 provides the ability to establish service level agreements with truly reciprocal penalties.

Under Bill C-30, which expired on August 1, 2017, interswitching provisions, which allowed shippers to access any interchange within 160 kilometres, proved to be a powerful and effective competitive tool to improve competitiveness for grain shippers.

[Jean-Claude Poissant, Liberal, La Prairie, QC]

Similarly, we agree that Bill C-49 must be passed quickly. That being said, I realize that this bill alone will not be enough. We have talked about the APP, Farm Credit Canada, infrastructures, elevators, road infrastructure, and the need to listen to farmers.

With regard to elevators, is it feasible to have infrastructures closer to the ports and to transport a certain amount of grain there in advance of any difficulties that may arise?

[Ian Boxall]

If what we saw on the letter that they posted on their website and circulated on the 15th is an indication of what their planning looks like.... With the passing of Bill C-49 and the planning aspect in that bill for them to submit a plan for the winter haul, if that's what it's going to look like—vague, broad, sweeping—then we're in trouble. As producers, we're in trouble, because that isn't a plan.

I want a plan. I want the number of cars by quarter, by province, by sector. That's what we need. We need a concrete plan that's going to work for the industry. I don't have any recourse, because I'm not a shipper. As a producer, I want a plan.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Nielsen and Mr. Boxall, you've possibly had the chance to hear the statements from CN and CP. You've heard of their plans to rectify the situation and hopefully get us to a place where we don't have to repeat this scenario.

Are you filled with much optimism and hope that we're going to get there with this plan, in addition to Bill C-49 being passed?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Nielsen, what do you believe? You've mentioned that there needs to be greater collaboration between the House and the Senate and that we need to pass Bill C-49 as quickly as possible. Is it your wish that we amend it or that we just get it passed? Again, we're getting mixed messages from industry on that.

[Ian Boxall, Vice-President, Agricultural Producers Association of Saskatchewan]

Thank you, Mr. Chair, and thank you for the opportunity to present to this committee.

I'm here today to explain how poor rail performance affects my industry, my community, and my family business, and why we need Parliament to take immediate action.

I and my wife Lisa and my brother and my sister-in-law together farm 8,300 acres of grains and oilseeds in northeast Saskatchewan. I am also vice-president of the Agricultural Producers Association of Saskatchewan.

We farm about as far from port as you can get, and in an average year our farm pays $360,000 in freight to get our products to our customers. The backlog of grain in the Prairies has had a huge effect on the ability of producers to cash-flow their operations and is making things extremely difficult for farmers going into their most expensive season. In the northeast, we are sitting with 3-month-old grain contracts undelivered due to the shortage of timely and sufficient railcar service to the elevators. At the end of February, personally, we were sitting with an outstanding wheat contract from December that we had been unable to deliver. This was leaving us in an extremely tough financial position. Luckily, our local elevator, which is one of only four in Canada that are serviced by both CN and CP, found some room to take our product and help us out. They didn't have room to take the entire contracted amount, but just enough to give us the money we needed at that time. We don't get paid on a contract until we deliver, and these delays place financial and personal stress on us as producers for something that shouldn't be a concern.

Two of the short lines that operate in northeast Saskatchewan have also felt the pinch of the lack of rail service this season. They have had a very poor and inconsistent supply of cars this shipping year, and this problem started in October, long before winter showed up again in Canada. They have also had several cases of cars that have been loaded and then not picked up for weeks. Producers do not get paid for the product loaded in these cars until it is received by the end user, so this is again placing unnecessary financial and mental stress on producers.

A lot of the highly sought-after oats grown in northeast Saskatchewan are loaded on these short lines in either dealer or producer cars. I grow 2,200 acres of these oats every year, and with poor rail service the market for these oats is in jeopardy. The processors need to find alternative sources for their oat supply, since our railroads have dropped the ball on shipping our product in a timely manner. My little boys want their oatmeal most mornings. I want that to be Canadian oats from Tisdale, not oats from Australia.

The rail issue isn't just affecting grain deliveries. Our local fertilizer dealer has been trying to put fertilizer in place for us, its customers, since last fall. Due to rail logistics, they have to pull fertilizer by truck out of Redwater, Alberta, instead of Clavet, Saskatchewan. That's an additional 1,000 kilometres per trip. So far this season, they have had to pull roughly 60 loads of fertilizer from Alberta, and that is only half of the product they require. If things continue like this, we are looking at an additional 120,000 kilometres of trucking freight. That's added manpower, truck power, wear and tear on the roads and equipment, costs, and carbon emissions that we as the end users are going to have to pay for. Spring road bans will be coming into effect very soon, and we could be short of fertilizer in western Canada to put in this year's crop. All of this is due to poor management and planning on the side of the railroads.

Farmers need to get the rail service that we pay good money for. Bill C-49 was drafted because of the disastrous shipping season of 2013-14, and it's completely outrageous that we are even here today and talking about this again.

In closing, we need all parliamentarians, from both the House and the Senate, to come together and pass Bill C-49 for the sake of the shippers, the processors, the retailers, our economy, our farmers, and all Canadians. Farmers already deal with so many unreliable factors—weather, crop prices, input costs—but reliable rail service is something we should be able to depend on every year.

Thank you.

[Jeff Nielsen, President, Grain Growers of Canada]

Thank you, Mr. Chair, senators, and MPs, for allowing me to come and provide some comments to you today.

Across the Prairies, farmers are once again suffering the impacts of poor rail service. Unfortunately, this is not a unique experience. We dealt with it four years ago, and that's why I am here today: to ask the committee to back the systemic solutions that can fix rail transportation for the long term.

Grain Growers of Canada represents 50,000 grain, pulse, corn, oilseed, and soybean farmers across Canada, from the Atlantic provinces to the Peace Country of British Columbia.

Personally, I run a family-owned incorporated grain farm in south central Alberta, near Olds, growing wheat, malt barley, and canola. Grains off my farm are shipped south to the U.S. and to Mexico, and shipped through the west coast to ports in Asia and around the world. Effectively, every tonne of grain I sell off my farm must travel by rail to get to the end customer, be it in Canada, the U.S., or overseas.

Over the last couple of months, because of poor rail service, elevators are filling up and our grain is not able to get to our customers. This situation has put many farmers across the Prairies in the position where, because their own grain hasn't moved, they haven't been able to get paid.

We appreciate that this committee has recognized the difficult position this has put grain farmers in and has agreed to hold this hearing today. We believe that transportation is not a partisan issue and that all members of the committee should be able to agree on the need to have a rail transportation system that works. That is why we're asking you to come together and support getting Bill C-49 amended as we've presented it and passed as quickly as possible.

As has been mentioned, the unfortunate reality is that road bans and seeding are fast approaching. I will quickly just give a bit more information on road bans. Every 10 loads of grain I can haul today without the road ban would mean 13 trips the next time, once the bans are in place. That costs me more money in manpower for that trucker, and naturally it costs more for fuel. Farmers will have to use their skills as business managers to work through the difficult position they have been put in due to these new issues.

However, there is an opportunity to fix this situation for the long term so that farmers are not forced into a rail crisis again. With the amended Bill C-49 in place, the industry will have effective tools to hold the railways to account or to be able to take their business to another railway if they cannot get acceptable performance.

I know you've heard of the problems farmers face today, and that is why there is a focus on Bill C-49. First and foremost, the bill provides the ability to hold the railways financially accountable for the service through reciprocal penalties. The current lack of accountability impacts all the players in the supply chain, and ultimately farmers. Giving shippers the ability to hold railways to account through the reciprocal penalties in Bill C-49 will help ensure that car orders are fulfilled and my grain can get delivered.

Other benefits of Bill C-49 include a clear definition for “adequate and suitable service”, increased requirements for reporting and railway contingency planning, improved data collection, and new powers so that the Canadian Transportation Agency can play a larger role in areas such as improved dispute resolution processes.

However, it is important to understand where Bill C-49 falls short.

First, the maximum revenue entitlement, or MRE, is a key tool for protecting grower interest, and it needs to be amended to cover the movement of soybeans. I understand that when schedule II was created in 2000, soybeans were not really grown yet on the Prairies; however, soybeans are now a major commodity. They are the third-largest crop in Manitoba and soon will become second. Their production is spreading across Saskatchewan and Alberta as growers get new varieties. The act also excludes chickpeas, which should be corrected. It is simply unfair that some producers are protected, but not all of us are.

The real benefit of Bill C-49 is the long-haul interswitching, which gives shippers the ability to take their business elsewhere if they can't get acceptable service. Grain farmers saw improved service when interswitching was in place previously; often the threat of taking their business elsewhere was enough to get the railways to improve service.

However, as the bill is written today, too many elevators and too many processors will be excluded from long-haul interswitching. This means farmers will likely be put in the same situation of grain being backed up in their bins the next time one railway starts to suffer.

That is why the second target amendment that Grain Growers of Canada supports is to amend the provisions for long-haul interswitching so that it can remain a very useful tool for our grain companies to obtain more competitive terms of service.

Bill C-49's long-haul interswitching provision allows some of the same benefits as the previous extended interswitching; adoption of the amendments proposed by the crop logistics working group will ensure that oat and other grain farmers will receive the service they require.

Grain farmers across Canada have worked hard to provide the world with top-quality grain, oilseeds, pulses, and corn. We strongly support the government's ambitious target to increase agrifood exports to $75 billion by 2025, but this can only be achieved with a dependable and accountable rail transportation system. We can't meet our target if we can't get our grain to market.

The bottom line is that this year's repeat of the 2013-14 rail crisis is another example showing that we need to see Bill C-49 amended and passed as soon as possible. While it may be too late to see significant improvement this year, Parliament has an opportunity to give shippers the tools they need to prevent this situation from happening again. CN and CP have demonstrated time and again that they will not act on their own, and that is why shippers need tools to hold them to account. Without these legislative tools, we know it will happen again. It shouldn't take a farm crisis to get the grain moving.

I thank you and look forward to your questions.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I've heard all of you talk about Bill C-49. It was my colleague Robert Aubin, the NDP transport critic, who moved the motion to split the rail provisions off of Bill C-49, create a new bill, Bill C-51, and refer it directly to the transport committee. Unfortunately, we were not successful, but it was our hope at the time that those particular clauses of Bill C-49 could make a speedy passage. In hindsight, that might have been the best option. Unfortunately, as a House body we have no control over the other place, but I hope they are hearing the message loud and clear that those provisions need to get the attention they deserve.

Thank you, Chair.

[Ron Bonnett]

The initial reaction is that I think we got their attention. The frustrating thing is that it's taken a lot of pressure from government officials, individual MPs, and farm organizations, as well as an almost crisis situation that developed in February, when Manitoba didn't have any cars delivered in one week. Some of what we're hearing sounds so similar to what we heard in 2013 and 2014. There is a need to make sure we have some type of system so that proper planning takes place, but it has to go beyond that. There have to be some teeth, and Bill C-49 provides part of that, to ensure there's compliance.

It's not the same as trucking grain. In that case you can go hire another trucker if one isn't performing. You're stuck with those railroads, so you don't have the flexibility to do that. That's why the regulatory system has to be in place to ensure there's compliance.

[Tyler Bjornson]

With the ability to continue to innovate and adopt new technologies at the production level as well as the handling and grain processing levels, we definitely see the potential to reach those levels. In terms of our ability to deliver on that, there are still a lot of question marks. That is why the remedies in Bill C-49 are so critical, from our point of view.

[Ron Bonnett]

The cash flow is just one point.

I was a little disappointed when I listened to some of the railroad presentations. The one thing that gets missed in there is about getting the planning in place so that you can deal with the issues. Everybody knew back in October that there was going to be an issue, and then all of a sudden it's February when you start putting locomotives in place and drawing people back. I think the only reason they put those people in place was the threat of government action, and I think what we're looking at with Bill C-49 is that this threat is always going to be there. They have performance standards that they're going to have to meet.

We're talking about a bridge with the advance payment programs, but we have to remember that the core issue is that farmers can't market that grain when the grain is ready to be marketed. That's going to affect the cash flow, so unless we have a long-term solution, we could be back at this table in three years.

It's interesting that they talked about putting in interim engines to keep the lines open. That was discussed when they were in front of this committee four years ago as well. Why wouldn't that type of planning be in place?

[Rick White]

I did mention briefly about the advance payments program. As a proactive measure, the government should be looking at the advance limits that are currently in place. Right now, if farmers have not delivered and paid down much of their advance and they're at the maximum $400,000—say they paid it down to $300,000 due to slow movement—they're running into a brand new program on April 1 and they're only eligible for another $100,000. That's catching some of them in the pinch between two programs, because the overall maximum is $400,000.

An easy fix would be to expand that limit to whatever the government would be comfortable with. We would say double it to $800,000. Farmers use the program for what it's intended for, which is to cash-flow themselves so they can market their grain appropriately. They can't market now because of the grain transportation problems that are plaguing the industry such that they're not able to sell their grain. That is one very proactive measure on the finance side.

Again, I don't want to take away from the focus on the service issues at hand. Bill C-49 is what we really need long term, and we really need that bill amended and passed. There are some good amendments coming forward. It needs to be done this year to get ready for next year, because this year, what's happening is going to happen. We can address some of the financing, as I suggested—a short-term Band-Aid fix to help farmers through it financially—but at the end of the day, Bill C-49 is the focus. We need to get it passed. We need to get it through the Senate. We need co-operation with the House to get royal assent on it before we go into the summer break, because we need to start next year in a lot better place than we have been this year.

[John Barlow, Conservative, Foothills, AB]

Thanks again, Luc. You're exactly right.

Tyler, you touched on it. I remember speaking in the House about this last September and October; we did want to work across the floor. We adamantly supported splitting the rail transportation off of Bill C-49. We would move it through. I think if that had been the case, we would have caught some of these proposed amendments that you're bringing forward, like the long-haul interswitching and those types of things. If it had been a separate bill, we could have addressed some of these points then, but because it's such a huge bill, it's now stuck in the Senate on something that has nothing to do with what we are talking about right now. That's the frustrating part of this entire discussion.

I like to think that when we went through this in 2013-2014 as the government, we knew what we were facing. Bill C-30 would have addressed some of these issues in good faith. We said, “We're warning you that this is going to happen, so let's try to address it.” It is frustrating for us, but it's more frustrating for you as producers and stakeholders that you're having to go through this again when there was opportunity to try to fix this situation.

Rick, you brought up an interesting point that I think we missed out on, and it's a fact that Tyler brought up too: we're missing markets that we may have had. We're not getting a premium for our product, because on the international trade market when we're talking about our producers and we want agriculture to have a $75-billion trade business, which is fantastic, we're taking away every possible tool for our producers to be able to reach those types of goals.

Can you touch on the fact that we are not getting a premium for our product because we are no longer a reliable trading partner because we cannot meet our sales deadlines because we can not get our product to market?

[Ron Bonnett]

I think our issue is very similar. We know we have a problem with grain transportation. Frankly, it's not our job to fix it; it's the government's role to figure out the best way to fix it. I think what you've heard from the presentations is the urgency that's required, and I think what we have to focus on now is that urgency.

This is about the Senate, this committee, and the minister working together to figure out how to make sure that we can get Bill C-49 passed and how to make sure it has the teeth that are necessary to make it work.

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

For the last little while, you have been calling for Bill C-49 to be passed as quickly as possible. Do you have an opinion on the Canadian passenger bill of rights, though? Do you have an opinion on the public participation of foreigners in the funding and shareholding of Air Canada? That is the problem with Bill C-49.

The problems with Bill C-49 can be traced primarily to the fact that the Liberals refused last June to divide up the bill so as to speed up the adoption of certain measures. The two opposition parties wanted to proceed very quickly in order to avoid the black hole of August, given that the special measures established in Bill C-30 were about to expire and become void. That is the truth.

The government does not want us to be partisan, but it behaved in a partisan way itself by putting forward Bill C-49, which is full of things that have nothing to do with each other. Now, it is using us to get this bill passed as quickly as possible, but you have nothing to do with the passenger bill of rights.

What we want is for the grain to be shipped. What we want is for you to sell it on the market. What we want is for the system to work. Unfortunately, what the government wants is to pass an omnibus bill that is full of things that have nothing to do with grain shipment. That is the problem.

If the bill had been divided up and we had been able to pass these measures last June, would we be in the same situation today?

[Tyler Bjornson, Consultant, Western Grain Elevator Association]

Thank you, Mr. Chair and members of the committee.

I'm presenting to you today on behalf of my client, the Western Grain Elevator Association. We're pleased to have the opportunity to contribute to your study of the grain transportation backlog.

The WGEA represents Canada's six major grain handling companies, with inland and port facilities from Quebec to British Columbia. Collectively, these companies handle in excess of 90% of western Canada's bulk grain movements. Working alongside grain producers and other rail-reliant industry sectors, the WGEA has been committed to finding long-term solutions to chronic capacity and performance deficiencies in our rail freight system.

The growing backlog of rail shipments in western Canada continues to have a significant negative impact on shippers and the farmers they serve. As you will hear from numerous witnesses over the course of this study, declining rail service over the winter months has created the worst backlog we have experienced since 2013-14.

According to the Ag Transport Coalition, the total railcar shortfall is currently at almost 28,000 railcars. This represents over two and a half million tonnes of grain that companies have submitted orders for that have not been filled in the week they were ordered.

Overall performance over the course of this shipping season has been steadily deteriorating, with car order fulfillment below 50% on average in most weeks. One railway in particular has brought the average down, hitting an all-time low in the week of February 12, when just 17% of cars ordered were filled for that order week.

For grain shippers, that translates into serious costs in the form of not just lost sales but penalties due to vessels waiting at port. It also means a hit to Canada's reputation as a reliable supplier, a reputation that has not yet recovered from the 2013-14 grain crisis. As members of the committee will know, in a highly competitive market like ours, once business is lost to a competing supplier, it is very difficult to win that business back. These are the immeasurable costs that hurt us not only in the immediate term but also for years to come.

In this context of challenging service, we would like to thank Minister MacAulay and Minister Garneau for their interaction with the railways and for working to find ways to see an immediate improvement in rail service, not only for grain but also for the many sectors that are experiencing problems.

As most of you will know, the WGEA has been singularly focused on fixing rail issues in a permanent way. While this current backlog is shining much-needed light on the systemic problems that plague Canada's rail logistics system, the issues are of a much more chronic nature.

The WGEA is of the view that the measures contained within Bill C-49 represent a big step in the right direction toward arriving at permanent legislative solutions. The ability to negotiate reciprocal penalties into our service level agreements, for example, is in our view one of the most important provisions contained within the bill.

Consider what has likely precipitated the current rail backlog. Would the railways have planned differently this fall had there been the legitimate threat of penalties for not moving grain and other bulk commodities? We believe the railways would have taken different decisions if credible reciprocal penalties had been in place. Unfortunately, with the provisions of Bill C-30 expired and the passage of Bill C-49 uncertain, grain companies and farmers are effectively left in this no man's land with no tools or remedies for poor service.

It is to that end that the WGEA has joined with farmers and the entire grain sector in asking that Bill C-49 be passed without delay. The bill, as you know, is currently before the Senate committee on transport and communications. We are grateful to the senators of that committee, who are taking the time to ensure the bill achieves its intended goal of better performance by rail.

It will be well known to members that the WGEA is of the view that the bill needs to be improved in a key area with respect to the long-haul interswitching mechanism, the LHI mechanism. The LHI provision is not only more bureaucratic and difficult to use than the extended interswitching mechanism we saw in Bill C-30; we are also concerned that the grain sector will not be able to leverage its use properly if two small targeted amendments are not made.

As the bill is current written, if an elevator is dual-served—meaning it already has access to two competing rail lines on site—or if it's located within 30 kilometres of an existing interchange, the facility will be excluded from applying for an LHI order. Now, if those two rail lines are both headed in the relatively wrong direction—for example, east-west when the traffic's final destination is the southwestern U.S.—that elevator for all intents and purposes is still captive. The LHI is useless to them.

We have done an analysis on this point and have determined that 75% of all Canada's value-added grain processing facilities would be prohibited from using LHI because of this restriction. In terms of creating competition, we believe this was not the intent the government had when it drafted this provision.

The grain sector submitted an amendment to the House of Commons transport committee study to address this situation, but unfortunately it was ultimately rejected by the House.

It is our hope that now, during these final hours of consideration and in the context of the current grain handling situation, the Senate committee will take this opportunity to include these important targeted amendments in their report.

I want to take these final seconds to address you, the members of this agriculture committee, to ask for your help to ensure that once the bill is brought back to the House, you will work with your colleagues to do whatever is necessary to get the bill passed.

The WGEA, grain farmers, and our sector as a whole have waited too long to see this bill made law. We implore you to work across party lines in the interest of this sector to get the job done.

Members of the committee, the reality is that we've already lost too much in this shipping season. Let's not lose the next one as well.

Thank you for your time. I look forward to your questions.

[Mark Dyck, Senior Director of Logistics, G3 Canada Limited]

Thank you very much for the invitation to be here today to speak about the grain backlog. My name is Mark Dyck. I am the senior director of logistics for G3 Canada Limited.

G3 Canada Limited was formed through the combination of the former CWB and Bunge Canada's grain assets, funded by two strategic shareholders, Bunge and SALIC, with the long-term vision of establishing a state-of-the-art grain handling company in Canada and a new competitor for Canadian grain farmers.

The G3 transportation model was developed well in advance of the formation of G3 in 2015. G3's strategy was formed on the heels of the bumper crop in 2013-14, when the Canadian grain handling system's fundamental weaknesses were highlighted through shipping and rail backlogs. The government of the time intervened with Bill C-30 to further regulate the Canadian grain handling system with minimum volume requirements to address the short-term issue.

There were some unintended consequences. Service levels did increase; however, they may have at any rate, as that coincided with warmer weather and the reopening of the port of Thunder Bay. We believe the regulation never solved the fundamental problems in the industry.

Western Canada is blessed with an abundance of natural resources. The markets for those resources rely largely on Pacific export corridors, and grain must compete with other commodities for a scarce resource: rail capacity. G3 is making investments to address some of these issues to ensure grain handling remains competitive with other industries in Canada.

We believe the fundamental issues are as follows.

Insufficient improvements have been made in the grain industry to invest in efficiency improvements. The last major port terminal construction was in the early 1980s. Much of the port terminal infrastructure dates to the mid-1950s or earlier, when the industry was still moving grain in boxcars. They have been upgraded since, but not to the same standard as for other resources, such as coal and potash.

Inland primary elevators are of a newer vintage, with most dating from the mid-1990s to the early 2000s, but many small shippers still exist. The logistical technology that is incorporated at these elevators has failed to keep pace with other industries and is relying on ladder tracks and breaking trains apart. This slows the loading process for grain, which is exacerbated in the cold Canadian winters when it is difficult to air up the train when it is being reassembled.

The supply of grain does not enter the grain handling system in a steady state. Market conditions are such that demand for rail capacity is generally higher in the fall and winter months. The surge capacity required to effectively conduct these exports, particularly off the west coast, does not exist today. Terminals are generally operating at or near capacity, and this problem will continue to grow as the production level in Canada continues to increase.

Early this crop year we saw that farmers were tight holders of grain during what has historically been a very busy season immediately following harvest. The volumes started to shake loose at the same time that western Canada entered winter. The railroads did not have the capacity to service such a spike, following a slower than expected delivery in the early fall period.

If these are the fundamental issues, what are the solutions?

First, it's important to recognize that the situation is not as dire as it was in 2013-14. Production in western Canada in 2017 was 70.9 million metric tons, down about 1% from last year but about 3% above the five-year average. According to Quorum Corporation, the federally appointed grain monitor, total metric tons unloaded at the Vancouver, Prince Rupert, and Thunder Bay ports, which is where the vast majority of western Canadian grain is shipped, is 6% behind last year but on par with the five-year average.

In comparison to 2013-14, Quorum shows that the railways moved 25% more grain hopper cars—that's about 40,000 cars—to Vancouver, Prince Rupert, and Thunder Bay in 2017-18 versus 2013-14. That is from August through January. The February date is not yet available. While rail performance has not met industry's expectations this year, the situation is not as bad as it was in 2013-14. That said, the long-term issues need to be addressed with long-term solutions.

G3's long-term strategy was born out of discussions with industry experts, the railroads, and farmers alike. G3 is investing significant money in a new type of grain handling system featuring loop tracks, a feature not uncommon in the coal and potash industries. We load grain faster and more efficiently than ever before. In addition, we are constructing a new state-of-the-art grain terminal in Vancouver, with loop tracks that will be able to accommodate three fully loaded grain trains intact on the property. G3 is making investments that industry has not experienced in decades, investments that will create surge export capacity, rail efficiency, and velocity.

In periods when demand spikes and conditions become challenging, companies such as G3 will still be able to function at levels not seen anywhere else in the industry. We are able to load a full, 134-car unit train even in extreme cold weather by keeping the trains intact, with the railway locomotives on the train. When locomotive power is not left on the train, the railroads are forced to shorten train lengths to ensure they can properly air out the train for their braking systems. Our model creates a win for us as the grain handler, as well as for the railroads and for farmers.

G3's position is that its investments in efficiency will allow Canadian farmers to effectively reach world markets, allow railroads to function, and allow those grain handlers willing to make the investments to thrive in the long term. Competing exporters around the world—in the U.S., Latin America, the Black Sea, and Australia—have been investing in efficiency for decades. It is time that Canada does the same. We are leading by example in this regard.

The railroads have the responsibility to provide sufficient rail service to the grain handling system. Overall, we are supportive of Bill C-49, which introduces reciprocal penalties, as each party in the supply chain needs to be held accountable. We believe this will provide the motivation required for the railways to be adequately resourced to handle surges in rail demand and winter operating conditions. Further, Bill C-49 introduces the incentive for railways to invest in newer hopper cars, allowing for more grain to move on the same unit train. New, shorter cars will bring additional efficiency to the supply chain and allow companies such as G3 to load 150 cars on our loop tracks, where today we can only load 134. In addition, each car will be able to load about 2.5% more product. This represents a total increase of 16% for each train that arrives at one of our elevators. We would like to see Bill C-49 pass as soon as possible.

We are also supportive of the national trade corridor fund and hope to see some of this fund applied to projects that will further increase railway efficiency, specifically around the port of Vancouver.

In conclusion, I would like to thank you for the opportunity to share G3's unique perspective on the issues and potential solutions pertaining to grain handling in Canada.

Thank you.

[Ron Bonnett, President, Canadian Federation of Agriculture]

Thank you, Mr. Chair and the committee, for inviting me to talk about rail transportation and how Bill C-49 can help to prevent the same chaotic situation from happening again.

Right now demurrage costs for vessels waiting at port are escalating, farmers are experiencing significant disruption in their cash flow, and international markets are yet again facing volatile delivery dates. You'll hear more about this in later presentations.

We are here today because a mere four years after an unprecedented breakdown in rail transportation amounting to billions of dollars of losses to the Canadian agricultural economy, we are on the verge of exactly the same disaster. The Canadian Transportation Agency, the CTA, held a review, and three years ago the agricultural industry submitted 10 recommendations to this review that if implemented in their entirety would most certainly have helped prevent this near repeat of the 2013-14 disaster.

Incidentally, recommendation 1, which was to give the CTA own-motion authority, which I will address in more detail shortly, would have prevented the current disastrous scenario, because everyone, including the CTA, was aware of a pending crisis as early as last October. The railways were either unaware or didn't care, knowing that the grain would wait. For the short term, and to solve the current crisis, we ask the minister to look at all options available. If that means mandating volume, we simply ask that it be done strategically to ensure that all geographic areas and commodities are equally well serviced.

Second, FCC and several banks have already announced various mitigation programs. The CFA would support Rick's comments about the advance payments program to address any cash flow issues farmers may be experiencing, and would support the expansion and higher levels as recommended.

For the long term, the needs have changed. At first it was thought that just an immediate implementation of Bill C-49 would serve us well and perhaps even prevent a repeat of 2013-14, and there was an urgent push to pass legislation quickly, even at the expense of several important amendments. Not everyone believes that this is the key thing right now. We have to ensure that Bill C-49 has the tools to prevent the current crisis from happening again. As it is currently written, it does not, as confirmed by many industry players, including CN, which at the CFA annual meeting said that the passage of Bill C-49 would not have avoided the current crisis. They went on to say that only end-to-end data collection, analysis, and fact-based decision-making could solve the problem. This sounds like a ringing endorsement to give CTA own-motion authority, since for the data to have any value, someone must have the authority to investigate and mandate solutions before a problem has started.

Honourable members, the Canadian Federation of Agriculture recommends the following with some urgency.

First, Bill C-49 should be amended to give the CTA investigative authority and the authority to act on its findings by mandating solutions. This would be, for example, investigative authority to be able to request information and data relevant and robust enough to provide a clear picture of transportation logistics, and own-motion authority to proactively mandate solutions. The second is to expedite passage of the bill after the inclusion of industry-submitted amendments.

Allow me to quote the Canada Transportation Act review. It recommended “amending the Canada Transportation Act to confer upon the Agency investigative powers, and the authority to act on the Agency’s own motion and on an ex parte basis, as well as to address issues on a systemic basis and to issue general orders.” The agency itself has requested own-motion powers in its most recent annual report, highlighting it as a major weakness in its ability to discharge regulatory responsibility. Shippers from across all sectors broadly support that request. This amendment will ensure that the regulator has the authority to proactively monitor the system, identify and investigate problems before they become a crisis, and take necessary action.

Own-motion authorities are not exceptional powers in Canadian economic regulation. Other expert quasi-judicial tribunals and regulators often have broader own-motion authorities. The agency's predecessor, the National Transportation Agency, had broad powers to address problems without a formal complaint. The National Energy Board and the Canadian Radio-television and Telecommunications Commission also have the power to act without complaint to address issues within their jurisdiction.

To reiterate, an extension of the agency's own-motion authority would allow for proactive solutions and inquiries when there are reasonable grounds for believing a problem might exist. Such grounds could include statistical evidence, a pattern of complaints, or consistent and credible media reports regarding a transportation service provider's financial difficulties or service failings.

We further support amendments suggested by various industry players, including the long-haul interswitch provision, and the inclusion of pulse crops in the MRE, which would help make our own grain transportation network more competitive and more capable of serving our growing international markets.

The CFA dismisses the argument that amendments will delay the passage of the bill. Members know that this does not have to be the case. Amendments suggested to date have been made by knowledgeable industry players striving to build an effective competitive transportation network and to provide the confidence we need as we continue to grow our international markets.

In conclusion, the excuses of winter weather and unexpected yields don't pass the smell test. The real reason, cutting costs to increase shareholder value rather than focusing on customer service, is much clearer. Information that included higher-than-expected yields, inventory, and grain movement requirements compared to previous years was well known by industry players as early as last October. The fact is that we can no longer depend on railways to get it right without significant regulatory and legislative guidance and authority.

[Rick White]

Lastly, looking forward, Canada must continue to find ways to address the fundamental problem of railway market power and the resulting lack of competitive forces in the rail freight marketplace.

Bill C-49 appears to make progress towards this goal in several areas and does reflect a consideration of what the Canadian rail shippers and the grain industry have been telling successive governments for years about the core of the imbalanced relationship. Bill C-49 is designed to balance two competing interests, that of the shipper and that of the rail service provider. The true measure of success will likely take years to fully gauge. The reliability of our transportation system affects buyer confidence in the global Canadian brand. We know that, because we directly hear about it.

The CCG encourages the Senate and government to work together to ensure Bill C-49 passes and becomes law as soon as possible. This is the long-term fix to the problems we have today. We need it passed, and we need it passed before this session is over.

Thank you.

[Rick White, Chief Executive Officer, Canadian Canola Growers Association]

Thank you and good afternoon, Mr. Chair and members of this committee. My name is Rick White. I'm the CEO of the Canadian Canola Growers Association. Thank you for inviting me here today to contribute to your committee's investigation into the current grain transportation backlog.

The Canadian Canola Growers Association is a national association governed by a board of farmer–directors that represents the voice of Canada's 43,000 canola farmers from Ontario west to British Columbia. In crop year 2017-18, Canadian farmers harvested an estimated 21.3 million tonnes of canola, and that is an all-time record.

Canada is the world's largest exporter of this highly valued oil seed, and we grow a truly global crop. In any given year, over 90% of Canadian canola, in the form of the raw seed or the processed products of canola oil or canola meal, is ultimately destined for export markets in more than 50 countries around the world.

Canola farmers critically rely on rail transportation to move our products to customers and keep those products price competitive within the global oilseed market. We have no alternative. The competitiveness and reliability of the canola industry, which currently contributes over $26 billion annually to the Canadian economy, is highly dependent on the supply chain providing timely, efficient, and reliable service.

Last year, Canada's railways transported over 50.7 million tonnes of grain originating in western Canada. It is a complex system, but we need to make it work to the benefit of all parties and the broader national economy as a whole. Farmers occupy a unique position in the grain supply chain, and this is what fundamentally differentiates this supply chain from that of other commodities. Farmers are not the legal shippers, but we bear the cost of transport, as it is reflected in the price we are offered for our products from the buyers of our grains and oilseeds, who are the shippers.

Simply put, farmers do not book the train or boat, but they ultimately pay for it. Transportation and logistics costs, whatever they may be at a point in time, are passed back and paid for by the farmer. Transportation of grain is one of several commercial elements that directly affect the price offered to farmers across western Canada. When issues arise in the supply chain, the price farmers receive for their grain can drop, even at times when commodity prices may be high in the global marketplace.

Another transportation-related issue for farmers is that until their grain is delivered to the buyer, they are not paid. Cash flow depends on grain delivery, regardless of the terms or dates that may be specified on a contract.

When transportation issues disrupt the typical commercial flow out of a bulk elevator or process facility, it affects the ability of the buyer to accept the contracted grain in the agreed-upon window, as there may be no physical space available. When this becomes highly unpredictable or there is a sustained lack of rail service, weeks or months in length, the reverberations extend back directly to the farm gate. It also extends forward to final purchasers in export markets, as grains do not arrive when planned, damaging the reputation of Canada as a solid and dependable source.

This is a primary reason that western Canadian farmers have such an interest in transportation: it directly affects personal farmer income.

Beyond that, farmers critically rely on the service of Canada's railways to move grain to export position. The last several years of reasonably good overall total movement and relative fluidity of the supply chain should not lessen our focus on seeking to improve and do better, as a sector and a nation, as fundamental issues continue to exist.

The current transportation predicament can essentially be grouped into three related but separate issues. The first is that the current rail service issues have created a backlog of grain. The second is the need for immediate government action, and third is the linkage to Bill C-49.

Starting with rail service, one of Canada's class I railways has incurred what we can politely characterize as a system-wide sustained operational failure on its network. As it has conceded, this was largely a problem of its own internal business forecasting and planning, which then was exacerbated by the effects of annual winter operations and various other disruptions.

The other has had better performance overall this year, but at times still at unacceptable levels. The dismal service level sends signals to elevators to not accept grain and in turn to producers to not ship grain. Producers who need to pay bills and purchase inputs for seeding cannot do so, at no fault of their own, and there are no options. Poor rail service causes disruptions in the market for producers, for shippers, and for our export customers. The level of service seen over the past period has been simply unacceptable.

In terms of the second issue, the role for government starts with a recognition that Canada is served by two major railways that operate in essentially monopoly positions. There are no alternatives to move our large volumes of grain. Governments need to play a role in balancing the power of these railways. We were pleased that Minister MacAulay and Minister Garneau have directly communicated with the railways and demanded an action plan, but this should not be needed. Rail should move regularly and predictably on a permanent basis. Bill C-49 can help in that regard.

For farmers impacted by the poor rail service, cash flow can be a problem. A proactive policy measure available to government could be to increase the maximum limit available under the well-established federal advance payments program. The increase would expand farmers' access to competitive financing while the backlog clears the system, maintain flexibility in grain marketing and farm management, and be at no cost and low risk to the government.

The program maximum is currently set at $400,000. Aside from the transportation challenges being discussed today, a compelling business case for an increase already exists. Since the limit was last set in 2006, farm size and demographics have evolved, farm expenses have grown, inflation has increased, and the grain marketing environment has become more volatile. A limit increase would work to ensure that the program remains relevant and continues to help farmers finance their operating requirements, especially in times like these. Increasing the limit would provide an additional tool for farmers to manage cash flow and finalize 2018 production plans, with spring seeding close on the horizon.

The railways have committed to take steps to improve service, with action plans already set in motion to obtain resourcing. With winter almost over, we expect to begin seeing service improvements in the coming weeks, but an increase to the limit under the APP could offer a tool to help farmers who have been directly affected by the current backlog.

[Jeffrey Ellis]

In the regulated grain space, already an area where there is regulation, we're prevented from recouping our investment in grain cars. In economics, it's a free rider problem. We can't recoup our direct investment. That's what we want to have corrected by Bill C-49 on the discrete issue of investing in hopper cars.

That said, since 2012 we've invested close to $7 billion generally in our infrastructure and other items that James referred to around investment in people and the network. Those investments are ongoing. I think Canada benefits from the fact that the rail industry, rather than relying on taxes, makes this significant commercial investment annually in the network.

[Sean Finn]

We're not waiting for Bill C-49 to pass. We're going to invest $250 million in the network, following our announcement two weeks ago of $3.2 billion for the year. We're not waiting for Bill C-49 to pass.

Bill C-49 comes out of a consultation by the minister and David Emerson over an almost two-year period about how the environment is working today. Clearly, we came out publicly saying we don't like to have regulation and we don't think regulation moves more product, but we're saying that there are provisions in Bill C-49 that, for example, will increase the amount of information to be exchanged with the business supply chain, allowing Transport Canada, us, and our customers to have contingency plans to face issues that come up.

Bill C-49 is a balanced bill. We don't like all of it, and that's normal, but there are provisions. My good friend Claude Mongeau has said to you that regulation is not bad, but ultimately you want commercial relations between the railways and the grain companies and between the railways and the farmers to dictate in an open market how we make sure that we serve our customers. Ultimately, we'll serve the customers because it's in our best interest to do so, and as I said to you before, Canada's reputation depends on it.

However, I think there are provisions in Bill C-49 that allow our customers to take measures to make us more accountable, which is not a bad thing. We're not looking for regulations for the whole industry, but there are areas where we think we can improve the exchange of information between the railways and our customers.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

A few years ago I was at the Chateau Laurier listening to your former former CEO, Claude Mongeau, advocating for fewer regulations. Now, if I'm hearing correctly, we want more regulations. We want Bill C-49 passed in order for us to invest.

What is the uncertainty in Bill C-49 and why do you believe it may not pass? Why are you waiting until it does pass to make those investments?

[Eva Nassif, Liberal, Vimy, QC]

My next question is for the officials from CN and CP.

What are you doing to get the Senate to pass Bill C-49 as quickly as possible?

[Sean Finn]

Obviously passing Bill C-49 through the House of Commons would possibly be a good step in the right direction, first of all.

Second, I think that part of that bill will require that the railways exchange information. We realize today that this impacts not just farmers and the farming community but also Canada's reputation abroad. In the end, we have to realize that when we do this, we don't just impact our local customers but our reputation around the world, and it's important that the railways and the supply chain realize that customers around the world have choices. Canada is a great place to enter North America and to have access to two great railways, but if we can't deliver the goods, we have an issue going forward. I think there was an acknowledgement on the part of the CN board of directors, which made a very decisive step two weeks ago in changing the leadership and then within two days coming out and saying, “We realize that it's part of our DNA to move Canada's goods to the market.” This is as much as saying, “We have a role to play to ensure Canada's reputation abroad is what it should be.”

You can't just have talk. You have to make sure you deliver.

My answer to your question is that you have a commitment on the part of CN to ensure that's always in the back of our minds. All 22,000 railroaders at CN realize it's not just about serving customers; it's about serving all of Canada.

[Sean Finn]

If I may, we have taken very concrete steps since 2014. As an example, CN's annual capital investment last year was $2.7 billion. This year it will be $3.2 billion, an increase of $500 million. We set a big number for capital. It's a great network that we're investing in, but clearly it's where you invest the capital that makes a difference for resilience and fluidity, so under the leadership of Mike Cory and Jean-Jacques, we've looked at our capital constraints and where the bottlenecks are that we can address very quickly.

You're going to see, as of this spring, reactions being made. It is true that it's somewhat reactive from what happened this fall, but the big difference this fall was this unforeseen surge in traffic that we had to address as we went along here as winter hit. It's important to realize that this year, the $3.2 billion is way more than 20% of our gross revenues, which is probably a rule of thumb for some of the railways in North America. We're investing more capital to ensure that we can address the bottleneck issues. We're hiring employees at a rate we haven't seen for many years. We are hiring for what should be many years to come.

I think the big difference compared with 2014 is that in 2014 we had an increase in volumes and all of a sudden a dip. Obviously, we didn't react quickly enough. I think this time the railroaders in the room have probably learned a lesson that we have to reinvest early on and see the trends coming earlier. Part of Bill C-49 will be this exchange of information between us, Transport Canada, and our customers to try to get a better feel for logistics planning. If we do have an increase in volume, how do we address it?

I think the best answer to your question is that the railways must invest in the network at a point to avoid the bottlenecks so we can face the surge in traffic as it comes along.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I represent a riding on the coast of British Columbia, and this issue is going all the way to the coast. All around my riding in the Gulf Islands, we have tankers at anchorages that are very rarely used. If you look at English Bay in Vancouver, you see it's chockablock full, so this issue is going all the way down to the west coast.

You've been saying that if Bill C-49 is passed, you pledge to do better and you're investing in this. It seems to be very reactive to the situation at hand. I'm wondering if we'll be in this situation in another four years and we'll have to ask you to come again before the committee.

Yes, you know that at -25° you have to reduce your speeds and decrease the length of the train, but anyone who lives in Canada in the winter knows that we have this weather on a regular basis. You know the long-term trends of what our country is hoping to do, which is that we're hoping to increase our exports, but we're still operating in that same environment. I want to be assured that we won't revisit this situation in another four years. I hope that instead of being reactive to the situation at hand, you'll be very much proactive so that in 2023 we don't have to repeat this same exercise.

[Sean Finn]

If I may, obviously with Bill C-49 being in the Senate, CN's position is very clear: pass it as soon as possible. The benefits are probably twofold.

First of all, it will provide additional tools to our customers to hold the railways more accountable, which is not a bad thing in and of itself. I think we're all here today because we recognize that we have to be a lot more accountable to both Parliament and our customers.

Second, when talking about investment, there's no doubt that this will allow us to better prepare, to Mr. Barlow's question. A lot of provisions in Bill C-49 require that we provide additional information, but Transport Canada can help us, obviously, to better forecast and better plan our demands—not alone, but with them.

I think the investments are required. Therefore, as we better understand the weaknesses in the supply chain, we as a railway can help invest in the parts we have to invest in and, more importantly, realize that we're only as strong as our weakest link. Obviously, there are weak links in the supply chain. We can't just hide behind them. We must address them together for the benefit of farmers and Canadian markets.

[Jeffrey Ellis]

Certainly.

Again, we don't think of Bill C-49 as a perfect bill. We think it's a compromise, and an appropriate one.

From our perspective, we are eager to go forward and make a capital investment in hopper cars, which is going to increase capacity in the network for grain for the foreseeable future. We stand ready to deploy anywhere from $1.3 billion to $1.5 billion over 2018, as soon as we can get the certainty we need that the bifurcation that is presently within Bill C-49 will come into play.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Thank you to all the witnesses today. This is a serious problem that we know you're working on collaboratively with the government. We've seen evidence of the actions that you've committed to taking and that you are taking. Moving forward, hopefully we'll see Bill C-49 get through the Senate so that we can make further gains in investments.

Starting with CP and Mr. Ellis, could you describe what the delay in Bill C-49 means to your capital investment programs?

[James Clements, Vice-President, Strategic Planning and Transportation Services, Canadian Pacific Railway]

Thanks, Jeff.

Honourable members, we are pleased to report that our rail network performance is improving. The grain supply chain is on the road to recovery

Our operations team has been focused on moving grain and working extremely hard to rebound from the weather challenges in February. The data and evidence provide encouraging signs that a recovery has taken hold.

Week 32—March 4 through March10—saw grain shipments increase by 22% compared to the previous week, totalling 484,000 metric tons of grain. This is the highest weekly volume we have moved since mid-December.

Our daily network throughput has increased by 8% compared to last week, and is up by more than 16% overall since mid-February. We placed 10% more empty railcars in the country in week 32 compared to the week prior, a further sign of incremental gains being achieved. I am happy to report that we are up another 5% in week 33. Our network velocity is also improving, with train speeds up approximately 13% this past week versus mid-February.

As weather conditions moderate, we expect the positive trend to continue through March, with a further lift as the port of Thunder Bay reopens. Until Thunder Bay is available, we expect heavy demand for railcars out of Manitoba to ship all the way into the Vancouver corridor.

CP continues to add both crews and locomotives to support a strong recovery. We are adding more than 700 new employees, who are currently in various stages of training, and we are adding 100 locomotives, which will start being integrated into the fleet through the summer.

We have also deployed a “SWAT team” of retirees and CP managers to provide additional crew capacity, which is helping ensure the system recovers as quickly as possible.

As we move into spring, we are taking strong precautionary measures to avoid operational constraints caused by adverse environmental conditions, such as the heavy snowfall melting and the resulting runoff, as well as avalanches.

CP's avalanche monitoring and control program continues to work closely with all stakeholders through B.C.'s mountainous transportation corridor, including Parks Canada and the B.C. highways ministry, to constantly monitor present and forecasted weather conditions that could adversely affect the corridor.

We have also commenced our spring thaw surveillance program, which has strong protocols in place to monitor conditions and respond effectively in the event of high water conditions across our network. Early indications across most of CP's network east of the Rockies are pointing to an average to below average threat for spring flooding. Although we remain optimistic the snow will melt slowly, all precautions are being taken with respect to potential avalanche and spring flooding disruptions.

We continue working closely with our customers to deliver on the commitments of CP's grain products and services to meet their needs. Beyond these measures, we have earmarked between $1.35 and $1.5 billion for capital improvements this year to help strengthen the capacity and fluidity of the supply chain.

Capacity-enhancing infrastructure investments are critical to realizing long-term gains to the overall performance of the grain supply chain. This is particularly true in regard to the market's preference for Vancouver as the primary and growing outlet for grain. CP is hopeful the Government of Canada will prioritize investments under the national trade corridors fund for projects that will enhance supply chain capacity in this corridor.

In closing, as we have said previously, CP strongly encourages the swift passage of Bill C-49 by the Senate. Although imperfect, this legislation will provide additional certainty for the grain supply chain, particularly with respect to the potential new hopper car investments.

Again, thank you for the opportunity to be here today. We would reiterate that in spite of the difficult operating conditions this winter, CP is committed to improvement and is still moving more grain than we did last year, and we are well positioned to have a strong year overall.

Thank you.

[Michael Cory, Chief Operating Officer and Executive Vice-President, Canadian National Railway Company]

Good afternoon, everyone.

I'm only going to spend a brief part of my time discussing the circumstances that put us in this position. I believe it's more useful to focus on what we have done and are doing to recover and ensure that our service is back at the levels that you and our customers have come to expect as quickly as possible.

At the outset, let me point out that the situation has not been taken lightly by CN. On March 5, the CN board of directors took unprecedented, decisive action. You're probably aware that we have a new CEO, J-J Ruest, and within two days of taking up the position, J-J acknowledged our service issues, apologized to our customers, and pledged to do better on behalf of all of us at CN.

The challenges we have been facing are not specific to grain. All areas of our business have been impacted. CN has been facing a capacity and resiliency challenge over the winter.

After six consecutive quarters of flat to negative growth, we underestimated the level of growth that was about to come at us. We're not alone in this; the Bank of Canada and many of our customers also greatly underestimated the strength of the Canadian economy. This has left us seriously stretched, with little resiliency in some corridors.

Frac sand and intermodal traffic are both up very significantly. Forest products, coal, potash, and virtually everything we move saw an increase in volume. Grain volumes were not a surprise and the grain car fleet is sufficient to handle the volume; however, locomotive power and crews have presented a serious challenge, along with winter resiliency that wasn't there this year. We simply did not have enough locomotive power or crews to deal with the rapid increase in business. Hiring and training operating personnel takes a minimum of six to nine months, and there is also a long lead time for acquiring new locomotives and for building capacity.

The increased business also led to bottlenecks at a number of locations on the network. Through the fall and early winter, we were getting by and providing fair service, but we did suffer setbacks in the late fall owing to mainline incidents, including a severe windstorm that blew a train off a bridge in Alberta, shutting down the main line until the bridge could be repaired.

However, as our CEO recently said, we had a horrible February. When the extreme cold hit us in February, forcing us to shorten our trains and requiring even more locomotives, crews, and network capacity, our service deteriorated badly to levels that were clearly unacceptable to our customers and to every one of the hard-working, dedicated CN employees who take great pride in their work.

While our grain service prior to February did not match last year's record numbers, in every month from September to January we moved the third-highest volume of grain in CN's history. This clearly was not sufficient, but not so weak that we cannot recover over the balance of the crop year.

I am pleased to say that we are already making good progress in turning things around in moving the backlog that accumulated in February. In week 31 we spotted 5,349 grain cars, including 772 customer cars, at Prairie elevators; in week 32, we spotted 5,953 cars, including 905 customer cars, and in the week that just ended, we spotted 5,742 cars, including 647 customer cars.

As a reference, we view 4,000 CN cars per week as the normal sustainable capacity of the system in a normal winter operating condition, and 5,500 CN cars as being the sustainable capacity outside of winter and when the port of Thunder Bay is open.

We are confident that we can maintain this pace through the spring. We are committed to catching up, as we are with all of our customer traffic. Our car placement numbers to the week for grain are not yet in line with where they need to be, but there has been significant improvement.

To begin turning things around, the first thing we needed to do was relieve network congestion, particularly in the very busy Edmonton-Winnipeg corridor. We undertook a number of measures to temporarily restrict traffic in this corridor to gain fluidity and velocity in our network. Only by reducing congestion could we create more capacity and resiliency.

We had to make some tough decisions to restrict and regulate the flow of cars into this congested part of our network. For example, we implemented a system controlling the flow of both incremental frac sand and crude cars.

We have also established a 24-7 situation room of cross-functional representatives at our network operations centre in Edmonton to review critical customer issues and to prioritize their movements.

Turning to other actions we have taken to add capacity to our system, in the short and medium term we added 250 qualified conductors in the fourth quarter of 2017, and an additional 400 will have completed their training and be in place by March 31. We will be adding a further 375 conductors in the second quarter. That said, we are still hiring, and there remains a challenge to find new labour at some remote locations. Our national training centre in Winnipeg will remain at full capacity.

With regard to locomotives, CN added 34 new high-horsepower locomotives in Q4 of 2017, and that was all we could get from the manufacturer. We also leased 130 locomotives, some of which required upgrading, but almost all of which are now online. For the longer term, we have placed an order for over 200 new locomotives and will begin to receive the first 60 in the second half of this year.

CN has a strong record of investing in our network. Even in the years with weaker growth, we maintained a very robust capital spending program. Earlier this year, our board of directors approved an increase in our capital expenditures from $2.7 billion to a record $3.2 billion. Over $250 million of this increase will be spent this spring and summer on projects in our western region to increase both track and yard capacity and to create fluidity that will build a base of capacity and resiliency before next winter.

If there is one thing that has become clear from this year's challenges, it's the need for better sharing of data among the supply chain stakeholders. Bill C-49 will require railways to provide even more data than at present, and we accept that. We are, however, only one link in the supply chain, and we are concerned with the lack of data provided by some of the other supply chain participants. For all of us, transparency with all partners in the supply chain is in our interests, and it ultimately benefits the Canadian economy.

Recent actions by our board of directors and all of us at CN have shown how seriously we take these service issues that have adversely affected our customers. Our capacity challenges will not go away overnight, but we have acted aggressively to address them, and I am confident that our service will continue to improve for the grain sector and all parts of our business going forward.

Thank you.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, we want to get our western farmers' grain to market as quickly as possible, unlike the previous government, which for 10 years did not do a darn thing to move grain and other commodities more efficiently. By the way, they voted against Bill C-49 and I would ask them to speak to their colleagues in the other House to speed up the process with Bill C-49.

In the meantime, the Minister of Agriculture and I have spoken to CN and CP, and told them that they have to do better. They are doing better, but we will watch them very carefully.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's called Bill C-49. It needs to pass. An order in council is not going to get passed by March 19, I can guarantee you that.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I'm not so sure that writing a letter to the ministers and asking them for action now will solve the issue. They have acted. The House has acted. What we need to do is pass Bill C-49. I understand that it may not be perfect. I remember when my mother used to make me dinner. She would put a steak on my plate, and peas and rice. I didn't like the rice, but I still ate it. It wasn't perfect, but I was thankful for it. I think the best action we can take is pass Bill C-49. I'm failing to understand....

Here we are, going back and forth, arguing about whom we should write. The quickest action this committee can take before March 19—I do recall that we are meeting with stakeholders on March 19—is to send that letter to senators, because they will be meeting, and they have to respond to that. I don't necessarily agree with sending a letter to the Minister of Transport and the Minister of Agriculture when we know that in fact they have acted. They have sent a letter to the rail companies. They have acted on this issue. Their hands are tied, because they don't have the legislative power to act. That's called Bill C-49.

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

Thank you very much, Mr. Chair.

I think that the debate on the letter to the Senate is over. In any case, we've just seen that several groups are asking the Senate to change Bill C-49. Let's let the Senate do its work and respond to grain producers who are requesting amendments, and let's deal with that which concerns us directly.

What concerns us is the Minister of Agriculture and Agri-Food and the Minister of Transport, and the western grain crisis. It's important that we ask these two ministers to act. That is why we will support the NDP motion asking the committee to write a letter to the two ministers, so that cabinet may intervene immediately in this dossier.

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

Thank you very much, Mr. Chair.

I could not agree more with my two colleagues than I do at this time.

As I said already in my introduction, we offered to split Bill C-49 countless times in order that certain measures be adopted more quickly; we suggested it to the Liberals. We agreed and would have provided our unanimous consent to adopt it at the right time. We said this several times in speeches, as did the other opposition parties. We were ready to have certain parts of Bill C-49 passed quickly because we knew that a crisis was imminent, since this has happened before.

Even though some want to present Bill C-49 as an omnibus bill, in my opinion it is rather inconceivable to amalgamate the rights of airline passengers with the settlement of a grain crisis in the West. Explain to me how those two topics can be related, Mr. Chair. It's incredible.

Now they would like our committee to ask the Senate to accelerate its study of the bill to solve the grain crisis, at the risk of adopting, at the same time, provisions that would have disastrous consequences on the rights of airline passengers. That is not my role.

Some suggestions have already been made. If the Senate wants to split the bill on its own initiative, the opposition will commit to having things move very quickly so that...

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

I have mixed feelings about writing a letter to the Senate. I want to see action. I can count, and I realize that we don't have a majority. You have the majority, so whatever happens here will be the Liberal will. As for whether we should write a letter to encourage the Senate to pass a piece of legislation fast, just for one part of the legislation, to deal with a crisis, I'd rather go the other route and split it apart, to do the appropriate study on the entire legislation in the Senate and then do the appropriate study on Bill C-49 on the rail aspect of it. Then you would actually be bringing forward good legislation, not rushed legislation. In the meantime, the minister has the ability to issue an order in council to backstop farmers right now, to have an impact right now, and to see that as Bill C-49 chugs through and perhaps gets amended, it actually comes out as a reasonably good piece of legislation instead of a rupt piece of legislation.

I guess I'm kind of disappointed. If you're going to write a letter, the persons who can have the most impact right now are the ministers and the Prime Minister, not the Senate. The Senate does what the Senate does, in the Senate's time. From talking to the chair of the transportation committee in the Senate, I see that he tried to include more meetings. It was the Liberal independent senators who would not agree to extra meetings. So if you're going to write a letter, I would maybe suggest that you write a letter to the whip of the Liberal senators and ask him why he wouldn't be willing to hold more meetings.

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

Thank you, Chair. I hope that the letters the agriculture committee sends bring action.

I think back to all of the numerous letters on PACA that we wrote recently to the Minister of Agriculture and the Minister of Innovation. It took us many months to get a response. Finally, we did get a response. I've found it very frustrating and almost insulting that our committee wrote letters and didn't even get notification to say that they got the letter, they're looking at it, and they'll eventually get back to us. Our letters were completely ignored.

I think Bill C-49 is going to be part of the solution. Once again, I think everybody wants to see the portion of Bill C-49 on grain passed, and passed quickly, but it has to be done right. A lot of groups, a lot of farmers, and a lot of our stakeholders have said that it needs to be fixed. It needs to be amended. Once again, I think we have to make sure that we get it right.

As for Bill C-49, we could debate ad nauseam what is an omnibus bill and what is not, but when there is a piece of legislation that changes 13 other pieces of legislation, even though they might have some kind of link, it is an omnibus bill. We're not going to have that debate right now at committee.

I've said before—and I've been thinking about this for a while because Bill C-49 is in the other place—we're looking at ways to get the grain part carved out and expedited. When we get back to the House, I will be asking for unanimous consent to have that done in the Senate. Maybe you guys could look at it. We've been talking to the clerks. We're going to draft a motion. Hopefully, we'll get all-party support to ask the Senate to carve out the grain portion.

I'm not against writing a letter. I think what we should also be writing a letter to the Minister of Agriculture and, notably, the Minister of Transport asking him to act, asking him to look back. He was in the House in 2013-14 in the second opposition party. He needs to look at the measures that were taken by the Conservative government. There are tools he could be using that he isn't using right now.

As the agriculture committee, we have decided to look at this on the 19th, but I think what we need to do is write to the Minister of Transport and ask him to move forward with an order in council. I think we need to ask him to pull out the big stick. Hopefully, the Minister of Agriculture is putting pressure on and working with the Minister of Transport, but we need to be standing up for farmers.

Bill C-49 is one thing, and obviously we're going to do our best to see that the grain portion gets carved out and moved forward with in a decent manner in the Senate, but I think there's something we could do now. We could be putting pressure on the Minister of Transport and asking him to take all the tools available to get grain moving. We can have all the trade deals in the world, but it doesn't matter if we can't get the grain out. The perception of us on the international scene is being tarnished once again because we can't get our shit together, so I'm really hoping that we could all come together. Why don't we put a letter together for the Minister of Transport—and cc it to the Minister of Agriculture—asking him to use all of the tools in the tool box?

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Again, I'm a guest at this committee today, and I appreciate being here. I'm going to draw on some historical knowledge. I've been talking to some of the other people in the room who were here before, when we did this the last time. We had two meetings, and then we had five meetings on Bill C-30, which was the legislation, so you could say that in 2013-14 we had seven meetings to talk about this.

Right now in my riding I have a farmer-owned rail line that has 65 loaded cars sitting there. They have been sitting there and sitting there, and when they are sitting there full of grain, that means everything else behind them is full of grain, so the farmer-owned terminal is full of grain.

To say, okay, we're going to come back when it's convenient for us, I don't think is appropriate. I think we should come back next week and show them that we are committed to this. To me, the 15th makes a lot of sense, because CN and CP are supposed to have that data for us on what their game plan is moving forward.

It's nice to see CN publish it in the paper. I think that's good, but I've had them do this to me in the past so many times when the railways said that they were going to do this and do that. When it comes to actuality, it never happens. That's why you need to have penalties in place. You need to have an order in council in place. That's why I think you need to have the Minister of Transport here, listening to those farmers. He should be here for the full four or eight hours, whatever we do, to really get an understanding of the impact this has on people's livelihoods and on their families, their farms, and their operations.

I would suggest that we come back on the 15th and do the whole day. The ministers can be here. The stakeholders can be here. The farmers can be here. You can take any committee room you want. You can televise it so that people back in western Canada can watch us and listen. It would show from this committee that we're serious, that we're taking this issue very seriously, and that we care.

This isn't a partisan issue. You'll find that at least in the past it has never been a partisan issue. We're on the same side in fighting for our farmers and our producers. CN and CP are the problem here again, unfortunately, and we can learn from the things we did in 2013-14. We can make some fixes and do some improvements in the order in council to make it more effective and efficient. We can have something in place so that the producers know they have a backstop right now, and then Bill C-49 will do what Bill C-49 does, with amendments or without amendments, split apart or not split apart.

The reality on Bill C-49 is that even if you wrote them a letter today, the Senate won't read it until probably the 21st, and then, in terms of the reaction time from there, we would probably be looking at May, June, or July. That's not even a feasible option. You would have more impact by writing a letter to the ministers, because they can do stuff right now. They can do an order in council tonight if they so choose. They can take action if they so choose.

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

Thank you, Chair.

It's frustrating. I know there is goodwill in the proposed subamendments to the motion put forward by my colleague Luc. But, you know, we're on break week from the House, and we've had this important meeting today. We're not sitting next week. I think, because of the context we're in right now, we need to look at this next week. Four hours is four hours. We'll have CN and CP. I would love to have Minister MacAulay and Minister Garneau come before committee and talk about their plan, but I don't see why we can't start looking at this next week.

Writing letters is great. Wishful thinking, good intentions, hoping, and wishing haven't done anything to make this situation better. I think the letters that were put out yesterday were just a front to say, “Look, we're taking this seriously. Look at us dealing with this issue.”

I think you know that the Minister of Transport wrote a letter in January. What happened with that? Nothing.

There are so many things that can and should be done. Looking at this issue in a week or two is going to do what to help farmers? I think people who are in this situation right now are looking towards the agriculture committee to stand up for them, and I think taking this issue seriously would mean we would look at this next week.

We all have responsibilities as members of Parliament and as members of the agriculture committee. I think we should be looking at this next week. I think we should be putting pressure on the minister to be using all the tools in his tool box. In 2013-14 there were measures taken by the Conservative government. Those measures put pressure on the railways to get their act together, and they worked. Penalties—$100,000 a week—are peanuts to CN and CP. The pressure that farmers are under currently.... They should not be in this situation again. We should have learned from the grain crisis in 2013-14. There were signs.

Obviously we cannot go back in time, but I think we need to do our job, and I think we need to put pressure.

And you, too, members of the Liberal government, need to put pressure on your ministers, the Minister of Agriculture and the Minister of Transport. Bill C-49 is not going to fix everything, but definitely when we get back to the House, I'm going to go forward with a unanimous consent motion to ask the Senate to carve out the grain piece and get that moving along as quickly as possible. The part of Bill C-49 on grain transport needs to get passed, but we have to fix it too. We have to make sure that we get that right, and not just pass it to pass it. It can't just be a band-aid. I think we have to make sure we get this right. We have to take the time and we have to get it right. Amendments and subamendments to this motion are great, but I think we need to look at this seriously. We need to roll up our sleeves; we need to get down to work; and we have to take this seriously.

I think having a meeting next week might by shitty. We have to cancel stuff in our ridings, but it's our responsibility. This is our job, so why not get down to work next week? It's an inconvenience for farmers. This might be an inconvenience for us, but we have a responsibility to fix it.

That's my piece.

[John Barlow, Conservative, Foothills, AB]

Excuse me. I have the floor.

I appreciate that, but again, they should have done this weeks and months ago. We're not here to stand up for the rail companies. We're here to try to address the situation, and it is critical. I would prefer that we meet next week. March 15 would be one date. That's the deadline that the CFA and some of our stakeholders asked for.

Really briefly on my colleague Mr. Drouin's comment on the letter that we should be writing to the Senate, the Senate is not our problem. The Senate is the Senate. Again, this is something that should have been addressed months ago. Also, Bill C-49 may not even resolve all the problems. Our stakeholders, the grain terminals, and the producers also asked for the government to come up with a plan to try to address some of the backlog. Will we solve all the problems? No, but we can certainly put some things in place that will help alleviate some of the situations.

In conclusion, Mr. Chair, I would suggest that we try to meet next week if at all possible and that the government work on putting the infrastructure and the framework in place for an order in council to get the grain moving, and that it take some concrete steps to protect our grain producers and our trade markets that are out there and ensure that we get the grain moving sooner rather than later.

[Eva Nassif, Liberal, Vimy, QC]

Bill C-49—

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair.

And thanks, Mr. Berthold.

The idea of March 19, I think, is a good idea, and four hours is better than two. Generally, Monday evening is an evening when we can get things done. I think that also shows that this committee does work well together, which we do. We are working on behalf of the farmers. I think we do all have a common focus there.

It was good to see the Grain Growers of Canada also mention in their letter: don't make it a partisan issue; just solve the problem.

I want to comment on the omnibus piece, but maybe we could do that after we deal with the subamendment. I spoke on Bill C-49 in the House, and I have some thoughts relating to the purported omnibus nature of the bill, which I want to share with this committee from I said in the House about it, but if we could deal with the subamendment, that would be wonderful.

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

I would like to continue talking about my suggestion, and then I will propose a subamendment in a few minutes.

I support the amendment, but I would like it to be a four-hour meeting on March 19 rather than March 21, given the urgency of the matter.

As to Mr. Drouin's suggestion about the committee sending a letter, I would reiterate that Bill C-49 is an omnibus bill that does not concern our committee alone. The letter will have to reflect that, if you want us to agree on sending such a letter. That involves other committees and other stakeholders. The committee may express its concern, but we know that Bill C-49 will not solve the grain shipment problem in the short term. We need a short-term solution now. It is important for the committee to signal that it is monitoring the situation closely.

If we were to hold a four-hour meeting on March 19, that in itself would send a signal that people will have to get moving before March 19 at 4 p.m. If the committee is in the mood to write letters, it could also write to the Minister of Agriculture and Agri-Food, calling upon him to take all the measures available to him to intervene as early as March 15, rather than waiting for the committee's meeting on March 21. There are clearly measures the government can take.

I would remind you that the Canadian Federation of Agriculture wants a plan from the government, not just Bill C-49.

As to the subamendment, I propose therefore that the meeting be held on March 19 and that it be four hours long. As to sending our list of suggested witnesses by March 15, that would not change.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, for being here today.

Of course rail has always been an issue. As Ms. Brosseau said, we last dealt with this in 2013-14, and I'm disappointed that we're back here dealing with it again. There have been some changes between now and then. Then we didn't have the numbers. We didn't see the data. We didn't know what was going on. Now we have Mark Hemmes with the Quorum Corporation giving us that data every week. When you start seeing at week 12 that 50% of the railcars aren't being delivered, that's the first sign. Then, when you start seeing it show up in weeks 13 and 14 and continuing on...activity should have happened a lot sooner, but we can't take that back.

I think we need both ministers because, for example, with the Minister of Transport coming in front of this committee, we're going to need an order in council to actually show some results here. The reality is that Bill C-49, the way it stands right now, would not fix this problem, and the producers are telling you that; the grain companies are telling you that. Basically, anybody who is relying on rail for service is telling you that Bill C-49 won't do, so you need amendments. That means the amendments that have to come out of the Senate will take a lot more time.

In the meantime, we need to have an order in council sitting there with fines. The only thing that CN and CP actually react to is fines, so when they start seeing that there's a penalty for not performing, then they actually stand up and take notice.

I give CN credit for the letter that was in the paper today, whether or not that was a result of today's emergency meeting. I will also give credit to the FCC. Again, it's nice and convenient that it made its announcement at the time when this meeting is taking place. Farmers need to know that. That's another reason why we now need the Minister of Agriculture to come in, because there is a cash flow issue here. You have a transportation issue, for which we need the Minister of Transport to tell us the path forward. What he is going to do in the meantime with an order in council is what I'd like to see, until Bill C-49 is amended and brought back to the House with something we can all support.

Then you go to the cash flow issue, so the Minister of Agriculture is going to have to come in. Whether it's having advance programs, talking to all the banks, and doing what they did with the FCC, he needs to have a game plan moving forward now on spring advances, because cash flow is a big issue. We need to figure out what that's going to look like, so he needs to report on that. It's not as though they've never done this before. The department has done things like this in the past, so it's not as though he is taking any new path forward. He can lean on experiences in the department from the past and do something there. That's basically an hour of a meeting.

Then you talk about CN and CP coming in for an hour. I think that's good, because they need to present their path forward and what they're doing. I think CN, in their article, talked about leasing locomotives and putting managers on the lines, and that's good. I wish they would have been doing it in week 12 instead of now, because road bans are hitting. Basically, with road bans, restrictions come into play, and then they usually don't get lifted until we start seeding. So by seeding time, we have a whole pile of grain that has to move into terminals; guys are trying to put their crop in; and everything just hits the farm at the same time. There's no ability to spread it out. That's why the winter season is so important to move grain: you have the frozen roads; you can move grain, and you don't have to worry about planting, spraying, or anything else going on at that time. Again, we can't take that back. It's unfortunate, but that's just the way it is.

So you look at that, and then you say, “Now we want to talk to producers.” Think about it. One hour of producers would get you four producers in here from three prairie provinces—Saskatchewan, Alberta, and Manitoba—and then there are even some producers in northern B.C. That doesn't even get you one per province. Then you have three parties here, so everybody is going to want their producers here. So again, one hour is inadequate to give you a good idea of how it's impacting different areas across the Prairies.

And it does have an impact on different areas. When CN and CP start getting behind, instead of bringing cars into Saskatchewan and Manitoba, because it's a longer trip, they flip things through Alberta more quickly and ignore Saskatchewan and Manitoba, so you have to deal with these inter-regional aspects. There are lots of things to consider here before you can just say, “Hey, we're going to have an emergency meeting” and feel good. Farmers won't buy it, guys. It shows that you're not willing to do the job. It just shows that you're going to show the goodwill but not actually put any teeth into anything to get results. So you need the order in council. You need to move this forward. You need to do it now, because it has waited too long.

Chair, I guess I'll wrap it up there. Just keep in mind that if you're sitting on the farm right now, you have bills to pay from last year. You're supposed to be buying inputs for next year, so you're supposed to order your canola and stuff like that. A lot of that stuff is supposed to have been ordered in December or November, and all of those bills are starting to come due. You have bins full of grain. We have some 40 ships sitting out on the west coast waiting to be loaded. This is a crisis. This is very real. I'm sorry, but pushing off until it's convenient for us isn't acceptable. We need to do it now.

Thank you, Chair.

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

Thank you, Chair.

I would like to say how happy I am to see you guys again. I wish it were in different circumstances, but it's good that we're having this meeting. It reminds me of all the years I spent on the agriculture committee with Randy, although we were on opposite sides of the table at the time. It also reminds me of a situation in 2013-14 when we did work together. We were three different parties with different points of view on different issues, but we were all able to come together, work hard, and put politics aside to make sure that we were standing up for farmers.

It's really disappointing and frustrating that a few years later we're back in the same situation. We did have red flags come up. We talked about the urgency to act. On Bill C-49, we tried to have the part about grain transport carved out to make sure it would be adopted more quickly. The situation we're in right now is very frustrating.

I think that once again we all need to work together to make sure that we are standing up for farmers and that we are going to get this right this time around. I'm hopeful. I'm optimistic. Once again, I think we and the government need to use all the tools in their tool box. There are some options that were used in 2013-14 that can be applied to the situation we're in right now.

I'm happy to see that there is an openness to looking at this at committee, but I'm just concerned, because looking at this on March 21 is once again too late. The timeline that was given for the expectation for the ministers to act was March 15. Every day that goes by.... I can't imagine being in the shoes of the people who are trying to transport their grain and how frustrating this is for those farmers. They already deal with weather and so much unexpected volatility, and for this to happen again is completely unacceptable.

I'm really hoping that.... We do have our two weeks off from Ottawa when we're supposed to be back in our constituencies, but I think we need to sit down as the agriculture committee and flesh out what options can be undertaken immediately by the government.

I'm supportive of the motion by Luc Berthold, but I think we really need to have CN and CP here. We also need to have Minister Garneau and Minister MacAulay or their representatives come to committee. It's our job to stand up for farmers. This is something that should be non-partisan. I think March 21 is way too late. I know that Bill C-49 is in the Senate right now. It's an omnibus bill; it changes 13 laws. We did try to have that section for grain carved out. When we get back to the House, I propose that we do a unanimous consent motion to have the Senate take out the bit about grain to have it fleshed out and to see if they could look at ways of getting that moving forward faster.

For now, in dealing with this motion, I think we really need to make sure that we are listening and taking the time to take this situation seriously. I'm hoping that there will be an openness from the Liberals on the other side to look at this seriously and to have CN and CP, the ministers, and also the farmers here. We have to listen to the farmers. This is a complicated issue. It's not black and white. I think it's time for all of us to roll up our sleeves and make sure that we get it right for them this time. We can't drop the ball again. We just can't.

Those are my comments for now.

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

Thank you very much, Mr. Chair.

I was at the end of my introduction.

As I was saying, the federal government must act right away. We cannot wait one or two weeks. The Liberal government must take immediate action. It has the means and the capacity to take action to ensure that this is working.

As I was saying, one of the two railway companies in question, CN, fired its president and chief executive officer owing to his inaction and the lack of services, according to the CN press release. There is a true crisis happening. People from the offices of the Minister of Agriculture and Agri-Food and the Minister of Transport should take note of what just happened at CN and understand the seriousness of the crisis and the urgent need for action.

I have also taken note of the apologies issued this morning by CN. That is an action I want to commend. CN recognized that it had failed to fulfill its duties in the case. Allow me to quote a few excerpts from the CN press release:

“We apologize for not meeting the expectations of our grain customers, nor our own high standards,” [Interim President and Chief Executive Officer] Mr. Ruest said. “The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadians businesses, and protecting Canada's reputation as a stable trade partner in world markets.”

CN decided to take action. All this is probably a consequence of the Canadian Federation of Agriculture's arrival in Ottawa last week, of the press conference held by western grain farmers and of the convening, thanks to our initiative, of this emergency committee meeting. When we invest all our energy in something and work together, we can achieve results. However, the committee has few means at its disposal. It has to rely on the decision of the government and the cabinet to expedite the process. That is what we want.

Time is of the essence; we called for this emergency meeting to recognize and resolve the worst backlog in a number of years in grain shipping.

Everyone here is aware that this is happening at a time when an ambitious export objective has been set—$75 billion by 2025. That figure comes from the Barton report. A study has even been undertaken to figure out how technological innovation can be used to achieve that export objective. Logically speaking, without an adequate transportation infrastructure and with companies being unable to send Canadian grain to markets, we will never reach that ambitious objective.

That is why it is important for us to talk about it. The committee should take note of this and hear what producers and railway companies have to say about the current situation in order to find a medium and long-term solution.

I repeat that, in the short term, the solution is in the hands of the Minister of Agriculture and Agri-Food.

The crop yield was very good this year. Farmers should not be punished for successfully increasing their production. However, they are literally paying the price of increased productivity because they cannot ship their product.

Right now, when we are trying to increase our access to markets, not being able to perform on contracts in a reliable and timely manner goes in the opposite direction of the one we want to take. There is a lot of volatility around access to markets, specifically given the renegotiation of NAFTA, but also the unexpected tariff increase on Canadian products in markets where Canada would like to expand, especially India.

Those situations are beyond our control; we cannot do anything about them. We have no decision-making power in what is happening abroad. However, we have a way to do something about our grain transportation system, as we are the ones who control it. We do not depend on other countries for that. It is up to us to implement appropriate measures to ensure that our grain is shipped to foreign markets. We have to implement everything to ensure that Canadian farmers have access to a logistical system that delivers their products to markets in a predictable and timely manner.

Todd Lewis, President of the Agricultural Producers Association of Saskatchewan, said that his year's shipments are disastrous and that we cannot allow ourselves another similar year.

Daryl Fransoo, Director of the Western Canadian Wheat Growers Association, said that a crisis is happening right now. The levels are astronomically bad. Farmers are getting together and trying to do something.

Wade Sobkowich, Executive Director of the Western Grain Elevator Association, said that the situation was not improving, but rather getting worse.

Art Enns, Vice-President of Grain Growers of Canada said that this situation is unacceptable and must change.

Finally, the Premier of Saskatchewan, Scott Moe, said the following:

“We need the grain moving.”

I quote: “We need it moving sooner rather than later,” Moe said, warning there “is a cash crunch that is coming.”

We will certainly have the opportunity to talk about that. Transportation and shipments are being discussed a lot, but let's not forget the producers who cannot be paid because they cannot ship their grain to market. This is a disaster for many farmers in the west.

The grain crisis of 2013-14 cost the Canadian economy $8 billion. This loss affects not only the farmers, although they do bear the brunt. It is also a direct loss to our economy.

There are reports indicating that losses will be higher this year. This is unacceptable. We cannot constantly undermine our own growth. As everyone knows, people want more Canadian products because they are the best in the world. Technology is being considered as a way to meet export targets, but what good does it do if the higher yields of perishable crops are lost?

We have to find a long-term solution. The solution must not only provide quick relief, although we do want an immediate solution. The committee must definitely hear the solutions that grain producers have to suggest and recommend. We must hear what explanation CN and CP have for the disaster this year, what they have done, what they will do to remedy it, and what they will do to help. We must also ask the government what it is going to do for grain producers in the west, who will unfortunately suffer major economic losses if nothing is done to help them.

We can't keep talking about these problems year after year. We need a viable solution specifically for Canada in order to resolve the systemic issues in grain shipment.

Clearly, we will always be at the mercy of the weather. We live in Canada and have winter every year. Unfortunately for those who do not like winter, it is part of life in Canada. Why? Because we are in Canada. It is unacceptable for the rail companies to use this as an excuse.

In conclusion, this study is intended to identify the systemic problems. We want to hear from stakeholders who want a plan and action immediately, but who also want us to find a way to prevent this crisis from happening year after year. We want to make specific recommendations to the government to find solutions to the grain shipment crisis in Canada. We are asking for the support of all MPs around the table, that is, of all members of the committee. We cannot say it is not our problem, because it is Canada's problem. When Canada is unable to export its grain or sell its products abroad, it is our responsibility to address the problem. It is a problem for agriculture, because we are talking about agricultural products.

There is more for us to do than consider Bill C-49. We must also do an exhaustive review of the problems that undermine grain shipment and provide viable and feasible solutions immediately.

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

Thank you very much, Mr. Chair.

The committee's Conservative and NDP members called for this emergency meeting because farmers need the government to take action now. We are united in our willingness to find immediate and long-term solutions. I am convinced that the committee's Liberal members also have the willingness to find a solution.

The situation is disastrous. When the government began an ideological battle by introducing Bill C-49, an omnibus bill from the Minister of Transport, all the observers warned it of the dangers of a new crisis.

We have all seen the figures. Between the two of them, CN and CP fulfilled 32% of hopper car orders last week. CN fulfilled 17% of the orders, and CP fulfilled 50% of them. Combined, last week marked the worst performance so far for the 2017-18 crop year.

Farmers are forced to absorb demurrage fees. We don't often use that term. I will give the definition of “demurrage”, for those who are not used to hearing that word. Demurrage fees must be paid by the charterer to the ship owner, in a voyage charter, when the time it takes to load or unload exceeds the laytime set out in the voyage contract. It's good to use the proper term.

In order words, the grain remains in elevators.

We learned that there are 35 vessels in the Port of Vancouver, we think for grain. Another five are waiting in Prince Rupert. With every unfulfilled order, Canada's reputation as a reliable trading partner is taking a hit. To quote an editorial:

Increasingly, our reputation among global customers is that of a supplier with aging and inadequate transportation infrastructure which fails to deliver its products on time, whether it’s canola or crude.

This has very real implications at a time when we want to expand market access, maximize our crops' yield, and increase our exports.

Every unfulfilled order undermines the reputation of reliable partners for Canada.

Unfortunately, the Liberals have ignored our advice to pass a separate bill on grain transportation and have not extended or made permanent the provisions of the Fair Rail for Grain Farmers Act. So protection for grain producers disappeared on August 1, 2017. Consequently, as predicted by the official opposition and a number of observers, a crisis occurred. It did not take two years; the first winter following the end of protection ensured by Bill C-30, a crisis situation arose in grain transportation.

Allow me to read a few excerpts of comments made on June 5, 2017, at second reading of Bill C-49, since that's pretty important.

My colleague Kelly Block, who is the transportation minister within our shadow cabinet, took the floor to speak to this omnibus bill. If people are still unsure that it is indeed an omnibus bill, here is how Minister Garneau himself described it, on June 5, 2017:

Specifically, the bill proposes to strengthen air passenger rights; liberalize international ownership restrictions for Canadian air carriers; develop a clear and predictable process for approval of airline joint ventures; improve access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and, increase the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.

That is how the minister himself described Bill C-49. You will understand that we are far from Bill C-30, which focused only on grain transportation.

That is one of the reasons why the consideration of Bill C-49 is taking so long: the government wanted to make an omnibus bill focusing on several different topics and concerning a number of stakeholders. It was clear that its consideration would take time.

My colleague Mrs. Block reiterated the following, during the study of Bill C-49, at second reading:

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.

In short, on June 5, 2017, we already asked that Bill C-49 be split, so that we could study the protection of western grain producers more quickly.

The Conservatives responded positively to the request of their Liberal colleagues from the transport committee to expedite the study of Bill C-49. The Conservatives agreed to return to committee a week before Parliament resumed. NDP members were also in attendance. If I remember correctly, they were also fully prepared to review the bill and to dedicate a whole week to that study in order to expedite the process. After the summer break, all the committee members came here and spent a week discussing Bill C-49. We knew it was important.

However, there was a major issue. When we were studying Bill C-49, the provisions in Bill C-30 had already expired nearly two months before. So the protection was already gone. Those are the arguments my colleague Kelly Block reiterated when the committee studied Bill C-49.

Let me draw your attention to another excerpt from Mrs. Block's comments:

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.

Unfortunately, the government did not keep its word. It did not ensure that those provisions would be dealt with by August 1, 2017.

Mrs. Block concluded her comments with the following:

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.

On June 5, 2017, she predicted that this would happen. Unfortunately, we are now facing that situation.

The Liberal government and railway companies have been inactive since August. It was business as usual for everyone. It was only yesterday that the Minister of Agriculture and Agri-Food bothered to take the first step to resolve the crisis: he wrote a letter with the Minister of Transport asking railway companies to prepare a plan to resolve the crisis and to post that plan on their websites by March 15. However, since the consequences of this crisis are being felt every day, last week we asked the government to act now, to implement the necessary tools and use its power to resolve this crisis as quickly as possible.

It seems that the calling of this emergency meeting had the positive effect of getting things moving. The Minister of Agriculture and Agri-Food has at least written a letter. This is a step in the right direction, but we have to go much further. We were expecting the minister to call a Cabinet meeting to adopt measures and make things happen, so that this crisis would be resolved immediately. The presentation of a plan and measures to ultimately find a solution should not be endlessly postponed again. The crisis is happening now.

This leads us to conclude that the government, aside from this letter, is once again relying on luck and the good faith of railway companies, instead of taking action and implementing the necessary measures to ensure that grain is shipped to markets, that farmers are paid and that this season's exceptional crop yields would not be compromised owing to a lack of planning by those who have the power and the tools to take action.

It's simple: the Liberal government must take immediate action to address the backlog in grain delivery and provide the tools needed to hold railway companies accountable for inadequate services. Inaction is costly. Talk to the president and chief executive officer of CN about that, as he lost his job because CN had not managed to provide a quality service. CN clearly indicates in its press release that it fired its president and chief executive officer for that reason.

If CN has realized that it should have taken action earlier, I don't understand how none of the advisors and other employees who are working at the offices of the Minister of Transport and the Minister of Agriculture and Agri-Food saw this crisis coming. Will a minister have to be fired for inaction—

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, again, we have proven time and time again that we are strongly committed to Canadian farmers and our agricultural industry. Unlike the band-aid solutions of the past with an expiry date, our government put forward Bill C-49, which would meet the long-term sustainable needs of users for years to come.

To quote the Western Grain Elevator Association, “this bill [Bill C-49] is a significant improvement over the existing legislation and is a positive step forward for the grain industry.

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, our government recognizes the importance of efficient and reliable rail service, especially in moving Canadian grain and other commodities to market. However, after enduring 10 years of band-aid actions on behalf of the other government, we introduced Bill C-49. It will provide a strong, reliable, and efficient freight rail system for the future.

The Minister of Transport and the Minister of Agriculture have been in contact with the railways, urging them to do better. We will closely monitor the situation.

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

Mr. Speaker, if they are working on improving the Asian market, why do we have a 50% increase on chickpeas?

For two of the past four weeks in Manitoba, the one railroad has only met 6% of the railcar orders placed by shippers. That means tens of thousands of tonnes of contracted grain is not moving, which has virtually stalled cash flow for farmers on the Prairies.

Will the Liberal government stop delaying? We warned the Liberals about Bill C-49 last fall. It is too late. Farmers cannot wait. Action is needed. Reinstate our previous Conservative government's effective measures and get grain moving now.

Agriculture and Agri-Food

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, our government has proven time and time again that it is strongly committed to Canadian farmers and to the agriculture industry. Unlike the previous Harper government's band-aid solution with an expiry date, this government put forward a permanent and sustainable solution in Bill C-49 that would meet the long-term needs of farmers.

The Western Grain Elevator Association said, “...this bill is a significant improvement over the existing legislation and is a positive step forward for the grain industry.”

[Lawrence MacAulay, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, we know this is a serious situation. That is why we introduced Bill C-49 to establish a strong, reliable, and efficient grain transportation system for the long-term.

The Minister of Transport and I have contacted CN to indicate how serious it is, and that it needs to move grain faster. I have spoken to grain farmers, and indicated to them that we are fully aware of the seriousness of the situation.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, unlike the previous government that did nothing for 10 years, we actually brought forward Bill C-49, which, by the way, that side voted against. It was intended to have fair rail legislation for the movement of grain.

I was speaking to CN this morning and in actual fact, the amount of grain transported at this point in time is only 3% behind the average of the past three years. Last week was particularly bad, but the situation is improving.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, our government recognizes the importance of an efficient and reliable rail system to transport grain for our farmers.

That is why we put Bill C-49 in place, unlike the previous government that did absolutely nothing for 10 years. I have been in touch with CN and CP. I was in touch with CN this morning. The month of February was particularly difficult, but at this point I feel that, looking to the future, the grain situation will certainly improve in the months to come.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, let me correct the hon. member.

For 10 years, the previous Conservative government did absolutely nothing for the farmers in this country except to put in place a band-aid temporary bill. We put in place Bill C-49 to give our farmers, shippers, and railways a modern freight rail legislation. We certainly hope that the other chamber is going to pass this bill as quickly as possible.

I would encourage my fellow member across the way to encourage his fellow Conservatives to pass the bill as quickly as possible.

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, unlike the former government, which for 10 years did absolutely nothing except introduce a temporary bill, we are here for Canada's grain producers.

We have farmers' interests at heart. That is why we introduced Bill C-49. I hope that the other chamber will pass this bill as soon as possible.

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

Mr. Speaker, while the Prime Minister and six of his ministers were traipsing around India, the situation of western grain farmers deteriorated. Because the Liberals decided to play partisan politics instead of taking care of government business, they refused to split Bill C-49. A whole season's crops cannot be delivered by rail for partisan reasons, and the Minister of Agriculture and Agri-Food is doing absolutely nothing.

When will the Prime Minister finally do his job and take action so Canada's grain producers can access the market and sell their crops?

Grain Farmers

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, the government has failed Canadian grain farmers with Bill C-49. According to Ag Transportation Coalition, CN and CP supplied only a combined 38% of hopper cars ordered in grain week 29. Week 29 was the worst week to date during the 2017-18 grain year.

This is a crisis for grain farmers. They need to get their product to market and pay last year's bills. Guess who pays the penalty for delayed delivery for shipping the wheat at the port in Vancouver? It is not the port facility, not the shipper, and of course not the railway. It is the farmer who pays the penalty.

We urged the government to split up the omnibus Bill C-49 so we could pass the interswitching provisions quickly and protect the grain farmers, and the Liberals failed to do so. Now Canadian grain farmers are feeling the consequences.

The government needs to act quickly. We have winter in Canada every year and the Liberals need to quit using that as an excuse. It is time to get it done. Let us fix it for the grain farmers.

Air Transportation

[Karen McCrimmon, Liberal, Kanata—Carleton, ON]

Mr. Speaker, Bill C-49 is presently before the Senate Standing Committee on Transport and Communications. The Senate will debate the merits of this proposed legislation, and we look forward to hearing its views on our efforts to establish a world-leading approach to air passenger rights.

The intent has always been to have air passenger rights enshrined in regulations, as is done in the United States and the European Union. Undertaking a regulatory approach would also ensure that Canadians are consulted before and during the regulatory development phase. These passenger rights are for all Canadians, and this approach would ensure that their voice is being heard.

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, it is my pleasure to provide an update to the hon. member and to the House on the status of Bill C-49 and our efforts to create and implement a world-leading air passenger rights regime in Canada for Canadians.

When Canadians purchase a plane ticket, they expect the airline to meet its end of the deal and treat them with respect, fairness, and consistency. That is why our government has introduced legislation for the establishment of new regulations to strengthen Canada's air passenger rights. The Minister of Transport has even challenged airlines to immediately respect the clear intent of this legislation so we can finally move toward greater passenger rights.

The Senate Standing Committee on Transport and Communications is currently reviewing Bill C-49, and we look forward to hearing the views of the Senate on this proposed legislation.

It is important to note that, should the bill receive royal assent, it would be the Canadian Transportation Agency, in coordination with Transport Canada, that would begin to develop the air passenger rights regulations, not the airlines, as suggested by the hon. member.

Some concern has been expressed about having the proposed air passenger rights regime enshrined in regulations, as opposed to legislation. Let me address those concerns.

The existence of these rights in the regulations would not diminish their power. Air passenger rights would cover a number of issues, including denied boarding and tarmac delays, and would establish clear standards of treatment and levels of compensation in some instances, with specific penalties against air carriers that do not comply.

Utilizing the regulatory process for air passenger rights would ensure that Canadians and industry stakeholders have a voice at the table during the development process. We have always said that the most important voice in this process is that of the Canadian public, and the regulatory process would ensure that this voice is heard and that a balanced and effective air passenger rights regime is developed.

As well, the regulatory process would make it easier to make future changes and modifications, as opposed to the time-consuming process of changing legislation. Other jurisdictions, such as the United States and the European Union, have also taken the regulatory approach for these very same reasons.

As Bill C-49 continues to move forward in the other place, we will continue to listen to Canadians as we work to develop a world-leading air passenger rights regime that will be the envy of travellers throughout the world.

[Lawrence MacAulay, Liberal, Minister of Agriculture and Agri-Food]

Thank you very much, Mr. Chair.

Good afternoon, everyone.

I'm pleased to be back at the committee today. I'm joined by Deputy Minister Chris Forbes and by Assistant Deputy Minister Pierre Corriveau of the corporate management branch.

I want to thank the committee for its outstanding work in support of the Canadian agricultural sector. You have been tackling some very important issues for Canadian farmers, including a food policy for Canada, non-tariff barriers, climate change, and water and soil conservation issues.

My message to you today is that the government will continue to work with you to grow Canada's agriculture and food sector. Today, I'd like to touch on three key points: our progress since we last met, our priorities ahead, and challenges and opportunities.

Mr. Chair, Canada's agriculture and agrifood industry continues to grow. Last year, the industry generated over $111 billion of our GDP. The sector is not stopping there, and neither are we. The estimates you have before you show the government's increased investment of $23 million to support programs in competitiveness, market development, and innovation. That brings our total allocation for the department to $2.4 billion.

As you know, Growing Forward 2 is ending on March 31. We are now working with the provinces and the territories on the new Canadian agricultural partnership. Beginning on April 1, 2018, the Canadian agricultural partnership will drive investments of $3 billion over five years. This agreement will build on the future of our great industry. It will support the growth and potential of the Canadian agriculture and food sector. It will help farmers innovate, grow, and prosper.

At Agribition last week in Regina, I announced federal programs under the partnership. Backed by a federal investment of over $1 billion, these programs will help farmers and processors expand into new markets, be more efficient and environmentally sustainable through agriculture research and technology, and build better consumer confidence.

Trade continues to be a strong focus for our government. We aim at increasing our agricultural exports to $75 billion by 2025. Trade with China will help us get there. This is a vital market for our farmers. China is our second-largest trading partner in agrifood. Their middle class grows by the population of Canada every year.

I was in China two weeks ago with a delegation over a hundred strong. I can tell you, Mr. Chair, that Chinese consumers are looking for the safety and top quality that our farmers can deliver. More and more, they're buying groceries on their smartphones and tablets. I have to say that we had a very successful trip. Industry signed deals for new business worth nearly $300 million, from wild blueberries and barley to swine genetics and ice wine.

We promoted e-commerce to sell our great Canadian food and beverages, and I sat down with my counterparts, Minister Han and Minister Zhi of AQSIQ to explore further ways to develop our trade. We also signed an agreement to collaborate on biotechnology.

Also, we were in Europe in October to help our industry maximize its opportunities under CETA. This historic and progressive agreement will help boost agricultural exports to Europe by approximately $1.5 billion a year.

There is still much more work to be done, and that is why our mission to Europe was so important. We helped open doors for our exporters and made many great connections with European importers. We also held bilateral meetings with many senior EU officials. We want to maximize the opportunities that CETA provides our farmers.

Here at home, we continue to support a strong and modernized NAFTA. Over the past few months, I have met with many government and industry people from the U.S. and Mexico. I can tell you that everyone I've spoken to recognizes the benefits that NAFTA has brought to our industry, our farmers, and the economies in the three countries. Canada will continue to work hard to grow our trading partnership across North America, and we will continue to defend our supply management system and our dairy, poultry, and egg farmers.

We're also investing $350 million in programs to make sure our dairy farmers and processors stay on the cutting edge through new technologies.

To ensure that our products get to the consumers around the world, we're also strengthening our grain transportation system through measures in Bill C-49, the transportation modernization act.

Just yesterday, we announced that Canada successfully restored market access for Canadian pork exports to Argentina, effective immediately. This could put another $16 million a year into the pockets of our farmers.

I want to say, Mr. Chair, that we're deeply concerned by and disappointed with the recent regulatory and tariff decisions made by the Government of India that are affecting the Canadian pulse trade. We've been working together with our farmers to find a mutually acceptable way forward with the Government of India to provide stable, sustainable access for Canadian pulse exports to India.

I've raised these issues with my counterparts in India. Recently, the Minister of International Trade led a mission to India, and the recent increase of tariffs on pea imports was raised at every opportunity. Canada and the rest of the world have been hit with a 50% tariff on peas, and this was a decision that India made without any advance notice. We stand ready to work constructively with the Government of India and our pulse farmers to resolve these issues, thus helping to ensure India's long-term food security.

Mr. Chair, I would now like to take a brief look at our priorities over the coming months.

On the Canadian agricultural partnership, CAP, we continue to work closely with our provincial and territorial partners to finalize the bilateral agreements. Our government is committed to supporting our farmers with strategic investments that expand growth and create well-paid middle-class jobs.

As I mentioned, last Friday I announced federal-only investments of $1 billion under CAP. These investments will focus on key priorities: growing trade and expanding markets; the innovative and sustainable growth of the sector; and, supporting the sector by better reflecting diversity and enhancing public trust.

This is an exciting new chapter in Canadian agriculture, and the Canadian agricultural partnership will help ensure that farmers and food processors can meet the world's growing demand for our high-quality products. My deputy minister will be pleased to provide the committee with further updates on the Canadian agricultural partnership during the second half of this meeting.

Governments fully realize that we must continue to make sure that our business risk management programs respond to farmers' needs. Along with my colleagues from the provinces and territories, we have made changes to strengthen these programs. We also announced a comprehensive review of the BRM programs in partnership with our Canadian farmers.

Innovation is certainly a priority for the Canadian agricultural partnership. It will give our farmers a competitive edge on the world stage. We will continue the great work of our agricultural clusters under the Canadian agricultural partnership. We will collaborate with the private sector to help the industry grow and help feed the world. Our government has identified the agrifood sector as one of six industries that can make Canada a global leader in innovation, and that is exactly what we intend to do.

Action on the environment is key to keeping the sector meeting the global demand for food sustainably. Our government is investing in programs to help farmers adapt to climate change. We have invested $27 million in the agricultural greenhouse gases program, which will help ensure that our farmers are the world leaders in the use and development of clean and sustainable technology and processes.

We have invested $70 million in agricultural science through budget 2017, which will focus on addressing emerging priorities such as climate change and water and soil conservation. We are encouraging industry across the country to take a national approach to the environmental farm plans. These have been tremendously successful, and they have a great potential to build the Canadian brand in global markets.

We look forward to placing an increased focus on environmental sustainability under CAP. I know that your committee has undertaken a study on some of these issues, and I certainly look forward to the results of these studies and how you can inform the government on these issues going forward.

We continue to work towards a food policy for Canada, based on our consultations, which reached tens of thousands of Canadians and industry stakeholders across the country. This policy will be our shared vision for the future of food in Canada. I look forward to the results of your recent study on the food policy.

Mr. Chair, there will always be challenges in agriculture, whether it's tough competition on the global stage, protectionism, or changing consumer demands. At the same time, Canada has the competitive advantages that will help turn these challenges into opportunities. We are blessed with huge resources of farmland and water and the best farmers and ranchers in the world.

The time is right for the Canadian agriculture and food industry to increase its presence on the global stage. Through smart investments and continued collaboration, I'm confident that we're up to any challenge that lies ahead.

Thank you for the great work.

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

Good.

I just want to get back to your website with your watch-list.

Despite what happened in Lac-Mégantic a couple of years ago, you still have it listed on your watch-list as transportation of flammable liquids by rail. We've had some changes with double-hulled tankers and Bill C-49. Why specifically is it still on the watch-list? What's Transport Canada not doing that we should be doing to get this issue off the watch-list?

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

I will follow up on the previous comments in terms of the robust system in the transportation of dangerous goods.

I'm sure you're aware that in Bill C-49, there is an exclusion clause when it comes to TIHs. I'm wondering why an exclusion clause like that would have been put into that bill. We moved an amendment to have it removed because it didn't address the concerns around captive shippers that are shipping dangerous goods or chemicals that are considered dangerous.

If we have a robust system in the transportation of dangerous goods and we know we have another piece of legislation that governs it, why would we need to have an exclusion put into Bill C-49?

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

In fact, I would like to ask more questions about CATSA. Besides, I have one that is very clear.

Bill C-49 indicates that if regional airports want to obtain security services for chartered flights, at the international level, for instance, it will have to be done on a cost-recovery basis. It's also true for designated airports, but it's very true for smaller airports, like the one in my riding of Trois-Rivières.

Have you been able to evaluate, in any way, what the cost recovery is for a regional airport?

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

My questions are going to be directed to CATSA first.

It is my understanding that airlines are required to register and collect the air travellers security charge. However, under Bill C-49 we know that CATSA will be allowed to enter into a contract with airports, both designated and non-designated airports, in order to provide additional screening services on a cost recovery basis. How will airports pay for this additional cost? Can you comment on that?

Transportation Modernization Act

[The Assistant Deputy Speaker, NDP, Carol Hughes]

It being 5:30 p.m., pursuant to order made Tuesday, October 31, 2017, the House will now proceed to the taking of the deferred recorded division on the motion at third reading stage of Bill C-49.

Call in the members.

The House resumed from October 31 consideration of the motion that 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 read the third time and passed.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Madam Speaker, the member talked about how much legislation is in Bill C-49. The member is quite right. It is a very comprehensive piece of legislation. For 10 years we were dormant on this. When we looked at modernizing our transportation network, we looked at rail and air and saw what was happening around the world, and we were just not keeping pace.

I know that the member feels strongly about the Ambassador Bridge but more so about getting that Gordie Howe International Bridge complete. We know that there is $2 billion a day going across our border every single day. It is goods, people, etc. It is really a lifeline, if we think about our trade in this country. That bridge is probably the number one spot for trade.

Does the member not feel strongly that we have to get on with this and move forward? We have to modernize our transportation network for the health of his community as well as our country.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, it is an honour to raise issues on Bill C-49, the transportation modernization act, which is a long bill with many different components in it. I am going to focus on one important component. There are a number that speak to all Canadians and communities, but one specifically speaks to an issue in my community that is very troubling, very sad, and very disturbing. This bill would give the powers that be, those who are appointed, who lurk in the shadows, and who do not have to have accountability, the strength and more empowerment to do what the public does not want. Specifically, Bill C-49 would allow port authorities to have more clandestine borrowing practices through the Canada infrastructure bank and allow the ports to do more environmental and other community damage with less accountability.

People at least appreciate the context of what a port authority can or cannot do. Port authorities across Canada are stewards of the land of the people. That is, first and foremost, what we need to get straight, especially for the people who feel they do not have the power to speak against the powers that be. The reality is that ports, with their control and their power, at the end of the day, are responsible to the Minister of Transport, the Prime Minister, and cabinet, full stop. The use of the lands and relationship with communities are still, at the end of the day, controlled by the Prime Minister, the cabinet, and the people of Canada. They are not private businesses or enterprises that have no responsibility or no moral compass as they go about their business. They are, in fact, having to answer accountably to the Prime Minister and the Minister of Transport.

In my situation, what is very peculiar is that the bill would create additional powers that cause me concern related to a place called Sandwich Town. It is basically the oldest European settlement west of Montreal. It was settled by the French, then the English, and now is the home of many immigrants, new Canadians, students, populations that, quite frankly, have challenges because of the geography. For those out there who feel compelled to understand the story of the underdog, this is it in Canada.

Imagine living in an area where Canada was defended during the War of 1812. This was where it happened on the front lines of southern Ontario. This was where the decisive battles occurred that formed this nation. Aboriginal communities, the British at the time, the militia, and the local populations bonded to defend Canada. Since that time, we have seen the most unusual of circumstances for this small settlement that eventually became part of the City of Windsor, which marks its special foundation today.

I am talking about a small community being trapped next to the Ambassador Bridge, which is owned by a private American billionaire, who in his operations on the U.S. side actually went to prison because of practices related, ironically, to government contracts on the U.S. side, where homes were being bought up, boarded up, and eventually demolished or left to decay. People have lost businesses, schools, and places of faith. All of those things have happened in the shadow of an empire that has 10,000 trucks per day, 40,000 vehicles in total, of pure profit. Some 30% to 35% of Canada's daily trade with the United States, nearly $1 billion, is within earshot of some of the people most disenfranchised because of the repercussions from what has taken place.

Why Bill C-49 is important is that most recently there has been hope, an extended opportunity, with the fight for this area, for a new border crossing. It took place over a decade and a half. The original idea was to allow the development next to this place to destroy it.

However, we have a new border crossing, the Gordie Howe international bridge, which will be built as a result of a compromise among the community, the environment, business, and two nations to finally add border capacity. In this capacity, there will be a community benefit fund. We actually voted for that in Bill C-344, a Liberal member's bill that the House recently passed at second reading, including with the support of the Minister of Transport and the Prime Minister, to at least send it to committee. The community benefit fund is for infrastructure projects such as this to get some relief, planning, and opportunity. That bill, in spirit, is what is taking place. We are finally getting some community benefits to come to this area.

What has happened, and why Bill C-49 is so important, is that the port authority wanted to develop a piece of its property, called Ojibway Shores, against the wishes of the community. This port authority property is pristine environmental acreage, 33 acres in total, with endangered species, flora, fauna, species at risk, amphibians, wildlife, birds, and all of those things that are so important. It is right on the Great Lakes, and one of the last places on the Great Lakes that is undisturbed in this era.

The port wanted to bulldoze Ojibway Shores, it wanted a way to clear it, and it actually got at one time a private partnership that would have done so. The private developer with the port at that time, despite knowing they would have made a lot of money, said no, because it was the wrong thing to do. When they backed out, the port no longer considered Ojibway Shores to be developable. However, the port has asked for $12 million from the community benefit fund to not develop Ojibway Shores for 30 years. They do not just want the land to remain undeveloped, in terms of turning it over to the public in perpetuity, but have asked for $12 million for a 30-year lease not to bulldoze it.

It is almost unconscionable to think that a board member would request this of the public. By the way, board members are representative of the city, province, federal government, and the users. They are citizens like anyone else. Part of people's education today, including the the people of Sandwich, Essex, and beyond who care about the environment, is to understand that people are paid to represent them on these boards and to make decisions. They need to understand that power and their ability to connect with those individuals, and not just in Windsor, but in other ports across this country. This is the first step in actually taking back land and stewardship for the people, which should belong to them.

Bill C-49 now proposes to give more power to the infrastructure bank to allow the ports to develop things. We are concerned about that, because it would potentially open up another revenue source for the port to go ahead and bulldoze the property.

It is interesting right now that when we think about this situation, a choice has to be made for the people. A simple clause would allow this property to be divested to Environment Canada. It is a simple thing that we have asked for. It would just take a two-signature process, and has been done before. We have done the research, and it is actually part of a legislative process, and part of what I think was drummed up with regards to the transfer of properties for situations like this in the public interest.

As I conclude today, we have a choice on this. Right now, Bill C-49 would give more powers, but in the meantime, let us save this situation. Instead of the port getting that $12 million, it can go to poverty reduction, students' education, housing, or employment in one of the most disadvantaged areas of Ontario.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I welcome the opportunity to provide some comment at third reading on Bill C-49. I represent a part of the country that has a lot of rail workers, and I have heard concerns from the workers themselves and from their union about Bill C-49 and what it would mean for their privacy rights when they are working on trains across Canada and the ability for employers to access footage and audio recording of those workers working on trains pretty much for just about any purpose.

The government says that the real rules are going to come in regulation, but we have seen that it is a government that has a pretty cozy relationship with some of the major transportation companies in Canada, and frankly, its track record has not been very good.

We heard already from my hon. colleague about some of the concerns around privacy, which are very real and ought to be addressed in the same way they are for the airline industry, where only the Transportation Safety Board has the authority to look at those recordings. I wonder if the member would want to expand his comments to the question of why Canadians should have faith in the government to leave it all to regulation, without legislating in favour and ensuring the privacy protection for railway workers in this country.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, before I begin, I wish to notify you that I will be splitting my time with the hon. member for Windsor West.

When I look at this bill and examine some of the debate surrounding it, I think about some of the Liberals' key messaging over the last two years, specifically how they like to talk a lot about helping the middle class and those working hard to join it. However, when we look at some of the measures contained within Bill C-49, I believe that some of them are indeed designed to help the corporate class and not the middle class.

I want to concentrate my speech, because to give a 10-minute speech on such an expansive bill makes is nearly impossible to do in the detail it deserves, but there are a few key areas I wish to touch on that I believe have incredible significance for the constituents I represent and, indeed, many Canadians across this great country.

We have opposed some of the principal amendments proposed in this bill. I have to give great credit to my colleague from Trois-Rivières for his incredible work on the transport committee, and the way he has informed our caucus of the work he is doing. He did a lot of great work on this bill. He attempted to shift it, to amend it, to change it, and to make it more amenable. We can see that those efforts came to naught when the Liberal-dominated committee chose to reject them.

The first measure in the bill that we oppose is with respect to the arrangements between airlines. This bill amends the Transportation Act to give the Minister of Transport the power to approve joint venture arrangements between airlines even if the Commissioner of Competition finds an arrangement to be anti-competitive and one that could increase the price of airline tickets. Again, this measure is not really designed to help middle-class Canadians, who will have to suffer through this if prices are increased.

Next, the Transportation Act is amended to increase the limit on foreign ownership of Canadian airlines from 25% to 49%. I believe there was even a study cited on Transport Canada's website showing that this would have absolutely zero effect on increasing the competitiveness of Canadian airlines. Therefore, we have to wonder why that measure is in here.

Another point is with respect to the amendments to the Railway Safety Act that would will force railway companies to use video and voice recorders.

Of course, there is also the attempt to create some sort of passengers' bill of rights, wherein the Canadian Transportation Agency is ordered to propose and make regulations to establish a new passengers' rights regime. Indeed, this last issue is one that is very near and dear to our caucus. In previous parliaments, several members have fought long and hard to codify a passengers' bill of rights through private members' bills. Therefore, although we are glad to at least see the attempt made here, we are certainly unhappy with the end result.

This bill primarily protects the interests of foreign investors and violates the right to privacy and workers' rights. That is specifically with respect to railway workers.

We are certainly in favour of improving the rights of air travellers and protections for grain shippers, but we want to call upon the government, and indeed we have called upon the government, to separate those specific measures out of this omnibus bill so they could be studied as separate pieces of legislation and passed into law. I think the government side would have found a lot of co-operation from the Conservatives and NDP if those measures had been left to standalone bills so they could be examined in the detail they deserved.

We opposed Bill C-49 at second reading, and certainly made attempts to amend the bill at committee. Many amendments were put forward by both the Conservatives and the NDP, but ultimately many of them did not make it. We moved amendments specifically to establish far more concrete air passenger protection and compensation measures, to make the interswitching routes more accessible to grain farmers, and to protect the labour rights of train conductors, which were all rejected by Liberal members of Parliament.

Now I would like to talk about the joint venture agreements between airlines. Currently, the Commissioner of Competition has the power to determine whether these joint venture arrangements are anti-competitive and whether to apply to the Competition Tribunal. It gives me great pause to now know that the minister is in fact going to have final power over these measures.

The bureaucracy is supposed to be non-partisan and not influenced by outside events. However, cabinet is lobbied extensively by many different companies and private interest groups. In the current government and in previous governments, once corporations try to bend the ear of government, legislation sometimes is changed in their favour. To give the minister this kind of power, a person who can be lobbied by industry, and who perhaps gets a greater voice than the average Canadian citizen does, gives me cause for concern.

If Air Canada proposed an arrangement to merge its operations with those of an American company, even if the commissioner were to find that agreement would lessen competition among airlines and would increase ticket prices for passengers, the minister could still approve that arrangement. We are quite concerned with this.

With the amendments to the Railway Safety Act, Bill C-49 would force railway companies to fit their locomotives with video and voice recorders. The government wants us to believe this measure will improve rail safety, but we are worried that Canadian National and Canadian Pacific could use the information to discipline their employees and measure their productivity.

We believe the bill is far too vague and does not specify how the private information of train conductors would be accessed, collected, and used by the minister and the railway companies. Therefore, we proposed amendments to limit the use of these video and voice recorders to the Transportation Safety Board. Of course, that was rejected by the Liberals. We have concerns this may violate those workers' charter protections, specifically under section 8 of the Charter of Rights and Freedoms.

The vice president of the Teamsters Canada Rail Conference stated:

We think the bill in its present form is contrary to our rights as Canadians. To exempt 16,000 railroaders from PIPEDA, we believe is not appropriate, and this legislation would call for a specific exemption for the purpose of our employers, the people who have been found to foster a culture of fear, to watch. We have a problem with that.

I would like to move on to the part that has the most significance for people all across Canada, the venture to try to establish some sort of rights regime for passengers.

In the previous Parliament, the NDP introduced Bill C-459, which would have codified many of these measures and put them explicitly into an act. It was a far stronger effort than what we see in Bill C-49. The measures in Bill C-49 give the minister the power to make regulations.

Regulations can be well and good for certain measures. For certain legislation, we want the minister to have that leeway to change rights and so on. However, we again have to raise our concerns that if airline companies start lobbying the minister really hard on these, how are the regulations eventually going to turn out? Are the regulations going to start benefiting airline companies, or are they honestly going to be on the side of passengers? That is why we feel codifying these in the actual bill rather than leaving them to regulations would have been a far stronger measure.

My concerns are not unjustified with respect to Air Canada. I would like to remind members of when we were busy debating Bill C-10, which was the government's attempt to legislate outsourcing for Air Canada. It was an amendment to the Air Canada Public Participation Act. Air Canada definitely had the ear of the government during that time. It brought forward a bill that specifically benefited that company and left many workers out in the cold. It gave Air Canada the ability to outsource jobs if it so wished.

Half measures are not what we were expecting after this length of time. Two years have passed. We would have liked to have seen some greater efforts in many of these areas. We are disappointed that this bill is the final result.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Madam Speaker, I am pleased to take part today in the debate for Bill C-49, the transportation modernization act. This Liberal omnibus bill would substantially amend 13 different acts and have a profound effect on three major modes of transportation: rail, air, and water.

These are big changes, and it does not look as if the Liberals would be changing the rules for the better. Bill C-49 is the first legislative response to the 2016 Canada Transportation Act review. While we welcome the commitment to a modernized and safer transportation strategy, we are concerned that the proposed changes would have costly unintended consequences.

While I would like to discuss all the complicated sets of changes from Bill C-49, such an undertaking would be impossible, given the time constraints of this debate. Today, I would like to particularly talk about the changes to rail transportation and what this means for our Canadian farmers and producers.

Our biggest concern on the changes to rail transportation has to do with the changes to the long-haul interswitching that this bill would make, in replacing the provisions introduced by the previous Conservative government with Bill C-30. Bill C- 30, or the Fair Rail for Grain Farmers Act, extended interswitching distances to 160 kilometres. Those provisions expired on August 1.

While new interswitching provisions were anticipated, this bill is far from meeting its objective of improving shipper and producer options with the new 1,200-kilometre interswitching tool. The system introduced through Bill C-30 was popular with shippers. It provided the certainty of a regulated rate up to 160 kilometres, and it is key that they dealt with the regulated rate for that full 160 kilometres.

With Bill C-49, the Liberals are putting forward a new long-haul interswitching tool 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 the rate determined by the Canada Transportation Agency, which is determined on a case-by-case basis based on similar pricing hauls. That goes for the remainder of the distance to the interswitch point.

Shippers would only be able to interswitch at the first available interswitch point. The nearest interswitching location for many shippers and producers in northern Alberta and British Colombia would be in the Kamloops–Vancouver corridor, and the other exclusionary zone is from Quebec City to Windsor. lnterswitching is not allowed beyond 30 kilometres in these areas. For captive shippers, the new interswitching provisions would do nothing to encourage more competitive rates or improve competition.

This is a serious problem. It is important to remember that railways in Canada operate in a near monopoly situation. Captive shippers and producers have no choice but to use one company, to which they are effectively held hostage. This situation could put shippers and producers at a real disadvantage.

While there are provisions in Bill C-49 that would allow shippers to request a contract from a railway with reciprocal penalties, the penalty needs to be designed to acknowledge that the railways have much greater economic power than the shippers. We can also see that Bill C-49 is intended to encourage the efficient movement of shippers' traffic while creating a system that is fairly balanced between the shipper and the railway, but this original intention is eclipsed by the many uncertainties of Bill C-49, which are also present on this issue. To achieve the intended outcome, the government must improve and clarify its provisions for both issues of interswitching and penalties.

Bill C-49 also proposes changing the 30-kilometre interswitching rate so that the interswitching rate over 30 kilometres would be decided by the CTA on an ad hoc basis, as I mentioned earlier. This 30-kilometre interswitching rate would be set each year. It purports to take into account the railway's infrastructure needs across the entire network, which could increase the rate paid by shippers.

The rate-setting regime this bill introduces needs to be designed to ensure shippers always have access to competitive rates. As it stands, the rate would be derived from comparable traffic that is subject to captivity. This system needs to concentrate on a concrete review mechanism to ensure it is actually working for shippers.

However, the Liberals cannot just design this system and leave it to simply administer itself. It is not a budget. Without a sunset clause or predesigned review dates in two to three years, there are absolutely no guarantees for shippers and producers that they will benefit from it.

To remain competitive, shippers and producers rely on clear provisions to ensure efficient access to competing railways. The Liberals are failing to provide clarity and assurances for our Canadian shippers.

In addition, the new long-haul interswitching rates would be more difficult for shippers to use and will not serve as a useful tool in negotiations with the railroads. The proposed slew of changes to the long-haul interswitching rate present very vague outcomes. The sheer number of the regulatory changes and the administrative cost will put Canadian carriers at a disadvantage, especially against U.S. carriers.

Some argue that implementing these changes will increase U.S. railroad access to Canadian traffic at regulated rates without reciprocity. The government has expressed a desire to increase agricultural exports exponentially in the coming years, but has come up short with policies that would help achieve this. If we want to help the agricultural sector increase production and expand its global market share, we need to do more to increase its competitiveness in the global market, not restrict it. One of the ways to do that is to make sure they have efficient and reliable ways of moving their products.

Transportation needs to work much better and the bill must strive to improve rail transportation, because increasing the amount of produce that our amazing farmers produce will be useless if getting it to market becomes a substantial business cost for our producers. Canadians need and expect great rail service. We need an efficient system that ensures the cars show up and grain gets shipped on time.

An article in the Manitoba Cooperative states:

Western Canada’s bigger-than-expected crop is moving to export slower than at last crop year’s record pace, and while grain companies aren’t panicking, Keystone Agricultural Producers’ (KAP) president Dan Mazier says it’s costing farmers....

For most of the current crop year, which began Aug. 1, Mazier said CN Rail hasn’t delivered as many cars as it did a year ago, based on data published by the Ag Transport Coalition (ATC). It reports weekly on the number of cars most grain companies order and the number the railways deliver.

I have the Ag Transport Coalition numbers here for week 12 from October 15 to 21, showing that CN supplied 51% of the hopper cars that were ordered for shippers for that week, which resulted in an unfilled shipper demand of 2,614 hopper cars; and CP supplied 94% of the hopper cars ordered by shippers for grain in week 12, resulting in unfulfilled shipper demand of 281 hopper cars, with nearly 3,000 in total not making it in week 12.

In addition to that, speaking of competitiveness, we are also aware of the ongoing NAFTA negotiations. It is therefore remarkable that the government would allow the new 1,200 kilometre interswitching distance to increase U.S. rail access to Canada at regulated rates, allowing the U.S. to access this Canadian traffic without reciprocity. It seems like weak negotiating on the part of the government to give up this leverage before the NAFTA negotiations are concluded. It is another head scratching idea by the Liberal government to propose such changes even as NAFTA is being renegotiated. No wonder people think that the Prime Minister is napping on NAFTA, because Canadian competitiveness seems to be at the bottom of his priority list. Policies like this directly hurt our competitiveness and are yet another hurdle for producers and shippers to clear.

As it stands, there is simply too much uncertainty about the impact of the newly redesigned interswitching provisions. They need to be reviewable and timely.

Unfortunately, all of this uncertainty and unintended consequences stem from the Liberals' inability to actually consult and listen to industry experts and Canadians. The Liberals are quick to spend taxpayer money to travel around the country to consult and take selfies with Canadians, but when it comes down to it, the Liberals only listen to themselves.

Members from this side of the House have spoken to many stakeholders and experts. Many of these experts believe that what the Liberals are proposing is a convoluted remedy with unknown consequences.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Last I checked, Madam Speaker, we are debating Bill C-49, and it would do nothing for passengers.

I was very clear in my remarks. The bill is a hodgepodge of a number of ideas, but there are not a lot of details. The devil is in the details, and passenger advocates have been clear that this legislation does not cut it.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Madam Speaker, when we look at this vast country, with a pretty small population, what we have seen are a lot of monopolies and oligopolies when it comes to transportation in our rail system and our airlines. We have few, and that has caused a lot of concern, a lot of challenges, and a lot of difficulties for our shippers.

The member should listen to the experts and read the science on modernizing our transportation system and making a better transportation system.

I listened to University of Saskatchewan professor James Nolan, who said that this is good news for our grain shippers. He said, “The bill is surprisingly pro-shipper. Shippers have got a fair number of concessions that they wanted”.

This legislation would meet shippers' requirements when they have only one or two transport companies in their area they are able to negotiate with. This legislation would enable them to move away from that, maybe the primary carrier, and have another carrier take care of their needs. That has not been possible, and that has been a challenge for farmers. We must listen to the experts.

Would the member for Simcoe—Grey not agree that bringing in more competition through Bill C-49 would help our industry, our farmers, and our businesses compete in what we find in our country, which is a transportation system with few players?

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Madam Speaker, I will be sharing my time with the member for Red Deer—Mountain View.

Bill C-49 has a number of legislative gaps.

This bill is simply an omnibus bill. It is a whole bunch of random ideas tossed together to make one large omnibus bill.

Obviously, the transport minister looked around his department and asked if anyone had anything he or she wanted passed in legislation. He took a list of requests, put them in this bill, and that is what we have. Besides having some loose connections to transportation, there is little common among the items in this bill.

One component of the bill outlines a passenger bill of rights, but there is nothing concrete, no details outlined in the bill, that truly protects passengers. The reception of this bill by passenger rights advocates has been the political equivalent of standing for three hours on the tarmac on a hot summer's day. It is really terrible. That is because the Liberal government is proposing a passenger bill of rights that fails to actually do much for passengers. However, the one thing it would do is allow the Minister of Transport and the Canadian Transportation Agency to set monetary compensation for passengers on their own, with no oversight, yet again another constant theme of the Liberal government.

We all know that the last thing Canadians want is the Liberals having an easier time spending tax dollars. Along those lines, there is more.

The Liberals have also suggested possible increases to the cost of airport security charges.

The Liberals also opened the door to possible increases in security service fees at airports. To top it all off, the minister also gave himself the power to approve or reject risk ventures between airlines, which could diminish the role of the Competition Bureau, which is independent and non partisan.

This is yet another scenario under which the Liberal government has placed more power in the hands of the minister and less power and control in the hands of Canadians, where it rightfully belongs.

Not to be outdone by other omnibus bills, the government has also decided to tackle the issue of grain shipping by rail. I am certain prairie producers, just like those in the riding of the member for Brandon—Souris and other members who represent grain farmers, were delighted when they heard the Liberals would tackle this grain shipping issue. As part of the previous Conservative government that supported the Marketing Freedom for Grain Farmers Act, greater opportunities were provided for grain farmers. The Liberals are not focused on that.

What have the Liberals done? They have proposed major changes to shipping policies that were introduced by a former great minister of agriculture and member of the House, the Hon. Gerry Ritz, and the very capable minister of transport at that time, the member for Milton. By changing the interswitch rate, the Liberal government will make it more difficult for shippers and farmers. We will also see an increased use by American railroads without reciprocal rights for Canadians. Again, I am not sure what the logic of that is. Last I checked, the Canadian government should be putting Canadians first.

One hopes this is not the Liberal negotiating strategy for NAFTA, literally giving the farm away. The Liberals could and should keep the Conservative policies in place, policies that were designed by people who actually have experience in this area and who are working, or have worked, with grain farmers. Instead, they have chosen to side with the industry, making life far more difficult for shippers and farmers.

Another part of this omnibus bill, and, as I said, this is just a laundry list of things, is a proposal for the railways to have locomotive voice and video recorders. This has already been mentioned in the House today. I believe this initiative is designed to help prevent further rail accidents, but, again, this is another item that has been added to the list and the legislation has not been thoroughly thought out.

There is not a person in the chamber who does not want to improve rail safety. We want our railways to be as safe as possible. As a former minister of labour, I understand the call for locomotive voice and video recorders, the LVVR, to be installed, but I do not think this legislation has been thoroughly thought through.

First, Transport Canada just launched a review of the Railway Safety Act in May. Why would we not wait until that review comes back before moving forward?

Further, the public has not seen the analysis of the privacy aspect of this initiative. Regulations mandate that airline cockpit voice recorders keep only a record of the last two hours of a flight. Thus far, all we have heard is that an entire transport trip would be recorded with respect to rail. The minister needs to clarify this, and fairness is important. As I have mentioned before, details are important, and the details of this legislation simply do not exist.

There have also been concerns raised about the use of this data. The legislation states that it would only be used for Transportation Safety Board accident investigations and for rail corporations to inform their safety management systems. However, there are concerns that there would be no limit on LVVR usage in the legislation and that the rail industry would use it for employee discipline beyond the intended purpose. This initiative clearly needs to be better thought out, and quite frankly, clarified. Workers need to know what is happening, and the rail industry needs to understand as well.

If all these loose ends do not demonstrate the weakness of, and the concerns about, this omnibus bill, I have decided to save the best for last. In one of the two marine-related clauses, the minister is proposing to amend the Canada Marine Act to allow port authorities and their wholly owned subsidiaries to receive loans and loan guarantees from the Canada Infrastructure Bank.

As members know, I have some strong views on this bank. First of all, it seems like just another classic example of an ill-thought-out component of the Liberal omnibus bill. Despite calls from every party and every sector in Canada to separate the Canada Infrastructure Bank from omnibus Bill C-44, the Liberals ignored everyone and rushed ahead with this flawed initiative. Even the bible of the Liberal elites, the Toronto Star, demanded further parliamentary review. This $35-billion slush fund, as the Star says, “should not be railroaded through Parliament as a mere footnote in a 300-page omnibus budget implementation bill”.

The only people in Canada who seemed to have been in a rush for this infrastructure bank to be created and the legislation passed were those who use their connections with the Liberal Party to make a few more dollars. The infrastructure bank has been a boondoggle from day one. The budget in 2017 revealed that $1 billion of lapsed infrastructure funding from 2016 will not be reallocated until fiscal year 2022-23. If that is not bad enough, we learned that $15 billion will be taken away from community infrastructure projects to finance the infrastructure bank.

Municipal leaders in my riding and others across the country, particularly in small communities like my own, are wondering why they never seem to benefit from the Liberal government. I wonder if part of it is that the Minister of Transport comes from a large urban area, and the Minister of Infrastructure comes from a large urban area, and they just do not seem to understand that small communities like Collingwood or Alliston, or others across the country, actually need help as well. Small municipalities may never benefit from the infrastructure bank, because even if they scraped together all the money for a large proposal, they would be competing for the minister's approval. While folks like the Minister of Infrastructure and the transport minister live in large cities, small-town Canada actually has no place in the Liberal infrastructure plan.

If the clear favouritism toward big cities over the rest by the Liberals is not clear enough, the governance of the infrastructure bank is so vague and open-ended that we can see a governance scandal on the horizon. I will start with the mandate of the bank. What mandate? There does not seem to be a clear one. The mandate of the Canada Infrastructure Bank is so vague that we are not sure what it is actually supposed to target, and there is no policy directing the bank's investments thus far.

There are also no criteria to determine whether the bank has made investments that benefit Canadians, or whether it has been a huge waste of money and resources.

It will certainly be the latter, as the bank duplicates the work of the P3 Canada fund, which is a completely independent crown corporation.

Alarm bells have also been rung about the bank and its potential for political interference, and there is good reason for this. Final sign-off on the project will be in the hands of the minister, and we know that this is a flawed initiative.

We have learned that foreign companies are able to apply for it. Let us say that a Chinese donor to the Liberal Party applies to the bank and receives $100 million as a loan, and the project goes bust. Who is on the tab for that? It is Canadian taxpayers, people in my riding and yours, Madam Speaker.

Like Bill C-44, Bill C-49 is an example of a poorly thought-out omnibus bill. It would do little to improve transportation.

I will be opposing this legislation, as will my colleagues on this side of the House.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, we wanted a passenger bill of rights. We wanted passengers rights to be guaranteed, but we wanted that from concrete measures, and not from some window dressing in Bill C-49. It does not even contain the minimum standards.

It seems to me that the government reached a consensus with airlines through some great deal. It is as though the industry were the government's boss and told the government what to do so it would not be angry. It almost seems as though the government is lobbying on behalf of the companies. As for consumers, they need much stronger measures, like the measures found in other countries, such as the United States. We were told we would have a great passenger bill of rights, but when we look more closely at this omnibus bill, we see that it contains very little. It is really disappointing.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, in Quebec, between high school and university, students attend CEGEP, where they take mandatory philosophy classes. In those classes, they learn about sophisms, which are false arguments. One can condemn what the previous government did, but one cannot justify one's own actions on the grounds that those of the other government were worse.

The idea of a black box in passenger trains is a step in the right direction, but it is a very, very small step. I just talked about the Lac-Mégantic tragedy. There is a lot to be done, and we see this as urgent.

My colleague, the Parliamentary Secretary to the Leader of the Government in the House of Commons, said the Liberals are taking a step in the right direction, but the problem is that all of the other elements in this mammoth bill are big steps in the wrong direction. On seaway safety, I am sorry, but this is anything but reassuring, and the situation is getting much worse. On air transportation and the Competition Bureau, why is the minister giving himself the power to just ignore the analysis of transactions? What was wrong with the existing system? I think there has been too much pressure from lobby groups. We need a government that can stand up to businesses and do a better job of ensuring safety and keeping prices down to benefit consumers. Bill C-49 is certainly a step in the right direction in some cases, but it is not nearly enough considering everything that needs to be done.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I would like to thank the member for Mississauga for his question. First, I would remind him that I travel by bike more than by train or plane. Living in Joliette allows me to get around using active modes of transportation such as walking and cycling.

I must say I find the actions of the Liberal government deplorable. It is the same for almost all issues. If we listen to their speeches, like the one my colleague just gave, we hear fine statements about about train safety and about how we need to do more and what the government is doing is fantastic. In speaking about the budget and finance, the government constantly refers to the middle class. The mini budget repeated that phrase 61 times. In reality, however, both it and the budget contained virtually no measures for the middle class.

In our opinion, the rail safety measures set out in Bill C-49 are completely inadequate. Yes, putting black boxes on locomotives and recording what is done is another step, but people in Quebec just lived through the Lac-Mégantic disaster. The subcontractor must have its own maintenance and monitoring plan. Everything is being left up to the private sector. That is the ultimate in complacency. Rail cars that are no longer up to standard are being used to transport oil. Companies are pressuring employees. We are still dealing with the same toxic combination that previously ended in disaster, and that is shameful. This would have been the time to present a real comprehensive rail safety plan so that a tragedy like that never happens again. The government should have given the people of Lac-Mégantic something, like a rail bypass, and made sure that a situation like that never happens again.

Right now, all we have is a black box for rail passengers who are travelling. The government is out of touch with reality. Once again, we agree with what the Liberal Party is saying, but it is not backing up its words with action. The Liberals cannot govern using only a communications plan.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, Bill C-49, the transportation modernization act, does not live up to its name. Many aspects of this bill represent, quite simply, a step backwards.

The government announced its air passenger bill of rights and many other great measures as part of this bill. Not only is the bill of rights not there, but there is nothing to enhance our security. We see this as a missed opportunity. Bill C-49 could have really addressed some of the concerns of Canadians, like the people in Lac-Mégantic, for example, who are still waiting for their bypass. This omnibus bill is problematic in many ways. Unfortunately, once again and as usual, the government is introducing a bill that is far too big to be examined effectively. This omnibus bill includes a lot of measures, and we did not have time to comb through it and discuss it properly.

As well, in the Bloc Québécois, we have fewer rights than members of the other parties in the House. There are not enough of us. We cannot sit on committees, ask questions to experts who come testify, or debate the bill in depth in the House. My comments today will therefore be the only ones by my party on this bill, which will have major repercussions on transportation as a whole and affect many of our laws.

For example, Bill C-49 gives the minister the authority to allow airlines to circumvent the Competition Bureau as he sees fit. That is something. Call a spade a spade: it makes no sense. The government is politicizing a process that currently a judicial one. Come on. We can already see the lobbyists in the minister’s office, and almost lining up one by one to get the green light to act on plans that will reduce competition. We can even imagine that they will obtain that by attending a fundraising cocktail party. It seems to be a model that works.

How can the Minister claim that that is for the good of passengers? We are not fooled. Everyone in the House understands that the government does not want to repeat the situation we saw in 2011 and 2012, when Air Canada and United Continental wanted to coordinate their activities on 19 transborder routes. The Competition Bureau studied the matter and determined that, on 14 of those routes, Air Canada would have far too much market share, which would have greatly reduced competition. The bureau found that a near-monopoly on certain routes would lead to an increase in the rates paid by travellers. Its role is to block that, and that is what it did.

For some routes, like Montreal to Washington or Montreal to Houston, Air Canada and United Continental together would have held the entire market. That is a near-monopoly for sure. In the end, travellers would have paid the increase in ticket prices, which is obviously unfair, because of the rules of trade. The Competition Bureau stated that, if the situation changed, it would be reassessed. That is logical and fair, even though Air Canada did not like the decision, as they wanted to line their pockets.

It was the right decision for travellers and other businesses. The Competition Bureau committed to reassessing the situation if there were any changes. In our opinion, there was therefore no problem. If we do not want that to happen again, why would we want to politicize something that is not politicised? Why give the Minister the authority to circumvent the Competition Bureau? That is what we are asking here, and that is one of the elements that we deplore in Bill C-49.

What purpose will the Competition Bureau and the Competition Tribunal serve if the government gives the minister the authority to circumvent them as he sees fit? We can see that, with the Liberals, the interests of travellers take a back seat to those of big business and party cronies. We can think of Air Canada in particular.

Another thing I would like to mention is foreign ownership. This bill seeks to increase the foreign investment limit for air carriers from 25%, or one-quarter, to 49%, which is basically half. A single corporation or individual cannot own more than 25% of voting shares. The idea here is to give airlines more cash flow and to promote the creation of low-cost carrier services. The government is saying that Canadian air carriers will not be subject to the controlling influence of international investors. That seems fine at first glance, but it creates an opening that allows the government to get its foot in the door and make major changes to the way things are done. We are worried about the future. What will the next step be? The next time a company like Air Canada is on the verge of bankruptcy, will it meet with the minister to say that it wants to be sold to a foreign company?

We already know that the government did not even make Air Canada obey the law when it decided to hand over its maintenance division to Aveos. The government even changed the law after the fact, and announced it the Thursday before an Easter recess. I remember. I was very angry with the transport minister that day. That is why these measures being announced in an omnibus bill is not very reassuring.

It is the same thing when it comes to shipping and coasting trade. The government is taking a number of steps backward in that regard. Bill C-49 will allow ships registered in other countries to reposition empty containers, when currently only Canadian shipowners have that right. Way to go. It is already clear that good jobs will be lost here in Canada and that they will be replaced by cheap foreign labour. Why? The government is putting large foreign corporations ahead of Canadians. That is not even to mention the different training standards, which means that there will not only be fewer jobs here in Canada but that there will also be a decline in the quality of work and a significant increase in the risk of accidents. That is no small thing.

We also have concerns over the part of the bill on transporting products on our river. The bill allows ships registered in European Union countries to transport bulk commodities between the ports of Montreal and Halifax in accordance with the Canada-EU agreement. We are concerned about this announcement and the pilotage legislation that is being discussed. By all accounts it looks to us as though our seaway pilots will no longer be the only ones to navigate the St. Lawrence River. That is one of our major concerns and we see an opening in it. We know that it takes a real expert to navigate our river. It has challenging winding routes and many obstacles.

It is more than our jobs being threatened, but our very safety. The pilots' role is not just to pilot their ship, but also to assess whether the ship that enters the seaway presents an environmental or security risk. Our pilots are also responsible for protecting the public's safety and well-being and can decide that a certain ship is not to enter our river.

The day this role is no longer reserved for seaway pilots is the day we have serious problems. A foreign pilot hired by a foreign country that instructs the pilot to do their job without concern for the environment or safety will have no choice but to follow orders. Why take this chance? This should not be allowed. We have to remain vigilant and speak out against such practices. We are unnecessarily exposing ourselves to huge risks.

There are many elements in this mammoth bill. We do not have the time to study them all, but we would like to draw the attention of the House to the issue of the infrastructure bank. Bill C-49 shows us once again that the federal government is backing away from infrastructure. The bill opens the door wide to the funding of ports and other federal infrastructure by the infrastructure privatization bank. Investors will expect to make a profit, the infrastructure will not be maintained as well, and there will be more charges and fees. Taxpayers will have to pay more. As we have said, with this bank, profits are privatized while losses are socialized. It is too bad that this is in Bill C-49. Once again, the Liberals are helping their friends.

As I said in my introduction, there are many reasons why the Bloc Québécois will be voting against this mammoth bill and we do not have time to cannot mention them all. This bill just does not address Quebeckers' concerns. As I said at the beginning, we were expecting that there would be something for the people of Lac-Mégantic, but there is absolutely nothing. There is no mention of the bypass.

The government has made it a habit to put everything into a single mammoth bill, even though it is breaking an election promise by doing so, and then making sure that we cannot study it thoroughly. That is not the best approach to take and we are against it.

This bill politicizes a process by giving the minister the authority to circumvent the Competition Tribunal. That is a step backwards, a step in the wrong direction. It will contribute to the loss of our businesses. It is the withdrawal of the state for the benefit of the private sector. The government is potentially jeopardizing safety on the St. Lawrence River and sacrificing our jobs for the benefit of foreign companies.

As everyone may have guessed, the Bloc Québécois will be opposing this bill, which we found severely disappointing.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Madam Speaker, actually, many shippers feel that the new approach to long-haul interswitching to be created by Bill C-49 will merely be a renamed version of the current and hardly used competitive line rates. There must be reasons that system is hardly used. This new long-haul interswitching rate would be more difficult for shippers to use and would also not serve as a useful tool in negotiations with the railroads, which Bill C-30 did. That bill was greatly appreciated by our farmers, to the point where they said to the government that they did not want to see it changed. They wanted to see that good policy continue.

There is another issue with this long-haul interswitching remedy. It will increase U.S. railroad access to Canadian traffic at regulated rates without reciprocity. When NAFTA is being renegotiated, it is unwise for Canada to be making this concession before those negotiations have gotten to where they need to be on this issue.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, in the fall of 2016 of the Liberal mandate, 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. The vast majority of the testimony heard was supportive of maintaining the 160-kilometre regulated interswitching limit. That 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.

The current government ignored the committee's main recommendation. Basically, what the government is proposing with this new legislation is to replace 160-kilometre extended interswitching with the creation of a new long-haul interswitching on hauls of up to 1200 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 rate determined by the Canada Transportation Agency, 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 effectively taken a little-used existing remedy called a competitive line rate and renamed it long-haul interswitching.

When Bill C-30 was first introduced, there was universal support among shippers for the extended interswitching. The recommendation from stakeholders was to retain the interswitching distances up to 160 kilometres in order to maintain a more competitive operating environment for rail shippers with direct access to only one rail company. Again, the Liberals went through the motions of appearing to consult, and once again deaf ears prevailed.

To make up lost time and opportunity, the transport committee began special hearings on Bill C-49 in the week prior to the House's return from its summer recess. A total of 44 hours of testimony from dozens of stakeholders and expert witnesses was heard in each of the sectors touched by Bill C-49. Also on record are briefs and letters consisting of thousands of pages of data with more than 100 suggested technical amendments from those whose lives and livelihoods would be affected by this bill. From these incredible witnesses, there was unanimous agreement that Bill C-49 was a good start and that, if their suggested amendments were made, the bill would actually accomplish its stated objectives.

After only giving two weeks to review this mountain of information, the Liberal members of the transport committee defeated more than two dozen reasonable technical amendments. Again, these amendments were suggested by a wide range of stakeholders and experts and were written to make the act a workable solution for all involved.

Once again, the Liberals have a skewed definition of consultation—in other words, they pretend to listen and then blah blah blah—and prove again that it is only a buzzword that they used to get elected. With the introduction of long-haul interswitching, the Liberals sought to create their own solution to a problem that had already been addressed with a reasonable Conservative solution. In the Fair Rail for Grain Farmers Act, the previous Conservative government created a regime of extended interswitching that worked so well in the prairie provinces that shippers of all kinds from across Canada requested that it be extended to the entire country. Instead, the Liberals are committed to their complicated, inefficient long-haul interswitching regime that has such poor conception and so many exceptions that it would be basically useless to many shippers.

For example, a minor technical amendment proposed by both Conservative and NDP members of the committee would have changed the wording of the provision to allow the first interchange point to be in the reasonable direction of the shippers' destination. Under the legislation as it is, shippers may have to send their products potentially hundreds of kilometres in the wrong direction to reach the nearest interchange point, increasing their costs.

What happened to this very reasonable amendment? The Liberals defeated it. They ignored the advice and recommendations of even the the most competent, experienced, and concerned Canadians in regard to extended shipping lines.

Canadians have been ignored by this Liberal government. The laudable and credible efforts of Canadians to contribute in meaningful ways to improving the weaknesses of the Liberal legislation have again fallen on the deaf ears of the government.

The House resumed consideration of the motion that 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 read the third time and passed.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I am pleased to rise today and speak to Bill C-49, the transportation modernization act. This bill would amend a number of different bills, I believe 13 in fact, with many significant changes being more than just technical in nature. My focus will be on the issues around grain transportation as this portion of the bill is of great concern to those who farm in my riding of Yorkton—Melville and ship their products from Saskatchewan to multiple destinations by rail.

I look at this omnibus bill and wonder what the rationale was for creating such complex legislation. It could have been more effective on many levels to split Bill C-49 into rail shipping, rail safety, air, and marine to target consultation to expedite the best legislation for each. My colleague, representing Carlton Trail—Eagle Creek and the transport shadow minister, put forward such a motion in response to the Liberal member for Niagara Centre, who raised the idea of expediting the passage of this bill in order to provide grain farmers a greater amount of certainty as they negotiate contracts for future shipping seasons. It is telling that the member did not have the support of his Liberal transport minister or his colleagues, as the Liberal vote was unanimously against splitting the bill.

The Minister of Transport's silence and inaction on critical and time-sensitive transport issues over the past two years, especially on rail transport, has fuelled uncertainty with both shippers and the railroads as they negotiate shipping rates for the coming season. The previous Conservative government introduced Bill C-30, which gave the Canadian Transport 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 for 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 shipping community because, even if shippers 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 former Conservative government had announced that the Canada Transport Act statutory review would be expedited. It began a year early in order to provide long-term solutions to the grain backlog of the 2013-14 shipping season and other problems in the transport sector within Canada.

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

Mr. Speaker, as usual, I loved listening to my colleague's comments and his speech. I am sure that, with all the experience he has acquired in the House in recent years, he is capable of recognizing a government tactic when he sees one.

Bill C-49 strikes me as a perfect illustration of how the Liberal government is trying to run the country. The Liberals are trying to put everyone to sleep with a bill that deals with practically everything we talked about in a committee meeting. They are putting everything together in one bill. They are throwing all kinds of different things together, so that the opposition would not be able to support one aspect and oppose another. They are using tricks that prevent members from being able to vote properly on each aspect of the bill and to walk away with their heads held high. The Liberals know this is going to create some unintended consequences, but it does not matter. Canadians are used to seeing them govern like this.

What are my colleague's thoughts on that?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is a pleasure for me to rise to speak to Bill C-49. I will be splitting my time with the member for Yorkton—Melville.

We have before us what is very clearly an omnibus bill. It is a transportation bill that deals with many different pieces of legislation. It is more involved, more complex, and deals with more topics than perhaps the 95 theses. If the government wants indulgence today, it will not get it from members of the opposition.

I will continue to pontificate on this for a bit. We are seeing the government's total unwillingness to take its past commitments with respect to omnibus legislation seriously. It criticized the previous government for covering a range of different topics in the same bill. This was allegedly a big part of its push for changes to the Standing Orders. The Liberals said that the Standing Orders had to be changed because of the big problem of governments bringing forward omnibus bills. They said that a solution had to be found for this.

If the Liberals thought it was such a problem, the simple solution would have been for them to simply not propose omnibus bills. In so many different areas, whether it is Bill C-46, a bill that covers a range of different proposals on the issue of impaired driving, or a transportation bill, or budget bills they have brought forward, there is a real abundance of what clearly are omnibus bills even by their own definition.

The Liberals have said that an omnibus bill is a bill that members might want to vote for parts of it, but oppose other parts of it. Again, there is no credibility. Their policies and platform in the spirit of the season really is ghosted. Nothing is left but a ghost of the commitments the government made with respect to omnibus legislation.

I would like to talk specifically about some of the different pieces of the legislation.

Much of the discussion by members of the government has been about an alleged passenger bill of rights. I am sorry to report to members, but this is more trick than treat. The passenger bill of rights is skeletal at best. It is a framework for legislation that others will be asked to eventually develop, but the House is in no position to evaluate its substance. We are expected to theoretically consider a passenger bill of rights that somebody else might develop without any kind of clarity on its structure or how that would be approached or operationalized in practice. Again, it is more trick than treat even if passengers were expecting something more substantive.

As members of Parliament, we often fly. We could probably all share stories of less than ideal experiences we have had with air travel. It behooves the government to be more clear about what it is talking about when it brings these kind of measures before us. This is the Liberals' idea of being able to check a box for something they want to say they done but really is lacking in meat.

Many provisions in the bill come from a lot of different directions.

I also want to address the issue of joint ventures. If airlines want to propose a joint venture for a route, at present, the proposal is reviewed and ruled on by the competition commissioner, and hat is appropriate. The competition commissioner evaluates the impact of proposals on competition. When a joint venture is in place, that can have a negative impact on competition, because companies work together. Therefore, there is less competition that can be beneficial to consumers.

As a party that believes in the importance of functioning free markets, our caucus is very concerned about ensuring there is as much competition as well. We recognize if we want to get good outcomes for consumers there is a place for regulation. The best way to get to that end is that if we have robust competition, we are going to have good outcomes for consumers. Consumers can drive through the market the kinds of treatments and services they want by choosing between the different available options.

Unfortunately, this omnibus bill makes some changes to the framework in place for joint ventures. It gives authority to the minister instead of to the competition commissioner to make those decisions. In that context, it gives him a fairly wide discretion to make these determinations on the basis of public interest criteria. “The public interest” is the sort of concept that everybody is in favour of, but the devil is often in the details. When the minister has a wide discretion to make a determination on the basis of a concept of public interest, that really gives him the ability to do what he wants with respect to these joint ventures, and he may well be subject to influences and questions which are not in the public interest. We have regularly had concerns raised in this House about ministers who find themselves in conflicts of interest. Therefore, when we have cases of ministers who have been able to circumvent the law with respect to blind trusts, we should legitimately be raising concerns about the minister taking an authority that had previously been exercised through the commissioner.

One other issue that I want to address is with respect to interswitching for rail. The issues that I have addressed in the short space of my speech today again underline the breadth of transportation measures in this bill. That should be concerning to members. In the existing framework, the previous government brought in something that was called “extended” interswitching, which allowed for the use of another company's rail line. That would be done on a cost-plus framework, so the rates would vary depending on the costs that were in place for the company. It was fundamentally a competitive framework, because there was no fixed rate across the board for interswitching, rather there was a cost-plus framework, so it still encouraged some degree of flexibility and competition. However, the long-haul interswitching provisions the government has in place in this bill do not encourage competition. The way in which the rate is structured for that interswitching is based on an average rate, so it is the same rate that would be charged across different companies. It reduces the pressure for competition vis-à-vis different cases of interswitching. Our view is that competition is important, and that facilitating competition in the transportation sector and other sectors is beneficial for consumers. It leads to choice and innovation.

In conclusion, I would like to say that when we asked the minister about this during time allocation earlier, he said that he did not think we should be hearing more opposition speeches because they kept talking about the carbon tax. Since the minister does not want us to talk about the carbon tax, I think we actually have a duty to talk about the carbon tax in this context. Of course, the government does not want to talk about how negatively it is impacting the transportation industry by trying to impose a carbon tax, which is literally a tax on everything. It is trying to compel provinces, in a way that is profoundly disrespectful to provincial jurisdiction, to impose this carbon tax. I had the pleasure of presenting a petition for my constituents on this yesterday. Many of my constituents are very concerned about the negative impacts to the transportation, energy, and other sectors associated with the carbon tax.

To summarize, we have in front of us an omnibus bill. Again, the Liberal government is showing a disregard for its commitments. There are some specific things that I take issue with. The most publicized element, the air passenger bill of rights, is not at all clear. We would be much better off encouraging competition to help consumers have the flexibility to drive improvements in quality and innovation themselves.

The Liberals are in the process of taking choice away from consumers, talking about an air passenger bill of rights that is not clear or defined in any way. Of course, the government is proceeding with other measures that are very harmful for the transportation industry, such as the carbon tax.

On that basis, we oppose this bill.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Mr. Speaker, it is an honour to rise in the House today to speak to this important bill, Bill C-49, the transportation modernization act, on behalf of my constituents in Saint Boniface—Saint Vital.

In his mandate letter to the Minister of Transport, the Prime Minister stated that his overarching goal is to ensure that Canada's transportation system supports the government's agenda for economic growth and job creation. To carry out that mandate, it is essential to look ahead, and today, I would like to reflect on that by focusing on some of the key amendments in Bill C-49, the transportation modernization act, that would help ensure that our transportation system can continue to help build this country for future generations.

In particular, it is essential that our transportation system be fluid in its operation and responsive in meeting the needs of our society and economy. To meet these goals, we need to lay the groundwork for a transportation system that will be safe and secure, innovative and green, adaptable to changing trade flows, and sensitive to the needs of travellers. Following a comprehensive consultation process with Canadians, industry stakeholders, provinces, territories, and indigenous groups, we have established a foundation to realize these goals through transportation 2030, the government's strategic plan for the future of transportation in Canada.

For this government, the transport portfolio is critical to economic growth. Transportation in Canada must continue to be a single interconnected system that drives the Canadian economy. In February of last year, the Minister of Transport tabled the report of the review of the Canada Transportation Act, also known as the CTA review, which was led by the hon. David Emerson. It had been 15 years since the last such review. The review report looked ahead to position our transportation system to continue to support Canada's international competitiveness, trade, and prosperity. As Mr. Emerson noted, our transportation system is the connective tissue that binds us together as a nation, that enables us to participate in the global economy, and that helps us ensure our economic and social well-being.

The review pointed toward many of the goals to which we need to aspire in building the transportation system of the future. We, as a country, must take the long view. We must develop a long-term vision of Canada's transportation system that is focused on the future, on the outcomes of what we want to achieve: better growth, more competition, and better service. When we mention economic potential, we must remember that we can have the best-quality products in the world, but it will not matter if we lack in efficient ways to get those goods to international markets.

Improving our trade corridors is a key requirement in building our future transportation system. That is why Bill C-49 focuses on promoting transparency, system efficiency, and fairness. The bill proposes legislative amendments that would better meet the needs and service expectations of Canadian travellers and shippers, while creating a safer and more innovative transportation system that would position Canada to capitalize on global opportunities and thrive on a higher-performing economy.

In particular, Bill C-49 recognizes that a reliable freight rail network is critical to Canada's success as a trading nation. Many of our commodities, from minerals to forest products to grain, depend on rail to move to markets, both in Canada and abroad. Canada already enjoys a very efficient rail system with the world's lowest rates. Bill C-49 would sustain this by addressing pressures in the system so that it can continue to meet the needs of users and the economy over the long term.

There is no clearer example of the importance of our freight and rail network than the prairie provinces. Each year, over $280 billion worth of goods move through our freight rail system throughout Canada. It is the backbone of our export trade, allowing goods to move efficiently throughout the country and to our export markets.

Bill C-49 builds on our already strong freight rail system by safeguarding its continued reliability and efficiency. Bill C-49 seeks to create a more competitive environment for shippers and producers by introducing long-haul interswitching, a new mechanism that would be available to all captive shippers in Canada across all sectors. Long-haul interswitching would allow shippers access to competing railways at rates and at service terms set by the Canadian Transportation Agency. This measure would allow better service options while improving system efficiency. It would ensure that shippers across industries would be able to bring their products to market.

There has been much discussion of the plan's sunsetting of an extension of the interswitching mechanism created in 2014 with the passing of the Fair Rail For Grain Farmers Act. This system only applied to captive grain shippers within the prairie provinces. In the year prior to the act's implementation, there was a record prairie grain crop, which was immediately followed by a devastating winter. This act was introduced to address this unique situation and the conditions in the grain handling and transportation system at the time. These no longer exist. It is important to emphasize the temporary nature of the previous legislation. Bill C-49 would replace this temporary legislation with a stronger and permanent mechanism that would apply across various sectors, including the grain sector in various regions in Canada. It would apply to a much longer distance of 1,200 kilometres or more, far greater than the 160 kilometres in the previous act. It is critical that this new mechanism apply to all commodities over a much longer distance throughout this great country. At committee, changes were adopted to the exclusion zones, opening the interswitching mechanism to captive shippers in northern Quebec, British Columbia, and Alberta, which will have a favourable impact on the mining and forestry industries in those regions. By extending the interswitching system, we would strengthen multiple industries while still supporting the grain industry.

It is also important to note the stronger benefits and protections that Bill C-49 would provide to prairie grain shippers and farmers. These include the ability of shippers to seek reciprocal financial penalties in their service agreements with railways. These include a better definition of what adequate and suitable rail service means, and improved access to final-offer arbitration. Bill C-49 better defines adequate and suitable rail service. Previously within the Canada Transportation Act, the terms “adequate and suitable” were not defined and had been the subject of various definitions over time. By better defining the term and providing better clarity to both shippers and rail companies, we reduce the potential for service disputes that can be both costly and disruptive to both parties.

It is also important to balance the shipper's service entitlements while taking into consideration the railway's broader obligations across the network. The act strongly affirms that railways must provide shippers with the highest level of service they reasonably can provide within the circumstances. Factors for the Canadian Transportation Agency to use in assessing what is reasonable will also be identified. These would include the service that the shipper requires, the railway's obligations under the Canada Transportation Act, and the operational requirements of both the railway and the shipper, among others.

The act also addresses penalties for delays, which currently are one-sided. While railways currently can impose penalties on shippers for delays, shippers are not able to impose penalties on the railways unless the railway agrees to these as part of a confidential contract. This causes an inequity between the rail lines and the shippers. Reciprocal penalties would ensure that the responsibility for efficient and timely movement of goods would be shared between the shippers and the rail companies.

With Bill C-49, shippers will be able to pursue reciprocal financial penalties through the service level agreement process under the CTA. The process will allow a shipper to obtain an agreement on service through CTA arbitration when negotiations with the rail company fail. The CTA arbitrator will ensure that the penalties both balance the interests of the shipper and the railway and encourage efficient movement of goods. This is of vital importance to grain farmers on the Prairies and was one of the big asks of stakeholders in the period leading to the tabling of the bill.

The bill would also increase transparency by increasing the amount of publicly available information on the performance of the rail transportation supply chain. Of note is that Bill C-49 requires railways to provide a report assessing their ability to meet their grain movement obligations prior to the start of a crop year. The state of the year's crop and forecast for the upcoming winter will be reviewed annually. This will ensure that should a similar scenario occur like the one seen in 2013-14, a contingency plan can be put in place by the railways to ensure the movement of grains.

In addition, railways will need to report service, performance, and rate metrics publicly. The bill will require railways to provide service and performance information on a weekly basis to the Canadian Transportation Agency, which in turn will make this information public by publishing it on its website.

Rate data will be required from the railways as well for Transport Canada. The rate data will be used by the agency to help calculate long-haul interswitching rates. It is important that this information be available in a timely manner to ensure the efficiency of the supply chain.

Bill C-49 would encourage the long-term growth of the freight rail system by encouraging investments. It would change the provisions of the maximum revenue entitlement regime by making adjustments to intensify hopper car investments and reform the MRE methodology. These reforms will better reflect individual railway investments and encourage investments by all supply chain partners.

One only has to think of Lac-Mégantic, where people are still recovering from the tragedy that took the lives of 47 residents in 2013. This and other events like the derailment at Gogama remind me that the most crucial thing the Minister of Transport can do is to keep the people who use our transportation system safe. Nothing else is as important.

Bill C-49, the transportation modernization act, would further this goal. It would do this by implementing in-cab video and voice recorders, commonly referred to as LVVR, as recommended by the CTA review panel and the Transportation Safety Board. These recorders would further strengthen rail safety by providing objective data about the true actions taken leading up to and during a rail accident. This technology would also provide companies with an additional safety tool for analyzing trends identified through their safety management system.

Finally, the transportation system of the future needs to better meet the needs of travellers who seek greater choice and convenience at a reasonable cost. For example, passenger traffic at Toronto Pearson airport has almost doubled in the past three decades and the airport marked its 40 millionth passenger in 2015. Just cast our minds ahead to 2030 when Toronto Pearson forecasts that it will serve some 66 million passengers per year. That is a lot of people to manage, and our airports need to be up to the task.

Along with connections, we must also consider the air traveller experience and the need for new tools to assist consumers. The traveller needs to know how decisions are made when flights do not go as planned and what recourse they have. That is the very reason that Bill C-49 proposes the creation of new regulations to enhance Canada's air passenger rights, ensuring that they are clear, consistent, and fair to both travellers and air carriers.

The Canadian Transportation Agency would be mandated to develop, in consultation with Transport Canada, these new regulations, and would consult Canadians and stakeholders should royal assent be given. The overriding objective of this new approach is to ensure that Canadians and anyone travelling to, from, or within Canada understands their rights as air travellers without having a negative impact on access to air services and the cost of air travel for Canadians.

The simple fact we must address for all travellers is this: Canadians are spending more on transportation in all forms. In the past 30 years, household spending on transportation has more than tripled, up to 16% of expenditures, second only to shelter. Our government's vision for the Canadian traveller experience is one in which we have more integrated and seamless connections between air, rail, and transit to reduce the overwhelming reliance on the automobile.

These are some big issues, and sorting through the implications of what I have just talked about is a tall order that requires many conversations with Canadians.

The CTA review started this engagement. The report is a comprehensive source of independent advice to government. As I said earlier, I see transportation as essential to driving this country's economic growth and future prosperity for all Canadians. We must also design and manage the transportation system so that we continue to protect passengers, communities, and our environment.

I challenge all of us to think about how we can achieve all of these goals so that we can develop a transportation system that is even more safe, efficient, and green, and which supports both our economy and our country.

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, I would like to thank my colleague for his remarks. It is fitting that we are talking about Bill C-49 today, on Halloween, because it is a real Liberal horror show.

It is a horror story, not only because of the rudely imposed time allocation, which the Liberals opposed so passionately in their days as the third party in this House, not only because it is a monster of an omnibus bill, but because the contents of the omnibus bill have nothing in common, piece by piece, except for the fact that they involve, one way or another, the word “transport”.

The Liberal government has made much of the fact that there are six amendments proposed by the opposition. I would like to ask my colleague whether six amendments on a bill this large represent anything of significance.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, I would like to begin by mentioning the 60 or so seniors in my riding who suffered a tragic loss two days ago. There was a major fire in a retirement home in Beauport Sunday evening. The people on Joncas street, who are older than those living in other retirement homes, had to leave in the middle of the night and get on a bus. Incidentally, I would like to thank the city of Quebec for sending buses as quickly as possible. My thoughts are with these seniors and their families in these difficult times. I hope that most of them have family who can take them in. I have visited the home twice since I was elected.

I would now like to express some of my general concerns about this government, which has shown time after time that it is serving special interests, be they Liberal interests or multinational interests. The small and medium-sized business tax hikes it announced this summer are just one example of that. Another is the current crisis concerning the Minister of Finance's conflict of interest, which involves $20 million worth of shares in his family company, Morneau Shepell, that he was supposed to sell off two years ago.

Yesterday, we found out that five more government ministers apparently used the same technique as the Minister of Finance to avoid selling their shares or putting them in a blind trust. I hope we will all keep asking who those ministers are today. I am beginning to have some serious doubts about the behaviour of this government and the Prime Minister. The latter is responsible for ensuring that his government is complying with the law and is not using all kinds of loopholes to circumvent the spirit of the Conflict of Interest Act. I am very concerned about this.

This government is not working for Canadians; it is working for the multinationals. We saw a good example of this this morning in a Radio-Canada article written by Philippe-Vincent Foisy. It says that the government and the Minister of Canadian Heritage met with representatives of Amazon 99 times in the past 12 months. They met 37 times with representatives of Google and 16 times with representatives of Netflix, including 5 meetings with the Minister of Canadian Heritage a few months before she announced her extremely controversial agreement with Netflix.

In contrast, the minister met only once with representatives of ADISQ, whose gala I attended as a representative of the Conservative Party of Canada on Sunday evening. The minister met only twice with representatives of the Association québécoise de la production médiatique, and did not even meet once with representatives of ACTRA. This really gives the impression that the government is giving priority to the multinationals and that it has no time for organizations and Canadians.

Since we began debating Bill C-49, the government has boasted that it wants to focus on railway, aviation, and maritime safety. I, too, believe that railway safety is important, but 90% of this bill has nothing to do with railway safety.

Here is what I have done about railway safety since I was elected. First, I met with authorities at CN, since there is a railway serving Limoilou, in particular the port facilities in my riding, the port of Quebec and the Quebec railway station. I had a great meeting with a CN police officer. The CN has dozens of police officers that ensure railway safety. The police officer answered all the questions and concerns raised by citizens in my riding. My constituents wanted to know why trains often stayed at the two railway yards for several days, and they were also concerned about the trains' speed. It is very important.

If railway, aviation and maritime safety is so important, why was discussion in committee constantly stifled, and why were the amendments proposed by the official opposition rejected out of hand?

Most of the amendments proposed focused on the improvement of certain aspects of safety and competition.

The omnibus bill includes amendments to 13 different acts affecting the three main modes of transportation in Canada and the rest of the world. As I said, most of the content of this bill has nothing to do with safety, despite the fact that the parliamentary secretary’s speech was all about transportation safety. It is unfortunate.

Last night before I fell asleep, I happened to be reading the Canadian Parliamentary Review, a very interesting review of everything happening in all provincial and federal legislative assemblies across Canada. An academic wrote that he had conducted a study of the past 30 years and that, over the past two decades, there was a pattern of using, more often than not, time allocation for bills, in particular omnibus bills.

His study shows that efficiency and a need to act quickly are often cited as the reason to use omnibus bills. Parliament needs to be more efficient, since Canadians expect the House to act efficiently. In reality, in the past 30 years, the use of omnibus bills has not increased the number of bills passed in the House, regardless of the government in power. The academic goes so far as to say that we should let Parliament follow its natural course and allow members to thoroughly debate each bill. Thus, Bill C-49 should have been split into several bills so that we could get a more detailed understanding of every change the government is trying to make, as the hon. member for Mégantic—L’Érable so eloquently argued.

This being said, there are five aspects of the bill that caught my attention and that I would like to mention. First, with respect to allowing airlines to form international joint ventures, the bill will enhance the role of the Minister of Transport. How? Consider Delta Airlines and Air Canada, for example, each of which offers flights between Toronto and Atlanta. For the purposes of productivity, operations or efficiency, these companies could decide to merge the Toronto-Atlanta route in order to provide better service.

Normally, when two companies decide for form an international joint venture on a given route, they must obtain the approval of the Competition Bureau. With this bill, the Minister of Transport will have far more influence, because, at the end of the day, he will decide for the commissioner of competition whether the two companies can move forward with the international joint venture. The minister will act in the public interest. So far, neither the Liberal members or the parliamentary secretaries have been able to define the public interest in the context of the minister’s analysis.

The second issue I am interested in are the new security fees. The Minister of Transport has often mentioned the problem at Pierre-Elliott-Trudeau International Airport, where there are very long lines because there are not enough gates to ensure the safety of passengers as they embark on their flight. He said he wanted to make sure that there were more security checkpoints to make the lines shorter, but he will allow airports to charge additional fees. It is an open secret that the customers will end up paying these additional fees.

This specific clause of the bill shows us right away that Canadian consumers will have to pay more for their plane tickets when this bill comes into force. That is interesting because, every time the Liberals want to solve a problem, in this case wait times at airport security, they solve it by making Canadians pay more. The Liberals wanted to address the problem of climate change, so they created the carbon tax. They wanted to reduce their huge structural deficit by $20 billion, so they cut tax credits for Canadians, including tax credits for public transit, school supplies, sports, and arts.

Third, they want to change the act to give international shipping companies access to coastal trade thereby creating competition for Canadian shipowners between Halifax and Montreal. This will create an enormous amount of unfair competition for our shipowners because Canadian employees receive decent wages while other foreign companies do not pay their workers very well at all. This will create a lot of unfair competition for our shipowners.

This bill should not have been introduced as an omnibus bill. We should be given the opportunity to carefully examine each measure, which is something that we cannot do today. That is shameful.

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

Mr. Speaker, it is an open secret today that very few amendments were accepted by the Liberal government. I was, indeed, a member of the Standing Committee on Transport when it first began discussing Bill C-49. The government wanted it passed as soon as possible. As we have seen, it even brought in a time allocation motion yesterday to speed up the process even more. Worse yet, the time allotted for all of the testimony on Bill C-49 was compressed into a single week, which was clearly too little. We heard testimony all week. People came in to share their comments. Unfortunately, most of the comments heard in committee that week are not included in the version presented by the government here today. The government says that it consults, that work is done in committee, but in the final analysis, whatever is said is ignored. It was therefore a useless exercise aimed solely at passing the bill the way the Liberals wanted it to be passed.

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

Mr. Speaker, obviously, the riding of Mégantic—L’Érable is pretty far from the coast, but I do understand the concerns of citizens who live near the coast and who must live with the measures contained in Bill C-49. I am convinced that there are many people in my colleague’s riding who would have liked to testify and who would have liked us to take more time to discuss this situation, which is highly problematic, especially for people who live on the coast and are very concerned about it. Unfortunately, the way in which the Minister of Transport chose to present the measures that will affect the people in my colleague’s riding prevents us from taking the time we need to consider all possible consequences. This will lead to unintended consequences.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Mr. Speaker, my colleague mentioned “unintended consequences” a number of times. He has probably heard that from our side. The Minister of Finance has used the these words repeatedly in the last couple of months. This is why we engaged in that level of consultation. This is why the Liberals think it is so important to engage in wholesome consultation to ensure we do not have unintended consequences.

Therefore, just as we engaged in consultation with respect to Bill C-49, we did the same in finance with the proposed tax changes. As a result of that consultation, we made substantial changes, and I am proud of that. We listened to do exactly what the member addressed, which was to avoid unintended consequences.

The member said that he liked certain parts of the bill, and I appreciate that honesty. It is fantastic when members in the House can talk about the positive things on which we all agree. Could the member at least mention one or two things he likes in the bill?

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

Mr. Speaker, first I would like to say that I will be sharing my time with the member for Beauport—Limoilou, and I look forward to hearing his thoughts on this issue.

I also want to thank our transport critic, the member for Carlton Trail—Eagle Creek, for the excellent work she has done on Bill C-49. I had the pleasure of working with her on this file for a while. I know that she worked very hard on this and that she shares many of the opinions that I am going to express here today. I also want to thank Patrick, my intern from the parliamentary internship program, for his assistance in writing the speech I will be giving today. He witnessed the magnitude of this omnibus bill first-hand.

The scope of this bill is huge; it makes significant changes to 13 different acts. It will substantially affect air, rail, and sea transport. This bill will affect most of the trains, planes, and ships that travel around and across our immense country. It is what is known as an omnibus bill.

I would remind members that, in 2015, the Liberal government promised to change the rules of this place to prohibit omnibus bills. The Liberals made that promise to Canadians over and over again. In its election platform, the Liberal Party said that it would no longer resort to legislative tricks to avoid scrutiny. It added that it would bring an end to this undemocratic practice by changing the Standing Orders of the House of Commons.

It was a very convenient promise to make during an election campaign. Now it is more convenient to ignore it. What is even more interesting is that the minister who sponsored the omnibus bill we are talking about today has repeatedly criticized the use of these political games in Parliament. In a motion the transport minister moved in the House in 2012 when he was the Liberal House leader, he suggested that the intentions of omnibus bills were so varied that a single vote on so many matters would put members in conflict with their own principles.

The sponsor of the omnibus bill we are talking about today said those things in 2012. That is a totally different perspective than the one the minister and his government are taking on Bill C-49.

Why did the Liberals change their minds? Where are their principles now that they are in power? Let us not forget that this is not the only political stunt the Liberal government has pulled in order to circumvent the democratic process here in the House. Omnibus bills are not the only trick up the Liberal government's sleeve. To top it off, yesterday it decided to use time allocation to limit the debate on all these proposals. As a result, even though the government's list of proposed changes remains quite long, the time we will have to debate those changes has been shortened considerably. This is the same government that likes to talk about being open and transparent. It claims to be a government that listens, but after having worked with this government it is clear that it really does not.

By all accounts, a bill that changes our transportation system, that weakens the legislative protections for shippers and farmers, and creates a passengers' bill of rights that does not even have the support of passengers' rights advocates, deserves a more thorough and engaged debate. However, yesterday's decision to use a time allocation motion does not really surprise me or any of the other opposition MPs. It certainly did not surprise Canadians who have been watching for weeks as the Liberal government tries to defend their tax reform and the Minister of Finance's decisions in question period.

What is becoming very clear is that Canadians are losing faith that this government has a moral compass. That is another unintended consequence for the Liberals. What is not clear is the bill we are currently debating. After months in committee, and debates and studies on this bill, there are still very few details and explanations.

Let us talk about Bill C-49. The Liberal government says that the measures it is proposing will establish a new air passenger rights regime; loosen international ownership restrictions for Canadian air carriers; enable Transport Canada to examine and approve joint ventures by two or more airlines; update the Canadian freight system; require railway companies to install voice and video recorders in locomotive cabs; expand the authority of the Governor in Council to require major railway companies to provide information regarding rates; and amend the Canada Marine Act to permit port authorities to access the Canada Infrastructure Bank.

All of that is in the same bill. Whether one is for or against certain of those measures, voting is impossible. One may like some of them, but if one dislikes others, there is no way one can logically vote for this bill.

There is a fundamental lack of respect and clarity in all these measures, including the passengers' bill of rights that the government promised. The Liberals say the measure is a document that will protect travellers, but upon closer examination, one can see that is not necessarily the case. Precious little is known about this bill of rights. Nobody knows what it will look like or what penalties will be imposed on airlines if they break the rules.

Instead of putting forward something very clear, the government decided to let the Canadian Transportation Agency made the decisions. The agency will decide what is in the document and will flesh out the details, details that will affect every air traveller and every airline in Canada.

How can we have an intelligent discussion about a passengers' bill of rights without all the necessary information? How can we avoid other unexpected consequences of the sort that seem to be this government's trademark and that arise, when we are not given details about what it is proposing?

We must not forget the unintended consequences of tax reform on farmers and on small and medium-sized business owners. We must also not forget how this government attacked our most vulnerable citizens by clawing back the disability tax credit. As members of the opposition, what can we do to seek solutions to a bill under the current circumstances? For that matter, we are not the only ones sounding the alarm. We cannot support measures that are unclear. The government is asking us to trust it blindly, but it would be irresponsible of us to do so.

Let us move on to the other proposals in the government's bill. Bill C-49 would permit port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada infrastructure bank . However, this is somewhat paradoxical because, as members may recall, the infrastructure bank does not exist yet. This measure therefore makes no sense.

This bill would allow port authorities to receive loans from a soon-to-be-created infrastructure bank. In other words, they are getting immediate permission to do business with an entity that does not yet exist. What a great opportunity for the Liberal government to create even more unintended consequences with a new bank that has yet to be approved by Parliament and that will cost taxpayers billions of dollars.

As we continue to consider the impact of this bill on other industries, we find more examples of its lack of clarity. For shippers who use the railways, this bill proposes new 30-km interswitching rates that, according to the government, would be set every year and take into account railway infrastructure needs for the entire system. However, the lack of information about how the bill will implement these rates is leading shipper organizations and producer groups to be cautious regarding their position on long-distance interswitching. Like us, they are not really sure how this is going to affect them.

Shippers like Greg Cherewyk, Pulse Canada's COO, reminds us that the devil is always in the details. In May, he told the Manitoba Co-operator, and I quote, that “every word does matter, and the order of the words matters”. He pointed out that he was not sure about the exact impacts of the government's new proposals.

Today, we are going to vote on this matter because we have to vote on the omnibus bill as a whole. We cannot study this component more thoroughly because the government decided to make it part of one huge bill. We tried to make this part of the bill less vague, but the Liberals voted against those changes, even the administrative ones. It is clear that they do not understand the consequences of these measures, and that will create even more unintended consequences.

The two major railway companies in Canada have also expressed their concern regarding the impact of the new regulations, especially with respect to investments in the Canadian railway system. The president of CN thinks this is an odd decision, especially since NAFTA is still being negotiated and we do not know what impact the negotiations will have on trade. Why then give American companies even greater access to Canada? These are the questions we are asking.

In conclusion, everyone in Canada knows how important transportation issues are. Bill C-49 is an omnibus bill that is forcing us to take a position on measures that might have seemed acceptable but that we cannot support, because there are other, totally unacceptable measures in the bill.

For these reasons, I cannot support Bill C-49. There are too many unintended consequences that we can already foresee.

Once again, I would like to thank my intern Patrick for his assistance writing this speech, and I am ready to answer my colleagues’ questions.

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

Mr. Speaker, I apologize. I was not here in the House when the previous government was here.

Speaking to the first part of my colleague's question, we cannot compartmentalize such a vast transportation system. When 90% of Bill C-49 deals with one act, I do not see that it is an omnibus bill.

To the second part of the member's question, we worked quite collaboratively in committee. If specific amendments were rejected, it could have been due to duplication or a number of other reasons. There was no malice there. We worked really well together.

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

In fact, Mr. Speaker, in the fall of 2016, the Minister of Transport exempted from the 25% ownership restrictions two companies that wanted to enter the Canadian market supported by increased foreign investment. This decision is now permitting Enerjet and Jetlines to pursue their intention to create low-cost carrier service to Canadians. With liberalized foreign investment provisions, Canadians would have more frequent access to air travel within and from Canada to transborder and international locations.

Like most countries, Canada limits international ownership and control of domestic air carriers. As I mentioned, under the Canada Transportation Act, non-Canadians currently cannot possess more than 25% of the voting shares of a Canadian carrier. Additionally, Canadian air carriers must also be controlled by Canadians, which means they may not be subject to controlling influence by international investors.

Limits on foreign ownership and control of air carriers are the norm around the world. For example, in the United States, the limit is 25%, while the European Union, Korea, Australia, and New Zealand allow up to 49%, and Japan allows 33.3%. Limits vary depending on the circumstance of each region. However, Canada's current ownership limits may be acting as a barrier to new services and enhanced competition.

Earlier I mentioned that the two prospective ultra-low-cost carriers, Canada Jetlines and Enerjet, have already applied for and received exemptions to the current limits on international ownership from the Minister of Transport. This was granted because both companies successfully argued that, under the current 25% limit, there is insufficient risk capital in the Canadian market to support the launch of new services.

Reflecting on this reality and the Canada Transportation Act review recommendations, the government is proposing changes that would allow international investors to own up to 49% of the voting shares of Canadian air carriers, by introducing legislation that would amend the act and other relevant acts. As I mentioned earlier, countries have different approaches to international ownership of air carriers, and our government wants to make sure that Canadian air carriers compete on a level playing field.

To protect the competitiveness of our air sector and support connectivity, no single international investor or any combination of international air carriers would be allowed to own more than 25%, but how would this benefit Canadian travellers? The direct impact of higher levels of international investment is that Canadian air carriers would have access to a wider pool of risk capital. This would allow air carriers to be better funded and could allow new carriers, which are otherwise not able to find sufficient risk capital, to enter the Canadian market.

New carriers, including ultra-low-cost carriers offering extremely competitive prices, are expected to bring more competition into the entire Canadian air travel sector. This could, in turn, reduce the cost of air transportation and open new markets to Canadian consumers and shippers. Small markets currently underserved by existing carriers could also benefit from services by new carriers. For example, airports in smaller cities that currently offer services to a very limited number of destinations could benefit from the addition of new services since we know that ultra-low-cost carriers use these smaller airports as their hubs. All of this could lead to more choice when purchasing airline tickets, more travel destinations for all travellers, including those from smaller cities, and lower prices for Canadian travellers. Additionally, there could also be benefits for airports and suppliers and the entire country, as more jobs are added to the Canadian economy.

Another improvement to the air travel sector in this bill is that it proposes a new transparent and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations. Joint ventures are a common practice in the global air transport sector. They enable two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, and marketing and sales. In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau under the Competition Act.

Unlike many other countries, notably the United States, Canada's current approach does not allow for the consideration of the wider public interest benefits other than competition and economic impacts. Furthermore, the bureau's review is not subject to specific timelines. This raises concerns that the current approach to assessing joint ventures may make Canadian carriers less attractive to global counterparts as joint venture partners and may limit the ability of Canadian carriers to engage in this industry trend.

The bill before us in the House proposes amendments that would allow the minister to consider and approve air carrier joint ventures, taking into account competition considerations. On this latter concern, the current transport minister would work in close consultation with the commissioner of competition to ensure that he or she was properly informed regarding any concerns he or she may have with regard to competition. Air carriers that chose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

Providing Canada's air carriers with such a tool would also benefit the air traveller. By joining up networks, air carriers could allow seamless travel to a wide range of destinations and could reduce the duplication of functions. For Canadians, this could mean more seamless access to key global markets, easier inbound travel in support of tourism and business, and increased transiting traffic through our airports, thus increasing flight options.

Globally, airports are making unprecedented investments in passenger screening to facilitate passenger travel and to gain global economic advantages. Canada's largest airports have expressed interest in making significant investments in passenger screening, either through an additional workforce or technology innovation. Smaller airports have also shown interest in obtaining access to screening services to promote local economic development. In the last two years alone, 10 small airports across Canada have requested screening services.

The proposed amendments to the Canadian Air Transport Security Authority Act are important, as they would create a more flexible framework to allow CATSA to provide these services on a cost-recovery basis, which would in turn allow Canada to maintain an aviation system that is both secure and cost-effective. It would also strengthen Canadian communities' competitiveness as they attracted new commercial routes.

That is not all the transportation modernization act would do. Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in partnership with Transport Canada, new regulations to enhance Canada's air passenger rights. These new rules would ensure that air passenger rights were clear, consistent, and fair for both travellers and air carriers. When passengers purchase an airline ticket they expect and deserve that the airline will fulfill its part of the transaction. When that agreement is not fulfilled, passengers deserve clear, transparent, and enforceable standards of treatment and compensation for such situations.

Under the proposed legislation, Canadians would benefit from a uniform, predictable, and reasonable approach. The details of the new approach would be elaborated through the regulatory process, which would include consultations with Canadians and the air stakeholders. My objective is to ensure that Canadians have a clear understanding of their rights as air travellers without negatively impacting access to air services and the cost of air travel for Canadians.

Bill C-49 specifies that the regulations would include provisions regarding the following most frequently experienced irritants: providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; setting standards for the treatment of passengers in the case of overbooking, delays, and cancellations, including compensation; standardizing compensation levels for lost or damaged baggage; establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; seating children close to a parent or guardian at no extra charge; and requiring air carriers to develop standards for transporting musical instruments.

The minister has been clear that he intends that the regulations include provisions ensuring that no Canadian is involuntarily removed from an aircraft due to overbooking after having boarded. The minister has issued a challenge to Canada's air carriers on this matter, on seating arrangements for minors, and on moving to strengthen air practices even before new passenger rights are finalized.

The bill also proposes that data could be required from all parties in the air sector to monitor the air traveller experience, including compliance with the proposed passenger rights approach. This data would also inform any future policy or regulatory actions taken by the Minister of Transport to ensure that the air traveller experience to, within, and out of Canada was efficient and effective.

To finish, I will underscore that the experience of Canadian air travellers is a priority for the Government of Canada. We know that it is also a priority for Canadians. This is why we have proposed to increase international ownership restrictions for Canadian carriers. It is why we are proposing new rules on joint ventures that would help create greater efficiencies and more choices for Canadian travellers. It is why we are proposing some modest changes to the provisions of CATSA screening services that should help air passengers transit through airports more quickly. Finally, it is why we are creating a legislative framework so that Canadians can finally benefit from an air travellers' bill of rights.

Once these new measures were in place, they could help lower prices, support increased competition among air carriers, provide more choice to Canadians when it comes to purchasing tickets, and improve service and connectivity for all Canadians and Canadian travellers.

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

Mr. Speaker, last year the Minister of Transport presented his vision for the future of transportation in Canada, also referred to as transportation 2030. This vision reflects thorough consultation with Canadians, stakeholders, provinces and territories, indigenous groups, and academics, following the release of the final report on the Canada Transportation Act review, also known as the Emerson report.

Transportation 2030 is made up of a series of initiatives under five themes: the traveller; safe transportation; green and innovative transportation; waterways, coasts, and the north; and trade corridors to global markets. These themes encompass various modes of transport and allow the government to take a holistic approach in ensuring the transportation system is equipped to support our broader priorities.

Canadian travellers and their experiences are top of mind for our government. During consultations conducted by the Minister of Transport, we asked Canadian travellers for their feedback, and they were clear. They want lower-cost air travel, more opportunities for leisure and business travel, and they want to see Canada become a more attractive travel destination for visitors. Canadians told us that they want long-term sustainable competition, which will allow for the introduction of additional air services, improved air connectivity, and more choice.

The government has listened, and it is committed to achieving tangible improvements to the traveller experience. As a result of the feedback we received, a number of proposals have been introduced in Bill C-49 to help improve the traveller experience. For example, the government intends to liberalize international ownership restrictions for Canadian air carriers. What does this mean for Canadian travellers? Allow me to briefly describe this initiative.

The legislation proposes to liberalize international ownership restrictions from 25% to 49% for Canadian air carriers, with associated safeguards. For example, a single international investor would not be able to hold more than 25% of the voting interests of a Canadian air carrier, and no combination of international air carriers could own more than 25% of a Canadian carrier. The policy change would not apply to Canadian specialty air services, such as aerial photography or firefighting, which would retain international ownership levels at 25%. Liberalizing international ownership restrictions means Canadian air carriers—and this includes all passenger and cargo providers—would have access to more investment capital that they can use for innovation. This would bring more competition into the Canadian air sector, providing more choice for Canadians, and generating benefits for airports and suppliers, including—

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

Mr. Speaker, I thank my colleague from Salaberry—Suroît for asking this truly broad question.

Indeed, in this magnificent maritime corridor that is the St. Lawrence and the Great Lakes, all members affected will not have the opportunity to speak. Spokespersons are sent to Ottawa to defend their part of the country, and they are not given the opportunity to speak on bills that affect them directly. That is ridiculous.

As for the passenger bill of rights, the main amendment by the NDP was very simple. It sought to include in Bill C-49 the passengers' bill of rights that was tabled by the NDP in the previous Parliament, and to have us vote on a true passengers' bill of charter, not guidelines for consultation.

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

Mr. Speaker, I thank my colleague for her comments.

We may have wanted Bill C-49 to do more, although I am not sure, as we are already dealing with an omnibus bill. Quite certainly, Bill C-49 could have done better, particularly on the issue of fatigue. Most witnesses were independent. No one would be surprised to learn that the union representatives who came to speak about employee fatigue among their members probably leaned a certain way. Similarly, no one would be surprised to learn that the employers claimed the issue was not really a priority and that it is already being addressed by an all-party committee.

However, neutral witnesses, such as the Transportation Safety Board, came to say that there was a problem with pilot fatigue and that it needed to be addressed. That was not done. Bill C-49 completely misses the mark on the issue of fatigue, even though many joint committees are already working to find solutions.

How can the Minister of Transport not be sensitive to this issue? Unfortunately, I still have no answer.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, it is my first time to rise at this stage of Bill C-49, and due to the time allocations applied, I was not able to have a chance to speak to the bill at all.

I do want to say that I am disappointed that so much has been lost in what is the potential for a transportation act. To give an overarching statement before I go to my quick question to the member, it is as though the Government of Canada decided, for efficient transportation on our highways, we should figure out ways to attract capital investment to privatize sections of road, and hope that people from other countries want to invest. To paraphrase, this is no way to run a railroad.

I thank my colleague from Trois-Rivières very much for his efforts to highlight the importance of fatigue. I would like to ask him if he wants to add a few elements, because it really is a priority issue for the safety of our transport system.

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

Mr. Speaker, I thank my colleague for her questions. I will try to answer both.

First, the passenger rights issue perfectly illustrates just how empty Bill C-49 really is. It does not propose a passengers' bill of rights. To be clear, it only proposes guidelines that may lead to potential consultations by Transport Canada, who will then invite the minister to accept or not accept the recommendations made by Transport Canada. Moreover, if that ever actually happens and recommendations are made, they will only be applied through regulation. Once again, that is much easier for a minister to undo than legislation, which can only be amended by Parliament.

On the issue of protected rights, we are miles from what was needed. Though the member may not have been with us in the previous Parliament, I remind her that the Liberals voted in favour of a passengers' bill of rights proposed by the New Democrats, and yet, we were never shown what was now wrong with that bill before throwing out the baby with the bathwater and embarking on consultations.

As for my colleagues, if I can so easily answer questions about Bill C-49, it is only because I have been working on it for months, so I can understand if some of my colleagues need a little more time to prepare than they are given under a time allocation motion.

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Mr. Speaker, first, the member started by talking about concerns of time allocation used on this particular bill. If the member is concerned that not everybody had the time to speak, why did his party, the NDP, give up spots yesterday in terms of speaking to this bill?

Second, the statement was that the member is concerned about lobbying in favour of big business at the cost of consumers. I am quite curious about that because Bill C-49 is about consumers. It is about establishing rights so that travellers can be assured safe and comfortable travel. Would the member not agree that Bill C-49 is an effort, and a very good one, to ensure that travellers are protected and made comfortable in their travel?

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

Madam Speaker, I would really like to say that I am pleased to rise to speak to Bill C-49, but that is not the case. In fact, I rise because I have an interest in this bill and because it is my privilege to do so. As my party's transport critic, I have the privilege of rising first today, which will not be the case for my colleagues who are directly affected by this bill but who will not have the chance to rise in the House because the bill is under time allocation. This is the first serious mistake.

The Minister of Transport told us that this is not an omnibus bill since it only affects transport legislation. However, we could be talking about an omnibus, mammoth, or even a Trojan horse bill, since it contains a number of intentional gaps.

For young people who do not yet have the right to vote, a good metaphor would be a chocolate Easter bunny. Everyone remembers biting into their first Easter bunny only to find it hollow, sadly. What a disappointment. Bill C-49 is kind of like that, especially when it comes to the passengers' bill of rights, which I will come back to.

In speeches from the government side, we hear a lot about Bill C-49 striking a balance, but nothing could be further from the truth. Hearing everybody's point of view is a good thing, but it does not mean that the middle ground the Liberals are proposing strikes that balance. I would suggest it is just the opposite.

It is no secret that I am fond of my fellow Conservative members of the Standing Committee on Transport, Infrastructure and Communities, but we rarely see eye to eye. It would be a shock if one of my Conservative colleagues were to run as a New Democrat in the next election or vice versa. Having heard the same witnesses and the same evidence, they and I have managed to get ourselves on the same page with respect to quite a few amendments. If the right and the left have found a way to agree, how is it that the Liberals, who have positioned themselves as the extreme centre, are not listening to reason? We have to ask ourselves some serious questions about why that might be.

The chair of the Standing Committee on Transport, Infrastructure and Communities was particularly skilled at getting us to work together in a spirit of co-operation. However, unfortunately, the end results do that reflect that. I cannot believe that none of the amendments proposed by the opposition parties were good enough. Obviously, instructions came down from on high that the bill should remain as is, with no changes. That is not what the witnesses we heard from wanted, but that is what the ministers wanted, for their own reasons, which coincidentally are not consistent with the agenda they announced during the election campaign.

To give just one example, during the election campaign, the Liberals promised not to amend the Coasting Trade Act. However, Bill C-49 makes three major amendments to coastal trade. As far as I know, Canadian shippers did not storm the transport minister's office to tell him that he absolutely had to make changes to the Coasting Trade Act because it makes no sense.

The government is therefore responding to other lobby groups. We are seeing that more and more often. I have mentioned it in some of the questions I have had the opportunity to ask since debate began this morning. Lobby groups are having a growing influence on this government, and the outcome always seems to be the same: big business profits at the expense of consumers.

This debate is taking place under time allocation, and yet debate in the House is the only means we have left to try to shed some light on a given situation and change it, if possible.

There are probably dozens or even 100 or so members who wanted to speak in this debate but could not, and yet in a few hours, all 338 members will be voting either yes or no to express their support for or opposition to Bill C-49 as a whole, which is all over the map. This does not say much about our democratic process.

Furthermore, if we look at the Minister of Transport's legislative record, I have to say that after two years, I am not very impressed. There has been talk of a high-frequency train for decades, but nothing is happening on that file. On top of that, during the campaign, the Liberals promised to reverse the terrible amendments the previous government made to the Navigation Protection Act. Instead, we are heading in exactly the same direction as before, and the list of protected waterways in Canada is going to stay exactly as it appears in the schedule of the act, even though many witnesses, if not the majority, wanted the government to abolish that schedule altogether.

However, we are not there yet when it comes to protecting navigation, when it comes to developing rail transportation, or with respect to Bill C-49.

I want to talk about what is not in Bill C-49. After all, it is an omnibus bill that is supposed to cover just about everything that has to do with transportation.

At the Standing Committee on Transport, Infrastructure and Communities, we had the chance to conduct a study on aviation safety and we had a significant number of studies on rail transportation. One thing that kept coming up in both files was fatigue among both pilots and train conductors. Fatigue is the cause of most accidents or incidents. We never want accidents to happen, or at least we hope to keep them to a minimum.

What does Bill C-49 propose to combat fatigue or to take a new approach to air or rail transportation? It seems to me that this also falls under transportation. Guess what? There is not a word. There is nothing in Bill C-49 to address this major issue.

Let us now talk about some of the dubious aspects of this bill. The first one that I want to address has to do with airport safety, especially as it relates to the potential development of regional airports.

Security measures at Canada's major international borders are working well, although there are still questions, mainly about direct costs charged to passengers. Under the former government, a lot of money was charged for security. It is clear that there has been no improvement in this practice under the Liberals, because even more money is being charged for security. According to the most recent data from Statistics Canada, $636 million was collected from passengers and $550 million was actually spent on security measures. That is a difference of $100 million. Where is that money going? It goes into the consolidated revenue fund and apparently is used for other measures. Once again, just like employees' employment insurance contributions that were used for other purposes, passengers are being charged more money for air security than is being invested into the security network.

Furthermore, while millions of dollars are being raked in, regional airports are told that they can certainly expand, but they will have to do so on a cost recovery basis.

What that means, for example for a regional airport such as the Trois-Rivières airport, is that it can obtain CATSA services, but it will have to foot the bill. Oddly enough, Bill C-49 makes no mention of a great report that I have here called “Expanding Passengers Security Screenings at Regional Airports”. This report is signed by no less than nine of the largest airport authorities in three Canadian provinces, namely Quebec, Ontario, and Alberta. The report proposes measures other than cost recovery. Even after the document and research findings were presented in June 2016, which is not that long ago, we have heard nothing from Transport Canada. It is still going with a cost recovery model.

I will give an example of what this can mean for an airport like the one in Trois-Rivières. The Trois-Rivières airport was originally a very small airport, mainly intended for what I would call recreational flying. It offered flying lessons and skydiving, but it was really tiny. Then the city of Trois-Rivières decided to massively expand its airport facilities to turn them into a major economic driver. This involved making numerous investments, such as extending the runway so any jumbo jet could land there. The airport also invested in high-intensity approach lighting so planes could land at any time, day or night. The area's economic activity was diversified, creating a major aerospace cluster in Trois-Rivières. The city has welcomed several aerospace companies, such as Premier Aviation, which is now contracted to maintain much of Air Canada's fleet at its facility in Trois-Rivières. As a recent $500-million investment shows, this company is thriving. Trois-Rivières' aerospace market, specifically its airport, has come a long way from its original recreational niche. It is now a centre for economic development and a major regional hub for business people flying to other destinations in Canada or internationally.

Over the last few years, partnerships have also been developed with aviation companies that offer charter flights to southern destinations. Market studies have been done and Trois-Rivières is clearly the heart of Quebec for a reason. We are the metaphorical heart but also the geographic heart of Quebec. If someone wanted to take a charter flight for a trip down south and had the choice between going to Trois-Rivières with traffic jams that easily last five to six minutes, or to the airport in Montréal, the choice would be quite easy. However, that whole study, that whole potential and all of those agreements already negotiated with carriers have fallen through because CATSA security measures are only available for regional airports through cost recovery. That is totally ridiculous. If an airport like Trois-Rivières, Sherbrooke or any other regional airport has to cover the cost of security measures alone, that drives up air ticket prices considerably. That means that the company is no longer able to compete on the market and the agreement collapses.

However, other options are considered in the report I referred to earlier. In particular, there is the possibility of all amounts collected for security being allocated to security expenses and not returning to the government’s consolidated coffers. We could also consider the possibility of all transportation costs being distributed among all passengers on the flight.

Flying south, whether from Trois-Rivières, Québec City or Montreal, involves the same business and the same security services. The cost could therefore be divided between all travellers annually, instead of the number of passengers related strictly to one airport or another.

There are many possible solutions that should have been heard, discussed, and questioned, but Bill C-49 sweeps all that under the rug, a fitting image today for Halloween.

I just want to say a word about cabotage. I would remind members that the Liberal government committed during the election campaign to not touch the Coasting Trade Act. However, there are three amendments in that regard. There are not one, not two, but three major amendments regarding coasting trade that directly affect the Canadian marine industry.

What are those three amendments in a few words? There is the repositioning of empty containers, dredging activities, and the transportation of bulk products between Montreal and Halifax.

Those are three important areas of economic activity that systematically fell to Canadian shipowners and that could now be offered to foreign shipowners. Because of the market opening under the terms of the economic agreement that we signed with Europe, they are saying that European companies cannot be prevented from conducting dredging in the waters of the St. Lawrence River. Oddly, however, no one can confirm that the opposite is true and that Canadian shipowners would be able to bid on dredging contracts in Europe.

Beyond what might be seen as relatively unfair competition, it is important to realize that European dredging companies, for example, that operate all year long and are much larger, may be better able to consider crossing the Atlantic and remaining in our waters, where they can be competitive, while the opposite is quite hard to imagine.

Trois-Rivières is also a port city. It is impossible to understand this without having visited an organization like the Foyer des marins in Trois-Rivières, where shipowners come from all around the world, but it only takes a few exchanges, sometimes with the help of hand gestures because my knowledge of foreign languages is limited, to realize that there are fundamental differences between foreign-flagged vessels and their crews and Canadian-flagged vessels and their crews. I mention no country in particular as to not single anyone out, but first, we are talking about very different salaries, working conditions and expenses. These amendments to the Coasting Trade Act will therefore create unfair competition that no one ever asked for, certainly not in Canada.

I would like to read one or two quotes. St. Lawrence Shipoperators said, “The Comprehensive Economic and Trade Agreement entered into with the European Union opened an unprecedented breach in the Coasting Trade Act by giving ships of all flags access to certain parts of the Canadian market. Bill C-49 widens that breach. We are witnessing the erosion of the Coasting Trade Act.”

Maritime Magazine said, “After years of underfunding of port infrastructure, disengagement from dredging, and inaction on renewing the fleet of icebreakers, it is now coasting trade that is being sorely tested. It is important for decision-makers to understand the scope of the economic, social and environmental role of maritime transportation and the importance for the country of having a strong and health maritime industry and domestic fleet.”

Those are just two examples about coasting trade. I could also have talked about the Infrastructure Bank that is once again being quietly included in Bill C-49. I could have talked about the passengers' bill of rights. I could have talked about joint ventures.

I could have talked about so many subjects that it shows once again that we are dealing with an omnibus bill and that it is a total disgrace to ask all parliamentarians to vote yes or no on an omnibus bill. It is one more thing that the Liberals committed to stop doing during the election campaign. They seem to have a short memory.

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

Madam Speaker, I would like to commend my colleague on the excellent speech he gave, in which he very ably summed up what happens when we discuss a bill in committee and when we return it to the House afterwards.

Naturally, we try to work with the government in a different, more collegial atmosphere when we are in committee, to try to get amendments passed. Unfortunately, in the case of Bill C-49, many of the amendments proposed by the opposition parties were voted down by the government.

I will remind members that our committee convened a week before Parliament resumed, to allow for intensive study of Bill C-49. We had to absorb a lot of information in a very short time, because the government wanted to rush this bill through. This unseemly haste was vividly illustrated by yesterday's time allocation motion, which was introduced to prevent members who had something to say about Bill C-49 from speaking.

Would my colleague agree that Bill C-49 amends so many acts and will have so great an impact on various sectors that we should have taken as much time as we needed to study it and that each member should have had a chance to speak on every option and part of this omnibus bill?

In fact, given what the Liberals promised on the campaign trail, this government should not be tabling any more omnibus bills.

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

Madam Speaker, I know that the Minister of Transport does not like it when we refer to Bill C-49 as an omnibus bill, but I think the fact that I have questions for my colleague on a number of different subjects when we are talking about just one bill further illustrates the omnibus nature of it. Since I have to pick and choose, I will refer to a part of his speech that dealt with these joint ventures in Bill C-49 and in which the competition commissioner's authority has been diminished. As we saw in the way the Minister of Heritage handled the Netflix file, lobbies have a considerable influence on this government. My question is quite simple: can my colleague tell me whether the competition commissioner can be lobbied as easily as a minister?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am pleased to join this debate at the last stage of the bill, affording my last opportunity to mention a few things.

I did not get a chance to stand once more to make another comment for the parliamentary secretary. She used the word “historic” in her speech. It would be incumbent upon me to point out that today is a historic day. It is 500 years since the great reformation when Martin Luther nailed his 95 theses in the Wittenberg Cathedral. That is a true historic day.

The bill is interesting, and it is an omnibus bill. However, before I go into the nature of omnibus bills, I want to mention a unique part of my riding of Calgary Shepard, and I am very honoured to represent the residents there.

The community of Ogden is on the north side of my riding. It is where my constituency office is located. The head office of one of Canada's major railways is also located there. It is called the Ogden stockyards for a reason. CP moved its headquarters to Ogden, a community that was historically set up and named after CP's vice president at the time, Mr. I.G. Ogden. There is a deep relationship between the railroad, Calgary Shepard, and the area in which the riding finds itself. It hosts a spectacular Legion Remembrance Day celebration, commemorating all those who were employees of the railroad and their family members who served in Word War I and World War II. It serves a lunch to the community afterwards. It is a fantastic thing. It started after it moved to the area, with which it historically has a relationship. CP used to have its headquarters in downtown Calgary at the Gulf Towers, but moved it in 2012.

Another interesting part is that because CP cares so much about its history and has such a deep relationship with the community, early in June it moved the 91-tonne Locomotive 29 from downtown. If people have been to the Calgary Stampede, they would see this locomotive on TV, as the parade route passes by it. It is a 130-year-old locomotive, and was moved to commemorate CP's history.

The bill, because it deals with railroads, airlines, and transportation, is omnibus legislation. The minister said yesterday that 90% of the bill dealt with one facet. However, it would go on to amend so many other pieces of legislation, some of which really do not deal so much with safety as with competition and the relationship between a consumer and producer of a good or service provider. Therefore, when the minister says this, then it is an omnibus bill. It is kind of like introducing an infrastructure bank in a budget implementation bill. That makes the budget implementation bill an omnibus bill. Therefore, the Liberals cannot deny that this is another broken Liberal promise.

Yesterday I called it a trick or treat bill. It is offering something that supposedly will resolve an issue or problem in the marketplace, a user-experience problem, but it is not so much the treat but the trick. It would not resolve the issues the Liberals believe it would.

The general opinion I have heard on the bill, from editorialists and critics on passenger rights and the service provided by different railroads, is that the proposed legislation will not meet the goals set out by the government. It might be a step in the right direction sometimes, but it is one step forward and two steps back.

As I had mentioned in my commentary for the parliamentary secretary, all the reasonable amendments put forward by Conservative members were voted down. The three that were not were subamended by Liberal members. I had put forward very similar ideas. The Liberals had heard a very similar concept from witnesses. They are actually changing it from seven to two days and one year to 180 days. These are highly technical date and number amendments done at committee. It is not the type of work I have seen with other pieces of legislation, such as the Senate private member's bill that dealt with the Magnitsky Act. There was far more back and forth and substantive amendments were made.

I know many members expect this, so I have a Yiddish proverb. “To every answer you can find a new question.” I will lead off the rest of my intervention on this proverb.

The more I hear answers from the government and various members on all sides, the more questions I have about the goals of the bill and where it will go. With every answer, I have even more questions. Therefore, I have some rhetorical questions that I will share with the House.

I read a May Globe and Mail editorial called the bill “a strange beast”. Yesterday, I called it the “demogorgon” from Stranger Things, a show I highly recommend for all members of the House, although not for young children.

The bill works at cross-purposes. Editorialists mentioned that the costs might be reduced on one end but would go up on the other end. Hopefully, competition will increase, which is a goal of this legislation. I do not think it will achieve that. The government hopes more people will be enticed to use airline services and choose to fly instead of drive.

Security fees will go up, which is a disincentive for air passengers. However, cost is only one issue for passengers. There is also the user's experience and accessibility. Access, in general, is a point we should always remember.

The bill talks about a higher max amount for foreign ownership being changed for Canadian airlines. Although it is a step in the right direction, it is only one step.

Higher equity stakes by themselves do not lead to more competition, and that is important to remember. Allowing international investors to own a bigger portion of current companies will not lead necessarily to more competition. It is a goal. What we need is a level playing field to allow an opportunity for new airlines and joint ventures.

I have much more to say about joint ventures because the bill gets that balance wrong. It puts the onus on the wrong person. More government involvement in the private sector in business is not the correct way to structure the economy in general.

As well, new entrants will look at taxation and a solid, stable business environment. That is something the fall economic statement does not envision for the future of Canada. GDP is going down every year. There is a gap between the first budget the Liberals tabled in the House and the following budgets, such that GDP growth goes up one year and the next year it goes down drastically. Today is Halloween, so I find these GDP growth numbers spooky.

A few provisions in the bill directly affect how joint ventures will be agreed to. It gives the minister of transport a role in approving applications for airline joint ventures, where two independent companies arrive at a negotiated agreement to provide a service to customers in Canada. Injecting the Minister of Transport into such a process is the wrong way to go. We already have the Competition Bureau to ensure there will be an increase in competition. We should not be involving more ministers of the crown in business decisions. There should be less government involvement in the business sector and the private economy.

The Government of Canada's answer has been that this will be good for business. This brings back the Yiddish proverb that it begs more questions. If the solution is that more government involvement will create more competition and thus be good for customers, then why politicize the process by putting a minister of the crown in the position where he or she has to decide whether a joint venture goes forward? Why inject the minister into a business decision?

The exact reverse is being done in the energy infrastructure approval process where everything is being delegated down to the National Energy Board. We can see the results of this. There is a complete paralysis in companies going ahead with the approval and construction of new projects. A lot of companies are concerned about going forward with new projects being considered in their shops and offices. They have not yet gone to the regulator to propose them. They are concerned that they will be unable to meet the new rules the NEB keeps creating, or that the costs of meeting them will be high.

This does not improve the business environment. Rather, it is worsen it. It would be much better to level the field, reduce political involvement, and ensure business certainty is provided. I do not think injecting the minister into joint venture provisions and allowing him or her to have a say over whether a joint venture can go ahead is the right way.

Most of the amendments were put forward after the committee had heard from witnesses, but I really want to dispel the notion that this bill, as it stands, is a product of bipartisanship or collaboration between the parties. Although I am sure there is collaboration at committee in terms of the discussions back and forth and that everything is cordial and collegial, there still have to be substantive differences between the opposition and the government, and there were on this issue. The opposition parties provided substantive amendments that could have been considered more seriously by the government caucus members for approval. Then we could say the bill was truly due to a collegial bipartisan effort and that the product is good.

What do passengers care about? That is the goal of the bill. Members were asking themselves what passengers and producers care about when dealing with railroads, but especially asked this question with respect to air passengers, because more and more Canadians are travelling by air. Cost, access, and user experience I think are the three most important things. Cost comes down to the dollar amount. There is opportunity to shop on different websites and I think everyone considers how many points they will get. We know that Canadians love their points, whether from Mastercard, Visa, Aeroplan, or Air Miles. Whatever they are, people in this country like to collect points, and it goes into the total cost.

Access comprises the ease of the travel, the convenience, and the airport services. Who can travel and how are other considerations. I choose an airline based on my ability to sit with my kids. I have three young kids and I want to make sure that I do not have to rush to the airport early to get them assigned seats. I want to make sure that they will all be sitting with me, so other passengers and I have an easier time travelling. I actually pick an airline based on the one that will give me the easiest time dealing with my three kids to make sure they can get through their experience.

As for the total user experience, Bill C-49 focuses only on user experience. This is not just my point. Massimo Bergamini, president of the National Airlines Council of Canada, says that the bill focuses too much on air carriers and fails to recognize that the air traveller experience, as I mentioned, does not just start at the check-in phase and then end at baggage pickup. It is the total experience one has. That is far more difficult to get right in one piece of legislation and the bill before the House does not quite achieve that point, because it does not consider the end costs or the access component of it.

We should not sacrifice customer expectations. That point was raised by others, and I agree with it. We are always purchasing difference services and products, and critics of the bill have said that the passenger bill of rights is a band-aid solution. To the point of the Yiddish proverb, the government caucus says this will resolve customer expectation and service-delivery issues, but it begs the question of why we are doing this if critics are saying this is only a band-aid solution. What then is the best remedy? The best remedy is always more competition in the free market, which leads to more consumer choice. The solution is not more government, yet this bill would create more government. By setting out expectations, the government would be able to deliver on more fairness and would be able to police the airlines more effectively. On the railway side, the government would also be more involved in setting prices and telling the railroads how to deal with their customers.

The passenger bill of rights has a section called “Ministerial Directions”, and says, “The Minister may issue directions to the Agency to make a regulation under paragraph (1)(g) respecting any of the carrier’s other obligations towards passengers.” This is after listing a whole series of obligations. In the bill, “obligations” is a very general term. It says, “The Agency shall comply with these directions.” If, in the future, the minister decides that airlines have a new obligation they need to meet, whatever it could be, whether providing a certain type of meal, a certain type of seat, or a certain type of service beyond those enumerated, then the minister can give that direction.

Again, in a free market, we can shop around. That would be the best way to go forward. We have already seen this is in the tech sector. There are apps on our iPads and phones and when an app does not deliver what we expect, we delete it. We get rid of it and move on. Whatever costs we have sunk into it, we ignore them. Hopefully, it was free, though it is not always free, and then we move on.

The same thing applies to smart phones. There is broad competition phones between all of the different smart phone providers and software types offered. People pick and choose which ones they want based on the services offered, the functionality, cost, and ease of use of the phones, and sometimes the ease of transferring to another device when it comes time for an upgrade.

The same concept should apply to airlines and the services they provide, particularly if people are not satisfied with them. It is not necessarily just a matter of choosing between airlines, but also about choosing other modes of transportation. Depending which part of the country someone lives in, people will have different modes of transportation to choose from. If someone lives in the Windsor, Montreal, Toronto, Ottawa corridor, they will have more choices. I have taken advantage of that and taken Via Rail in the past. As a westerner, it is quite an experience because we do not have those types of service levels. The distances are far greater. I could have flown but chose not to. I wanted to experience Canada, as well as the travel time it would take using passenger rail.

I have travelled throughout Europe using passenger rail as well. It is very convenient. Again, their governments are sometimes involved in setting prices, but mostly in dealing with disputes. There is far more competition in Europe. Encouraging competition and new entrants is more than just about the equity stakes allowed. It is a matter of the regulatory environment, fees, and taxes that new entrants will face. At the end of the day, it is about the ease of doing business.

I remember my time working at the Calgary Chamber of Commerce, where people would not come to us complaining about taxes or to verify a specific regulation, although that would happen, but more about the total package. For example, there was the issue of how complicated it was for them as business owners to comply with regulations. That applies to the owners of small-, medium-, and large-sized businesses. If the large businesses are publicly traded companies, the owners will be looking at the quarterly bottom line, and their executive team will be looking at how easy it is to comply with different rules and whether they have the people to do it. Can they meet the expectations of both their customers and the government, and can they deal with their competitors?

I know that the equity stake issue has been used. Vancouver's Jetlines have said they want a higher equity amount in their specific case to capitalize their company. This is because airlines face cash flow crunches and need large volumes of passengers to make ends meet, and profitable routes are quite limited. To have a new entrant come in, companies need to be well capitalized to be able to compete. Therefore, in their particular case, it would be beneficial to them.

As I mentioned before, I think about this Yiddish proverb, and every answer we hear from the government caucus and members leads to more questions. More generally, why do we continue to worry about foreign ownership in airlines? I want to draw a parallel. We are not as worried about the devices we use that are not manufactured in Canada, with operating systems not made in Canada, or that sometimes have data that is not even stored in Canada. I do not hear vast amounts of complaining about that, because people generally like the services they receive from their smart phone providers and the different software they use on the phones, whether it be operating or business software, or other recreational features they use. We are not as concerned about where those components come from, where they are ultimately made, but at the end of the day we care about the user experience and the cost. Foreign ownership in that respect is not as important.

However, with airlines, we could achieve far more if we provided much looser foreign ownership rules. In the legislation itself, the government goes into a lot of detail trying to change it. It has been said that airlines are not at the commanding heights of the economy. I know the government changed some of the definitions of what being Canadian means.

I have been signalled to wrap it up, so I have one last point. The problem thus far is that the answers I get from government caucus members lead me to have more and more questions. The bill is incomplete. Its goals for air passengers will not be met. Amendments offered by my colleagues at committee would have vastly improved this proposed piece of legislation.

I will continue to oppose this bill. I hope that every answer I give during questions and comments leads to even more questions, just as I used the Yiddish proverb to illustrate.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, when I meet with my constituents from Saint-Hyacinthe—Bagot, I tell them how honoured I am to rise in the House to vote on their behalf. The question that I would like to ask my colleague is this: how can I properly fulfill that role when I am being asked to vote on an omnibus bill like Bill C-49, which seeks to amend 13 pieces of legislation.

The bill may contain one or two worthwhile measures, but I cannot properly represent the people of Saint-Hyacinthe—Bagot by voting in favour of an omnibus bill that amends 13 pieces of legislation. How can my colleague justify asking members to vote on an omnibus bill that changes so many aspects of our society?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Madam Speaker, Bill C-49 is about bringing transportation into 2030 and the future. The bill would be an expansion of economic opportunities for the airlines, our shippers, and our railways. Much of this focuses on the economic side.

Would the parliamentary secretary elaborate a bit more on the passenger bill of rights, which we all know is extremely important as we move forward with more transportation challenges? How would that better protect the interests of Canadians when they book flights with airlines?

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

Madam Speaker, I thank the parliamentary secretary for her speech. Even though it went on for quite a while, I do not believe it will do much to change my position or my vote at third reading. We have seen over the past few weeks how much influence major lobbies exert on this government.

Considering the many inconsistencies between what we find in this bill and some of the Liberals' campaign promises, for example, it seems to me that the Liberals switched their focus. During the campaign, they were talking to consumers, and yet with this bill they seem to be talking to large corporations, or rather to be acting under their influence. This is apparent in the sections dealing with the passengers' bill of rights, among others.

In the 41st Parliament, the Liberals voted in favour of an NDP bill that would have created a real passengers' bill of rights. Now, Bill C-49 is taking us a step back by proposing guidelines for consultations that might eventually lead to regulations on the matter. That said, it is easier to amend regulations than legislation.

In conclusion, then, is Bill C-49 the government's way of saying that it gives the interests of large corporations precedence over those of consumers?

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, at the outset, I want to start by thanking all the members of the Standing Committee on Transport, Infrastructure and Communities for convening a week early, before Parliament was scheduled to resume, to allow for intensive study of Bill C-49, the transportation modernization act.

I would also like to thank all the witnesses who appeared before committee, along with the many other stakeholders who have shared their views. This includes the feedback provided by Canadians, industry stakeholders, provinces and territories, and indigenous groups, as part of the government's extensive consultation process undertaken last year leading up of the announcement of transportation 2030, our strategic plan for the future of transportation in Canada.

While there were some differences of opinion during the committee's proceedings, we also heard on a number of occasions how important this bill, as a whole, is for Canadians, the transportation system, and the economic prosperity of our country.

It is important for this bill to strike the right balance, which is why the committee adopted some important amendments in response to concerns that were raised during its in-depth study of the bill. This balance is a reflection of the collaboration that was achieved during the committee’s study.

The minister, and I also, was happy with the progress and the review of this bill and the extent of collaboration, which demonstrates the importance accorded by committee members to this bill.

Bill C-49 promotes transparency, system efficiency, and fairness. It is an important legislative step towards delivering on concrete measures in support of transportation 2030, our government's vision for the long-term future of Canada's transportation system.

Canada is a vast country with a very complex transportation network. It is therefore critical to ensure that our laws and regulations position our country to thrive as a high-performing economy that can respond to changing conditions and to Canadians' expectations when they travel.

This proposed legislation aims to provide a better experience for travellers and a transparent, fair, efficient, and safer freight rail system to facilitate trade and economic growth. In particular, the bill would strengthen air passenger rights; liberalize international ownership restrictions for Canadian air carriers to provide travellers with more choice and encourage greater competition; develop a transparent and predictable process for authorization of joint ventures between air carriers; improve access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and enhance the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.

Together, these proposed initiatives advance a strategic and integrated plan for the future of our country’s transportation system.

Our government's focus on inclusive growth for the middle-class and greater safety and security for Canadians led to the introduction of some key amendments to the Canada Transportation Act in Bill C-49 specific to the air traveller.

What does this mean for Canadians?

Bill C-49 would mandate the Canadian Transportation Agency to develop, in collaboration with Transport Canada, a set of clear regulations to strengthen air passenger rights that would apply consistently to all carriers. The regulatory process would allow broad consultation with Canadians and industry stakeholders to develop world-leading regulations, which is what Canadians expect and deserve.

Canadians and passengers travelling to, within, or from Canada would be provided with rights that address current irritants faced by air passengers. These rights would be easy to understand and uniform across all airlines and all flights, domestic and international.

Canadians understand that in certain circumstances airlines do not have full control over events, such as weather, emergency, and security incidents, or even medical emergencies, but even then Canadians have a right to a certain level of protection when they travel. In other circumstances, when the carrier makes commercial decisions that may have an impact on the passenger, Canadians expect fair compensation for any inconvenience they experience.

Should Bill C-49 receive royal assent, the minister has received assurances from the agency that they are committed to establishing the regulations on air passenger rights as soon as possible.

Bill C-49 specifies that the regulations would include provisions addressing passengers' most frequently experienced irritants: providing passengers with plain language information about carriers' obligations and how to seek compensation or file complaints; setting standards for the treatment of passengers in the case of denied boarding due to overbooking, delays, and cancellations, including compensation; standardizing compensation levels for lost or damaged baggage; establishing standards for the treatment of passengers in the case of tarmac delays over a certain period of time; seating children close to a parent or guardian at no extra charge; and requiring air carriers to develop standards for transporting musical instruments.

The minister has been clear that the regulations would include provisions ensuring that no Canadian is involuntarily removed from an aircraft due to overbooking after they have boarded the aircraft. He has also been clear that airlines will be expected to fulfill their obligations to the passenger and, in cases where a passenger cannot fly as a result of overbooking, the air carrier would be obligated to fulfill its contract with that passenger.

We intend to monitor the air passenger experience. This bill proposes requiring data from all parties in the air sector. This data would not only allow for monitoring of compliance with the proposed air passengers' bill of rights framework, but also inform any future policy or regulatory actions to ensure that the air travel experience to, within, and out of Canada is efficient and effective.

Bill C-49 also proposes to increase the foreign investment limit from 25% to 49% in Canadian air carriers, with associated safeguards. No single international investor would be able to hold more than 25% of the voting shares of a Canadian air carrier, and no combination of international air carriers could own more than 25% of a Canadian carrier. The ownership restrictions at 25% would remain for specialty air services, such as heli-logging, aerial photography, or firefighting.

Liberalizing the international ownership restrictions would allow Canadian air carriers, including all passenger and cargo providers, access to more investment capital, which they could use for innovation. We expect this to bring more competition into the Canadian air sector, providing more choice for Canadians, and generating benefits for airports and suppliers, including new jobs.

By allowing higher levels of foreign investment, Canadians would have access to better connectivity, and more frequent access to air travel.

Another improvement proposed in the bill is that it would allow the Minister of Transport, in consultation with the commissioner of competition, to consider applications for joint ventures between two or more air carriers. As it now stands, joint ventures are only subject to review as collaborations between competitors under the Competition Act.

Joint ventures are an increasingly common practice in the global air transportation sector. They enable air carriers to coordinate functions, including scheduling, pricing, revenue management, marketing, and sales. This would benefit Canadian passengers, giving them access to more destinations without needing to book separate tickets with different carriers.

This bill would open a process in Canada to both competitive and public interest considerations. This transparent and predictable assessment process would take into account the characteristics of the air transportation sector, as well as the wider public interest and competitive factors. It is expected that this approach would lead to better connectivity, less process, and a better overall passenger experience.

In Canada and around the world, airports are investing large sums of money and resources to simplify and improve the air travel experience for their passengers. Municipalities and businesses are also seeking new or additional passenger screening services as part of their economic development plans.

The proposed amendments to the act of the Canadian Air Transport Security Authority, CATSA, would create a more flexible framework whereby industry stakeholders could enter into agreements with CATSA on a cost-recovery basis. This flexibility would allow airports to increase screening services at their facilities, strengthen their competitiveness, and attract new commercial routes, which would enhance the traveller's experience without compromising aviation security.

Bill C-49 also proposes significant measures to strengthen the safety of Canada's rail sector. Proposed amendments to the Railway Safety Act mandating the installation of voice and video recorders in locomotives across Canada's railway industry would provide a clear safety benefit and improve rail safety overall. Locomotive voice and video recorders would provide essential information to better understand the causes and contributing factors leading up to an incident or an accident relating to human factors, which are often impossible to obtain by other means. The proposed regime does raise complex issues regarding the rights of employees to privacy. This is why the proposed framework carefully balances the safety benefits derived from locomotive voice and video recorders with the privacy rights of employees. This approach builds on 10 years of careful studies of the technical and privacy-related implications, and would address the Transportation Safety Board of Canada's recommendation in this regard.

Bill C-49 advances historic measures to promote transparency, fair access, efficiency and investment in the rail sector.

First, major new data requirements on the railways' service and performance would come into force more quickly. Railways would begin reporting specific service and performance metrics 180 days after royal assent, rather than one year. As well, the amendments would require that this data be reported more quickly. Railways would be required to report their service and performance metrics five days after each reporting period, rather than the 14 days originally recommended.

Finally, the Canadian Transportation Agency would have to publicly post that data within two days of receiving it, rather than the original seven days. Together, these measures would ensure that shippers have access to more timely data. Bill C-49 already provides the agency with the power to require even more data if needed, underscoring our commitment to a more transparent rail system.

Second, captive shippers in British Columbia, Northern Alberta, and Northern Quebec, in sectors such as forestry and mining, would have better access to the proposed new long-haul interswitching remedy. These changes reflect the spirit and intent of this new remedy.

The committee’s amendments would still maintain a critical balance by minimizing congestion in the Quebec-Windsor and Vancouver-Kamloops corridors. Extensive congestion could ultimately slow down the rail system to everyone’s detriment.

Third, another amendment at committee reinforces the point that a railway's removal of an interchange for interswitching would not affect its service obligation toward a shipper. Railways would also be required to notify the agency of their intent to remove an interchange and provide more advance notice to shippers, namely 120 days rather than 60 days. These amendments speak to a concern we heard that interchanges could be closed without any recourse for shippers.

Finally a technical amendment made by the committee would allow the new majority shareholder ownership limit for Canadian National Railway to become effective upon royal assent. This amendment would simplify the process for Canadian National and help ensure investment in a network that is critical to Canada's economic performance.

Bill C-49 would establish the right conditions for our rail network for years to come. The amendments the committee proposed would help advance our goal of a transparent, efficient, and safe Canadian freight rail system that meets the long-term needs of users and facilitates trade and economic growth.

Bill C-49 also addresses marine-related infrastructure. The legislation proposes amendments to the Canada Marine Act that would allow Canada port authorities and their wholly-owned subsidiaries access to loans and loan guarantees from the newly created Canada infrastructure bank.

The bank will invest $5 billion for trade and transportation related priorities. Allowing port authorities to access the bank would support investments in Canada's trade corridors and the infrastructure needed for our long-term economic growth and the creation of good, well-paying jobs for the middle class.

Bill C-49 would change the Coasting Trade Act by allowing all shipowners to reposition their owned or leased containers between locations in Canada without a coasting trade licence. Removing the licensing requirement for foreign vessels to reposition empty containers is expected to help improve the competitiveness of Canada's supply chain in support of Canada's exports, and enhance the attractiveness of Canadian ports as gateways to the North American market.

A strong and modern transportation system is fundamental to Canada's continued economic prosperity. All Canadians benefit from a competitive, reliable, and efficient transportation system.

The committee has proposed important amendments to ensure the bill achieves a fair balance. Collaboration helped in finding solutions that will contribute to modernizing our laws and regulations in order to increase investment in Canada and promote the long-term growth of our transportation system.

The proposals included in Bill C-49 are designed to achieve tangible improvements to our national transportation system that will serve and benefit Canadians for decades to come.

I would like to again thank the members of the committee for working together to ensure that Bill C-49 achieves a fair and balanced approach in fostering a more efficient and safer transportation system.

[Diane Lebouthillier, Liberal, Gaspésie—Les-Îles-de-la-Madeleine, QC]

moved that 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 read the third time and passed.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Speaker, there have been discussions among the parties and I believe if you seek it you will find consent for the following.

That notwithstanding any Standing Order or usual practice, at the conclusion of today's debate on 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, all questions necessary to dispose of the third reading stage of the said Bill be deemed put and a recorded division deemed requested and deferred until Wednesday, November 1, 2017, at the expiry of the time provided for Government Orders.

That being said, Happy Halloween.

[Celina Caesar-Chavannes, Liberal, Parliamentary Secretary to the Minister of International Development]

Madam Speaker, I would like to take this opportunity to speak to Bill C-49, an act to amend the Canada Transportation Act and other acts.

This proposed legislation is critically important to help modernize transportation policies and practices to help ensure that we have safe, clean, and efficient transportation across Canada. Of course, Canada is a vast country and we rely on transportation to ensure that our trade happens across the country and that we are able to travel across the country. Therefore, it is critically important.

Last week, we had an opportunity to hear the great news of our fall economic statement. We saw growth in this country that has not been seen in quite some time in terms of our place in the G7. We have seen the creation of hundreds of thousands of jobs and, more importantly, over 100,000 full-time jobs. Having an efficient transportation system will allow that growth to continue. It will give our businesses, our small businesses in particular, the capacity to get their goods and services from city to city and province to province, and across this great country.

I know that a lot of businesses in Whitby really appreciate the fact that we are looking at transportation. In Whitby, there is always heavy congestion on the 401, just as it bottlenecks into my town. Many of us realize the inefficiencies that can result when we do not pay attention to the intricacies and importance of our transportation networks and to ensuring that we are able to get our businesses' goods and services across the country. This helps broad economic growth. In this we want to make sure that we are taking a whole-of-government approach when looking at ensuring vast economic growth in Canada.

In Whitby there are a lot of families who really like to travel across the country. We have seen various reports in recent times that travel is not so nice for some passengers. The introduction of a passenger bill of rights will give families peace of mind when they are travelling. They want to know that when they have spent their hard-earned money to take a trip across the country either by train or by air that they will be treated appropriately in whatever mode of transportation they take.

However, this is not just about planes or trains. When we think about driving across country on a family trip, it all really ties together. We also want those roadways to be efficient. We want that transportation to be efficient so that people can travel across the country, spend their money, and encourage economic growth when they are going across the country. Again, it is very interconnected, and I think this government has taken a proactive approach of looking at each piece of legislation, seeing that we can build upon each of them in turn and ensure that we do have the economically viable modes of transportation we need to continue to grow the country.

I want to speak a little to the fact that we have adopted some of the amendments brought forward at committee.

When I came to this place, people asked me questions about our capacity to work together across the aisle and to exchange ideas and to ensure that we can put together the best pieces of legislation possible. We have taken the opportunity to put this proposed legislation to committee, and the committee came back with various amendments that we have taken into account. We know that it is very important to the Canadians, including people within my constituency of Whitby, that we serve and represent everyone and take their input into account.

The adoption of those amendments represents a critical opportunity to work together.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I could not agree more with my hon. colleague from Guelph that we made a dreadful mistake when we separated out passenger rail, VIA Rail, and gave the tracks in this country to CN and freight. The current length of trains that are bringing freight across this country is so long that they do not fit on any siding, which is why VIA Rail, that does not control the signals, is sent to the siding and passengers have to wait sometimes for as much as an hour for a freight train to pass.

I do not see anything in Bill C-49 that would fix the problem the member for Guelph just identified. What we need to do is make sure we are investing in VIA Rail and investing in tracks for VIA Rail. I do not see that in this legislation.

[Lloyd Longfield, Liberal, Guelph, ON]

Madam Speaker, it is my pleasure to rise to address the House today on Bill C-49. We have covered a lot of ground in the debate today.

The word “omnibus” has been used by both the official opposition and the NDP to describe this bill. The vision that came from committee and the minister is that this bill reflects the nature of transportation. Transportation, as we know, is now called logistics. It is more than just moving goods and people; it is also the data behind the networks. It is tracking packages as they go from one form of shipping to another. Whether it is from a ship onto a container at a transloading facility, onto rail, and then onto a truck, we need a transportation network that has an act behind it that reflects the true nature of transportation.

The acts that this legislation would cover, the CN Commercialization Act, as was mentioned by the previous speaker, would attract investment up to 25% of the ownership of CN or CP being covered by international investment, to look at attracting international capital into Canada.

The Railway Safety Act, as was just mentioned, would include the use of devices for the safety of rail and, as we saw in the disaster in Lac-Mégantic, how to avoid disasters in the future through the use of technologies, so we can make sure that the equipment is operated safely and effectively. It is governed by subsection 28(1) of the Canadian Transportation Accident Investigation and Safety Board Act. We have a backstop. We will not have to focus on conversations in the cab between the engineer and other operators. We are looking at safety and the safe operation of equipment, and we have acts to govern that. We are looking at the comprehensive nature of safety between air travel, road travel, shipping, and rail.

We are also looking at the Canadian Air Transport Security Authority Act, to authorize the Canadian Air Transport Security Authority to enter into agreements for the delivery of screening devices on a cost-recovery basis. That concern was mentioned by the NDP earlier, but cost recovery can take many forms in terms of financing activities, such as improving screening devices within facilities.

The Coasting Trade Act looks at repositioning empty containers on ships that are registered in any register. There can be tracking of empty containers and a more efficient way of handling the movement of containers across Canada as they become unloaded and go to other forms of shipping, and then eventually get back to the registered owners. It is to make use of the containers throughout the time they are in Canada.

The Canada Marine Act permits the port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada infrastructure bank. That infrastructure bank, which has been discussed in this place on other occasions, looks at how to attract international investment. It looks at how to maintain control of it through our management of foreign capital within our shores, knowing how expensive it is to operate ports, to add rail infrastructure, to build bridges, to improve our transportation network across Canada. There are international markets looking for investment, looking for projects to participate in. As long as Canadians know how we are doing that and we are transparent in the way the conditions of Bill C-44 will be coming forward to Parliament so that it can get royal assent and we can get on with investment in transportation, that is what we want.

There are also other acts, as always, including the Bankruptcy and Insolvency Act, the Competition Act, the Companies' Creditors Arrangement Act, the Air Canada Public Participation Act, the Budget Implementation Act, 2009, and also the Fair Rail for Grain Farmers Act.

This bill is not omnibus; it is omni-transportation. We are not suggesting that we cut down environmental protection in the middle of a budget bill or other things that have been termed omnibus in the past. We are not bringing this forward in any way, other than to make sure we have an integrated act that reflects the integrated nature of transportation in Canada.

When we look at integration and different forms of travel, we also have the competition between freight and people. How do we manage the investments in our infrastructure? In my riding of Guelph, people are trying to get down Highway 401 to Toronto on the train, and the train gets waylaid as freight comes through. Freight makes a profit for rail organizations. Freight always takes precedence over people. People are trying to get to work or trying to get home, and they cannot do that efficiently.

The only way to get past these problems is with comprehensive legislation that allows investment, so that we can get dual tracks between Toronto and Kitchener-Waterloo, including Guelph, to have one track for freight and one track for people.

Transportation 2030 is looking at where we are going in the next 20 or so years. We want to have an integrated nature of transportation that can also pave the way to use the new forms of transportation, autonomous vehicles, new ways of moving goods through new ways of port control, and new transloading facilities for rail. We need to have comprehensive legislation, such as Bill C-49, in order to make way for future carriers of people and goods across this great country that we have.

When we look the scope of Canada, we also need legislation that is as broad in scope as we are as a country, so that we can reach northern Alberta, reach Windsor, and so we can have proper control in our major centres of Toronto, Montreal, Vancouver, Halifax, and all points in between.

When we look at the joint ventures, attracting the most efficient use of travel, we do not want part carriers on part carriers and two operations losing money, but a means in which they can collaborate and work to the benefit of Canadians under the new legislation.

Competition is essential, and competition, as I mentioned earlier, includes attracting international participants. We can look at countries where there is best practices that we can borrow from, such as China and the United States. Europe has border issues that it has been able to solve. We are are still working on old border issues that will hopefully benefit from this legislation as well, as we open up our roads and bridges and our rail lines to international markets.

Finally, I mentioned in the question section that Guelph is looking at increasing our opportunities for air travel. We have YKF, which is the international regional airport in Waterloo that is partway between Guelph, Waterloo, Kitchener, and Cambridge. To come to Ottawa this morning, I had a 4:15 a.m. pickup and a shuttle to Pearson. I had to go through security, so I was dropped off an hour and a half before my flight. I got to my office here for 8:30 a.m., after having left Guelph at 4:15 in the morning. If we had YKF operating and we had a low-cost operator, as we almost had last year—we had it for a very short period of time—I would have been able to drive 20 minutes to the airport and be at the office an hour earlier than I was. I would be able to get home to my family a lot easier once we are finished with the work of the House.

However, we cannot do that without good legislation such as we have before us, which attracts investment, attracts competition, and enhances the network that we have in Canada, bringing it into the next century with transportation 2030.

I will be supporting this bill as it comes forward.

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Speaker, I appreciate the question from my great colleague, who also does a lot of work on transportation, in particular on the committee.

Canadians expect a transportation system that allows them to travel safety and to bring global trade through our partners' jurisdictions safely, efficiently, and in an environmentally friendly manner. We want to ensure that where and when a product is moving, it is also moving economically and that jobs are created and preserved. Businesses and customers expect a transportation system they can trust and have confidence in to deliver.

Bill C-49 would become an enabler of the entire transportation strategy, transportation 2030, to become something that will breathe and mature and offer our great nation the ability to perform better when it comes to our economy on the global stage.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Madam Speaker, I thank my colleague for his wonderful speech. Bill C-49 is a key piece of the plan to implement the transportation 2030 vision announced by the Minister of Transport last fall.

Would the member tell us a little bit about that and explain why it is important?

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Speaker, I appreciate the question by my hon. colleague, who has done a lot of work with me on the transportation sector.

Niagara is unique. We are a trade corridor. We have a very robust multi-modal transportation system, with the Welland Canal going right up the middle of the region, as well as short and mainline rail. We are a border community, with road and air links shared by both nations. Within a one day's drive, we represent over 44% of North America's annual income. Therefore, the bill, as well as the overall strategy with respect to transportation, not only contributes to Niagara, but because of the strength of Niagara as a border community, it can also contribute overall to accomplishing the recommendations that will be coming out of both the strategy and Bill C-49.

We look forward to its being passed. We look forward to taking advantage of the strengths, as well as the resources, that would be made available to us through Bill C-49.

[Kate Young, Liberal, Parliamentary Secretary for Science]

Madam Speaker, I thank the member for his very important words. We have had many discussions over the past two years about transportation, and I know how important it is to get this right. I wonder if the member could reflect on how Bill C-49 would help the Niagara area, because I know how important it is to ensure that transportation is increased and improved in that general area.

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Speaker, it is a pleasure to speak today, on behalf of many of my colleagues, to Bill C-49. I had the opportunity and pleasure, and privilege, to work on this, starting before we came back to the House. I worked with many great people on the committee and with witnesses and delegations that came to take part in the discussion.

There is a bigger picture. I have heard a lot of comments today in the House. Although we dug a bit deep in the weeds, I want to speak, in a broader sense, to the strategic plan for the future of transportation in this great nation, that being transportation 2030 and how Bill C-49 would actually contribute to that overall strategic plan.

This bill would be in part an enabler of a national transportation strategy. The minister worked very hard throughout the past year to put together transportation 2030 and a train corridor strategy as part of that overall strategy. It became evident, when speaking with many of our partners throughout Canada, that modernizing rail, air, marine, and road is a critical component of that overall national transportation strategy. Bill C-49 would be a critical component of that.

When we looked at the bill, we recognized quickly that a lot of the particulars relate to how we are going to ensure that Canada's transportation system is strengthened to give us an ability globally to perform better with respect to our economy and the economies of our partners. We also recognized that we had to hear from everyone across the House of Commons. It was not just about the Liberal side of the floor. It was also about listening to the Conservative Party, the New Democratic Party, and other folks, as I mentioned earlier, who were a great part of this entire process.

I want to highlight a few components of the report. The report states that, transportation 2030 will ensure that Canadians benefit from a safe, reliable, clean, and efficient transportation system that facilitates trade and the movement of people for years to come. That includes every method of transportation: rail, road, air, and, of course water. Transportation 2030 would also ensure that Canada's transportation system supports economic growth, job creation, and Canada's middle class while promoting a sustainable environment. We can see a trend here as it relates to a triple bottom line, that being economic, environmental, and social.

In a vast nation such as ours, Canadians rely on economically viable modes of transportation to travel and move commodities within our country, across the border, and to our ports for shipment overseas. The time has come to modernize our policies, not just in our own jurisdictions but with jurisdictions throughout Canada and with our trading partners, ensuring that we have a seamless method of transportation to move global trade. These practices also include a safe, greener, more competitive, and more respectful system that can respond to market conditions and to Canadians' expectations, not only with respect to moving trade but with respect to moving people, whether it be through high speed rail or any method of transportation. It is incumbent upon us to investigate those opportunities.

I mentioned earlier today that the transportation modernization act would represent only a first step in providing Canadians with safer, more reliable and efficient transportation, and a system that would better facilitate the trade and travel of goods and people. It would also respond to the needs of Canadians and their expectations for services, as well as allow Canada to take advantage of international opportunities and contribute to a highly productive economy.

When we look at a lot of the effort of the transportation committee now, we are starting to get a little deeper into the specifics of an overall strategy that attaches itself both to transportation and, most importantly, the economy and job creation. We cannot be content to sit back and depend on what we had, but look to what we can have. That is dependent on our strengths as a border country with our trading partners, such as the United States. Within the new trade agreements that we have and will be ensuring are in place, we have an opportunity to include that seamless movement and ensure that the agreements are of benefit to both Canada and our trading partners.

I want to speak as well to the involvement of all members at committee. For those who may not know and are watching this on TV, all three parties participate in the standing committees, the Liberals, the Conservatives, and the NDP. As the chair of the committee so eloquently alluded to earlier in her dialogue with us, we listened to all members of the committee, ensuring that all of their voices were heard. We made amendments, and those amendments came from all sides. The amendments were as follows.

Changes were made to the exclusion zones in Quebec and British Columbia to open up a new long-haul interswitching regime to captive shippers in northern Quebec, parts of British Columbia, and Alberta, which were previously excluded in the agreement put in place by the former government. This will be of particular importance to the forestry and mining sectors.

Changes were also made to the new system of approvals for joint ventures in the air sector to provide for greater transparency in the process, to provide greater service to passengers, and to provide greater certainty when travelling.

There were changes made to the new system of approvals and joint ventures for other methods of transportation, such as by rail, water, and road.

Changes were made to the rules around closing rail interchanges so that a longer notification period and greater transparency were required. As a former mayor for the past 14 years, I can relate to that one simply because of the cost of, as well as the work that has to be done on, some of these interchanges within our own individual jurisdictions.

There were also changes made to the reporting requirements for freight rail, which will result in timelier reporting of data and speed up the implementation of a new system from one year to 180 days. Once again, that will lead to better service, transparency, and accountability.

Finally, changes were made to the amendment concerning the CN Commercialization Act so that CN's directors could apply for a new 25% limit on individual ownership of shares immediately after royal assent.

In closing I want to say that not only is there a bigger picture attached to both the efforts at committee and what the minister and ministry are embarking on with respect to a national transportation strategy, but also that when we go to the next layer we see the minister's announcement of transportation 2030, and in the next layer the specifics of how we are going to accomplish that in Canada by 2030. Bill C-49 is but one component of that and will be an integral part of ensuring that the overall strategy is put in place. It is not just a document that will sit on a shelf and collect dust, but one that will breathe. With that, Bill C-49 will become an enabler to ensure that this great nation has the tools to move this entire strategy forward to benefit future generations.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Madam Speaker, I would not disagree at all with the member when he said that we need a revamp. However, I would definitely say that the bill before us does not look like a revamp.

What we have in Bill C-49 looks more like crony capitalism or paying off somebody. I am not sure what the whole bag of goods is intended to do, but for me, the ministerial sign-off on the joint ventures raises a red flag. It would give the opportunity for the minister to bypass the board, and the opportunity to participate in what I call crony capitalism.

What we need in northern Alberta and northern Canada is more competition. What we need is more of the government getting out of the way so that our resources can be developed. As we have seen in northern Alberta, hundreds of flights are being cancelled, because there is no economic activity any more. When there was a lot of economic activity, there were choices for a person who wanted to fly out. There was a flight every hour that left the Fort McMurray airport. Now I think there are only four every day flying to Edmonton. This is one of those things that we need to ensure, that we can get the economy going again, and then there will be a lot of choice when it comes to transportation, provided the government can get out of the way.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I thank my colleague for her question.

What worries me the most about Bill C-49 is that it does not make Canadians' interests a priority, whether it is customers, consumers, or even the people who work for these companies.

It seems as though this bill is going to serve the interests of large corporations and foreign investors. The government is ignoring the fact that some of the measures, such as the one calling for audio-video recorders in locomotives, will be in violation of workers' rights. The government is ignoring the fact that consumers will be the ones to suffer the consequences of this bill.

Our role in the House of Commons is to vote in favour of legislation that contributes to the common good and that serves the interests of our constituents. We need to pass legislation that respects charters of rights and freedoms.

When we were debating this bill, all of the members of the Standing Committee on Transport, Infrastructure and Communities were telling us that the experts were unanimous on some issues but that the amendments put forward to address those experts' concerns were still not adopted by the committee at report stage. We must ensure that the bill that we pass respects the rights of workers and consumers.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, as it often happens, the Liberal government's bills first and foremost protect big businesses, at the expense of the rights of workers and consumers. By amending 13 acts, the omnibus Bill C-49 is no exception. There is certainly no doubt that the Liberal members are going to support this bill, but I would still like to remind the House why the New Democrats want to oppose it.

After two years of waiting, the minister wants us to rush through a bill that is deeply flawed and primarily favours the interests of foreign investors, while violating the rights of workers and consumers. I will explain all the reasons why the New Democrats oppose Bill C-49.

First, in 2012, the NDP tabled Bill C-459, which clearly outlined the measures to be taken to create a proper passengers' bill of rights. This bill set out concrete measures, for example, providing for appropriate compensation for passengers who were denied boarding. That could have amounted to $600 for flights of 3,500 km or more. However, the Liberals voted against the amendment that proposed to include this bill of rights in Bill C-49, without even trying to study it.

Why did the Minister of Transport reject our amendment? He could have taken a page from our proposal, which included concrete measures to protect air travellers. It is even harder to understand when we consider the findings of a study showing that 0.4% of EU-regulated flights are cancelled, which is four times lower than the cancellation rate of flights under current Canadian regulations. It seems clear that the Liberals are giving in to pressure from the airlines and turning a blind eye to the studies on the issue.

Bill C-49 would also require railway companies to install voice and video recorders in the locomotive cabs. This seems to make sense for dealing with accidents, but it must not prompt the railways to use this information for surveillance or disciplinary purposes. That is why we are calling for the use of these voice and video recordings to be reserved exclusively for the Transportation Safety Board.

The provisions of Bill C-49 are not clear enough and do not spell out how the train conductors' private information will be used by the railways. For example, the minister could decide by regulation that a train conductor's hourly productivity is something to take in consideration in a safety review. Following that reasoning, Via Rail Canada could use this data to manage employee performance, for example, during a stop at the Saint-Hyacinthe station.

The employees are refusing to give up their right to privacy. The government is not listening to the testimony of people like Roland Hackl, vice-president of the Teamsters Canada Rail Conference. According to him, the bill, as currently drafted, goes against the employees' rights as Canadians, and he is right. Bill C-49 might be in contravention of section 8 of the Canadian Charter of Rights and Freedoms because it would authorize the government or employers to gather private information without providing adequate protections. What is more, according to the findings of a Transport Canada working group, voice and video recordings are not part of proactive safety management.

The NDP therefore proposed a series of amendments to ensure that only the Transportation Safety Board could have access to the recordings in the event of an accident. Our amendments would also guarantee that the minister and the railways would not be able to use the voice and video recordings. Obviously, the Liberals in committee once again summarily dismissed these proposals.

I would like to talk about the change in the agreement between the airlines included in Bill C-49. Currently, the competition commissioner may make an application to the Competition Tribunal to propose the rejection of a merger of airline companies that stifles competition. The Competition Tribunal therefore has the authority to cancel a merger or a part thereof. However, under Bill C-49, the Minister of Transport will now have the final say in the matter.

As soon as the minister approves the agreement, the Competition Tribunal can do nothing to stop it. The NDP is opposed to clause 14 of the bill because it gives the minister the power to supervise and authorize joint ventures between airlines.

Imagine if Air Canada submitted a proposal to merge with United Airlines. Even if the commissioner found that the agreement would reduce competition among airlines and could raise ticket prices, the minister could still approve the merger if he or she deemed it to be in the “public interest”. I challenge the minister to provide a precise definition of that term. In Bill C-49, it is so vague that the minister could include reasons that are not in Canadians' interest but in the interest of shareholders of major airlines. The Liberal government is trying to erode our consumer watchdog's authority.

Bill C-49 would also amend the Canadian Air Transport Security Authority Act, the CATSA act.

Instead of designating new airports and helping regional airports grow, the government is passing the cost of security screening on to them.

Why did the government not propose a fairer model in which CATSA is responsible for funding screening and security services?

The government has been withdrawing funding from this area for a long time. Statistics Canada data shows that the former government collected $636 million from the public but that it allocated only $550 million of that amount to air security. The Liberal government is no better, since it has continued to underfund CATSA. Clause 69 of the bill provides for the addition of subsection 30.1(1) to the act, under which any airport can enter into an agreement with CATSA to provide new screening and security services.

Everything is fine up to that point. However, it is up to the airport to pay for these new services, which means that passengers will be the ones to foot the bill. In contrast, the NDP proposed that public funding be put in place for the development of regional airports. Our amendment would have also prevented designated airports, such as those in Montreal and Toronto, from being forced to absorb the cost of enhancing security services.

Indirectly, our amendment also sought to ensure that the cost of enhancing security is not passed on to passengers via ticket prices. All of our proposals in that regard were also rejected. Unfortunately, that is not surprising. That is how the government has been withdrawing funding from regional airports and screening and security services in large airports.

The government wants users to cover the cost of its own policy of underfunding. Bill C-49 also creates a loophole in the Coasting Trade Act in clauses 70 to 72. We are asking that these clauses be deleted from the bill. Canadian shipowners and sailors' jobs—and I should point out that my son is a sailor—must be protected from unfair competition from ships registered in the European Union.

Why would that competition be unfair?

Simply because labour on EU-registered ships is not subject to the same requirements as labour on Canadian ships. Under the provisions of Bill C-49, crew costs for European ships authorized to navigate in Canadian waters are 30% of Canadian crew costs. What is even more appalling is that there is no reciprocity whatsoever. In fact, the minister could decide to allow the repositioning of empty containers by ships registered abroad, while Canadian ships will not have reciprocal access to the EU market.

We would also like to see clauses 73 and 74 deleted from Bill C-49, as those clauses authorize the Canada Infrastructure Bank to provide loans to port authorities.

Lastly, with regard to Bill C-49, I want to point out that we fully support improving the rights of air travellers and protections for grain shippers. Many grain farmers have acknowledged that Bill C-49 is a step in the right direction.

Grain farmers have, however, proposed measures that go even further.

I will close by saying that we strongly oppose Bill C-49.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I am pleased to stand today to discuss Bill C-49.

However, before I get to the meat of the bill, I want to quote from liberal.ca/realchange, which says, “We will not resort to legislative tricks to avoid scrutiny. Stephen Harper has also used omnibus bills to prevent Parliament from properly reviewing and debating his proposals.” It goes on to say, “We will change the House of Commons Standing Orders to bring an end to this undemocratic practice.” However, what do we have before us? Like budget bills and others before it, the Liberals have introduced an omnibus bill.

In the bill, there are air passenger rights, with subsections on liberalized international ownership rules; joint ventures between air carriers; increased access to security screening services; rail initiatives with subsections under locomotive voice and video recorders; freight rail policy framework; and another area under marine initiatives that includes items such as would amend the Coasting Trade Act and the Canada Marine Act to permit Canada port authorities to access Canada Infrastructure Bank loans and loan guarantees to support investments in key enabling infrastructure.

We also know the infrastructure bank was introduced in a different omnibus bill. Ironies of ironies, the Liberals put time allocation on this omnibus bill after promising to never do either. The Liberals said that they would never be so cynical as to introduce omnibus bills and they were so sure they would never use them that they made it a campaign promise to show Canadians they were so different from Stephen Harper. With this broken promise, it once again shows that the student has become the master.

While I am on broken promises, I will review some of the other broken promises of the government, such as a revenue-neutral middle-class tax cut. The Liberals said this tax cut would pay for itself by increasing taxes on the wealthiest. Unfortunately, it has not. The tax cut is costing all Canadians $1.2 billion annually from the federal treasury. It is like borrowing against a line of credit and saying we just got wealthier, but it is not.

The Liberals promised modest deficits. They said that annual deficits would be just $10 billion a year, but they blew that out of the water pretty fast. Even with the economy doing well, the Liberal deficit will still be almost 100% higher than they had promised. They promised balance budgets. They said the budget would be balanced, probably balancing itself, with a $1-billion surplus in 2019-20. Now we know they will not commit to a balanced budget ever.

The Liberals promised revenue-neutral carbon pricing. They said the plan would be revenue neutral for the federal government, but we know that is not true because they are charging GST on the provincial carbon taxes, which is expected to cost Albertans and British Columbians almost a quarter of a billion dollars over two years.

On electoral reform, we were famously told that the 2015 election would be the very last using the first past the post balloting system. On this side, we have always said that if the government is going to fundamentally change the way citizens elect their government, there should be a referendum. Therefore, I am not that sad to see this promise broken, but it still shows a pattern.

The Liberals make promises to get elected and then throw the promises under the bus faster than, say, the revenue minister threw Revenue Canada employees under the bus over her mess-up with taxing minor employee benefits.

The government promised an open and transparent government. This one is an omnibus of broken promises.

I will read from the mandate letters to ministers, which state, “You are expected to do your part to fulfill our government’s commitment to transparent, merit-based appointments”. Here are some of the merit-based appointments. The former chair of the Liberal election campaign in Ontario was appointed to an ambassador role. A failed Liberal nomination candidate was appointed to the VIA Rail board. Another failed Liberal candidate, who already said she would run again, was appointed as the director of the Hamilton Port Authority. A Liberal described as a friend of Gerry Butts, who ran twice for the Liberals unsuccessfully, was given a plum government position in San Francisco at double—yes, double—the official pay scale.

The finance minister's mandate letter includes this doozy, “your private affairs should bear the closest public scrutiny. This is an obligation that is not fully discharged by simply acting within the law.” Here we have the finance minister, who, before entering politics, lobbied for a change in the pension system that would benefit his company, Morneau Shepell. What did he do after he was elected and became the country's top financial regulator? He sponsored the very bill he lobbied for before entering politics, but excuses it by saying he was following the letter of the law.

There is also the failed Access to Information Act we debated just recently. The Information Commissioner herself said that she was very disappointed with the act, that it was being used as a shield against transparency, and that it was failing to meet its policy objectives to foster accountability and trust in our government.

I will now move on to Bill C-49. It is unfortunate the government has once again chosen to break its promise and presented yet another omnibus bill to the House.

Bill C-49 is like a game of three card monte. That is where the dealer shows that one of the cards is the target card and then rearranges the cards quickly to confuse the player about which card is which. Except in the case of Bill C-49, instead of the queen of hearts, the minister is presenting the passenger bill of rights as the target. He hides the flaws and omissions of the bill under the guise of passenger protection, referring constantly to the much-reported United Airlines incident where someone was dragged from the plane, as if something like that had happened here.

He also tries to pretend that government regulation is what is needed to prevent those situations in Canada. We all have our own horror stories of airline travel. What would address this issue is not half-hearted regulations, but more competition.

Changing the foreign ownership limit to 49%, up from 25%, is a good start, but why limit it at all? If we want improved service and other issues, then open up the market to more competition. We saw how this worked when WestJet entered the market. Nothing has done more to force better pricing and service from airlines across the country than having WestJet expand across Canada.

Why not focus on this, instead of measures that are rolled out populist-style to take advantage of consumer sentiment influenced by a viral video.

A University of Toronto report has found that relative to Americans, we often pay between 50% and 100% more for comparable travel between Canadian cities. Various expert reviews of the airline industry, including by the Competition Bureau, have recommended allowing a right of establishment for foreign carriers on domestic routes to put pressure on our airlines to improve.

The airlines might argue that foreign carriers would only operate on lucrative routes. However, Canadian carriers are under no obligation to fly to money-losing destinations currently, and there is no proof that the airlines are presently cross-subsidized to operate otherwise unprofitable routes.

One of the problems of this part of the bill is that it amends the Canada Transportation Act with regard to joint ventures, taking away decision-making authority from the Commissioner of Competition, and places the power in the hands of the minister. Yes, giving the minister the power to interfere for political reasons is just what is needed to improve airline service and lower rates—said no one ever.

The CAA, the Canadian Automobile Association, notes that the Bill C-49 relies on a complaint from a passenger in order to trigger action. The Canadian Transportation Agency cannot initiate domestic investigations on its own. Advocates and organizations can not intervene and each complaint is handled as a one-off, adding time and delays.

It is worth noting that the CTA was able to initiate hearings into the recent infamous Air Transat situation only because it concerned an international flight. The CTA would not have the authority, even under Bill C-49, to decide itself to hold a hearing into a similar situation if the flight occurred within Canada. Nor would the CTA be able to examine any broader systemic issues the CTA might note that did not come from a specific complaint and would have to ask the minister for permission to investigate them.

Noted passenger rights advocate, Gabor Lukacs, says the bill is “smoke, mirrors and has no teeth”, and contains no provisions about the enforcement of rights of the passengers. He says, “This strikes me as an an attempt to shield airlines from complaints and further prevent the public from ensuring their right.”:

He says that Bill C-49 contains no provisions about the enforcement and that it passes the buck to the Canadian Transportation Agency to establish standards at some point in the future. What we need is more competition, not relatively toothless regulations basically responding to a United Airlines' video that went viral.

We do not need regulations that will increase airport costs and thus ticket costs, which will happen as airports expand screening services and are permitted to independently decide how to cover costs. We all know how that will end: with consumers paying more.

There is quite a few other issues on this bill. We would have preferred that it be broken up into several bills to address.

It is unfortunate that once again the government is hiding poor legislation in an omnibus bus, and Canadians will be the poorer for it.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, once again this Parliament has been presented with a poorly and hastily crafted omnibus bill that would undermine workers' fundamental rights to privacy and protect the rights of investors.

It is hard to see any difference in policy between the current government and the one that went before. The disparity between Liberal election promises and Liberal actions in government is painful. Where is the promise to end the use of undemocratic omnibus legislation, so decried by the Liberals in opposition? Like the Conservatives before them, the Liberals are subjecting Canadians and members of this House to unworkable and flawed, now Liberal, omnibus bills.

Bill C-49, for all its omnibus bulk, contains only two measures New Democrats can support. We believe in the measures that would improve the rights of air travellers and the protections for grain shippers. These ideas are positive improvements to the status quo. For that reason, we are calling on the government to sever these two initiatives from the pointless and ineffective remainder of Bill C-49 so they can be studied at committee and passed into law.

As for the rest of Bill C-49, we will vote against it, and I will tell members why. Bill C-49 would amend the Canada Transportation Act, giving the minister of transport the power to approve joint-venture arrangements between airlines. This is worrisome, because that type of arrangement could proceed with the minister's approval even if the commissioner of competition found that it was anti-competitive, and it could increase the price of airline tickets. Let me repeat: it would give the minister of transport the final word on proposed joint ventures between airlines, and once an arrangement was approved, the Competition Tribunal could no longer prohibit it.

The NDP proposed deleting clause 14 of Bill C-49, because it would expose consumers to unfair increases in airline ticket prices, yet that clause remains. The bill would also increase the limit on foreign ownership of Canadian airlines from 25% to 49%, despite a University of Manitoba study, published on Transport Canada's own website, that demonstrated that this measure would have no positive impact on competition.

Most concerning, Bill C-49 would amend the Railway Safety Act to allow railway companies to use video and voice recorders, and despite the fact that the bill would risk violating section 8 of the Charter of Rights and Freedoms by authorizing the government or employers to collect private information without instituting adequate protections, the Liberals rejected NDP amendments to limit the use of these recorders.

Locomotive voice and video recordings should be accessible only to the Transportation Safety Board. There is nothing to stop individual railway companies from using them to attack workers' rights. In fact, there are a number of precedents in which CN and CP have attempted to attack workers' rights and privileges. New Democrats object to clause 14 for this reason.

If the government were truly serious about improving railway safety, it would revise the standards regarding train operator fatigue. Train operators are under pressure from employers to work unreasonable hours, and as such, this demand by employers represents a real danger to the safety of workers and the public.

There is a better way. Canada needs and deserves an affordable, accessible, reliable, and sustainable system of public rail transit, and Canadians have the right to the highest levels of service, protection, and accessibility of travel that can be provided. Instead, we see the erosion of infrastructure due to the neglect and corporate offloading of maintenance responsibilities, and passengers are subjected to the cancellation of rail services across the country.

Canada has a growing population, families with children, disabled Canadians, and senior citizens who need to travel. At the same time, Canadians are conscious of the environmental legacy we are creating for future generations. With proper stewardship and a visionary plan, we have the very real potential to revive our once thriving rail-travel industry. However, that kind of vision requires a federal government focused on national stewardship, rather than what both Liberal and Conservative governments did when they sold off national interests and pandered to those who bankrolled their campaigns.

It is because we need reliable rail service that I have drafted and tabled Bill C-370, which would create a clear mandate for VIA Rail Canada. Canadians are weary of the refusal by the current government, as well as Conservative and Liberal governments in the past, to acknowledge the economic and environmental benefits of a truly enhanced, integrated, accessible, and sustainable rail transit system that would far outweigh and outlive short-term political gain. Past governments have failed to understand that everyone, from the youngest Canadian to the seasoned commuter, benefits if rail travel is part of our future. I can tell members that this reality is not lost on the citizens of London and southwestern Ontario. They are the people who suffer from what is described, in the network southwest action plan, as the “mobility gap”.

Bill C-370 would provide the opportunity for Canadians and the current Parliament to evaluate cases where VIA Rail planned to eliminate a required router station. In addition, my bill would provide a legislative framework for VIA Rail's mandate as a crown corporation to make services mandatory, set minimum frequencies for certain itineraries, and increase levels of service with regard to punctuality. It would provide a transparent and democratic means to evaluate any proposed cancellation of service routes and a framework for managing and funding VIA Rail. It would help prioritize passenger trains where and when there were conflicts with freight trains and would create efficiencies. I encourage members on all sides of this House to support Bill C-370 when it comes to the floor for second reading.

In a previous parliament, the NDP introduced a bill setting out clear steps to establish a passenger bill of rights. The current Minister of Transport supported our bill. He could have followed our lead and introduced concrete measures to protect airline passengers but instead handed off responsibility for making regulations to the Canadian Transportation Agency.

The NDP proposal for a passenger bill of rights included measures to ensure that airlines would have to offer passengers the choice between a full refund and re-routing under comparable conditions when flights were cancelled. Air carriers that failed to comply would have to pay $1,000 in compensation to every passenger affected, in addition to the refund. Also, when an aircraft was held on the ground for more than one hour, the airline would have to provide passengers with adequate food, drinking water, and other refreshments, as well as compensation of $100 for each additional hour the flight was held on the ground.

Witness testimony tells us that such measures could result in flight cancellation rates four times lower than those experienced in Canada. The Liberals heard this testimony in committee, yet they rejected amendments from the NDP based on this solid evidence. It leads me to wonder what their motivation was and where their loyalties lie.

It is unacceptable for the government to shift the responsibility of protecting passenger rights to the Canadian Transportation Agency. Passengers and airlines need clear measures to discourage overbooking, and we need those measures now. The minister promised them for sometime in 2018. That is not good enough.

While our objections to Bill C-49 are many, I want to focus on one final point. Omnibus Bill C-49 would amend the Canada Marine Act to permit 18 port authorities to obtain financing from the Canada Infrastructure Bank. My New Democrat colleagues and I have spoken on the dangers of the Infrastructure Bank and will continue to do so as long as it exists as a loophole for selling off publicly funded infrastructure projects and public services to private corporations. We know that this transfer of public assets will allow private corporations to impose user fees and tolls on Canadians who have already paid hard-earned tax dollars for their public services.

Bill C-49 would allow private investors to provide loans to port authorities using the Infrastructure Bank. It would allow those private investors to charge high rates of interest on those loans, with the consumer footing the bill. In addition, ports whose building projects were valued at less than $100 million may not be eligible for Infrastructure Bank loans and so would be left without any resources. The cost of the required return on investment by these lenders could affect consumers, since many goods are transported through our ports.

New Democrats are wary of any legislation that shrouds the poisoned pill of selling off our valuable public assets and services to private corporations. Governments do not exist to serve private profits. At best, it appears that Liberals do not seem to understand that. At its cynical worst, they do understand and hope Canadians will not notice as they sell this country off to their corporate friends without any consideration for the public good. Either way, Bill C-49 is a flawed and poorly crafted piece of legislation that New Democrats cannot and will not support.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, there is much that we need to do in national transportation policy.

The minister has been holding consultations with members of Parliament. There is a lot to be legislated that is still missing in this bill. As we touch on rail service in this piece of legislation, Bill C-49, I wonder if my hon. colleague from Winnipeg North, the parliamentary secretary, has any comments on the critical importance of maintaining passenger rail service through VIA Rail? We have not legislated VIA Rail, ever, in this place.

There are some changes to that legislation contained in Bill C-49, but it is a missed opportunity not to legislate for VIA Rail in the same way that in the U.S., Amtrak has a legislated mandate.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, it is a pleasure to rise to speak to a couple of aspects of Bill C-49. I have had the opportunity to express a number of thoughts, a few of which I will go over, but I want to look at a very important issue. Even though the legislation deals with transportation in general, I want to focus my opening remarks on something that I think is really important.

It was not that long ago when we talked about the important role that standing committees play in Parliament. The Standing Committee on Transport, Infrastructure and Communities did a great job of listening to the different stakeholders that made representations with respect to this legislation. Ultimately, through those hearings, I understand the committee reported to the House early in order for the bill to pass clause by clause. The encouraging thing to recognize is that this is yet another piece of legislation that went through the process with a number of amendments. We often hear about government amendments on a bill that passes, but in my years in opposition in the House, it was very rare. I could not recall one occasion where opposition amendments were accepted and ultimately passed. I was quite pleased that out of nine amendments, there may have been six from the opposition, though I do not want to be quoted on that. That demonstrates a great deal of goodwill on the part of the government, and in particular the minister.

The minister has done an incredible job in bringing forward legislation that deals with tangible issues, and I want to focus on two of them specifically. One deals with the situation that many farmers have found themselves in over the years. When I was in opposition, I recall hearing from farmers first-hand about the piles and piles of wheat being stored outside because their containers were full. They could not get the rail service they required in order to get that commodity to port. I understand that there were empty ships outside of ports that wanted to transport that commodity, but unfortunately the disconnect was through the railways.

The member for Wascana at the time, along with myself and many others, was exceptionally frustrated. We felt that the farmers were not being listened to by the government of the day. We did not know why there was not more action, and why the producers, the ones putting so much of their sweat equity, finances, and resources into producing the world's best commodities, were not able to get their commodities to port in a more timely fashion. When I was briefed on this legislation, it was one of the issues that stood out. It is important to have mechanisms that enable service agreements to be arbitrated in a fairer fashion, so that there is a better quality of service for the producers.

As an MP from the Prairies, I am quite pleased that we as a government are able to do something that the former government, which claimed to have a significant representation in the Prairies, was unable to do. It speaks volumes about the sense of commitment that the Prime Minister in particular has, and that the government as a whole has in building rural communities. This is one of the ways that I think it is fairly well received. This legislation covers a number of areas, but that one really came to mind for me.

The other area is airlines and the idea of having an airline passenger bill of rights in place. This legislation contains a mechanism that would enable that bill of rights to happen. I see that as a strong and encouraging aspect of the legislation.

Most MPs do a considerable amount of flying, some more than others, depending on their proximity to Ottawa. I do not know how many stories I have heard over the years in regard to issues that have arisen between airlines and passengers. Passengers are quite upset because of the lack of recourse. Airlines have some restrictions in place that often lead to complications. Things are beyond one's control when it comes to nature. However, in many cases, airlines need to be held more accountable. That is why it is encouraging to see within this legislation things that will protect the interests of consumers and ultimately producers.

My colleague raised the issue of the Canada infrastructure bank and the opportunities there for our ports and others. He also talked about how this legislation would enable future investments. These things are critically important.

If we take the time to do this right and we invest in things such as infrastructure, or offer opportunities for investment in infrastructure through things such as the Canada infrastructure bank, then we will be creating all sorts of opportunities. We can talk about those opportunities in terms of the jobs directly affiliated with the construction of a particular project; they are tangible and easily seen. However, the jobs that can be created as an indirect result are equal to or quite often greater than that, especially if we are talking about issues surrounding our ports.

There is a huge demand for modernizing and improving our ports, and it would be at a substantial cost. We are talking about hundreds of millions of dollars. Bringing in legislation that could potentially enhance that development opportunity, the flow of goods both into and out of our country, is a positive thing. That would assist us in creating good, solid middle-class jobs that are necessary to drive our economy.

I am pleased with the policies that this government has put in place over the last couple of years, and their impact on Canada, on our middle class and those aspiring to be a part of it, and on those who are finding it more challenging. At the end of the day, literally hundreds of thousands of jobs are being created. We are seeing many benefits in terms of full-time jobs that are being created.

Bill C-49 would do many things, and I could list some of them, but I will not have time because I know the Speaker wants me to sit down. The point is that the bill caters to our airlines, our ports, and our railways, and members opposite would be best advised to get behind this solid legislation.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Mr. Speaker, the infrastructure bank was created for small and medium-sized businesses. That money should be given to them. Furthermore, Bill C-49 is not supported by the stakeholders, neither the customers nor the railway lines. There are 50 flaws in the bill. I am strongly suggesting that we go back to look into the questions from the railway lines, the airlines, and the people who are questioning the bill. We should go back and re-evaluate the bill.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Mr. Speaker, I rise in the House today to discuss 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. Bill C-49 is an omnibus bill that creates an air passengers' bill of rights, and introduces a new regime for railways and rail shippers.

This bill would establish a new air passengers' bill of rights and liberalize the international ownership restrictions on Canadian air carriers. As well, it would allow the Minister of Transport to consider and approve applications for joint ventures between two or more air carriers providing air services.

Further, it would amend regulations governing Canada's freight rail system, and mandate the installation of locomotive voice and video recorders in locomotive cabs.

Bill C-49 would expand the Governor in Council's power to require major railway companies to provide information relating to rates, service, and performance, and amend Canada's Marine Act so that port authorities are eligible for loans through the infrastructure bank.

In total, this bill substantially amends 13 different acts and would have enormous consequences for all three modes of transport.

My first concern with Bill C-49 is that this legislation drastically weakens legislative protections for western Canadian shippers and farmers.

Instead of making travel more expensive and unattainable for many Canadians, we need to focus on proactive measures to make travel less expensive and more convenient for all travellers. Maybe we should start by repealing the carbon tax, instead of legislating reactive compensation that only a small portion of passengers will benefit from.

Further, this bill provides few specifics on the proposed air passengers' bill of rights, and is not supported in its current form by many airline passenger advocates, including Gabor Lukacs and Jeremy Cooperstock from the Consumers' Association of Canada. They oppose this bill, as they consider its measures of little value to support passengers. If advocates for an air passengers’ bill of rights do not support this, it speaks volumes to this legislation.

Port authorities and their wholly-owned subsidiaries will be able to receive loans and loan guarantees from the Canada infrastructure bank. My Conservative colleagues and I strongly oppose the creation of an infrastructure bank.

A further concern that is raised by this bill is that of staffing. The Canadian Transportation Agency and Transport Canada will require significant new staffing to handle all the additional data collection and regulatory powers this legislation introduces.

This bill would lead to drastic changes in every means of transportation. With respect to air transportation, in particular, I have a few concerns. This bill does not specify the compensation levels for passengers under the proposed bill of rights. Voting for this bill would give the Minister of Transport and the Canadian Transportation Agency a blank cheque to set monetary compensation for passengers in the future with no oversight. That is wrong.

The bill also raises a concern that the Minister of Transport will have significant new powers to approve or overrule proposed joint ventures between airlines. This will lessen the role of the independent and non-partisan Competition Bureau.

Further, the bill would allow airport authorities to charge airlines and passengers for extra security lanes. This has the potential to lead to new airport security changes on top of the air traveller security changes presently levied by the Government of Canada.

There are also going to be major changes to rail transportation and safety, which the government cannot ignore. Unfortunately, the rail portion of Bill C-49 is a major reversal of the policies introduced by former ministers of agriculture and transportation in our Conservative government in 2014.

The first issue I would like to draw attention to is interswitching, an operation performed by railway companies whereby one carrier picks up cars from a customer or shipper and hands them off to another carrier that performs the line haul or transports them the majority of the linear distance of the overall railway movement.

The new long-haul interswitching remedy created by Bill C-49 is a renamed copy of competitive line rates, which are hardly ever used. The new long-haul interswitching rate will be more difficult to use for shippers and will not serve as a useful tool in negotiations with the railroad. This will be a problem. The entire long-haul interswitching program can be waived by the Minister of Transport if the minister believes that the railroad is in financial distress. I cannot support this.

Further, the 30 kilometre interswitching rate will be set each year. It will take into consideration the railroads' infrastructure needs across the entire network. I want to highlight that this will likely increase the regulated rate paid by shippers for interswitching and discourage the practice.

For toxic inhalation hazard material, shippers will not be able to apply for the long-haul interswitching remedy. This will negatively impact hundreds of shippers.

While long-haul interswitching will extend to 1,200 kilometres or 50% of the total haul distance, the first interswitching location for many captive shippers in northern Alberta and northern B.C. would be located within the Kamloops—Vancouver corridor where interswitching is not allowed beyond 30 kilometres, therefore removing their ability to utilize this remedy to increase railway competition. We should not be stifling competition in this country. It is this sort of legislation that is making it more expensive and less attractive to do business in Canada.

It is clear that Bill C-49 would create surrounding air and rail transport, but it does not stop there. Marine transport will also be impacted if the bill is passed. My concerns here are twofold. First, the Canada Marine Act will be amended to permit port authorities and their wholly-owned subsidiaries to receive loans and loan guarantees from the Canada infrastructure bank. Second, the Coasting Trade Act will be amended to allow ships that are not registered in Canada to move empty containers between Halifax and Montreal. This is simply illogical.

It is for these reasons that I will not be able to support the legislation.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, through the Fair Rail for Grain Farmers Act, the government allowed this agreement that is critical to grain farmers in western Canada. It ensures they have an opportunity to get their product to market.

The hon. member is right that this issue arose in 2013 when we had a harsh winter and a great harvest. That is why we brought in the Fair Rail for Grain Farmers Act to ensure that interswitching abilities were there and that they had the opportunity to get their product to market.

However, what concerns me and ag producers across Canada is that this government allowed that agreement or that act to sunset in August, despite much feedback from the Conservative opposition and stakeholders across Canada to try and extend that act before coming forward with Bill C-49. Right now, that option is not there for a grain farmer, should some of these issues come up again this fall now that harvest is complete.

I ask my colleague from Central Nova, if we start hearing from grain producers about issues in terms of access and the lack of grain cars, will the Liberal government and the minister of agriculture step in to address this prior to Bill C-49 being given royal assent?

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, it is my pleasure to rise and offer some comment on Bill C-49, an act to amend the Canada Transportation Act.

I had the pleasure of sitting through an inordinate amount of witness testimony as we went through this important bill, which really is the first step in implementing the minister's transportation 2030 strategy to make transportation more efficient in Canada.

I will start by offering a few comments on the importance of transportation to our country.

In the 21st century, we know that Canada is a trading nation. We know that in order to maximize our economic output, we depend heavily on global markets. When we are trying to maximize the economy in Canada, it does not take long to realize, with our skilled workforce and natural resources, that we have the capacity to produce more than we have the ability to consume domestically. As such, getting our goods to the world market is of extraordinary importance if we are going to succeed and thrive in a 21st century global economy. This is where Bill C-49 comes in. We recognize that to get our products to market in a timely way, we depend on the efficiency of the transportation system. We know that customers around the world are waiting anxiously for their products, and if they cannot find a reliable supplier, then they are going to go elsewhere.

The Canadian transportation system has a number of different important links along the way, and Bill C-49 addresses a few of them. Specifically, it deals with certain measures in the rail sector, air sector, and the marine sector, which has been the subject of little debate thus far, but it really does enhance efficiency of getting products to market or improve the experience of Canadian or international travel for Canadian travellers.

I will start first with the rail transportation in Bill C-49.

The importance of the rail sector in Canada cannot be overstated. Of course, before Confederation, north-south trade was of extraordinary importance, but as I mentioned at the outset of my remarks, getting products to global markets is becoming increasingly important. Of course, the rail corridor from east to west is of extraordinary importance as well.

The key part of the measures dealing with rail transport really has to do with the concept of long-haul interswitching. When I looked at the rules we had embedded in law before Bill C-49, they were not sufficient to deal with getting products from different industries and different regions to market in Canada. What we did have, and we heard this in a number of questions from members opposite, was Bill C-30, which dealt with the transportation of western Canadian grain to market.

Bill C-30 came in 2013, when there was a unique set of circumstances. We dealt with one of the worst winters in modern memory, and at the same time dealt with an unimaginable grain overproduction at the time, which really put our producers and shippers in a bind. If something were not done to get the product to market in a timely way, the economic output would have been significantly lessened. To the credit of the government at the time, it took some action to deal with that and implemented a system that simulated competition where there was none.

In Canada, it does not take long to realize that when we are dealing with rail transport, we are dealing with many captive shippers. There is essentially a duopoly in Canada with two major class I railways. However, for many shippers, there is only one option. If one is living in the northern prairie provinces, one does not always have access to competition, which can drive rates up. Therefore, measures in the previous legislation stated that within 160 kilometres of an interchange point, one would be allowed to essentially treat the monopoly holder as though it were competing, and one could create a bargaining circumstance around the table when there was none. It was not used all that frequently, but we did hear testimony from witnesses that it had made a difference at the time.

However, there is a key problem with that short-term fix, which was needed at the time. It did not consider that the Canadian economy depends on more than western Canadian grain. Bill C-30 did some good things for that industry in that region, but it did nothing for forestry or mining, and it did nothing for provinces such as Ontario and Quebec. Of course, the province I am from, Nova Scotia, does not necessarily have the same problem, with not having the class I railways present.

My point is that long-haul interswitching has come in to solve this problem because it provides opportunities for captive shippers who might not be within 160 kilometres of an interchange who might be in the industry of producing natural resources outside of grain in western Canada. This would provide an opportunity to simulate a competition around the table for so many different producers and this is a very important thing.

In addition to this significant change in the way that products can be transported on Canadian railways, we see a number of measures that were implemented in Bill C-49 to recognize that shippers sometimes have a tough time getting their products to market. We see reciprocal penalties. Previously, there was no remedy necessarily for a shipper whose service obligations were not being met by the railway. In this instance, we can imagine the brand recognition that it does and the cost of having goods waiting to get to market and having no way to transport them. Now the penalty is cut both ways and it encourages everyone to meet his or her obligations to ensure that goods get to market.

We also see a definition of adequate and suitable service. We are seeing enhanced data disclosure. We are seeing that the maximum revenue entitlement has been retained. We are seeing efficiencies embedded into the arbitration process, which creates the equivalent of a small claims process for disputes of less than $2 million. We are seeing agency authority to regulate service-level agreements going forward.

Quite a big focus of our testimony over the course of our committee study on this issue went to the rail sector. However, I do not want to ignore the other important sectors that really do make a difference in the communities that I represent as well.

When we look at marine transport, some of the nonsensical features that we had embedded into Canadian law previously included that international shippers did not have the ability to move empty containers within the Canadian ports system. This might put people who are shipping from Europe to a port in Montreal, for example, in a place where they are not able to take that container from Montreal and move it to the port of Halifax to help local exporters in the province I represent get their products to Europe. When we put it to them to say, “Is this a big Canadian industry right now? Are we going to be interfering with local jobs?”, we heard that in fact this is not being done right now. However, to protect the economic interests of Canadian workers, Bill C-49 would only allow this kind of practice to go forward on a non-revenue basis. Essentially, if I am a European shipper, for example, and I want to move my own empty containers between Canadian ports to make the transportation system for Canadian exporters more efficient, I would be able to do that under Bill C-49.

Of course, one of the key parts of Bill C-49 was the air passenger bill of rights. There are a number of substantive rights that were built into the framework, although a lot more of the details and specifics are going to be embedded in regulation that follows. One of the reasons that this has gotten a bit of uptake in the media is that so many of us, when we see those viral videos of passengers being hauled off planes, become frustrated because we have experienced the ordinary frustrations of air travel ourselves. I have personally experienced having my luggage be damaged and come off one size-16 shoe at a time on the carousel. We know what it is like to see that someone is going to be charged more to sit next to his or her infant. When people are travelling with a musical instrument, if it is not handled properly there can be severe damage and that damages some musicians' livelihoods. A number of these problems are being addressed in Bill C-49 and we are going to require that airlines make it known to the public how they can seek recourse when an airline falls below the standard expected for travellers who paid for quality service on their flight.

In addition, there is a key part of air travel that I wanted to hit on as well. We have changed the foreign ownership limits from 25% to 49%. This is going to encourage more investment by international companies in the Canadian air sector and potentially drive the cost of air travel down. We have already seen two discount airlines, when they qualified for this kind of an exemption under the previous rules, announce that they were going to be making investments in Canada to service secondary markets and offer cheaper service.

To wrap up in the little time that I have left, Bill C-49 is the foundation of the minister's strategy to enhance the efficiency of the Canadian transportation sector. It would see products move in different industries in different regions of our country to get to global markets more effectively. It would protect the rights of passengers who are travelling in the air sector. It would, important from my perspective, make shipping a more efficient part of the international transportation system. It would help exporters in places like Nova Scotia get their goods to market in a cost-effective and efficient way. This is a good bill and I hope the entire House supports it.

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, let me assure the member that through our committee hearings, everyone on the committee was especially sensitive to the issue of the shippers, the agricultural community, and what needed to be done.

Once Bill C-49 is passed, moves forward, and hopefully gets royal assent, people in the agriculture area will have certainty about getting their grain to market when they need to do that. That is an important part. It was important for every member who sat on the committee. We heard more from the agricultural side than we heard from the railway side. Clearly, the committee wanted to ensure we did this right and ensure that the farmers had the ability to get their grain to market as quickly as possible, without any additional problems.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, the member she said that the government spoke with freight stakeholders. That raises a concern for me. It did not speak with stakeholders from the agriculture sector.

Producers I have spoken with over the last few months are concerned with Bill C-49 and the fact that it does not entrench the Fair Rail for Grain Farmers Act, which our Conservative government enacted in 2015. This policy would ensure that grain growers had access to rail transportation when they had a real glut from huge harvests such as the one 2013-14. We are seeing this again in a lot of the western Canada provinces, with a very strong harvest this year. The concerns I hear from grain producers is that the access to grain act is not part of this legislation. It sounds like the government did not have any conversations with agriculture stakeholders, but simply listened to what the rail companies wanted to see in Bill C-49.

My question to my esteemed colleague is this. What conversations has the government had with agricultural producers and why did it not entrench the Fair Rail for Grain Farmers Act as part of this legislation?

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, I am pleased to follow my esteemed colleague. I think many of us in the House look forward to putting great projects forward for infrastructure funding consideration as we move forward.

It is a privilege for me to address the House today on Bill C-49, the transportation modernization act. I am pleased to have the opportunity to speak about the key measures the bill that propose to ensure Canada's freight rail system remains among the most efficient in the world.

As the chair of the Standing Committee on Transport, Infrastructure and Communities, I want to thank all committee members for their diligent work in reviewing this important legislation. The co-operation we had at committee from all parties at the table in reviewing Bill C-49 and ensuring it was the best it could be was a real tribute to the members who were there. Everyone's co-operation was very much appreciated.

As a result of that spirit of collaboration, the amendments to the bill will strengthen Canada's freight rail policy framework and maintain the delicate balance that Bill C-49 is meant to achieve.

Our freight rail system is a critical component of the Canadian economy. It directly creates and sustains thousands of Canadian jobs, while connecting Canadian businesses to international and domestic markets. Over $280 billion worth of goods move through our rail system every year, underscoring its major contribution to our economic well-being, something that is very much taken for granted by others.

Canadians are dependent on a reliable rail system to move their products to market across this vast land. A guiding principle for our legislation has been to sustain the commercial orientation that has allowed our system to rank among the most efficient and Canadian rates to be among the lowest in the world. Canada's economic growth and future prosperity is dependent on preserving our national advantage.

For this reason, in May 2017, the government introduced Bill C-49 to support a transparent, fair, and efficient freight rail system that would meet the long-term needs of Canadian shippers and facilitate trade and economic growth for the benefit of all Canadians. The bill aims to deliver outcomes aligned with the government's long-term transportation vision, including fair access for shippers, a more efficient, competitive rail system, greater transparency, and sustainable investments.

The bill would introduce a number of fair access measures to help balance the playing field between shippers and railways. While we support the commercial orientation of our rail system, we recognize that the remedies are required when commercial agreements cannot be reached. These are not easy things to accomplish.

In our consultations, we heard that remedies could be too complex, lengthy, or costly for all shippers to pursue. For this reason, the bill would improve access to and shorten the timelines of the Canadian Transportation Agency processes to settle service and rate disputes. This would result in more balanced outcomes for stakeholders and more timely and accessible remedies, something we heard from many people who came before the committee. Governments continue to have a very extensive process of forms to be filled out and applications to be submitted here and there, which makes it very difficult for a lot people when they try to achieve their goals.

This legislation would also provide clarity to shippers and railways by defining what “adequate and suitable” rail service meant. In our consultations with freight rail stakeholders, we often heard about uncertainty regarding a railway's service obligations. Bill C-49 would clarify that a railway would have to provide shippers with the highest level of service that could reasonably be provided in the circumstances, taking into consideration various factors, including the railway's obligations under the Canada Transportation Act. This would be a major help to all shippers.

The bill would strengthen competition to help create a more balanced and also efficient freight rail sector by introducing a new competitive access measure called “long-haul interswitching”. Long-haul interswitching will give captive shippers across regions and sectors of Canada access to a competing railway at a rate set based on comparable traffic. The committee has proposed adjustments to long-haul interswitching that will provide captive shippers across sectors in British Columbia, Alberta, and Northern Quebec with access to a remedy. These changes would maintain the long-haul interswitching's important balance between giving shippers competitive options and preserving network investment and efficiency for the benefit of all shippers.

During consultations leading up to Bill C-49, we also heard that shippers did not have enough information from railways on the location of functional interchanges. To address this concern, Bill C-49 would require railways to list their interchanges. Railways would also be required to provide advance notice of their plans to remove an interchange from this list, something that could have a tremendous impact on shippers and on local communities.

The committee has proposed to extend the notice period from 60 days to 120 days to allow shippers sufficient time to file and obtain a level of service ruling against the removal of an interchange, if necessary. As well, the committee has proposed an amendment that would require railways to notify the agency of an interchange removal to ensure shipper concerns would be adequately considered and reviewed.

Furthermore, Bill C-49 would greatly improve transparency throughout Canada's freight rail system. The availability of accurate and timely information is necessary to ensure the effective operation of a commercially oriented rail system. The bill would require railways to provide service and performance information on a weekly basis in line with what they provide in the United States about their American operations. This information would be made publicly available to all freight rail stakeholders on the Canadian Transportation Agency's website.

As well, railways would be required to provide rate data to Transport Canada, which could be shared in aggregate form with shippers. This rate data would also be used by the Canadian Transportation Agency to help calculate long-haul interswitching rates.

The committee has also proposed amendments that would ensure this data is provided in a more timely way to all rail stakeholders. The changes would require railways to begin reporting on service and performance metrics in 180 days rather than a year, and would require railways to submit metrics five days after each reporting period rather than two weeks. Furthermore, the committee has proposed that the Canadian Transportation Agency publish the data on its website within two days of receiving it.

Finally, Bill C-49 would help encourage investment in the freight rail system, which is critical to encouraging its long-term growth. For example, the bill would modernize the maximum revenue entitlement regime by making adjustments to incentivize hopper car investments and reforming its methodology to better reflect individual railway contributions.

As well, the bill would relax Canadian National Railway's majority shareholder ownership limit to facilitate investment in a network that is critical to Canada's economic performance. The committee has introduced a minor technical amendment that would make this change effective upon royal assent, allowing CN to more easily attract capital from its majority shareholders.

The measures in Bill C-49 would position Canada's freight rail system to compete globally for years to come. The proposed amendments that the committee has made will advance our government's goal of strengthening fair access, efficiency, transparency, and, very important, investment in Canada's freight rail system.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, one of the themes I keep trying to hit on, being from the eastern part of our country, is that Bill C-49 has changed the rules around transportation on freight rail in a fairly dramatic way. Under a different iteration of legislation that dealt with the transportation on freight, Bill C-30 previously, it dealt only with the ability for shippers of western Canadian grain to move product up to 160 kilometres That was in response to some unique circumstances that arose in 2013. One of the things we see in Bill C-49, by contrast, is a shift towards long-haul interswitching. This would see the ability of shippers in different industries in different parts of the country take advantage of a new regime that stimulates competition around the negotiating table and gives a remedy to captive shippers to make sure they can get a market price.

Does the hon. member support the expansion toward long-haul interswitching, which serves different provinces and different industries, including Ontario?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, it is my pleasure to speak today on Bill C-49, the transportation modernization bill.

First I would point out that this is another omnibus bill. There are things in here about rail and air traffic safety, and all kinds of different things. This was the government that said it was not going to do omnibus bills. I want to point out that this is another broken promise.

I will spend some of my time talking about rail, and then I will move on to air traffic. As members may know, I am the co-chair for the parliamentary rail caucus. In that role, I interface with associations that work in the railway industry, and I had had an opportunity last week to meet. Of course, rail safety is always a topic of conversation.

The conversation went like this. In terms of rail safety, I asked about their biggest concerns right now. Their biggest concern was not any of the things in this bill. They asked how the government could be talking about transportation modernization when it is legalizing marijuana. It recognizes that it is dangerous for people to drive a vehicle when they are impaired by drugs, so the government has allowed a bill that brings forward mandatory and random testing for car driving. However, people are driving trains, and that is an even bigger hazard, but workplace employers are not allowed to do that kind of mandatory and random testing. That was the concern that they brought forward as being a big deal in rail safety. I would encourage the government to address that concern.

I will speak to some of the things in this bill that are concerning. First, we have heard some conversation today about locomotive voice and video recorders. I know that the Teamsters and Unifor are quite concerned. I am concerned myself. I heard the last member who delivered a speech say that these things would not be used for disciplinary action, and then went on to say that if it were an egregious enough thing, then perhaps that would be the right thing to do. Obviously there is potential for it to be used in that way. I know that the Privacy Commissioner has raised a number of concerns. None of those things appears to be addressed in the bill.

We keep hearing that it will be in the regulations. We have not seen the regulations. It seems that there are a lot of vague, unclear, undefined parts to this bill, which we are supposed to trust that the regulation will address. I am not sure that will happen.

In my own riding of Sarnia—Lambton, we have a number of rail safety concerns that I do not see addressed in this bill. The Minister of Transport had decided that people needed to upgrade the rail crossings, for example. That takes a lot of money. I have one rural part of my riding that has eight rail crossings and 2,300 people. To fix those eight rail crossings to the new standard would be upwards of $5 million, and the 2,300 people are not going to be able to come up with that money.

With the Liberals being so far behind on their infrastructure spending, if they really wanted to modernize and cared about rail safety, I would have imagined they would be spending a lot of money updating the rail crossings across the country. We know that is a place where huge money needs to be spent. Another opportunity that was missed would be to do the high performance rail we have been talking about between Quebec and Windsor. There is zero money in the budget for that. While there is a lot of ideology in this bill, there is no follow-up action in terms of the infrastructure spending.

I would like to talk about one other thing. I have CF Industries in my riding. This is a company that makes fertilizer. I am aware that Fertilizer Canada appeared at committee to testify about this bill and to express their concerns. There is a long-standing principle in the rail business called the “common carrier principle”. It is a principle that shipping companies cannot discriminate or refuse service on the basis of the type of good. One of the things that is used to make fertilizer is ammonia. In the history of the rail industry, they have not had any incidents with ammonia. However, because this bill is bringing exclusions that would impact the fertilizer industry, that will drive them to change to a different mode of transportation, such as trucks, which would mean four times as many vehicles travelling, with a higher incident rate of collision. That actually increases the risk to the public rather than reducing the risk to the public. Again, although the bill is supposed to be about bringing more rail safety, in fact it is doing the opposite.

Fertilizer Canada has asked specially for proposed subsection 129(3) and section 136.9 to be altered so that it is not discriminating against the fertilizer industry, which is 12% of the supply that we use here in Canada and also 80% exported to other countries. It is a big contributor to the trade surplus, $4.5 billion. We ship our fertilizer to 70 countries around the world, and this update to the rail rules will negatively impact that business and increase costs to farmers in Canada. That would be a concern for me as well.

In terms of some of the air traffic changes in the bill, the air passenger rights regime, I have spent about 30 or 35 years travelling around the world, so I have certainly experienced all the outrageous things that can happen to passengers, including delays, cancellations, lost or damaged baggage. I had a flight recently on an airline that was not Canadian, I am happy to say, but my bag arrived with the corner torn right off and I had to replace the luggage myself. There was no compensation for me on that one.

I am not sure that this, although well intentioned, will be able to be easily implemented. For every claim for compensation, it has to be determined whether it was the airline's fault, the government agency's fault, the fault of the weather. That is a huge administrative burden, and that usually means increased costs. Those increased costs typically get passed on to the people who are buying the airline ticket. I have a concern that some of the provisions, although well intentioned, will result in higher airplane ticket fares. We already have some of the highest fares in the world. If I think about flying to Ottawa from Sarnia, it is nearly $1,000. I can fly to Florida out of Detroit for about $200 or $300 Canadian. We are already paying huge fees, and I do not see that the bill is going to address that in any way. I am concerned that the prices will go up.

I have a concern about the foreign ownership increase to 49%. I am concerned with all the changes that the government has introduced, the infrastructure bank, for example, where Liberals want to sell the eight major airports to foreign investors. There is something to be said for national security, for owning and controlling our own assets like airports that are so critical to the country, so I am not a fan of that at all.

The consumer groups and passengers who have been looking for a passenger bill of rights are not happy. The feedback is that they do not think the bill addresses their concerns. It fell short on that as well. In addition, I am a little concerned about the joint ventures phraseology in the bill. Basically, it is taking the authority away from the competition bureaus and giving that authority to approve joint ventures to the Minister of Transport. We have seen the government time and again go without parliamentary oversight, so, for that reason, I am not a fan of that section.

The bill falls short in many different ways. The Liberals need to take their time and go back to the drawing board on this one.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I thank my colleague for her question.

Let me reiterate that the installation of voice and video recorders on locomotives is something the Transportation Safety Board of Canada has been calling for for a long time. TSB officials appeared before the Standing Committee on Transport, Infrastructure and Communities to reaffirm their support for this measure and remind us of the critical role that recorders can play not only in helping investigators understand an incident, but also in preventing future incidents.

The TSB has added locomotive voice and video recorders to its Watchlist of key safety issues the transportation system needs to address.

As for the privacy issue, as I mentioned in my speech, Bill C-49 imposes strict limits on how the recordings could be used, and the regulations to be developed will have to take into account the important issue of privacy rights.

[Angelo Iacono, Liberal, Alfred-Pellan, QC]

Mr. Speaker, I am pleased to have the opportunity to speak today about rail safety in the context of Bill C-49, the transportation modernization act, which proposes to amend the Railway Safety Act. This is an important step in strengthening Canada’s comprehensive approach to rail safety.

I would like to take this opportunity to acknowledge the dedication that the Standing Committee on Transport, Infrastructure and Communities has demonstrated in its thorough analysis of the components of Bill C-49. Improving transportation safety and, in particular, enhancing the safety of the rail transportation system, is a priority for this government.

To this end, the government is proposing to amend the Railway Safety Act to mandate voice and video recorders in the locomotive cabs of federally regulated freight and passenger railways in Canada.

The approach proposed in Bill C-49 builds on the 2016 report from the Transportation Safety Board of Canada which confirmed that data from combined voice-and-video recording systems would help investigators understand the sequence of events leading to an accident and in identifying operational human factor issues, including those that may have been a factor in the accident.

The Transportation Safety Board of Canada also stated in its safety study that, when used proactively as part of a safety management system, the information from voice and video recorders can provide significant benefits to help identify and mitigate risks before accidents occur.

The proposed changes to the Railway Safety Act reflect careful consideration of the best way to maximize safety benefits while safeguarding the privacy rights of railway employees.

In essence, the amendments would require companies to install and maintain voice and video recorders in locomotives but would also establish specific limits on how the recordings can be used.

The result of the proposed legislative requirements would be, first, objective data that would allow Transport Canada, companies, and safety investigators to better understand events leading up to, and during, an accident or incident.

Secondly, the information could also be used in a proactive way, but within very clear limits, to identify safety risks before accidents occur. For example, data would allow Transport Canada to perform trend analysis to inform future safety rules and regulations. Companies could use the data to develop new or improved training programs, to strengthen existing operating procedures, or to establish new ones to address identified safety gaps.

This government understands that the proposed amendments have privacy implications, in particular for operating crews. These implications have been recognized throughout the study of this bill.

I can assure the House that safeguarding the privacy rights of railway employees has been a key consideration in the development of the proposed amendments. This is why Bill C-49 imposes strict and clear limits on the use of the information from video and voice recorders, as well as strict and clear provisions on how information must be handled, all to safeguard the privacy rights of employees.

For instance, any recording used for safety management must be selected through random sampling. Regulations that would follow royal assent will outline objective parameters for random sampling. They will also outline requirements for data protection that companies would be required to comply with, such as standards for encryption, data storage, and retention periods. Companies would also be required to develop and implement policies and procedures to respond to record-keeping requirements and managing access to the information, in particular how they will safeguard against unauthorized access.

During the committee’s study of the bill, one other issue we heard about is the issue of discipline. We heard from parliamentarians and some stakeholders concerns that data from locomotive voice and video recorders might be used for disciplinary purposes. I can assure this House that the fundamental purpose behind the proposed regime is safety. It is not about, nor does it allow for, the monitoring of day-to-day performance of employees. In this context, it is not meant to facilitate disciplinary measures.

However, it is possible that, in certain egregious circumstances shown by the recordings, disciplinary measures might be the most appropriate means to address a serious safety concern. The regulations will define what is meant by egregious circumstances so that this is not left to the discretion of railway companies.

Consultations with stakeholders, including individuals, companies, unions and other interested parties will be an integral part of building the regulations to ensure we get this right. The proposed regime clearly provides that no company shall use or communicate the information that is recorded, collected and preserved unless the use and communication is done in accordance with the law.

As is the current practice, Transport Canada would conduct inspections and audits to monitor compliance with legislative and regulatory requirements. In the event of non-compliance, Transport Canada would have the authority to take appropriate enforcement action, including imposing administrative monetary penalties.

I would like to reiterate that mandating on-board recording devices has one purpose and one purpose only: to strengthen the safety of Canada's rail industry for all Canadians, including railway employees. The recordings will help explain what happened after an accident, but, more importantly, they will have the real potential to allow us to identify and address safety concerns in order to prevent accidents from happening.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, today I rise to speak at the report stage of Bill C-49. This bill covers a range of amendments on the transportation sectors.

During my campaign, I heard loud and clear from many of my constituents that people were tired of omnibus bills from the previous government. There was an increased desire for accountability and transparency, yet here we are again discussing an omnibus bill that is moving through this House, with amendments to 13 acts, without giving parliamentarians adequate time for debate.

Because of the broad range of topics in this bill, I will keep my comments to air transportation, CATSA, and will quickly touch on marine transportation.

As many do in this House, I fly often. Over the last several months, we have seen stories of people being dragged off planes, stalled on the tarmac, and having to call emergency services. Too often, settlements are swept under the rug, and the industry continues with business as usual. I think Canadians are fed up. They are tired of waiting on the tarmac endlessly and are tired of overbooking.

The NDP introduced a bill that clearly set out the steps needed to establish a passenger bill of rights. The transport minister supported our bill and could have followed our example by introducing concrete measures to protect airline passengers. For example, when a flight is cancelled, the airline would have to offer passengers a choice between a full refund and re-routing under comparable conditions. Air carriers that failed to comply with this rule would have to pay $1,000 in compensation to every passenger, in addition to the refund. If an aircraft was held on the ground for more than one hour, the airline would have to provide passengers with adequate food, drinking water, and other refreshments. For each additional hour during which the airline failed to comply with that rule, it would have to pay each passenger $100 in compensation.

We also asked the government to implement protection measures immediately instead of delaying them until 2018. However, the minister chose not to propose concrete measures. Instead, he included provisions in the bill. The government sold it to the media and to Canadians as a passenger bill of rights, but that is simply misleading. The minister is delaying what needs to be done by handing over the responsibility for regulations to the Canadian Transportation Agency. When the CTA enacts inadequate regulations, it will give the minister a way out. That is not the political leadership Canadians expect.

What is disappointing is that the Liberals rejected our amendments without studying them, folding under pressure from the airlines.

The facts are clear that flights subject to the European regulations have a cancellation rate of 0.4%, which is four times lower than flights subject to the current Canadian regulations.

We have seen this government continuously abdicate its responsibility for airports. While the federal government does not manage them directly, it is up to the government to ensure a strategic vision, especially in a country as large as Canada. This vision must include every single size of airport, from Pearson to the local airports in my riding.

The communities of Campbell River, Comox, Port Hardy, and Powell River have expressed serious concerns about this continued pursuit of the for-profit privatization of our airports. These airports are essential elements of the social and economic infrastructure in our region. Representing many medium-sized and rural communities, air transportation provides a vital link that connects families and communities and promotes economic growth.

As a representative of the third largest riding in British Columbia, I have landed and taken off from several airports in my region, going to or returning from Ottawa. This is how I get to community events across the riding when travelling to and from this place.

These communities need these services, and as the government continues this privatization creep, they are connecting with me about their concerns. Campbell River recently shared with me that these privatization plans delay much-needed effective action on other issues, such as the burden of federal rents and fees on airlines and air travellers. These stand in the way of more competitive and economical air transportation in Canada.

There is still worse news in this bill regarding remote and rural airports. I think members can understand why I will not be supporting this bill as it stands. Bill C-49 would amend the Canadian Air Transport Security Authority Act. Instead of supporting the growth of regional airports, the government would use Bill C-49 to pass the buck for security screening to regional airports or the municipalities that own them. This policy would hurt rural economies, as the cost of security screening is so high that almost no small airport would be competitive if it had to pay the bill. The government is clearly stepping back from funding and developing regional airports.

Currently, the commissioner of competition has the power to determine whether a joint venture arrangement between airlines is anti-competitive and can subsequently apply to the Competition Tribunal to prohibit the joint venture. However, Bill C-49 would strip this power from the commissioner of competition. If Bill C-49 is adopted, the Minister of Transport would have the final word on proposed joint ventures between airlines. Once an arrangement was approved, the Competition Tribunal would no longer be able to prohibit it.

If Air Canada proposed an arrangement to merge its operations with those of an American company, even if the commissioner found that the agreement would lessen competition among airlines and increase ticket prices for passengers, the minister could approve the arrangement if the minister was satisfied that it was within the public interest. This is why the NDP proposed deleting clause 14 of Bill C-49, as it would expose consumers to unfair increases in airline ticket prices.

A decision by the minister to ignore the commissioner's advice could be influenced by political considerations to favour an airline at the expense of consumers. In addition, the bill does not spell out what is meant by the “public interest” as a basis for a decision by the minister to approve a merger of two airline operations. The concept of public interest is so broad that the minister could consider factors that are not in the interest of Canadians but rather in the interest of the shareholders of major airlines.

Bill C-49 would impact two elements in the marine industry. First, the bill would allow foreign-registered vessels to compete unfairly with Canadian shipowners. We are requesting that Canadian-registered vessels continue to have preferential access to government contracts, carriage of goods by container, and repositioning of empty containers. In addition, the government did not consult with stakeholders who would be affected by this measure.

Second, the Canada infrastructure bank would be permitted to provide loans to port authorities. Instead of assuming responsibility for directly funding the development of port facilities, the federal government would transfer that responsibility to private investors. Investors would charge high rates of interest on their loans, and once again, the consumer would foot the bill. The cost of the required return on investment could affect consumers, since many goods transit through ports.

If private investors such as Morgan Stanley acquire port facilities, Canadians would lose control of their port infrastructure. In fact, the government has asked Morgan Stanley to study a port privatization scenario, even though a subsidiary of Morgan Stanley is earning millions by buying and reselling parts of Canadian ports.

The concerns I have raised today were also brought up by our transport critic in committee and in the House. The bill is simply not good for Canadians, and for that reason, I cannot support it.

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I appreciate my colleague's enthusiasm for this bill. He referred to changes with respect to the air passengers' bill of rights. I wonder what rights he thinks passengers would have on a plane. The bill sets up a policy that discusses events and how someone else would establish the reasons for the events and the compensation to be paid. In the bills of rights in the United States and Europe, there are set standards, and when certain things happen the passengers know what they will receive compensation for. However, Bill C-49 is silent on that, especially as it talks about defining the causes of the problem after they have taken place. I wonder if the hon. member would respond to that particular issue with this piece of legislation.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, it is my great pleasure to be here today to debate this extremely important bill. I want to start by thanking the minister for his work and for the vision that he has shared with Canadians regarding this bill. I also want to thank the Canadians who were consulted and who gave us a lot of information about Air Canada.

The three main topics I want to discuss today are passenger rights, joint ventures and, of course, foreign ownership.

Before I begin speaking on those three points, I want to say that Canadians love to travel. They travel for pleasure, but also for business. When they do travel, they often mention certain areas that they feel we must do better in. One, of course, is the cost. The cost is very high in Canada compared to that in many other countries. It is an area where we need to make some improvements.

Canadian travellers also speak about their rights and ensuring that they are recognized in the many things they face while travelling. If it is simply a matter of delays, knowing the reason behind the delays would be extremely important. If it is overbooking, that is a different story altogether. They are looking for improvement in those areas, and it is obvious that Bill C-49 will answer many of those concerns.

I am the member for Sackville—Preston—Chezzetcook, and in Nova Scotia we have a fabulous airport in Halifax. It is a very important full-service airport in Atlantic Canada. It is always important to remember the importance of these types of companies that generate over $2.7 billion to the economy, which is extremely important for Nova Scotia. It is also important to mention that there are over four million travellers taking flights to and from Halifax. That, in itself, is very impressive.

Let us talk about the air passenger bill. This legislation will address very important issues that Canadians face and that we need to deal with, including consistency between our airline carriers, which is extremely important; passengers' rights; industry or carriers' rights as well; and when there are issues, the compensation. We need to bring some standardization to compensation, because it is not obvious if Canadians are being compensated for some of the challenges they face.

As I indicated earlier, we need to consider denial of boarding, delays and cancellations, baggage that is lost or damaged, tarmac delays, seating with family members or delicate cargo, such as musical instruments, etc. Those are major issues that we need to look at as a government. This bill will help us reach that objective.

Let us look at the issue we had last summer when a flight from Belgium to Montreal was diverted to Ottawa. The passengers stayed on the plane. They were told by the carrier there would be a delay of about 30 minutes. The 30 minutes continued on and on, and at the end of the day had become six hours. Throughout those six hours, the passengers were not able disembark from the plane, and the air conditioning stopped or broke down. They were running out of food and water. These are all critical things that passengers should be able to access at all times. Not being able to do so showed disregard for the passengers and their rights. We need to do something about that.

Not so long ago, we also saw on television a United Airlines flight on which a doctor, again because of a mistake by the carrier, was removed because of overbooking. Who did the overbooking? Again, it was the carrier that was at fault, yet the passenger was the one who was denied his rights. We need to make improvements in that area.

As far as adding to the bill of rights is concerned, we could also look at the question of official languages for Air Canada.

We need to ensure that people who want to use French or English have equal opportunities to do so. This is essential.

That is the important piece with respect to the bill of rights that I wanted to talk about.

We have to keep in mind that the air transportation sector is a challenging one today. There have been many changes. Many people choose to travel by air. It takes a huge capital investment by companies, yet results in a small profit margin. Therefore, we need to find ways to maximize efficiencies. It is already happening to some extent, as there are all kinds of different agreements. However, we need to do more. One approach that would really work well is the joint venture, with two or more companies working together to give better service to Canadians here in Canada and abroad. If a company or various companies want to have a joint venture today in Canada and to amalgamate to offer a better service, they normally have verify this with the Commissioner of Competition. That was the main analysis required. However, we need to look at the wider benefits for Canadians. With Bill C-49, these companies can now make an application to the minister, who would consult with the Commissioner of Competition, but who would also look at the other benefits that Canadians could take advantage of. To some extent, that would be the measurement we would use to make that happen. This process will be much better than what we now have and allow Canadian companies to benefit from global trends and to realize efficiencies. It will also allow Canadian travellers access to a wider range of destinations, provide for easier in-bound travel, increased tourism, and increased flight options. That is another big piece of Bill C-49 that will be very helpful.

With respect to foreign ownership, previously foreign investors were only allowed to own up to 25% of the voting rights. Now they will be able to own up to 49%, putting us in line with many other countries in the world. However, no single investor would be able to own more than 25%, which is crucial, as well as no more than 25% for other carriers as well, which is essential.

We are paying way too much. Many people are travelling across the border to take flights with JetBlue, allowing them to travel from Boston to Florida for $99. We need to do better, because last year five million people crossed the border to take flights in the United States. We need to do better in this area, and we are well on our way with this new bill.

In conclusion, Canadian travellers are a priority for our government, and this transparent new process will allow us to see many changes. We will see smaller airports, such as in Atlantic Canada, Fredericton, P.E.I., Cape Breton, etc., become more important because there will be more choices. With the new provisions for joint venture we will see more flights in smaller rural communities, lower fares, more choices, and improved services and connectivity. This bill is well in line with that. I wonder why it has been so long in coming, because this is extremely important to making us more competitive and ensuring that Canadians have better access to better transportation.

The House resumed consideration of 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, as reported (with amendments) from the committee, and of the motions in Group No. 1.

Report Stage

[Ben Lobb, Conservative, Huron—Bruce, ON]

Mr. Speaker, it is a pleasure to rise today to talk about Bill C-49.

First I would like to talk about a topic that has been mentioned a couple of times already, which deals with the locomotive voice and video recording. Many members of the House have met with Unifor and Teamsters members to discuss some of the issues around the video and voice recording.

The genesis of this has been real accidents through the years, particularly one that occurred in 2012, which killed three people, unfortunately. One of the recommendations was video and voice recording to aid in the critical minutes leading up to an accident. There is already a black box in the unit itself, and people at headquarters can track the movement in real time, such as braking and many other moves that the engineer and conductor would do. However, there are questions on this video and voice data. Who will have control of it? Where will it be stored? How will it be used?

If this data is to be strictly used for purposes of the final 15 minutes, or even one hour, leading up to an unfortunate accident, then I have not heard any issues from the workers. However, the issue they have is on whether the large rail companies would have the ability to use this data as a tool for HR monitoring or surveillance. For somebody who may be working an 18-hour shift, that is not what this is meant for and not what it should be used for.

For a lot of it, the minister has said to leave it up to them and it would be dealt through regulation through the safety board, etc. However, the workers doing the job want a little more clarification on that. Anyone who has ever worked knows that when someone is looking over their shoulder, it is never when they perform their best. The employees are trained and they have tests every year, and these are one of the most complex signage and lighting rules and regulations in the world. Therefore, I think the government needs to take another look at this, talk a little more with Unifor and the Teamsters, and make sure it is doing it right.

I would also encourage the people doing these jobs for companies like CN or CP to come forward. Once the bill is implemented, if they start seeing these video and voice recordings being used for disciplinary or worker surveillance purposes, bring that forward to members of Parliament and their union reps. They are not to be used for that purpose. That is not why the legislation is there.

Another point I would like to bring up is that the minister mentioned in his speech or response to a question that he has heard nothing but positive comments. That is obviously not true. There have been consumer groups, air passenger groups, who have expressed “cold comfort”, I think was the quote, for some of the passenger rights on airplanes. Another comment that the minister made, which I think he needs to expand upon, was his reference to the United Airlines incident. There was more than one incident, but specifically he mentioned the one where an individual was dragged off the plane. I do not believe that situation is addressed in the bill. If one is waiting on the tarmac in the airplane for over three hours, I believe it is dealt with, but as far as physically dragging somebody out of an airplane, I do not believe that is dealt with in the bill. He would perhaps like to provide further clarification on that at a later date.

Others also have concerns. I think Air Transat expressed a concern around the joint venture side of things, which is another area that needs to be fleshed out and further examined. With respect to foreign ownership, we always have debates on the proper threshold and amount of capital for a Canadian airline. It is set at 49%, and any individual entity can only own 25%. We will see how that unfolds.

If we are trying to modernize the act, some people would probably think that landing rights should be looked at as well. Over the last nine or 10 years, airlines like Emirates and others have requested more landing spots. Pearson, for example, would be one, and I do not believe that is addressed here either. As far as competition and pricing go for international flights, certainly competition has proven time and time again to bring in the best price and the best service.

The other criticism I have, and I am open to someone else proving me wrong, is the part that deals with the proposed air travellers bill of rights, including with in regard to flight delays, damaged or lost luggage, or passengers being on the tarmac for more than three hours. The bill does not specifically spell out what that compensation would look like. It does mention minimums, but those are left to regulation. I notice this is a recurring theme in some of the bills the government puts forward. Part of this will be gazetted and people will have an opportunity to comment on it, but if the minister feels so strongly about this as one of the key parts of the bill and an election promise, if he has been thinking about and focused on this for a long time, the least he could do is to provide air passengers or flight groups some framework or numbers from which they could work. That is the least he could do.

In addition, we all understand that there will be days like today or a couple of months ago when there were hurricanes in the U.S., and some of that weather came up to Toronto and Ottawa and messed up all the flights. People understand there are going to be adjustments made because of weather and that there is nothing we can do about it. However, from the time they recognize there is an issue, airlines can work with the people. That said, I do know know how we could compensate someone who takes take a week or eight days off and has two of those days messed up, one because of the weather and one because of the airline. From what the minister said, we are going to leave that up to the department and the agency.

Another issue concerns CATSA. A lot of money collected by the government is not put back into security screening at the airport. Anyone who goes to Pearson airport on a Monday morning will know it is pretty treacherous and that the standard of 95% getting through in 10 minutes is certainly not the standard on a Monday morning. It might be that 95% do not get through in 10 minutes and 100% may get through in an hour. If whatever money came in was put back into security, into CATSA, into further screening, these are the types of simple things that we could do to create a modern system to get people through, and to help Air Canada, WestJet, and other carriers deliver on their promises. We also know that in 2021, there will be 69 million travellers coming through, so we want to make sure we have that ready.

The other thing I would like to talk about before my time is up deals with rail and pipelines. The government set up a regulatory regime that makes it almost impossible for pipelines to be built, which in turns puts further stress on the rail lines. In consequence, rail lines are carrying a tremendous amount of oil when they could be carrying a tremendous amount of crops to ports and to markets. With a crop this year in the west within 10% or 12% of being a record, there will again be a tremendous strain on the railway system.

I would like to talk about the long-haul interchange, as other members have also discussed. Some members purport that it is a great thing. However, with the NAFTA negotiations ongoing right now, I question the logic of why the government would give that up when it could have been negotiated in NAFTA.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, simply put, the measures in Bill C-49 do two things. First, it extends the limit to 1,200 kilometres, which opens up the opportunity for a shipper, who would otherwise be captive, to use the rail line that is there but hand off to another company that would give them a better rate or service.

In addition, while the original Fair Rail for Grain Farmers Act focused on the Prairies and the 160-kilometre limit to allow grain to move more effectively, Bill C-49 opens it up to lumber producers and mines. Anyone who needs to ship anything by rail would have more access to competitive rates. The amendment we brought in specifically opens up areas of northern and southeastern British Columbia, as well as northern Quebec, to these better rates.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, it is a building block toward a foundation we need in place in the country to ensure that the whole supply chain, from start to finish, is working efficiently and in a synchronized way. Just as our transport committee studied Bill C-49 to ensure it was meeting the goals and objectives we needed for it, the transport committee will be taking on further action to look at the rest of the supply chain, including the efficiency of our ports. This is something I am looking forward to, particularly in the context of Port Metro Vancouver, which, as we know, is the busiest port in the country. They clearly all have to work together, and that is the objective of our studies.

[Vance Badawey, Liberal, Niagara Centre, ON]

Mr. Speaker, I would like to ask my colleague how Bill C-49 contributes to the overall strategic plan, in the broader picture, with respect to the minister's most recent announcement on transportation 2030.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, the efficiency of our systems means dollars, absolutely Those dollars are quite often passed on to the farmers, because they are price takers. As well, there is the damage to our reputation that we suffer when we cannot deliver our goods and services on time to our international customers. Therefore, it makes all the sense in the world for Bill C-49 to lead toward the more transparent sharing of performance data.

As well, there are provisions I did not talk about that would allow Bill C-49, through the rail companies, to ensure there could be investments in additional capacity. Our rail hopper fleet is wearing out. We need the railways, and perhaps government as well, to contribute to the refurbishment of that fleet with more efficient cars. That is all included in Bill C-49, so that everyone is paying their fair way in order to get an efficient system that would prevent the kinds of issues my hon. friend raises.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I am looking at Bill C-49 and seeing what essentially looks like some missed opportunities to do more to rationalize the relationship between shipping by rail and shipping by sea.

I have a specific point that I want to raise and get the member's thoughts on, and we can perhaps get back to this with other legislation. We have very poor communication and advance planning. The hon. member mentioned better information from the grain growers to know when they are able to ship. However, when they are able to ship by rail, there is often not sufficient capacity.

We then have large container ships coming into the Port of Vancouver. They have as many as four separate compartments that they need to fill with grain. They will hang out in the Port of Vancouver, come in and fill one hold, and then they have go out and wait again. Where they tend to wait are in legal anchorages, for which the Gulf Islands receives no compensation for the use of the space, or the annoyance and inconvenience of the noise and the lights. They wait in anchorages in my riding and in the riding of the member for Nanaimo—Ladysmith until they can go back to the Port of Vancouver.

This is inefficient, costly, and an annoyance. I wonder if Transport Canada could not do more to create better planning, which would be an advantage to the shipper and the grain grower, and certainly an advantage to people living adjacent to those areas where container ships are backed up and waiting. That is due to the inefficiencies of our loading and unloading in the Port of Vancouver and connectivity to the trains that deliver the grain.

I hope the question is not too complex for my hon. colleague. I am sure he is familiar with the problem as well.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, I appreciate the opportunity to provide some comments on the transportation modernization act, Bill C-49.

As a member of the Standing Committee on Transportation, Infrastructure and Communities, I want to start by applauding the work of all of my colleagues on the committee. We dedicated a full week in early September to studying the bill, hearing key witnesses, and working through a clause-by-clause analysis that produced well-considered, well-debated and productive amendments.

While Bill C-49 contains important aspects in marine and air travel services, notably, as my colleague from Mississauga—Streetsville just commented on, the creation of our air passenger bill of rights, I would like to focus my comments on the freight rail provisions. Modernization in this area was, in my view, an important step forward to creating equity for shippers across Canada, while balancing our national interest in ensuring a healthy rail sector.

Bill C-49 would ensure that service agreements establish, as much as possible, equal performance obligations between rail companies and their customers, better conflict resolution, and mechanisms. Therefore, balance is vital. Our producers, shippers, and others need reliable rail service to meet their obligations to customers at home and around the world. In the case of our international customers, it is critical that Canada, as a trading nation, build and protect a reputation as a reliable trading partner.

At the same time, we have to acknowledge that our class 1 rail services, CN and CP, must have the financial ability to maintain and modernize their capital assets across this vast and geographically-challenging nation. As we think about the struggles we had as a nation to see our railways built in the first place, we have to recognize that despite those challenges our country presented, our shippers enjoy among the lowest rates in the world.

Bill C-49 seeks to achieve equity and balance in three important areas: first, by creating a more competitive environment for shippers and producers across Canada when it comes to shipping rates, especially for those who were otherwise captive customers of one rail company; second, by creating service level agreements that establish a level playing field; and, third, by creating measures to improve transparency in the business relationship between the railways and their customers through a more transparent sharing of performance data and service capacity forecasts.

Creating a more competitive environment for otherwise captive customers involves a mechanism known as “interswitching”. Therefore, in response to my friend from Central Nova, here are more details on that.

Simply put, Canada has for years allowed customers within 30 kilometres of a transfer point between rail lines to have one company hand off its shipments to another if that other company offers better rates. The government sets the rate a rail company receives for transferring cars to another carrier, a rate that includes an allowance for the capital investments that the rail company requires for the line's state of good repair and improvement.

In 2013-14, we saw a record prairie grain crop, followed by one of the worst winters in Canada's history. Faced with service shortfalls by our railroads, the previous government expanded the interswitching limit to 160 kilometres, clearing the way for more captive grain shippers in the Prairies to access other rail services, including lines in the U.S. While it appears no shipper actually used the full 160 kilometre limit, the ability to shop for better rates led to improved performance by our railways, both in services and rates.

Bill C-49 introduces “long-haul interswitching”, a 1,200 kilometre limit open to all rail customers, except in two corridors where CN and CP both provide services, those being the Quebec City to Windsor corridor and from Kamloops to Vancouver. In our study of Bill C-49, I was pleased to introduce an amendment to the exclusion corridors that opened up long-haul interswitching to producers and shippers in northern Quebec, as well as both north and southeast of Kamloops in British Columbia.

Bill C-49 would take interswitching, a mechanism that in a limited way provides a competitive shipping rate for grain producers in the Prairies, and make it available in a big way to mines, mills, manufacturers, and producers across Canada.

Bill C-49 would also correct a long-standing inequity between the rail lines and their customers. Until now, a rail company has been able to penalize shippers for delays in loading or unloading cars, but there has been no reciprocal penalty against the railway for failing to provide the agreed to number of cars at the agreed to time.

When we think of the costs involved in keeping a ship waiting in Vancouver harbour for a train to arrive, not to mention the reputational damage we suffer when we do not deliver to customers on time, establishing equitable performance obligations between shippers and the railways makes sense. That is what Bill C-49 will do.

Finally, shippers and rail companies will more properly share responsibilities for the efficient and timely movement of goods. They will do this by accepting the consequences of non-performance in service agreements through reciprocal penalties.

Recognizing that issues will arise in negotiating and performing commercial agreements, Bill C-49 amends the Canada Transportation Act, allowing the agency to provide confidential, informal, low-cost, and expedient dispute resolution assistance. This has the potential to spare rail companies and their customers from the need to pursue expensive and time-consuming remedies. Similarly, access will be expanded to a summary, paper-based final offer arbitration process as a way to resolve disputes. Formerly this was available only when the freight charges involved were less than $750,000. Bill C-49 increases the threshold to $2 million, making this process available to more small and medium-sized shippers.

In our standing committee's study of Bill C-49, and previous studies, witnesses consistently called for more transparency in the performance data that the railroads release. This is important to ensuring that service standards are kept. This, of course, is of interest to producers and shippers because it allows them to fulfill contracts with customers. It also opens the way for them to collaborate more effectively in the management of the rail-based supply chain. The government is also keenly interested in this data because our reputation as a reliable trading partner is of national importance.

Bill C-49 will require the railroads to provide timely waybill information on the shipments they carry. This is data that shippers can reference in their negotiations for service agreements and rates with the rail companies. The data will also be used by the Canadian Transportation Agency to set the interswitching rates that the rail companies will be paid to move shipments to transfer points. Canada's two national railways have extensive operations in the United States, where they have been required to provide waybill data for some time, so this measure in Bill C-49 will put Canadian shippers on an even playing field.

As well, in the interest of transparency, CN and CP will also see new requirements to report in advance on any plans to close rail sidings or connection points, or to abandon sections of track.

Finally, referring back to the importance to farmers, shippers, and Canada's trade reputation of having reliable grain shipments, Bill C-49 will require the railways to provide a report before the start of a crop year which assesses their ability to meet their grain movement obligations. Then, before October 1, the railways will have to review the state of the year's crop and forecasts for the upcoming winter, and provide the government with its contingency plan to move grain in the event we see another scenario like the one we faced in the winter of 2013-14.

Bill C-49 has been an exercise in listening to some long-standing issues in Canada's freight rail system; considering, debating, and refining long-sought measures to make the system more equitable; and achieving a balance that will preserve the health of our rail sector while improving performance for our producers and shippers. It has sought a win-win result, with the greatest win being for Canada itself as the source of high-quality products and resources, and as a reliable and trusted trading partner in the world.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, I note my colleague's remarks focused primarily on the air passengers bill of rights. I know the member sat through many days of testimony as one of my committee colleagues. I would like to ask about a different portion of the bill.

I know the member is from Ontario. When it came to transportation for freight rail, one of the key features of the bill was long-haul interswitching. Previously, a regime was in place that pertained only to the transportation of western Canadian grain. Bill C-49 would expand to different industries and different parts of the country. Being from a different part of the country, does the member see the value in this extended long-haul interswitching as opposed to the simple regime that was in place simply for western Canadian grain previously?

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

Mr. Speaker, on May 16, the Minister of Transport introduced Bill C-49, the transportation modernization act, to bring our government's vision of a state-of-the-art national transportation system to fruition.

All Canadians want their transportation system to be safe and secure, green and innovative, while supporting economic growth and the creation of jobs for Canada's middle class. Bill C-49 meets all of these objectives, as well as the government's commitment to develop a fair, accessible, reliable, and efficient transportation system for 2030 and beyond.

One very important element of the bill is the proposal for strengthened air passenger rights, which would be reinforced by regulations. As more Canadians use their air transportation, thanks to increased services and lower fares, recent events at home and abroad have demonstrated the need for strengthened rights for air travellers. Canadian travellers want to know that when they purchase an airline ticket, the air carrier will, in fact, provide the services they have purchased. If the air carrier cannot deliver the purchased services, then the traveller must be provided with a certain standard of treatment and, in some cases, the traveller must receive compensation from the air carrier.

Canadian travellers also expect that they should not have to fight to get the service for which they have paid. As such, air passenger rights must be easy to understand and apply consistently to all airlines, domestic and international. They must apply to all flights from and within Canada and benefit all travellers.

Should Bill C-49 receive royal assent, the Canadian Transportation Agency will be mandated, in collaboration with Transport Canada, to develop a set of clear regulations to ensure a consistent framework for air passenger rights applicable to all carriers. As our government is committed to ensuring this regulatory process moves forward in an open and expeditious manner, further consultations will take place with stakeholders throughout Canada.

The regulations would enshrine standards of care and compensations in a variety of situations faced by air travellers. They would address some of the more frequent irritants, such as providing passengers with clear and concise information about air carriers' obligations and how to seek compensation or file complaints; establishing standards of treatment for passengers in cases of denied boarding, delays, and cancellations, including compensation for inconvenience in situations of overbooking; standardizing compensation levels for lost or damaged baggage on both domestic and international flights; developing clear standards for the treatment of passengers in the case of tarmac delays; ensuring children under 14 years of age are seated in proximity to a parent or guardian at no extra charge; and requiring air carriers to define their policies on the carriage of musical instruments.

Canada is not alone in legislating or regulating specific practices of the airline industry by establishing a framework of passenger rights. Other countries have developed guidelines or regulations to ensure that passengers receive a standard level of treatment for compensation when their flights are delayed or cancelled. This government, however, is committed to establishing air passenger rights that would make our country a world leader in how such irritants would be to be addressed.

For instance, under the regulations that would be developed for air passenger rights, provisions would be included to ensure that no passengers could be involuntarily removed from an aircraft after they boarded as a result of overbooking. If the airline cannot find a volunteer to give up his or her seat, it will need to pay compensation to remedy the inconvenience it has caused. The Minister of Transport has made this commitment and the government intends to fulfill.

Bill C-49 seeks a balanced approach as it relates to air passenger rights, one that would ensure the passenger would be treated fairly, but also one that would allow the air carrier to operate its business in a manner such that it could remain competitive and profitable. For example, the legislation clearly outlines that the requirement for compensation would be utilized only in instances where the air carrier would be directly responsible for the denial of boarding, delay, or cancellation of the flight. While recognizing that overbooking is a standard practice which allows air carriers to keep ticket prices low, passengers who are denied boarding should receive fair compensation when this occurs. This level of compensation would be clearly enshrined in regulations.

This government, however, recognizes that air carriers operate in a complex environment and that there are significant costs associated with safety and security, both in the air and on the ground. Increased competition and pressure from consumers for lower ticket costs have also resulted in a more complex business model for air carriers. There are also factors that are outside an air carrier's control, such as weather and medical emergencies, that may result in a flight being delayed or cancelled. We recognize that these factors must be taken into account when developing an air passengers bill of rights.

In cases where a flight is delayed for reasons beyond an air carrier's control, such as weather delays, passengers have a right to be provided a standard level of treatment, including ongoing communication by the air carrier.

Further, Bill C-49 also contains provisions to increase data collection from air carriers and others in the air travel sector. This would allow the government to measure air carriers' compliance with the regulations and to take corrective action if needed. Both government and air carriers can learn from these data, allowing for decisions to be based on solid evidence.

Should Bill C-49 receive royal assent, Canadian travellers can look forward to strengthened provisions that will better protect their rights. These passenger rights will ensure that Canadians are entitled to a world-leading standard of treatment and compensation.

For these reasons, I ask my hon. colleagues to support Bill C-49 to ensure air passenger rights for Canadians.

The House resumed from October 25 consideration of 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, as reported (with amendment) from the committee, and of the motions in Group No. 1.

Bill C-49—Time Allocation Motion

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, while I am not deeply familiar with all the text of Bill C-49, having been in the aviation industry for a long time, and for economic development purposes for small communities, I know that the aviation industry is very much a user-pay system, so any additional costs are downloaded to the passengers.

While on one hand, the minister is saying that foreign ownership should lower costs because of competition coming into Canada, and I would tend to agree, we know that there are other areas that could be downloaded onto smaller airports, which may or may not be able to compete in terms of some of the costs.

In terms of delays, we know that very often at this time of year we start to see weather delays that extend beyond three hours. I believe, and it is not mentioned here, that this could have a detrimental effect on small communities, more so than others, that are prone to weather IROPs, or irregular operations.

I would like to know whether our hon. colleague addressed weather delays and what types of delays are mentioned in Bill C-49 in terms of air passenger rights.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, again, I have to point out that 90% of what is in Bill C-49 are amendments, changes, to one act, the Canada Transportation Act. If one looks at the legislative agenda, it is virtually impossible, whenever legislation is passed, not to have an effect on certain other pieces of legislation. However, it is a small number of changes, about 10%, that will affect other existing legislation. The vast majority of the changes are focused on one act, the Canada Transportation Act.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, in his remarks, the minister pointed to the fact that this legislation, Bill C-49, addresses a number of pieces of transport legislation. It deals with trade, rail, privacy, competition, and passenger rights.

However, he somehow says that that is not an omnibus bill and wants to somehow distinguish the government's performance from that of the Harper government, where time allocation was brought forward over 100 times, with that member and his party standing with us to rail against the improper use of time allocation.

Can the member tell us what has changed?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, does the minister realize that Bill C-49 removes the power of the Commissioner of Competition to challenge mergers of airline operations? Is he aware that by eliminating the commissioner's power, the same minister can approve an arrangement that could quite possibly increase the costs of airline tickets? How on earth is that of any benefit? Why on earth would the Liberals limit the amount of time we have in the House to debate, discuss, and hopefully amend this ill-conceived legislation?

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, one correct thing the minister said is that the Liberals have an agenda and they are going to ram it down our throats, as well as the throats of Canadians, regardless of whether they like it or not. We are debating another time allocation motion on a bill that will have far-reaching impacts on trade, on small communities' air services, on our rail industry, and on privacy with respect to our engineers and our rail systems. We have had everyone from unions to passenger rights advocacy groups, to carriers, to airports, to shippers all over Canada asking why we are rushing this bill. They say that we are not getting it right. They have deep concerns. The Privacy Commissioner sent a letter to the committee chair, dated September 12, 2017, raising concerns about Bill C-49 and the handling of data from locomotive voice recognition and recording devices and privacy issues arising from sharing of that information.

Why the rush? If this is such a fundamental piece of legislation, why are the Liberals rushing it through?

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, of course I do have comments on and concerns about Bill C-49, but this is a debate on time allocation. I want to put a proposition to the hon. minister. The more the Liberals use time allocation, the more we normalize a practice that was offensive to this place under the Harper administration. Avoiding time allocation, treating bills thoroughly, and organizing the schedule of this place is the job of the House leaders. My concern is that by having time allocation time and again on many bills that proper management of the House calendar would have avoided means there are now very few opportunities to speak to bills in debate because the speaking rosters are shrunk to accommodate time allocation.

Therefore, time allocation really does limit democratic debate in this place. It really is normalizing what Harper did, which the hon. minister and I railed against when he was with me on this side of the House. I urge the current government not to decide to set the bar no higher than the previous government did, but to go back a few prime ministers to see how often time allocation was used in those administrations and then to shoot at doing better than that.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, I am very disappointed to see this happening again today. We are sitting here with Bill C-49, another omnibus bill that would amend 13 acts. We are not being given the time to discuss it. There are many proposals being put forward and still no concrete support for the government to move forward in a way that Canadians expect.

I appreciate my former colleague's comments about the passenger bill of rights. Again, it is very weak and really an example of the government downloading responsibilities again. In my riding of North Island—Powell River, there are a lot of concerns about regional airports and the direct impacts this bill would have on economic development and their keeping connected to the rest of the world. Here we are, not able to have the substantive discussion that we need to have. We are being closed down again.

Why does the minister think this is an appropriate movement forward when so many Canadians expect so much more?

[Marc Garneau, Liberal, Minister of Transport]

Mr. Speaker, the point that I made at the time of the previous closure motion about the opposition only talking about the carbon tax must have had a profound effect. I am very glad that the committee that studied this matter returned to Parliament four days early this fall and heard a large of number of witnesses on all of the issues surrounding this bill. As a result, I think we have ended up with a very good bill at this point, and I can talk more about that as we go along.

With respect to the passenger rights bill, we took the deliberate approach of mandating that that Canadian Transportation Agency produce the regulations that would govern this passenger bill of rights. We feel that a regulatory approach is a superior approach to enshrining it in the legislation of Bill C-49, because it will give us more flexibility to make changes later on.

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

moved:

That in relation 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, not more than one further sitting day shall be allotted to the consideration of the report stage and one sitting day shall be allotted to the third reading stage of the said bill; and

That fifteen minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration of the report stage and on the day allotted to the third reading stage of the said bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and in turn every question necessary for the disposal of the stage of the bill then under consideration shall be put forthwith and successively without further debate or amendment.

Bill C-49—Notice of time allocation motion

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Madam Speaker, I would like to advise that agreement could not be reached under the provisions of Standing Orders 78(1) or 78(2) with respect to the report stage and third reading stage of 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.

Under the provisions of Standing Order 78(3), I give notice that a minister of the crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings of the said stage.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, in a few minutes, we will begin examining Bill C-17 on the Yukon. Tomorrow, we will begin debate at third reading of Bill C-46 on impaired driving.

On Monday and Tuesday, we will continue debating Bill C-49.

On Wednesday, we will commence report stage of Bill C-45, the cannabis act.

Finally, on Thursday, we will start second reading debate of our second budget implementation bill. We intend to allot four days of second reading debate for this bill. We look forward to that debate as well as the discussions at committee.

Motions in amendment

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I want to say at the outset that I think that Bill C-49 is a very poorly written bill. There is a host of things wrong with it. There is a lack of detail and a lack of specificity in many areas, which I will get into in just a few moments. I will only have a chance to address perhaps two or three of the elements of this bill that are poorly crafted.

I will start with the airline passenger bill of rights component of the bill, but before I get into those comments, I have to say that every time I hear someone speaking on an airline passenger bill of rights, it brings a smile to my face. I recall an exchange several years ago in this place, and many of my learned colleagues who have been around this place for a while may remember the exchange I am referring to. It happened between an NDP member of Parliament—I believe his name was Jim Maloway—and a minister of the government at the time, Mr. John Baird. It was on a Friday morning. Sittings on Friday mornings, as most members know, are usually not that well attended. Many times, subject material comes out of left field. We were in government at the time this exchange took place. We never really knew what questions would be coming from members on the opposition benches. Because so few members attended, it meant that many members who had never had an opportunity to ask a question before could get up to ask something that was of local concern to their constituency. As a result, many of our members did not have direct answers for the questions. In this particular case, Mr. Maloway got up and indicated that he had introduced a private member's bill for an airline passengers bill of rights. In his question to former Minister Baird, the member pointed out that reports had indicated that in Europe a number of airline authorities were thinking, as a cost-saving measure, of charging airline passengers a fee to go to the washroom. Mr. Maloway asked Mr. Baird whether he thought it was right that airlines would be able to charge passengers to go to the bathroom. Mr. Baird, without a moment's hesitation, responded, “Depends”. Members may have to think about that for a moment, but it was one of the cleverest quips and retorts I have heard in my time, and one that I will never forget.

Let us talk about this bill and its suggestions for an airline passenger bill of rights. Once again, there is a lack of specificity and a lack of detail. The bill is suggesting that any passengers who feel aggrieved by an airline or who wish to file a grievance against an airline for a host of different reasons would potentially be able to receive monetary compensation from the government. That means that if a passenger had a poor flight and the airline lost that person's baggage or if passengers were stuck on a runway or the tarmac for several hours for whatever reason, or if passengers felt aggrieved in a number of different areas, they would be able to go after the airline for monetary compensation. This bill suggests that the minister responsible would then have the ability to set a monetary compensation level, but it is completely open-ended. It does not set down any clarity or any rules surrounding this compensation, such as what would prompt it, what would curtail it. The bill merely states that a minister would have the ability to arbitrarily set a monetary level of compensation for a passenger who felt his or her rights had been violated. On that basis alone, I do not think most members in this place could support the bill, because it is too vague. There is no detail illuminating exactly what the responsibilities of the airlines would be and what the responsibilities of the passengers should be. It is poorly written and I would encourage all members to at least go back to their own caucuses, talk to the minister and suggest that he look to at least amend or rewrite that portion of the bill, because it is poorly written.

Also, in a section in the bill dealing with air transportation and screening, in particular, whether or not airports would be able to avail themselves of additional screening devices. On the surface, it appears that might be a legitimate consideration for airports if their traffic were increasing and they felt they needed more screening devices to be able to properly screen passengers. It is something that most members here would think is a legitimate consideration. However, the bill also suggests that if an airport avails itself of a new screening apparatus, then the airline might end up paying for that screening device and passing along the additional cost to the passenger. In other words, rather than the airport authority paying for a screening device, it may pass that cost along to the airline.

The airline would want to recover that cost and would then pass the additional cost on to the passenger. What is that? It is a tax. There is no other way I can define it. It is simply a tax. Canadians are being taxed enough right now. The government, of course, wants to tax them even more, but that is perhaps a debate for another day. However, this provision is poorly thought out, poorly designed, and might end up, as an unintended consequence, taxing airline passengers even more than they are taxed today. It is another example of how the bill is not only poorly thought out, but poorly designed and poorly worded.

I will talk for a moment about another provision in the proposed act, the suggestion that locomotive railways would be able to put in voice and video recorders so that if an accident, God forbid, ever happened, the investigators would be able to determine, through examination of the voice and video recorders, what happened. The government is framing this as a preventative matter and and safety matter. However, I do not agree that it really is. While it may be of some benefit in the case of a major disaster, a major train derailment, for example, it really is not, in my view, a safety-related matter as much as things like brake inspections are. What it would do is open the door to the potential for abuse by railway investigators, who may take that voice and video recorder and use it for other purposes, perhaps for disciplinary action against locomotive, engineers, or union members who happen to be on that railway.

There are privacy laws in this country for a reason, and I am afraid that this particular provision, which may intend to address a safety issue, may have unintended consequences and end up violating Canadians' basic privacy rights. For that reason alone, together with the fact that I think the bill is poorly written, it should be defeated.

I can assure the House that members on the official opposition side will certainly be voting against Bill C-49.

[Jim Eglinski, Conservative, Yellowhead, AB]

Mr. Speaker, I am pleased to rise in the House again to speak on Bill C-49, the transportation modernization act. As we know, this omnibus bill would substantially amend 13 different acts and have consequential impacts on three modes of transportation: rail, air, and water. It should have been broken up, yet the Liberals across voted against the member for Carlton Trail—Eagle Creek when she made recommendations in committee to break this up and study each one in greater detail in order to cover some of the problems we have in Canada.

This bill is in response to the Canada Transportation Act review, which was tabled in 2016 by the Liberals, but was initiated by previous Conservative minister Emerson in 2014. The review Emerson did was looking ahead 20 years to 30 years to identify priorities and potential actions in transportation that would support Canada's long-term economic well-being. We recognized that transportation and the economy were changing, and had to make sure the legislation was up to date. The Emerson report was submitted to the minister almost 18 months ago, and provided the government with 60 recommendations to address a range of changing conditions and challenges across Canada's transportation sector. Unfortunately, the Liberals decided to launch another consultation process and are only just tabling the legislation this year.

I am not going to say there are no good parts to this bill. There are good parts and there are bad parts. They missed the mark in a few areas, and I would like to address some of those. I am going to address the good ones too.

I will deal first with railroad. In going through Bill C-49, the creation on new long-haul interswitching regulation has a lot of good facts. That followed suit from the Fair Rail for Grain Farmers Act that was brought in by the Conservative government. I am not going to go into too much detail, but there are good parts of it and there are some bad parts. I know it has been debated a lot in committee, and I think they worked pretty well on that.

One area I would like to comment on, which I think was positive, is that the Canadian Transportation Agency would gain the power to order a railroad to compensate any shipper that would be adversely affected for a railway's failure to fulfill the service level obligations under the new definition. It would also allow the Canadian Transportation Agency to try to inform these settled disputes between railways and shippers, and would mandate 90-day rulings by the CTA.

I was very glad to see this. CN runs through my riding of Yellowhead, and is a major east-west corridor for it. Over the last three or four years, I have received many complaints from major companies in forestry, coal mining, gravel hauling, fracking sand hauling, grain hauling, etc. about the railroad company committing to have a train at a specific location or facility at a certain time. These companies would have a crew of 10 people ready to load that train, yet no train would show up, and sometimes would not show up for a day or two. They are paying these crews, have shipment orders that might be going to the west coast or need to connect with a ship to get to an overseas port, and yet the railway did not consider that in good faith. This portion of the act is excellent to see, and hopefully it will resolve those types of issues.

Another concern I have that was not addressed in this omnibus bill is the length of trains that are now running in Canada and the lack of proper crews on those trains. Trains are running that are probably two to three times larger today than they were 10 or 15 years ago. It puts a lot of stress on the train crews and on communities. I am going to give an example, but before I do, I want to read a section of the Grade Crossing Regulations. Section 97(2) states:

It is prohibited for railway equipment to be left standing on a crossing surface, or for switching operations to be conducted, in a manner that obstructs a public grade crossing—including by the activation of the gate of a warning system—for more than five minutes when vehicular or pedestrian traffic is waiting to cross it.

It went on to say in section 98 that if there is a repeated issue with trains blocking a crossing, it should be resolved through collaboration between the rail company, local road authorities, etc. If that does not work, the local authority can send a letter to the minister to request a resolution.

Rail crossings have been brought up a number of times and the government and the committee failed to address those concerns. I am going to give an example.

The town I live in is Edson, located in the centre of Yellowhead riding. Our town is divided by the railroad tracks. We have two-mile trains that come in and stop, whether it is for crew changes, whether it is for checking brakes, or whatever. I could stack on my desk the number of complaints that the train is stopped for 15 minutes, 20 minutes, 30 minutes, an hour. When it does that, people from the other side of that track cannot get into town. We have had ambulances stranded and emergency situations. We keep bringing this up with CN, but we do not see changes.

CN is monitoring the crossings, but we still continue to see blockages. This is a problem. CN says if we phone it in, that CN will break a train. Try to break a train two miles long at a crossing. It is virtually impossible. If a person has a heart attack on the other side of that train and needs an ambulance, that person's life can be in jeopardy. That is the situation we are facing in our community and other communities throughout our riding.

CN says people can talk to the railroad company, then go to the minister and look for results. I did that as the member of Parliament. I called a meeting of CN and Transport Canada. The Transport Canada officials said, “We have really long trains. Disregard the five minutes, it is not a big problem. Ten or 15 minutes, so what?” We have big trains and Transport Canada is not interested in looking after it. That is a failing in the new regulations. It should have been addressed.

Creation of air passenger rights regime is right. We all know that over the last few years we have seen a lot of bad things happening in airlines and we see a lot of bad things happening in Canada: delays, lots of times the airlines say they do not have a crew, people cannot go to a smaller community, or the flight is cancelled.

One thing that was not addressed and is very important to Canadians is the cost of air travel. As an example, I go back and forth to my riding almost every weekend. It costs me four times as much to go to my riding than to go from New York to Los Angeles, which is 1,000 kilometres shorter. We need to look at the costs incurred by Canadian air travellers.

We are looking at parts of the new air regulations allowing CATSA to be increased at certain airports to improve the flow of people going through and security measures. I do not disagree with that. I spend a lot of time going through Ottawa and Edmonton airports, but that cost should not be deferred to the air traveller. I believe it should be incurred by the Government of Canada, which is requiring the security recommendations.

I want to quickly deal with marine ports and the ability for them to borrow money from the new infrastructure bank. I believe that is totally wrong. The infrastructure bank would say it would lend $100 million or more, but what about the small communities like Edson, the city of Fort St. John, small cities across this country that are looking for infrastructure money to assist them in their infrastructure needs? We are going to take that money and squander it in the large centres and large seaports, which is not the right way to do it.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I thank the hon. member for Trois-Rivières, who did an excellent job for us.

People need to understand how large this omnibus bill is. What is an omnibus bill? “They don't build those in Canada anymore”, is one of the things that comes to mind. However, the reality is that there are several pieces of legislation crammed into this one piece of legislation. What usually ends up happening as a result is that we do a lot of things, usually rather poorly. That is where we are headed today with regard to the very serious measures in this transportation act. These include rail safety issues, on which there are lessons that we should have learned from Lac-Mégantic and other places where derailments are still taking place. Rail safety issues continue to come up daily in Canada. We recently had another derailment.

We also have other things that could become quite problematic with respect to consumer rights. An airline passenger bill of rights is included in the legislation by name, and name only. It is a good example of what the government is proposing, namely, doing things by regulation, with no enforcement, no real law and, at the end of the day, nothing for consumers.

I will follow up a little on the people that consumers should contact about those types of situations in the future. If consumers have a problem with their airline and any type of compensation or problem related to it, they should contact the Liberals. The Liberals will own all of these problems directly, because they are willfully passing this on to the regulator. They will be the voice in the future to address any particular problems to that consumers face.

It is clever, because they are avoiding the responsibility of a real passenger bill of rights, which should have been done in a separate piece of legislation, with a rules-based system that is very clear and legislated. By doing it this way they are thinking they can say it is just a matter for the regulators and that they have nothing to do with it. However, the public could become quite educated about this process when they have a problem with the regulation in force. They would just need to see their Liberal member or to call another Liberal member somewhere else to get that direct input, because the Liberals are going to pass this piece of legislation with that knowledge. That will be the only real route to have input on anything, ranging from being delayed to not having one's rights observed, to being stuck on the tarmac for unlimited time, and so forth. All of those things, in terms of regulation, will basically be set through the minister. That is going to be a curse that the Liberals brought upon themselves once members of the public become a little more educated about how to actually respond to their particular situations.

With regard to report stage, the bill went back to committee and several pieces of legislation were dealt with in separate sections, which are important for Canadians to understand. One of them was the arrangements between airlines that would be allowed. We had amendments on that to challenge what would take place, because we will see less accountability in regard to airline mergers and ownership, and there will be no oversight to ensure that passengers and/or competition thrive. In fact, this bill would be a disincentive to competition, because it would take away that accountability and review by the tribunal.

The bill would strip away powers from an independent body that ensures competition in the airline industry, a body that would at least examine those issues and bring them to the minister, who would basically have the final say. That is problematic because when we look at the fact that the government has to deal with issues related to competition in the industry, not only domestically but internationally, with this bill we would be taking away an opportunity for increased competition in Canada. Indeed, we would potentially see some greater mergers take place, with less competition, and probably less routing. We have seen some development in medium-sized markets. There would be a disincentive to doing that now. It is important to note that we would be taking away what is currently being done, that lens of review for consumers. We are abandoning it.

The Railway Safety Act would also be affected by this legislation by adding video and voice recorders, but there is very little description on how that will take place, how they will be used, and what they are for. I think they are going to be used to reduce these positions while potentially increasing the hours for conductors and engineers as we have seen in this industry in the past.

We know from past independent reports that employees face a culture of fear and intimidation. These are the independent tribunal commission's own words as they relate to the safety management system.

With respect to the safety management system, people are expected to report problems in the workplace without any repercussions. Imagine doing something important at work for customers and realize there is a safety issue that could affect workers or customers, and that safety issue is brought to the attention of the person in charge. There is no accountability with respect to what happens to that information. We have seen the same thing federally. Whistleblowers have been fired and maligned in the public, because they have brought forth a number of cases relating to consumers. Imagine the intimidation.

We can even look more recently at some of the stuff that is happening with TD Bank. They are not necessarily life and death matters, but rather matters of privacy violations. A whistleblower spoke of privacy violations taking place in the bank, and that whistleblower is concerned about it.

The safety management systems that are in our rail systems right now are not conducive to good environments. It has been proven by an independent panel that workers are often blamed for bringing forward their safety concerns, and they face repercussions for doing so. That is the reality we are faced with today.

The Canada Marine Act would also be changed by this proposed legislation. It is important to note that ports are going to receive more autonomy, and have access to funds in the infrastructure bank, funds put there by taxpayers. Ports are fiefdoms onto themselves. They can often override municipal acts, or not follow them at all, in terms of environmental, and other planning practises that are necessary to ensure there is cohesiveness between the port, the municipality, and the areas around it.

They have the luxury of this type of environment that really creates quite a bit of conflict or animosity, because of the fact that individuals who sit on boards of various ports are political appointments. Ports are patronage bastions left from the dark ages of democracy. We only need go to the website, locate a person's name, and we will find the amount of the donation. We can see which riding association he or she belongs to, provincial or federal. It is quite interesting. I hope some thesis student is listening to this who would like to do a project on political appointments. This is low-hanging fruit which is easily accessible. In my experience, I have found some good rewards.

The Coasting Trade Act is also challenged in Bill C-49. Foreign registered ships would be allowed to have more freedom in Canadian waters. These are unaccounted ships. There is a problem with that. International ships are allowed to change flags for convenience to avoid human rights and worker rights issues on their ships and vessels, but also the way they can get oversight done with flags of convenience in particular. We had a case with former finance minister Paul Martin, who liked the Bahamas and Bermuda for flagging Canada Steamship Lines to gain tax advantages. This is no different than the current finance minister's use of those offshore avenues as well. This is very concerning because environmental issues and worker issues are at the forefront of that.

I will conclude by saying this is a missed opportunity. It is a dog's breakfast of legislation on so many serious issues. It is unfortunate, because it is an economic loss for us in terms of the operating systems we could put in place that would make us more competitive as a country.

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

Mr. Speaker, I truly appreciated working with my hon. colleague on the transportation, infrastructure and communities committee when he served as the shadow minister for infrastructure. It is on that note that I ask my question.

Clauses 73 and 74 would amend the Canada Marine Act to allow ports to borrow money from the Canada infrastructure bank. When the member was on the committee, he put forward a motion that we study the infrastructure bank. Would he like to comment on that measure in Bill C-49 and why he believes this might be problematic?

[Alain Rayes, Conservative, Richmond—Arthabaska, QC]

Mr. Speaker, today we are debating a bill that makes significant changes to 13 existing laws and affects three different sectors, namely the air, rail, and marine sectors.

By introducing this grab-bag of a bill on transportation modernization, the Liberals are breaking their campaign promise to not introduce omnibus bills during their term. This is just one more broken promise. Let us face it; Bill C-49 has lost the media's attention. There seems to be some push-back now, after it was introduced under false pretences as dealing exclusively with the passengers' bill of rights to ensure rights and guarantees for all Canadians. Perhaps that is what the Liberals are going for, that is, a communication plan, a political strategy, and a few talking points designed to make people forget all of their mistakes and broken promises.

From the beginning of the session, the Liberals have been managing one disappointment after another and are drowning in a political quagmire: supply management threatened, the mishandling of the Netflix deal, incredibly long delays and chaos regarding the plan to legalize marijuana, and the Minister of Finance's conflict of interest regarding his botched tax reform. This government could really use some good news, and that is probably what it is going for here.

Nevertheless, it is our job as parliamentarians to scrutinize the repercussions of a bill and to have the courage to point out the risks and problems of a given measure, even if that is not a popular move. That is what the Conservative Party did when the government introduced tax reforms that it framed as fair but that we figured out were anything but. That is what the Conservative Party has done since this bill was introduced. My colleague the member for Carlton Trail—Eagle Creek, who sits on the Standing Committee on Transport, Infrastructure and Communities, talked to her committee about asking the government to split the bill into four parts to make it easier for the committee to examine it closely. Every single one of the Liberal members said no, and they refused to explain themselves. Canadians do not see that as a confidence-inspiring move on the government's part; it is the kind of decision that feeds the public's cynicism towards politicians.

First of all, let us clarify a misconception: this bill does not specify what compensation passengers might be entitled to; it only establishes that they will eventually be eligible for compensation. We are to vote on the form, but not on the substance. We have no real information whatsoever. The government would rather shirk this responsibility and hand it over to the Canadian Transportation Agency. We are asked to vote on a blank cheque.

That is not all. If we give the Canadian Transportation Agency the responsibility of deciding which regulations will be part of the passengers' bill of rights, we also give the Minister of Transport the power to be the sole advisor to the CTA. That means that penalties will not be set by an independent body, unless the minister objects to these penalties and imposes his own proposals. How ironic for members to have to vote on handing over all of their powers to a single minister, the Minister of Transport. How ironic for an elected official to be allowed to deliberately influence an independent, non-partisan agency.

The Canadian Transportation Agency will therefore not be able to consult consumer groups, airlines, airports, or any other stakeholder in the sector, only the Minister of Transport. That is not all. The minister is also giving himself extensive powers to approve joint ventures between airlines. That power traditionally belongs to the Competition Bureau, which should also be independent and non-partisan, and certainly operate at arm's length from the Minister of Transport.

The lack of integrity and transparency in the process is quite apparent, but mostly it is troubling. If the minister cannot bear to allow the agency to establish its own standards, he should simply present them to the House and give all members a say on the matter.

There is another false message: the purpose of the bill is to reduce travel costs for Canadians, while improving service, and yet the reverse could happen. The costs related to the bill could force consumers to pay more, since they will have to pay for the new regulations, for example, regarding overbooking.

If the goal is to enable Canadians to travel for less, why not just lower taxes for airline companies, which already have a narrow profit margin, by cancelling the carbon tax, for example? Canada already has more than enough aviation legislation. Today, the government is just making it more cumbersome and complicated and forcing passengers to foot the bill.

The third inaccurate and false message is that this bill is a new air passengers' bill of rights. That is how the government is presenting it, but in reality, it will also affect three other modes of transportation and amend 13 different laws. Passengers' rights and benefits are just part of the bill. By leading Canadians to believe that this bill simply creates a new bill of rights, the Minister of Transport is glossing over a good portion of the bill, the part that is much more controversial and unpopular. The goal of this voluntary oversight is clear: to control the media message and ensure that the Liberal government does not make any more mistakes by announcing controversial measures.

That is why the transport minister failed to mention that the bill will allow foreign investors to own up to 49% of the shares in a Canadian company, give the transport minister the power to approve joint ventures, update the Canadian freight system, require railways to install audio-video recorders in locomotives that could be used for disciplinary purposes, and amend the Canada Marine Act so that port authorities can go through the Canada infrastructure bank that the government just created.

On top of all that, passengers' rights advocates and many consumer protection agencies are opposed to the bill as it was introduced by the Minister of Transport. Gabor Lukacs of Air Passenger Rights thinks that the bill of rights will not adequately protect passengers and that it would be more effective for Canadians to take legal action.

Jeremy Cooperstock, associate professor at McGill University and founder of a passenger rights web site, felt that this bill did nothing to protect air passengers and that the air transport regulations and the Carriage by Air Act already do the bulk of what is promised in this bill. In other words, we are reinventing the wheel. The Liberals are very good at that.

As if that were not enough, case-by-case management of the complaints and the long-haul tariff being charged to the railways could add more red tape. We will have to hire extra people and hope that consumers do not get discouraged by the response time and drop their complaint. In short, no one will come out ahead and no Canadian will be better protected.

I urge the House to be wary of the smokescreen this Liberal government is deploying today to make us forget its endless string of failures, disappointments, and disorganized policy ad libbing. I also urge all my parliamentary colleagues to be wary of the scope of power that this bill would give the Minister of Transport. We must also closely monitor the minister's dangerous intrusion into independent, non-partisan organizations such as the Transportation Agency and the Competition Bureau.

Lastly, to all those who are thrilled by the prospect of passengers getting more rights, I must point out that this bill makes no provision for consumer compensation. I would remind all members who are planning to support this bill that they will not be able to boast of having voted to improve rights and protections for the Canadian public.

Passengers' rights advocates are all profoundly disappointed to see this issue fumbled yet again. The bill before us is incomplete, imprecise, and totally inconsistent. It would be deeply troubling if it were to pass in its present form.

This bill is yet another sloppy rush job aimed at grabbing even more power by any means possible and entrusting it to a single individual, in this case the Minister of Transport. The same thing happened with the Minister of Finance's tax reform plan. We need to be extremely vigilant. I urge all members, even those on the Liberal side, if they have the guts, to condemn this bill and vote against it.

[Sean Fraser, Liberal, Central Nova, NS]

Mr. Speaker, I have had the pleasure of sitting on the committee during the hearings on Bill C-49 and enjoyed the company of the hon. member for Bow River.

I took some of the member's comments to suggest that perhaps the bill would not go far enough to protect the interests of shippers. I cannot help but point out that the bill includes a number of pro-shipper measures, such as reciprocal penalties, adequacy of service, protecting the maximum revenue entitlement, enhancing data disclosure, improving the arbitration process, and a number of other things.

The member raised the measures included in Bill C-30, suggesting that they were preferred, according to the witnesses he heard. When I listened to the witnesses over the course of the entire study, many of them suggested that having remedies only for one industry and only for one region of the country was not the best approach and that the long-haul interswitching would open up a more efficient transportation system across sectors and across geography. Does the member support measures that would extend this improved service to new parts of the country and to different sectors?

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I have already heard a lot of people speak about Bill C-49. I had the privilege of attending the hearings in September when I subbed in for that week. I found the hearings incredible in the sense of the knowledge that was shared by all of the experts, as well as the learning, and collegiality among all parties listening and questioning the people there. Having said that, I put some notes down on paper. I am not as well spoken as the previous member, so I will refer to my notes extensively.

Bill C-49, the transportation modernization act, makes large-scale changes to how transportation is regulated in Canada. It is an omnibus bill. It makes big changes to rail, air, and marine port authorities. The question is, does it make all the right ones?

I would like to discuss the complicated set of changes Bill C-49 makes to rail in Canada. The changes to the long-haul interswitching this bill makes replace the provisions introduced by the previous Conservative government, which extended interswitching distance to 160 kilometres. Those provisions expired on August 1. I remember well the winter of 2013-14, and the reason why these changes were made at that time.

This is a significant challenge. It needs to be dealt with sooner rather than later. The shipping industry has been left in limbo since that time. Shippers and producers rely on those tools to ensure access to competing railways. Without them, they lose an important bargaining chip in negotiating prices with railways. Some would say they were not used that much. On the other hand, they were there as a bargaining tool.

This directly hurts competition and can even result in no produce being moved at all in some areas. That' is what happened in the Peace country in 2014. That is why the Fair Rail for Grain Farmers Act was necessary to address the situation in 2014.

Therefore, new interswitching provisions are long overdue. Unfortunately, it is far from clear whether this bill meets its objective of improving shipper and producer options with the 1,200-kilometre interswitching tool. The system introduced through Bill C-30 was popular with shippers. It provided the certainty of a regulated rate up to 160 kilometres. Bill C-49 proposes changing this so that the interswitching rate over 30 kilometres will be decided by the CTA on an ad hoc basis. The witnesses I heard at the transport committee preferred the 160-kilometre regulated rate system we already had.

The 30-kilometre interswitching rate will be set each year. It takes into account the railroad's infrastructure needs across their entire network. This could increase the rate paid by shippers.

The rate-setting regime this bill introduces needs to be designed to ensure that shippers have access to competitive rates. As designed, the rate will be derived from comparable traffic that is subject to captivity. This system needs to concentrate on a concrete review mechanism to ensure it is actually working for shippers. The government cannot just design this system and leave it to its own devices. Without a sunset clause, which we heard asked for many times, or predesignated review dates in two to three years, there are absolutely no guarantees for shippers and producers that they will benefit.

As it stands, there is simply too much uncertainty about the impact of the newly redesigned interswitching provisions. They need to be reviewable and they need to be timely. We need them implemented now.

Speaking of captive shippers and producers, it is noteworthy that the nearest interswitching location for many shippers and producers in northern Alberta and B.C. would be in Kamloops-Vancouver corridor. The other exclusionary zone is from Quebec City to Windsor. Interswitching is not allowed beyond 30 kilometres in these areas. For these captive shippers, the new interswitching provisions will do nothing to yield more competitive rates and improve competition. This is a serious problem. These captive shippers and producers have no choice but to use one company to which they are effectively held hostage.

It is important to remember that railways in Canada operate in a near monopoly situation. This situation could put shippers and producers at a real disadvantage. The provisions of Bill C-49 that allow shippers to request a contract from a railway, with reciprocal penalties, offers the chance to foster more competition.

However, the penalties need to be designed to acknowledge that the railways have much greater economic power than the shippers. Bill C-49 is intended to encourage the efficient movement of shippers' traffic while creating a system that is fairly balanced between the shipper and the railway. Therefore, the government needs to take a clear position that because of the difference in economic power, railways would be penalized at a higher rate than shippers. One dollar to a shipper versus one dollar to a railway is very different. Giving both the same fixed penalty would not be reciprocation. The railway simply would not face a meaningful penalty for failing to fulfill its service obligations.

The lack of short-line rail is also a pressing issue. There are very few left, and they are a critical component, where they do exist, of our infrastructure. Without them, we need to rely on trucking, which is hard on the roads in municipalities and worse for the environment.

When the railway does not operate efficiently for shippers, the whole supply chain is impacted. This we heard a number of times. They need to collaborate and plan with the whole chain, or the system does not work efficiently. If the respective parties plan their supply chain, the whole system has a chance to be more equitable and efficient. If a producer contracts with a shipper for a specified date, then gets a call that the cars will be showing up a week late, that is a problem, and the producer pays the penalty. The cars then show up late at their destination, and the producer is often the one who ends up suffering for it. When railways do not get their cars where they are supposed to be on time, that incurred cost goes back to the producers. They are held ransom by the whole system.

What I heard in committee when this bill was being considered was a lot of talk about adequate rail service. This bill needs to do more than strive for adequate. The government has expressed a desire to increase agriculture exports by 40%. Transportation needs to work much better, or increasing the amount of produce will be irrelevant. Canadians need and expect great rail service. We need an efficient system that ensures that cars show up and ship grain on time.

We all are aware that NAFTA negotiations are ongoing. It is therefore remarkable that the government would allow the new 1,200 kilometre interswitching distance to increase U.S. rail access to Canada at regulated rates. The U.S. could access this Canadian traffic without reciprocity. It seems like weak negotiating on the part of the government to give up this leverage before NAFTA negotiations are concluded.

With regard to air travel, Bill C-49 introduces some interesting provisions. It would take the ultimate authority on joint-venture decisions away from the commissioner of competition, which was mentioned by others, and would give it to the minister. It would further require the minister to take into account the public interest. This is a broad and extremely subjective term. We currently have an independent, non-partisan public official making the decisions to promote competition. The bill may introduce a needless political component to the decision-making process.

Bill C-49 would also allow the Canadian Air Transport Security Authority to sell security screening services to airports. When large designated airports that already have security screening services buy additional screening, that cost is shifted to the airlines. The airlines then pass it on to consumers. This provision would essentially be a veiled tax on air travellers.

I respect that the government intends to benefit air passengers by introducing this bill. However, it would leave what compensation passengers would be entitled to from the airlines to the discretion of the minister and the CTA. This would be extensive government intervention. We cannot risk those well-intentioned measures actually making air travel more expensive through ad hoc decisions. The CTA would have to determine on a case-by-case basis if a service breach was the fault of the airline or of any other factors. We need a charter of rights. We need it up front. People need to know what the compensation factors are, not to be judged ad hoc.

The administrative costs of implementing this legislation could be large. Again, it is a large omnibus bill, with many parts to it. Do we have all the right parts in it? I think not. There are other things that could have been done and should have been done.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, I am speaking to Bill C-49 today. I am opposed to this bill because of a number of issues with it, but in particular I want to speak to section 14 of the bill.

Section 14 concerns the review of arrangements involving two or more transportation undertakings providing air services. In other words, section 14 involves joint ventures between two airlines, joint ventures that allow airlines to co-operate in terms of sharing routes, frequent flier programs, and revenue-sharing and cost-sharing.

This is not an insignificant section of the bill. This is a major change to competition law. Section 14 of Bill C-49 makes major changes to the Competition Act.

I want to take a step back and explain why I think this is so concerning. The Competition Bureau is a very important organization. It ensures fair competition in Canada. It ensures that Canadian consumers and Canadian companies operate in a marketplace where they can prosper, a marketplace where there is sufficient competition, and a marketplace that delivers lower prices and more choices for consumers and companies.

Canada has long had a strong legal tradition and strong framework legislation in the area of competition law. We introduced competition law before the United States did in the 19th century, and throughout the last 150 years we have continually strengthened that competition law in order to ensure that we do not see anti-competitive behaviours in the marketplace.

I remember in 2004 when the then-minority government of prime minister Paul Martin was in place. It introduced a bill that would modernize competition law with the introduction of administrative monetary penalties that would work in place of, and alongside of, Criminal Code penalties that have a much higher threshold of proof.

While that legislation did not pass, the subsequent Harper government introduced similar legislation that was eventually adopted, and administrative monetary penalties are now part of our competition law. Canada has long had a strong tradition of ensuring competitive marketplaces. We are also seen around the world as leaders in competition law enforcement and ensuring that companies cannot abuse their marketplace position.

It is with great concern that I read section 14 of this bill that is in front of us, because it would weaken the bureau. The bureau is an independent law enforcement agency. This bill would actually take power away from the Competition Bureau and the commissioner of competition, and give it to the Minister of Transport. Not only that, it would allow the Minister of Transport to ignore competition concerns and to approve airline joint ventures.

The reason why this is so very concerning is that we know that more competition and a more competitive marketplace leads to lower prices and more choice for Canadian consumers. If we look at the history of airline policy in this country, we have come a long way over the last 30 years.

Privatization and increased competition have given Canadians more choice and lower prices in the airline industry. We started with deregulation in the 1980s, we privatized Air Canada in 1988, we spun out of Transport Canada the airports across this country in 1992, we established independent airport authorities in the 1990s, and because of that, there have been literally tens of billions of dollars of investment in airports and in airlines in this country.

For example, in the early 1990s, some $50 million a year was being spent on airport improvements. Since airports were spun out of the Department of Transport in 1992, over $14 billion has been invested in Canadian airports. The same is true of Air Canada. It is a much better airline today than it was in the 1980s when it was heavily regulated and not subject to competition, and owned by the Government of Canada. Today it is a much better airline, and it is a better airline because it has been subject to competition.

However, the job is not yet done. It is clear through numerous studies that the Canadian travelling public is still paying far too high a price to get from A to B in this country. That is why section 14 of the bill is so very concerning. It is going to lead to less competition, increased prices, and less choice for the travelling public, which runs counter to the effort that we made over the last number of decades to increase competition and lower prices for Canadians.

I want to give an example to illustrate this point. In 2011, Air Canada wanted to enter into a joint venture with United Continental that would allow them to share many transborder routes between Canada and the United States, and Canada and other destinations. That joint venture was fully reviewed by the Competition Bureau and the bureau demanded that certain conditions be put on that joint venture. The bureau in its review concluded that 10 cross-border routes between Canada and the United States would be less competitive for Canadian consumers because Air Canada and United Continental would be subject a monopoly and nine other routes would be subject to less competition than currently is the case.

The bureau refused to approve the joint venture unless certain routes were exempted, so the consent agreement that was entered into between the parties and the Competition Bureau exempted 14 cross-border routes from this joint venture, ensuring that on those 14 cross-border routes there was sufficient competition for Canadian consumers. The bill in front of us today would allow the minister to override the bureau and to approve these joint ventures without any conditions to ensure sufficient competition.

If we take a step back from this and we ask ourselves why the government is doing this, it seems to me that one of the reasons is that it has become a bit of a political “scratch my back and I will scratch yours” game. The government pressured Air Canada to buy 75 C Series jets from Bombardier in order to help the government politically with the problem it had with Bombardier. Fearing that the company was entering a dangerous period of insolvency, the government put a lot of pressure on a private sector company to purchase these 75 C Series jets.

I suspect that in return two bills were introduced in Parliament. I think the government needs to come clean on whether or not there was a quid pro quo in this arrangement. Air Canada buys these jets and in return the government introduces two bills, Bill C-10, which lifted the requirement for Air Canada to have maintenance facilities in certain cities in this country, and Bill C-49, which has section 14 that would allow the Minister of Transport to approve joint ventures without any conditions to ensure sufficient competition.

This would be a real step back for competition law. It would weaken competition particularly when it comes to future joint ventures that airlines in this country may enter into. It would lead to higher prices for Canadian consumers and less choice. It is for that reason that I strongly believe that this section of the bill should be deleted and why I am opposed to the bill. I look forward to members' questions and comments.

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

Mr. Speaker, I thank my colleague for her question. My speech and questions may have made it sound as if I want to throw the baby out with the bathwater and think everything is terrible.

There is one positive aspect of our work that I would highlight, however, and that is the collegiality of committee testimony. We get to hear every point of view in committee. We studied Bill C-49 for five days from dawn to dusk, and we were happy to do it. Every piece of testimony added one more brick to the building of this bill.

That being said, why is it that, after our study, these bricks are not being used to build up the bill? Why are they instead being used either to build a Liberal version of the bill, or to stone some amendments to death?

Several lines of consensus clearly emerged from all of the testimony we heard during our study of Bill C-49. The reason they are no longer reflected in the bill is not because members from any party felt uneasy about calling for a given addition, deletion, or change. It is because, I repeat, all of the amendments were rejected, except those the Liberals had proposed.

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

Mr. Speaker, I would like to thank my hon. colleague for his remarks. I thoroughly enjoy working with him on committee. In fact, he would have made the observation during our clause-by-clause study of the bill and amendments made that we often had the same amendments we would have brought forward. I believe that was because it completely reflected what we heard from the stakeholders and experts. These were not amendments that we came up with ourselves, but amendments that the industry told us were needed.

The other observation made at that time was that this piece of legislation was a crowning achievement. I do not know if he would like to comment on that, but what I would ask him to comment on is the privacy commissioner's letter that was written to our committee chair, dated September 12, 2017, which raised concerns about how Bill C-49 was addressing the data that was going to be collected from LVVRs. Now that we are at report stage, does the member believe that the bill addresses these concerns adequately?

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

Mr. Speaker, I admit that I had two reactions when I learned that I had another 10 minutes to speak to Bill C-49.

First, I felt a little bit of panic. I asked myself how I would manage, in 10 minutes, to cover everything that is wrong with this bill. Second, I told myself to calm down, because no matter what I say, I will not be heard, and nothing I suggest will be retained. I will simply have to talk about some aspects of the bill that seem to have major problems, raise the question of relevance, and talk about how we work in the House and in committee.

Members will recall that during the 2015 election campaign, the Liberals said that everything about the previous Conservative government's approach had to be changed. Now, we see that essentially nothing has changed. As soon as a party is in government, it seems to magically become all-knowing, and bills automatically become wonderful and unchallengeable.

I still maintain that enlightenment comes from the clash of ideas. This is also what Quebeckers and Canadians expect from Parliament. They expect all members, regardless of their role in the House or their political stripes, to bring their perspectives and to work together to find the best solution. I must say that this is not the experience I am having right now.

I want to take the few minutes I have left to give an overview of the aspects of this bill that are ill advised. This bill plays well in the media, because Canadian consumers have been waiting for this for years. For a number of weeks the public saw Bill C-49 as a bill on the passengers' bill of rights, and yet, it is much more than that. It is an omnibus bill, so even if it often deals with transportation, it remains an omnibus bill.

One might ask why the government would introduce an omnibus transportation bill instead of addressing each problem and finding the best solution. Was the government hoping to use a wide-ranging bill such as this to discreetly gloss over some issues it does not care as much about? To ask that question is to answer it.

I will say that, as I was preparing my speech, I began to think 10 minutes might be too much. Perhaps I would not need more than 10 seconds to sum up Bill C-49 with the help of an old saying about biting off more than one can chew. That is exactly what is happening with Bill C-49, a bill that tried to tackle some major and necessary changes but falls short in many regards.

I want to comment on the passengers' bill of rights that consumers have been waiting for for years. Canada will once again be the last hold-out in adopting a passengers' bill of rights not unlike the ones that already exist all over the world. Let me emphasize that a great many witnesses told the committee that similar bills of rights already exist and that the European version is probably the gold standard. The European model is actually the one that inspired a New Democratic colleague of ours to introduce a proper passengers' bill of rights during the 41st Parliament. All Bill C-49 does is offer some general guidelines for Transport Canada consultations so that, at some point in 2018, the department can come up with some recommendations that the minister can do with as he pleases. If we are lucky, I get the sense the government will propose a passengers' bill of rights a few weeks or months before the 2019 election to generate some media hype. In the meantime, passengers will still have no rights.

No one needed to reinvent the wheel, here; every single witness testified that the systems that already exist work well, and yet, what we have amounts to an empty gesture. I would like to share one brief example of the difference a bill of rights can make.

Flight cancellations that invoke the European passengers' bill of rights account for 0.4% of all cancelled flights, whereas in Canada, where we still do not have a bill of rights, the rate is four times higher. That shows beyond a doubt that a bill of rights does have a real impact.

This could even be described as a government approach, since all of the rules that will make up this bill of rights will be applied by regulation. They will not be embedded in the act and so the minister will be able to easily change them on the back of a napkin some Friday afternoon as he sees fit. It is much more complicated to amend a law since that requires the involvement of the House. The approach is therefore questionable, as is the fact that the bill of rights is not embedded in Bill C-49,

I also want to say a few words about the voice and video recorders that were mentioned in previous questions. Everyone agrees that we should try to do everything we can to enhance protections and decrease the number of potential incidents. That is why airplanes have black boxes. As soon as there is an incident, the data from the black box can be checked to try to determine what the problem was, come to the best conclusions possible, and amend the approach if necessary.

We proposed an amendment that allayed all of the concerns workers have about the bill of rights and the protection of privacy. Everyone agreed that the Transportation Safety Board of Canada inspectors were the ones who needed that information. That is what those recordings should be used for. The TSB and the TSB alone should have access to those recordings if an incident occurs. That would allay all of the concerns of workers who might think that the employer could use those recordings for disciplinary or other purposes. It also addresses any concerns regarding the violation of privacy. The recordings would be available to TSB inspectors and only TSB inspectors when necessary. That is another amendment that was dismissed out of hand.

I would like to talk a little about the competition commissioner. Those who followed the case will remember the joint venture agreement between United Airlines and Air Canada that the competition commissioner ruled on. He said that a number of routes should be omitted from the agreement because, in the end, it was consumers who would lose out. He had the authority to limit this sort of agreement.

Now, the government is giving the minister that power, and relegating the commissioner to an advisory role. The minister can make his own decisions based on the public interest, a concept that is rather vague and becoming even vaguer. The committee never managed to define this concept. Neither the minister nor any of the witnesses or public servants who appeared managed to define it. That could result in an abuse of power by the minister, who may not necessarily defend the interests of Canadian and Quebec consumers. That is a serious problem.

Finally, I want to talk about regional airports. We all agree on the need to develop regional airports. Many companies want to offer cheap flights from regional airports rather than the larger airports. Some municipalities, such as Trois-Rivières, have explored the option of developing chartered flights, but had to abandon the idea because the cost of security is too prohibitive. No consideration is being given to the possibility of redistributing the cost of security to every passenger and airport. Instead, those who want security services are simply being told they have to pay for it. If a regional airport like the one in Trois-Rivières wanted to offer security services and pay for them itself, it would have to charge an extra $70 or $80 per ticket. We know full well that at that rate, the airport cannot compete and the idea will be dropped.

Those are the four elements I wanted to address. I sense that the Speaker would like me to wrap up so I will leave it there and make myself available to answer questions.

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

Mr. Speaker, I have to tip my hat to the response I got from my Conservative colleague a few minutes ago when she said that she cannot get inside the head of a Liberal. I would not be able to manage it either.

I always believed that in the House, as well as in committee, solutions emerge from the clash of ideas. That is how we come up with the best solution. I must apologize to the hon. member for saying earlier that no amendment had been accepted. That is not true. One amendment was accepted, and then only because the Liberals had proposed the exact same one. That is not what I would call open-minded. Even in the example that we are talking about, voice and video recorders on locomotives, what is being proposed in Bill C-49 is at odds with the conclusions of a Transport Canada working group.

I will repeat the question. What place do the opposition parties have in developing a bill if all amendments are always rejected?

[Karen McCrimmon, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I am pleased to rise today to speak to Bill C-49.

Our rail transportation system is essential to Canada's reputation as a reliable trading partner. It is one of the economy's driving forces. That is why our government is taking a proactive approach by introducing this bill. The proposed measures will support the system's commercial orientation, which has made Canada's freight rail service one of the most efficient systems with some of the lowest freight rates in the world—even lower than in the United States.

Railway companies have also made significant investments to make Canada's rail transportation system more efficient and safe. That is why this bill also includes measures to promote future investment. This bill not only adds to our success, but will also ensure future risk management. Even if the rail transportation system is currently doing fine, there are some pressures to handle.

Canada's freight rail legislative framework must address these pressures, and that is why Bill C-49 would foster a balanced, efficient, transparent, and safe freight rail system. Overall, the freight rail measures in this bill strike a delicate balance between railway and shipper interests and provide the right conditions for our freight rail system over the long term. These legislative provisions would provide shippers with stronger tools so they can access the highest level of service at the best possible rates.

Through their diligent work in reviewing Bill C-49, the Standing Committee on Transport, Infrastructure and Communities has proposed amendments that would further strengthen Canada's freight rail legislative framework. Amendments made by the committee include providing captive shippers in British Columbia, Alberta, and northern Quebec with access to long-haul interswitching; extending the notice period for the removal of interchanges and clarifying that the removal of an interchange does not relieve a railway of its level of service obligations; advancing the timelines for the coming into force of the new data requirements on service and performance metrics to six months following royal assent; and tightening the timelines for the posting of these metrics on a weekly basis by the Canadian Transportation Agency, which would improve transparency. Together, these amendments would strengthen the freight rail provisions while maintaining the balance that Bill C-49 is intended to achieve.

Safety is also a critical element of our future success, and that is why this bill includes important measures on voice and video recorders. We recognize that the greater use of technology can often create challenging and complex dynamics in the work environment. I am certain that my hon. colleagues can appreciate that this is the case with the proposed amendments to the Railway Safety Act, which would mandate the installation of voice and video recorders in the locomotive cabs, including both freight and passenger trains.

As background, allow me to remind my hon. colleagues that the call for in-cab voice and video recorders was added to the Transportation Safety Board of Canada's watch list in 2012. Further, the question of mandating this technology has been studied numerous times and been the subject of various recommendations from technical industry working groups, the TSB, and parliamentary committees. This includes, over the years, Transport Canada working groups, with the participation of the railway industry and labour unions, to study the feasibility and safety benefits of requiring this technology in locomotive cabs, specifically in 2006, 2009, and 2012. The latter resulted in the adoption of a voluntary approach whereby railways were encouraged to install the devices on a voluntary basis. More recently, there have been calls for a mandatory regime in the independent Canada Transportation Act review report and in the 2016 report of a committee of this House, the Standing Committee on Transport, Infrastructure and Communities.

The Transportation Safety Board of Canada has always supported a regime such as the one being proposed in this legislation, which is outlined in their safety study on in-cab recorders published in September 2016. In that report, the Transportation Safety Board of Canada concluded that to maximize safety benefits, the use of data obtained from these recorders should not be limited to post-accident investigation, but rather should be used to also support proactive safety management.

The government has carefully considered and examined how to maximize the safety benefits of this technology while respecting employee privacy. This is why the changes we are proposing specifically define, limit, and control access to, and uses of, the data obtained through these recordings in accordance with Canadian privacy laws. As my hon. colleagues can attest, this is a comprehensive and balanced approach that would significantly advance railway safety while expressly supporting employee rights.

Bill C-49 also proposes a new, transparent, and predictable process that takes into account both competitive and public interest considerations in the assessment of air carrier joint ventures. Under the proposed process, the Minister of Transport would receive a report from the commissioner of competition identifying any risks to competition. The minister would assess these arrangements from a public interest perspective and make a decision taking both competition and public interest considerations into account.

As mandated by the amendments made at committee, a summary of the commissioner's conclusions and the minister's final decision would be made public to ensure the transparency of the process. Making this information public would inform Canadians of the grounds for granting or refusing a joint venture arrangement, and under what conditions, and would likely help build public confidence in the process.

Also, due to a clerical error, the text of the French language version of the adopted amendment continues to make the publication by the commissioner of competition a voluntary step in the process instead of a mandatory one. There is a government amendment being proposed at report stage today that would correct this clerical error so that the English and French versions of this bill will be aligned.

To conclude on this topic, it is expected that joint ventures would lead to better connectivity and an overall improvement in the air passenger experience, while ensuring competition.

As it relates to air passenger screening services, Canada's largest airports have expressed an interest in improving the timelines of passenger screening, either through additional screeners or technological innovation. At the same time, some smaller non-designated airports have expressed an interest in obtaining screening services to help develop economic opportunities. The proposed amendments to the Canadian Air Transport Security Authority Act are important, as they would create a more flexible framework to allow CATSA to provide these services on a cost-recovery basis, which would in turn allow Canada to maintain an aviation system that is both secure and cost-effective.

Additionally, important amendments to the Canada Marine Act are proposed that would allow Canada port authorities to access loans and loan guarantees from the newly created Canada infrastructure bank, which would support investments in Canada's trade corridors and infrastructure projects, contributing to our long-term growth as a nation. Finally, Bill C-49 would improve the efficiency of Canada's supply chain by allowing foreign vessels to reposition owned or leased empty containers between locations in Canada on a non-revenue basis.

In summary, Bill C-49 provides critical objectives, including fair access to shipper remedies, efficiency, long-term investment, transparency, and safety. I urge members to support Bill C-49 in its current form and to adopt it as quickly as possible so that the right conditions will be in place for a successful winter season in our rail transportation system.

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

Mr. Speaker, I thank my colleague from Carlton Trail—Eagle Creek for her presentation. I admit that I agree with the key components of her speech. It is truly a pleasure to work with her at the Standing Committee on Transport, Infrastructure and Communities. I would not have believed it when she was in the Conservative government and that brings me to my question.

Since she was once on the government side, and it will surely be my turn in 2019, what happens to members when they arrive in government to make them suddenly think that they have all the answers and that every amendment proposed by the opposition is out of order?

That is what we experienced with Bill C-49, and that is what we recently experienced with Bill S-2 as well.

What makes the Liberal government members think that the light only shines when it is red?

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

moved:

Motion No. 14

That Bill C-49 be amended by deleting Clause 73.

Motion No. 15

That Bill C-49 be amended by deleting Clause 74.

Mr. Speaker, it is an honour for me to rise and speak to my report stage amendments to Bill C-49, the transportation modernization act.

This bill amends 13 other acts. It deals with planes, trains, and ships. It touches on airports and seaports. It is vast in its reach and wide in its scope. Yet, if I had to state my thoughts on this bill in two words, it would be “missed opportunity”.

Through Bill C-49, the government had the opportunity to make great strides in improving our Canadian transportation system to ensure that it works well for all Canadians. Instead, the government let that chance go by.

The transport committee began special hearings on Bill C-49 in the week prior to the House's return from its summer recess. Over the course of that week, we heard 44 hours of testimony from dozens of stakeholders and expert witnesses in each of the sectors touched on by Bill C-49. We were given briefs and letters, consisting of thousands of pages of data, with over 100 suggested technical amendments from those whose lives and livelihoods will be affected by this bill.

We heard, almost unanimously, that Bill C-49 was a good start, and that if the suggested amendments were made, the bill would actually accomplish its stated objectives. However, after only two weeks to review this mountain of information, the Liberal members of the transport committee defeated over 24 reasonable technical amendments. Again, these amendments were suggested by a wide range of stakeholders and experts, and were written to make the bill a workable solution for all involved.

The good new is that there are still some amendments we can make here at report stage of this bill. I will be suggesting four amendments, as they were moved. The first of these has to do with airline joint ventures. Joint ventures, while sometimes useful for creating efficiencies for airlines on routes in the air passenger industry, can also run the risk of comprising consumer interests due to the loss of competition on a given route, and the ensuing increase in ticket prices.

That is why the decision to grant or deny an application for a joint venture has historically been left in the hands of the very capable Competition Bureau and the Commissioner of Competition. Bill C-49 would change that. If the bill were to pass in its current form, the Minister of Transport would have the final say on whether or not two airlines could combine routes and share cost and profit.

Further, this bill stipulates that the Minister of Transport must consider the nebulous terms “public interest”, and not simply whether or not a proposed joint venture would reduce competition. I use the word “nebulous” to describe the terms “public interest”, because over the past two years, far too often we have seen the Liberal government and its ministers claim to be serving the public interest while, in fact, they are only serving their own political or personal interests.

The recent political machinations that led to the cancellation of energy east come to mind as an example of the government serving its own political interests rather than the interests of all Canadians.

However, getting back to the amendment before us, this change gives an uncomfortable amount of power to the Minister of Transport over the currently non-partisan process and over the Competition Bureau. Bill C-49 risks taking a non-political process and politicizing it.

Bill C-49 also introduces an option for airport authorities to purchase the services of additional security personnel from CATSA. Ostensibly, additional staffing would increase the speed at which travellers are processed through security. On the surface, increasing security and processing speed to ensure that travellers remain safe while not missing their flights sounds like a good idea. However, there are two significant areas of concern.

The first has to do with costs. Air travel in Canada is already among the most expensive in the world. This provision could increase the costs even more. We all know that any added cost for the airports would simply be passed along to the end user, making air travel for middle-class Canadians even more expensive.

Second, we heard in testimony throughout the study of this portion of Bill C-49 that the federal government currently takes more in security fees than it provides back to CATSA to perform its duties. I believe this is unacceptable.

This is the opposite of making travel more affordable for Canada's middle class. Bill C-49 would, rather than addressing the issue, simply impose yet another de facto tax on Canadian travellers. For this reason, I have proposed a report stage amendment to remove this clause from the bill.

I am also proposing an amendment to remove two other clauses, clauses 73 and 74, from Bill C-49 that would give port authorities access to the Liberals' infrastructure bank. The infrastructure bank is funded by taking $15 billion away from infrastructure projects for small and medium-sized communities across Canada through the Liberals' imposition of a $100 million minimum cost requirement for projects to qualify for support from the infrastructure bank. Small and medium-sized communities would see almost no benefit as a result. While I understand that our ports are in need of infrastructure investments, the infrastructure bank is not the way to address this.

While these are the report stage amendments I am proposing, I was very disappointed by the display of partisanship at committee when this bill was reviewed. At committee, my colleague from the NDP, the member for Trois-Rivières, and I proposed small, reasonable, technical amendments, which were defeated by the Liberals at committee.

For instance, with the introduction of long-haul interswitching, the Liberals sought to create their own solution to a problem which had already been addressed with a reasonable Conservative solution.

In the Fair Rail for Grain Farmers Act, the previous Conservative government had created a regime of extended interswitching that worked so well in the prairie provinces that shippers from across Canada requested that it be extended to the entire country.

Instead, the Liberals created the complicated, inefficient long-haul interswitching regime that has such poor conception, and so many exceptions, it will be all but useless to shippers. For example, the member for Trois-Rivières and I both proposed an amendment requested by many stakeholders that would have made LHI work that much better.

This minor technical amendment would have changed the wording of the provision to allow the first interchange point to be in the reasonable direction of the shipper's destination. What does that mean exactly? Simply put, shippers did not want to have to send their product potentially hundreds of kilometres in the wrong direction to reach the nearest interchange point, as this would increase their costs. What happened to this very reasonable technical amendment? The Liberals defeated it. It was another huge missed opportunity to make this bill work.

Meanwhile, not content to make this measure simply worthless, the Liberals may have actually succeeded in making it harmful. In Bill C-49, toxic inhalation hazards, known as TIHs, are exempted from long-haul interswitching, supposedly due to safety concerns. However, this is not a reasonable exemption to make. TIHs are shipped under an extensive safety regime, as prescribed under the Transportation of Dangerous Goods Act and its regulations.

The real concern is that this exemption undermines the principle of the common carrier obligation. This principle essentially states that railways are obligated to carry all products without discrimination, and allows shippers to access the railway's services without unreasonable carriage fees or threats of denial of service. Denying access to long-haul interswitching for TlHs could be the thin edge of the wedge that would one day break apart the common carrier principle.

Ten minutes is not nearly long enough to list every reasonable technical amendment that the Liberals voted against. Suffice it to say this bill is full of missed opportunities. It is my hope the government will take a small step forward, and accept our report stage amendments.

Speaker’s Ruling

[The Speaker, Liberal, Geoff Regan]

There are 15 motions and amendments standing on the Notice Paper for the report stage of Bill C-49.

Motions Nos. 1 to 15 will be grouped for debate and voted upon according to the voting pattern available at the table.

The House proceeded to the consideration of 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, as reported (with amendment) from the committee.

Business of the House

[Bardish Chagger, Liberal, Leader of the Government in the House of Commons and Minister of Small Business and Tourism]

Mr. Speaker, this afternoon, we will continue the debate we began this morning on the Conservative Party's opposition motion.

Tomorrow, we will begin debate at report stage of Bill C-46 on impaired driving.

Next Monday shall be an allotted day. For the remainder of next week, we will resume debate on Bill C-46 and also commence debate at report stage of Bill C-49, transportation modernization.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you, Mr. Chair.

Before I present, I apologize to the committee members, but I need to put it on the record that every time I am forced to be before a parliamentary committee, I am here under duress. This committee passed a motion that requires me to be here if I want to put forward amendments at this stage. Otherwise, but for the motion of this committee, I would have had rights to put forward these amendments at report stage.

Since report stage happens only once in the chamber, you don't have the conflict that I had just the week before Thanksgiving, when both Bill C-45 and Bill C-49 went to clause-by-clause consideration at the same time, and because of the motions passed in those committees, I had to present amendments at the same time.

I would particularly urge this committee, as the committee on procedure and House affairs, that this is the committee that should have determined whether my rights as an MP needed to be curtailed at report stage. Under the former prime minister, the PMO basically did an end run around PROC to change the way legislation is treated in the House, by passing identical motions committee to committee requiring members of Parliament in parties with fewer than 12 MPs, or independents, to bring their motions to committee with 48 hours' notice. This is to create a fake “opportunity” that denies me my rights at report stage.

That's the context in which I tell you that I am here under duress. I know a lot of you are unfamiliar with this situation, even though the committee passed this motion. You probably thought it was a friendly thing, a nice thing, but it has probably taken years off my life to try to get to every committee at clause-by-clause consideration, instead of having the rights I would otherwise have at report stage. It's particularly offensive to PROC. If you were, for instance, to repeal your own committee motion, I'd find that extremely helpful.

I'll be very brief. I understand that the conflict occurs with the Liberal amendment, which deals with lines 34 to 36 on page 6. So does mine.

PV-2 stands for Parti vert-2, because the clerks of the committees decided not to call my motions “Green Party” because then they would look like government motions, with a “G”. That's why it's Parti vert-2.

Parti vert-2 is in conflict with paragraph (b) of David's amendment. What I am trying to do with my amendment is ensure that it's not precluded that the reporting take place during an election. If you go to the bill, you see that I basically change the language. Where it says, “Subsections (1) to (6) do not apply in respect of a regulated fundraising event”, my amendment, Parti vert-2, would change the words “do not apply” to “continue to apply”, so that the fundraising rules within this legislation would apply during the writ period.

Thank you, Mr. Chair.

Transport, Infrastructure and Communities

[Judy Sgro, Liberal, Humber River—Black Creek, ON]

Mr. Speaker, I have the honour to present, in both official languages, the 15th report of the Standing Committee on Transport, Infrastructure and Communities in relation 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. The committee has studied the bill, and we had great co-operation from all members of the committee from all sides of the House. It was an example of how to deal with legislation in a proper and effective way in the House. We have decided to report the bill back to the House with amendments.

Bill C-48--Time Allocation Motion

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, I am glad that my colleague brought up the fact, as I did beforehand, that Bill C-49 passed yesterday through clause-by-clause. It is certainly my hope that Bill C-48 will go through a similar collegial process. There will be that opportunity.

I totally respect the independence of the committee as our government has done from the very beginning, unlike the previous government. I am sure when it does arrive at committee, there will be a similar opportunity to hear witnesses to argue for and against, and eventually go to clause-by-clause. I hope to do all this in a collegial manner.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Mr. Speaker, I sit on the transport committee, and we put through Bill C-49 last night. It was a little unusual that on Monday we were notified the committee would sit from 3:30 p.m. to 8:30 p.m. Be that as it may, the member from Saskatoon and the member for Wellington—Halton Hills stayed, and it was very collegial. In my nine years, I do not recall any bill getting passed in one day through a committee. The members made their points and were very collegial.

However, we see this take place today. If people wonder at home why politics are sometimes toxic, this is a great example. Here is an opportunity for members of Parliament to debate the issue, to let it go to committee, and probably have an opportunity to be collegial with the amendments in clause-by-clause. He has now forced the committee to examine every amendment, and every clause to the very finite end.

Therefore, between the minister and the House leader, could they explain why they would want to sour the positive relationship on the transport committee? For good measure, he should apologize to the chair, because she has done a great job, and now he is putting her in a heck of a situation.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Mr. Speaker, that is a good reminder.

Back in 2015 we definitely heard a lot of voices from Canadians who very strongly supported the concept of a permanent moratorium on west coast tanker traffic. That is, of course, the substance of this bill.

We feel that there is going to be a reasonable amount of time for members of the opposition to express themselves on this bill. The bill is going to go to committee. It will come back for report stage and third reading. There will be other opportunities for both parties to express themselves on whether they agree with it or not.

As well, there is the very important work that goes on in committee. May I say, on a very positive note, that yesterday there was great co-operation among all the parties in doing the clause by clause on another important transport bill, Bill C-49.

[Michelle Travis]

I would say that the Emerson report makes some good suggestions in terms of dealing with airport improvement fees. I think there are some limitations in terms of how far it goes. It did not get into the local decision-making issue. The other issue that's popped up with municipalities is taxation and how the tax that airport authorities have to pay the cities is determined, because really, airport authorities have a lot of power to determine that.

In terms of the Emerson report, what's interesting is having a process to contest the airport improvement fees through the Canadian Transportation Agency. I think the challenge there is that they're pretty short-staffed, as we're finding out just from following Bill C-49.

There's a question there about airport passengers having complaints and those running through the agency, and whether they are staffed and they can actually follow through with any sorts of complaints around airport fees. Whereas I think it's $20 here, I think in Calgary it may be closer to $30 for every time you depart. That's a high fee. There should be an opportunity for the community members who assess those fees to raise objections.

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

Since it has been a little bit of time since we first talked about it, I'd like to reiterate some of the reasons we brought this forward. A number of our witnesses told us many things about regulated interswitching. They believe that it has worked well as a pro-competitive remedy because rail carriers have been prepared to compete for traffic using it and because the applicable rates are known to all prospective participants at the time when they are negotiating potential routes, rates, and other conditions.

They have also noted that the long-haul interswitching remedy in Bill C-49 is far less user friendly. They made many points, but there are two that I would highlight at the end of this conversation. First, on a more fundamental level, LHI is very similar in concept and overall structure to the competitive line rate remedy that has been in the legislation since 1988. That remedy has been inoperative since the early 1990s because CN and CP have effectively declined to compete for traffic using the CLR. That was the conclusion reached in the statutory review of the National Transportation Act in 1993, which was almost 25 years ago.

Second, when speaking with regard to the four western provinces, the witness group stated that for most shippers in western Canada, the nearest interchange with a second carrier was an interchange between CN and CP, and they provided a map to us when they made their testimony. They stated that, like CLR, whether LHI provides competitive alternatives to any shipper will depend largely on whether CN and CP are prepared to compete with each other using this remedy. Unless they are, LHI will remain a concept on paper that has little or no practical application.

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

In keeping with our co-operative spirit and seeing that we ultimately do want to increase transparency and Bill C-49 increases the amount of data that needs to be submitted and calculated, I'd like to withdraw my motion.

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

Madam Chair, this is a recommendation that came to our committee through Mr. Tougas. Quite simply, the rationale would be because C-49 is not oriented toward fulsome disclosure, not to customers, not to the agency, and not to the minister, the proposal is a simpler revision to the performance data provisions of C-49.

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

Amendment NDP-12 proposes that Bill C-49, in clause 69, be amended by replacing lines 1 to 6 on page 49 with the following:

(3) The costs incurred for the delivery of screening by the Authority under the terms of an agreement entered into under subsection (1) shall be borne by the Authority and may not be recovered from the other party to the agreement.

[The Chair, Liberal, Judy Sgro]

No. It's from an independent member, and it's moved automatically here.

The motion is to amend Bill C-49 in clause 61 by adding after line 20 on page 42 the following:

(4) The information that a company records, collects or preserves under subsection (1) shall not be destroyed if it is used, or can reasonably be expected to be used, for any purpose authorized under this Act.

Is there any discussion on that amendment?

(Amendment negatived)

(Clause 61 agreed to)

(On clause 62)

We have amendment NDP-9.

Monsieur Aubin.

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

Madam Chair, I want to thank the clerk for bringing up the letter that we received from the Privacy Commissioner on September 12. I think that could have been the last day of our committee meetings on Bill C-49. I think it's really important to mention that the Privacy Commissioner noted...and I'll only pick out a couple of statements out of this letter:

However, we find the provision allowing rail companies to have access to these data for proactive safety spot checks is less clearly defined.

I think they're identifying a lack in the bill. Then he is also saying that:

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.

I think we have to be aware that we have the Privacy Commissioner weighing in on this piece of legislation and pointing out to us where there may be a need for more clarity. I guess our committee has to decide whether or not we're fine to leave that clarity up to what may be put in the regulations. What is the result of this? What will happen if we've received this letter from the Privacy Commissioner in regard to a proposed bill and we do not take those concerns...?

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

Thank you, Madam Chair.

I found Mr. Hardie's presentation particularly eloquent. He spoke about an environment of trust, and that's precisely what is lacking.

All the situations in which voice and video recorders cannot be used are being listed, but we are told that we are going to define them later in the regulations in order to specify them. We are against that. In any case, we aren't necessarily working on safety. If we really wanted to work on safety, it would have been good for Bill C-49 to propose measures against train operator fatigue. We had to face the same problem in aviation safety.

In our view, voice and video recorders are tools that allow the TSB to measure, after the fact, that is, after the accident, unfortunately, what was lacking or not. If we really want to talk about safety, we must review all the measures that affect events before an accident happens. Voice and video recorders do nothing to prevent accidents

Personally, I wouldn't want a voice and video camera installed in my office to monitor my daily work. I guess the Prime Minister and Mr. Hardie wouldn't like that either. Yet that is what we are offering to train drivers. We tell them that whenever they enter their office, meaning their locomotive, their actions will be recorded on a voice and video tape.

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

Thank you, Madam Chair.

In the next few minutes, you will see a number of amendments proposed by the New Democratic Party. They are all similar, because the discourse must be consistent.

In all the presentations, we were told that tapes of these voice and video recorders would not be used in any particular situation. The only thing on which all witnesses agreed was that these recordings should only be used by members of the Transportation Safety Board of Canada, or TSB. The bill should not contain any clauses that give the railways the power to do anything else because of criteria that are not quite clear. That's what we are trying to correct or eliminate.

Amendment NDP-8 proposes that Bill C-49, in clause 61, be amended by replacing lines 13 to 16 on page 42 with the following:

(2) No company referred to in subsection (1) shall use the information that it records, collects or preserves under that subsection. Instead of explaining how the company should not do it in unfortunate situations, let's say from the start that it cannot do it.

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

Okay, I move that Bill C-49 be amended by adding after line 23 on page 41 the following new clause:

59.1(1) The Minister shall, no later than three years after the first day on which sections 2 to 59 of this Act are all in force, carry out a comprehensive review of the operation of this act in relation to the Canada Transportation Act, and any other Act of Parliament for which the Minister is responsible that pertains to the economic regulation of a mode of transportation or to transportation activities under the legislative authority of Parliament.

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

Clause 59.1 would amend Bill C-49 by adding, after line 23 on page 41, a new clause which speaks to this:

The Minister shall, no later than three years after the first day on which sections 2 to 59 of this Act are all in force, appoint one or more persons to carry out a comprehensive review of the operation of this Act in relation to the Canada Transportation Act

You have the rest in front of you.

Before you rule on that, I think there might be a subamendment.

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

Yes. It states that Bill C-49, in clause 29, be amended by deleting lines 28 and 29. This speaks to my first amendment on this section, which did not pass, and we would be supporting recommendations by a number of witnesses to remove the following:

for the movement of TIH (Toxic Inhalation Hazard) material;

I think they spoke more around the common carrier obligations of a railway when it comes to moving this kind of material, and they said that if they do not have access to the long-haul interswitching remedy as a result of the goods that are being carried, there's a thin edge to the wedge there.

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

Madam Chair, I believe this amendment was put forward by several witnesses. We know that at least three witnesses we heard from came forward with this exact recommendation. It has to do with clauses within the long-haul interswitching section, which, with all due respect to my colleagues across the way and to our departmental officials who characterized Bill C-49 as a crowning achievement when they were here to provide testimony to us at the very beginning of our study, every single witness without fail—

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

Madam Chair, this section and this amendment have to do with access to competing railways. We heard an awful lot of testimony about long-haul interswitching. I think we would all agree that we heard from many of our witnesses that they thought this bill got a number of things right in many ways, but that the long-haul interswitching remedy was creating a lot of problems for our shippers, and in particular that the long-haul interswitching remedy in Bill C-49 is far less user-friendly.

I believe this amendment is being put forward to ensure that the extended interswitching that our shippers have come to enjoy remains in some way, shape, or form a remedy for them.

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

Madam Chair, this speaks in particular to level of service. We heard from a number of witnesses some concerns about some of the wording in Bill C-49.

This bill includes an addition to the level of service provisions that requires the agency to dismiss a complaint if it is satisfied that the railway has provided the highest level of service that is reasonable in the circumstances. What we heard was that this unfortunately does not tell shippers what they must prove in order to succeed in a level of service complaint.

If the intent is that unless the railway has provided the highest level of service that is reasonable in the circumstances it will be found in breach of its obligations, then the proposed new subsection should be amended to say so clearly. That's what this amendment is intended to do, Madam Chair.

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

Thank you.

My argument in favour is very simple.

Bill C-49 contains a proposal that is not really a proposal, in my opinion. It is actually a solution designed to save time. What for? We could spend a lot of time discussing that.

As for the air passenger bill of rights, Canada does not have to reinvent the wheel because bills of rights of that kind already exist. Many witnesses spoke very positively about the European bill of rights, for example.

The purpose of most of the proposals in this amendment is to include in the bill the main rights that passengers could rely on in case of a problem. The NDP is not actually insensitive to the Liberal approach, under which all that work would be done by regulation, because, when conditions change, it is easier to amend a regulation than an act. We are also sensitive to certain of the details, like the amount of fines.

However, in terms of rights, it seems to me that the problems have been known for a long time, and it is possible to enact the equivalent of the proposals in the European bill of rights, for example. That is actually what the text of the amendment proposes. It is a concrete proposal that I invite my colleagues to consider and take a position on.

[Helena Borges]

In fact, the intent behind Bill C-49 is to be as transparent as possible, but there are concerns about some of the confidential information that may be presented as part of the submissions. Throughout the act there are provisions to protect the confidential information. While the act didn't say that the reports had to be made public, we wouldn't necessarily oppose that, but we would ask that the confidentiality provisions would have to be safeguarded in order for a report to be made public, because certain information can't be in the public domain.

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

Thank you, Madam Chair.

Unless the officials tell me that I am wrong, it seems to me that, before Bill C-49, the Commissioner of Competition could, on his own initiative, block an agreement. So, my impression is that, although I agreed with all the amendments proposed by my Conservative colleagues—and that is an interesting realization, I confess—basically, the fact is that the minister can still circumvent the recommendation. The commissioner would therefore no longer have the means to block an agreement that, in his opinion, would be detrimental to competition.

Just to be sure that I understand the procedure correctly—because this is the first time I have done this kind of exercise—I could support each of the Conservative measures but, in the end, vote against section 14, because, in my opinion and in our opinion, it gives unreasonable powers to the minister and takes them away from the Commissioner of Competition.

Is my reading of the procedure correct?

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

Madam Chair, I don't intend to spend a lot of time providing rationale to the amendments that our party has submitted. Certainly, almost everybody around this table was in attendance at all of the testimony that we heard from our witnesses, but suffice it to say that this amendment is in keeping with a recommendation from François Tougas.

Do I need to read the amendment into the record? I can just leave it at that and state that the rationale for that proposal was that Bill C-49 is not oriented toward fulsome disclosure, not to customers, not to the agency, and not to the minister. Therefore, the proposal that was provided by this witness is a simpler revision to the performance data provisions of Bill C-49.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling the meeting of the Standing Committee on Transport, Infrastructure, and Communities to order.

We are dealing with, pursuant to the order of reference of Monday, June 19, 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.

I have a script that I've been asked to read, so that everyone understands exactly how we go through this procedure. I'd like to provide members of the committee with a few comments on how committees proceed with the clause-by-clause consideration of the bill.

As the name indicates, this is an examination of all the clauses in the order in which they appear in the bill. I will call each clause successively, and each clause is subject to debate and a vote. If there is an amendment to the clause in question, I will recognize the member proposing it, who may explain it. The amendment will then be open for debate. When no further members wish to intervene, the amendment will be voted on. Amendments will be considered in the order in which they appear in the package each member received from the clerk. If there are amendments that are consequential to each other, they will be voted on together.

In addition to having to be properly drafted in a legal sense, amendments must also be procedurally admissible. The chair may be called upon to rule amendments inadmissible if they go against the principle of the bill or beyond the scope of the bill, both of which were adopted by the House when it agreed to the bill at second reading, or if they offend a financial prerogative of the crown.

If you wish to eliminate a clause of the bill altogether, the proper course of action is to vote against that clause when the time comes, not to propose an amendment to delete it.

Since this is the first exercise for many new members, I will go slowly to allow all members to follow the proceedings properly. If during the process the committee decides not to vote on a clause, that clause can be put aside by the committee, and revisited later. Amendments have been given a number in the top right corner to indicate which party submitted them. There is no need for a seconder to move an amendment. Once moved, an amendment will need unanimous consent to be withdrawn.

During debate on an amendment, members are permitted to move subamendments. These subamendments do not require the approval of the mover of the amendment. Only one subamendment may be considered at a time, and that subamendment cannot be amended. When a subamendment is moved to an amendment, it is voted on first. Then another subamendment may be moved, or the committee may consider the main amendment and vote on it. Once every clause has been voted on, the committee will vote on the title and the bill itself, and an order to reprint the bill may be required, if amendments are adopted, so that the House has a proper copy for use at report stage.

Finally, the committee will have to order the chair to report the bill to the House. That report contains only the text of any adopted amendments as well as an indication of any deleted clauses.

I thank the members for their attention. I wish everyone a productive clause-by-clause consideration of Bill C-49, an act to amend the Canada Transportation Act.

Pursuant to Standing Order 75(1), consideration of clause 1, which is the short title, is postponed.

I will now call clause 2 to open up today's discussion.

Mr. Chong.

Rail Transportation

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, Bill C-49 is going to introduce important modernization to the Canada Transportation Act, including the air passenger's bill of rights, and new opportunities for shippers across Canada to gain access to competitive rail rates.

The bill also provides for the introduction of video and voice recorders in locomotives. Labour groups are concerned this could be used by railways to violate workers' privacy and discipline them for non-safety related issues.

Could the Minister of Transport reassure us that this will not be the case?

Taxation

[Jean-Claude Poissant, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food]

Mr. Speaker, our government is always focused on delivering results for Canadian farmers.

We tabled a budget that treats agriculture as one of Canada's key industries and that sets a target of $75 billion in exports. We improved the grains legislation with Bill C-49, something the previous government never did. We signed the Comprehensive Economic and Trade Agreement, which will help boost agricultural exports to the tune of $1.5 billion annually. That is what our government has done for agriculture.

[Gábor Lukács]

Unfortunately not.

The way I would articulate it is that Bill C-49 is going to double the amount of compensation that passengers are not going to receive.

[Sean Fraser, Liberal, Central Nova, NS]

I have just one question to wrap up, and perhaps it's a good time to say thank you to our witnesses and to my colleagues on both sides of the table. This has been a valuable and interesting few days, and I really do appreciate everyone's work and look forward to our further deliberations.

Dr. Lukács, chief amongst your complaints seems to be the fact, in essence, that a lot of people are experiencing irritants and not having a remedy, if I can say there's one overarching theme. Do you think Bill C-49, particularly the requirement that would have airlines adopt clear and concise descriptions of how someone can enforce remedies, is going to improve the situation over the status quo?

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

In your view, should Bill C-49 solve the problem by determining that the company from which the person buys the ticket is responsible for that person?

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

You say that the European regulations are being taken into account. Could you tell me what evidence you have that the current government has considered the European regulations in drafting Bill C-49?

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Madam Chair.

I want to begin by thanking you for being part of this. You work on a daily basis in this wonderful world of air transportation, especially with passengers. You provide us with tools that allow us to do our jobs well. Thank you for being here despite the rather late hour.

My first question is for the representative from Flight Claim Canada.

You are saying that the information for passengers is inadequate. Your goal is to ensure that the information is more detailed, transparent, clear and unequivocal. That's what you said in your presentation.

My question is very direct: do you think Bill C-49 meets those objectives?

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Yes.

We have an interesting situation. Our previous panels indicated that the profit margin per passenger is very low. In fact, you made the comment that passengers are treated as a commodity, and in a sense I guess they are, because the airlines deal on a volume basis. Gone are the days when only the elite would fly, and therefore everything was crystal and silverware. On the one hand, we have a migration to opening up air travel to more people, but on the other, there seems to have been a trade-off.

One of the principles they've been trying to weave through this bill, Bill C-49, is the principle of balance. What does reflect a balance?

Mr. Lukács, with respect, you sound a little bloodthirsty. But at the same time, obviously we have had some outrageous incidents, so what does the balance really look like?

Mr. Charbonneau, I'll ask you.

[Gábor Lukács]

With respect to northern communities, part and parcel of the problem is lack of sufficient competition. However, even as Bill C-49 reads currently with respect to the challenges for the industry, the delays they experience in the north are often caused by not simply “circumstances beyond the airlines' control”, but purely weather.

In Canada, no person would want to hold an airline responsible for a genuine weather issue. That is a no-brainer. I'm not advocating for holding airlines responsible for what is genuinely weather. The trouble is that airlines often abuse the claims for weather. A claim that a flight from Toronto to Halifax was cancelled due to weather when the weather was happening in Vancouver is unacceptable.

Insofar as enforcement is concerned, the greatest problem is that many of those enforcement actions are discretionary. They are up to someone to decide whether they will or will not take enforcement action, and that has changed....

To be clear, I'm not proposing to punish airlines for delays. What I am proposing is that if a flight is delayed and an amount of compensation is owed, even if it's a small amount, if that amount of compensation is not paid out, then there should be a hefty penalty. The penalty should be attached to not complying with the rules, not the delay itself.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

I'm just looking at the north. The only other country that experiences the same sort of climate that we have is Russia. We have Nunavut, and they're in a unique situation. People are in small, isolated communities and there are so many things outside of their control.

We have to remember that Canada is a very large country, and fuel delivery is a big issue that can be affected for various reasons. By saying that we'll make provisions, it means absolutely nothing if it is not in the legislation. Rules after the fact never happen. I think we have to be very cautious on how we move forward.

Also, I was looking at your chart up there, and it seems like complaints and enforcement go hand in hand—less enforcement, more complaints.

I don't know if the airline industry is getting worse or the enforcement is the problem. I do a lot of travelling and I haven't really experienced a lot of delays. There are delays, but I expect that, because airlines have situations out of their control.

I think we have to do a better job in enforcement. Also, with Bill C-49, we have to ensure that we make provisions for northern communities.

Enforcement has to go hand in hand. Do you think that changing the rules is going to make a difference if enforcement stays the way it is, or do you think that setting up rules and just moving on will make a difference?

[Jacob Charbonneau]

There would probably be as many complaints as customers who have been affected by a situation that would require a complaint. However, if people were aware of their rights and there was a process in place, they would no longer have to file a complaint because recourse would be available to them.

That is the direction we want to see Bill C-49 move in. People need to be provided with tools so that they no longer need to file a complaint for compensation or settlement. Provisions need to be in place in advance to allow them to get compensation without having to file a complaint and always having to fight to get something.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you Madam Chair.

I have a few questions for Mr. Charbonneau with respect to where we're going and how we're getting there.

Your organization has been pushing for more accountability and more clarity for the traveller for quite some time. You wanted uniform, or you've advocated for a uniform compensation regime. How far do you think Bill C-49 has gone? How far are we, and how much more do you think we should do? Do you think C-49 sits nicely now, that it's a good bill, a good piece of legislation; or do you think that we have some more work to do?

[Gábor Lukács, Founder and Coordinator, Air Passenger Rights]

Madam Chair and honourable members, thank you for inviting me to this meeting. It is an exceptional privilege to have the opportunity to present the perspective of air travellers today.

Air Passenger Rights is an independent, non-profit network of volunteers devoted to empowering travellers through education, advocacy, investigation, and litigation. Our Air Passenger Rights Canada group on Facebook has more than 5,000 members.

My name is Dr. Gábor Lukács and I am the founder and coordinator of Air Passenger Rights, which grew out of my advocacy for the rights of Canadian travellers. Since 2008, I've filed 26 successful regulatory complaints against airlines, relating to issues such as liability for baggage damage, delay and loss of baggage, flight delay, flight cancellation, and compensation for involuntary denied boarding.

I'm here today to deliver a cautionary message. Bill C-49 does not address the key issue of lack of enforcement of the rights of passengers in Canada, it does not adequately protect Canadian passengers, and it falls short of the rights provided by the European Union's regime. I will be expanding on each of these issues in turn.

The lack of adequate legislation is often blamed for the woes of passengers. This is a myth. The Montreal convention is an international treaty that protects passengers travelling on international itineraries. It covers a wealth of areas: damage, delay, and loss of baggage, up to $2,000; delay of passengers, over $8,000; and even coverage in the event of injury or death. The Montreal convention is part of the Carriage by Air Act and it has the force of law in Canada.

Canada also requires airlines to set out the terms and conditions of travel in clear language in a so-called tariff. Failure of an airline to apply the terms and conditions of the tariff is punishable by a fine of up to $10,000 and is an offence punishable also on summary conviction. Thus, the existing laws, regulations, and regulatory decisions could provide substantial protection for Canadian passengers if only they were enforced by the regulator, the Canadian Transportation Agency. The trouble is that the agency has abdicated its duty to enforce the law. As you see in this diagram, which shows the statistics for the past four years, the number of complaints has soared, nearly quadrupled over the past four years, while the number of enforcement actions has dropped by an equal factor of four.

The agency has also been criticized by the Federal Court of Appeal. In a recent judgment, Justice de Montigny found that the agency erred by ignoring not only the wording of the Canada Transportation Act, but its purpose and intent. Justice de Montigny went on to remind the agency that it has a role to also ensure that the policies pursued by the legislator—you parliamentarians—are carried out. There's no doubt these laws can be improved, and it is our position that they should be. However, without enforcement, the law will remain that letter. Bill C-49, as it is reads now, does nothing to remedy this state of affairs.

Bill C-49 suffers from numerous major shortcomings. It misses important areas of passenger protection altogether and undermines existing rights in other areas. First, the bill does not create an enforcement mechanism or any financial consequences for airlines that break the rules, that disobey the rules that are laid down. Thus, breaking the rules remains the most profitable course of action for airlines. Second, the bill offers no protection for the most vulnerable passengers: children travelling alone and persons with disabilities. Third, the bill hinders advocacy groups—such as Air Passenger Rights—in protecting the rights of passengers by barring most preventive complaints that seek intervention before anyone could suffer damages.

All but one of the 26 complaints I brought and that I mentioned earlier were successful and were of this preventive nature. I was not personally adversely affected, but the practices that I challenged were clearly harmful and were recognized as such.

We recommend that the committee remove from the bill the proposed section 67.3 found in clause 17 of the bill.

Fourth, contrary to the testimony of Transport Canada officials that you heard on Monday, Bill C-49 does not provide protection that is comparable to the European Union's regime. For the all-too-common event of mechanical malfunction, the bill proposes to actually relieve airlines of the obligation to compensate passengers for inconvenience. This is cleverly hidden in proposed subparagraph 86.11(1)(b)(ii).

In sharp contrast, the European Union's regime recognizes that it is the responsibility of the airlines to adequately maintain their fleets and requires airlines to compensate passengers for inconvenience in the event that the flight is delayed or cancelled because of mechanical malfunction.

We recommend that the committee amend paragraph 86.11(1)(b) to clarify that in the event of mechanical malfunction, airlines are liable to compensate passengers for their inconvenience.

Fifth, the bill takes a step backward with respect to long tarmac delays by doubling the acceptable tarmac delay from the current Canadian standard of 90 minutes to three hours. This is a step backward. It's actually clawing back our existing rights as passengers.

We recommend that the committee amend paragraph 86.11(1)(f) by replacing three hours with 90 minutes and thereby restore the status quo.

In closing, we would also like to draw attention to some troubling facts that deepen our concerns about the impartiality and integrity of the Canadian Transportation Agency. Before this bill is passed by Parliament and before any public consultation takes place about the regulations to be developed, the agency has already sought IATA's input with respect to the regulations that the agency is to draft.

IATA is the International Air Transport Association. It represents the private interests of the airline industry. In our view, this was in disregard of the parliamentary process and of the rule of law. Evidence showing this, for the record, is found in an affidavit submitted by IATA in Supreme Court of Canada file number 37276.

We have also received reports from passengers about agency staff turning them away, unceremoniously advising them that their complaint filed with the agency would be closed. The agency did not make a decision or order dismissing these complaints, yet complainants were made to understand that their complaint had been dismissed. Complainants were either not informed about their right to ask for formal adjudication or were discouraged from exercising that right by agency staff.

In our view, the agency has lost its independence, and the integrity of its consumer protection activities has been compromised. The agency's actions and failure to act to enforce the law, as we see right in the statistics, have undermined public confidence in the agency's impartiality.

We recommend that the committee amend the bill to transfer regulation-making power from the agency to the minister and transfer other responsibilities relating to air passenger rights to a separate consumer protection body.

I would like to thank you for the opportunity to present the concerns of air travellers to the committee. A brief outlining these concerns and also providing detailed recommendations on how to salvage the bill has already been submitted.

[Daniel-Robert Gooch, President, Canadian Airports Council]

Thank you, Madam Chair.

Ladies and gentlemen, thank you for the invitation to appear before you as part of this committee's study of Bill C-49.

My name is Daniel-Robert Gooch, and I am the president of the Canadian Airports Council.

The CAC has 51 members, operating more than 100 airports in Canada, including all the private airports in the National Airports System (NAS). Our members handle more than 90% of commercial air traffic in Canada, and an even higher percentage of the international traffic.

The CAC's priorities involve promoting safe, strong local airports, improving the traveller experience, value for money in government services, and growing by air a globally connected Canada. Over the last few days we've been listening to the testimony on this committee's study of the Transportation Modernization Act.

Certainly, air transport is a complex industry involving interaction with several different partners on the airport grounds, including airport authorities, and airlines, of course, but also Nav Canada, service providers, and government entities such as the Canadian Air Transport Security Authority and the Canada Border Services Agency.

In terms of the role of airport authorities, they provide the infrastructure needed to facilitate air carrier movement and the processing of passengers. They enforce airport safety regulations, employ airport emergency response services in response to aircraft emergencies, and provide central command to respond to operational safety, infrastructure, and security matters.

Major airports have passenger care response plans in place to support passenger needs during irregular operations. These plans involve the deployment of certain assets as needed, such as airfield buses, water bottles, snacks, and baby supplies. Airports are empowered to activate their passenger care plans when needed, and can call in extra resources to assist in ensuring passengers have the basics they need on a short-term basis. During irregular and regular operations, the goal is always to get passengers to where they need to go in a timely, safe, and secure manner.

Airports strive to improve passenger experience on an ongoing basis. This is becoming increasingly important for airports that have seen tremendous growth in air traffic over the past decade. In the first seven months of this year so far, for example, there has been a 6.3% increase in passenger traffic. This traffic is boosting international visitor numbers, which is contributing to Canada's economy and providing extra tax revenues for government. It's a good news story. But while this is good for business and the Canadian economy, fuller airports can create logistical challenges to delivering the high level of passenger experience that the industry strives for. Canada's airports have made strategic investments in infrastructure when needed to accommodate growth and respond to the needs of passengers. In fact, they have spent $22 billion since 1992 on infrastructure, with improvements to safety, security, comfort, and the flow of passengers.

This growth has put a particular strain on government services at airports, in particular on screening provided by CATSA and on border services provided by CBSA. Travellers are faced with long lineups at security screening checkpoints and at our air borders during peak times. This has a negative impact on passenger experience. In fact, it's the complaint that we hear about most often from travellers.

You may recall that I've spoken about these issues before, at your committee earlier this year as part of your study on aviation safety. I'm pleased to say the file is progressing, but we're not where we need to be yet. Transport Minister Marc Garneau has begun important work in this area.

The launch of Transportation 2030 almost a year ago commits to look at CATSA's governance, making it more accountable to a service standard, and its funding more responsive and sustainable. Bill C-49 provides a framework for CATSA to administer new or additional screening services on a cost-recovery basis. This will provide added flexibility for airports to supplement security screening services for business reasons, such as giving a higher level of service for connecting travellers, or a separate check-in area for premium travellers. However, this should be accompanied by a full allocation of air travellers security charge revenue from passengers to funding screening by next year's budget. Otherwise, airports have a real concern that the cost-recovery mechanisms in Bill C-49 would become the mechanism used to prop up funding for screening. In other words, passengers today paying their travel security charge for service at screening...not all that money going to the airports. If airports are having to also pay up to get an acceptable level of service, then they will have to raise additional revenue that would then have to be recovered from air carriers and passengers. In other words, travellers would have to pay twice, and travellers should not have to pay twice for this service.

Canada's airports are pleased that the government has recently begun additional work on a long-term structural fix for the problem. Our shared goal should not only be to improve screening wait times, but to also deliver a professional, facilitative customer experience while continuing to provide a high degree of security.

Some airports believe the best approach would be to allow airports a greater role in the delivery of screening at airports, as is the case in Europe and many other parts of the globe, but the important message is that, when it comes to a permanent solution, one size does not fit all. It is important that a fulsome exploration of all options occur before a final decision is made by government.

Finding a long-term solution for screening is essential for passengers, who deserve predictability and value for money, but we also can't be complacent in the meantime. CATSA needs to be sufficiently funded next year to support demand. Government should also restart its stalled investments in CATSA Plus lanes, which is a new approach that is improving traveller experience in the limited sites where it has been deployed. But CATSA isn't able to proceed any further until funding is restarted.

Improving air traveller experience also means improving air service in communities through more air links and lower airfares. The proposed amendment to the Canada Transportation Act to increase foreign ownership limits on Canadian air carriers from 25% to 49% is intended to stimulate traffic and domestic competition, and these are worthy goals.

Canada's airports are delighted with the progress made by this government in all these major areas. We hope that the dynamic approach will continue, and that the work that has been started as part of the Transportation 2030 strategic plan, and through the hearings of your committee, will translate into concrete reforms.

Once again, thank you for giving me the opportunity to speak to you today.

[Jacob Charbonneau, President and Chief Executive Officer, Flight Claim Canada Inc.]

Thank you, Madam Chair.

My name is Jacob Charbonneau. I am the co-founder and the President and Chief Executive Officer of Flight Claim Canada Inc. I am accompanied today by my colleague Meriem Amir.

Flight Claim Canada Inc. is a multidisciplinary firm, duly registered with the Quebec Bar and made up of a number of professionals governed by Quebec's Professional Code. Through our lawyers, we provide legal services pertaining to air transportation.

The company's primary mission is to advocate for the rights of air passengers by informing consumers of their rights and by helping affected travellers to obtain compensation easily, quickly, and free of risk. We offer our clients a comprehensive service in order to provide them with compensation for delays, cancellations or denials of boarding.

We are proud and honoured to have been invited to these public consultations. So we have submitted a brief, written jointly by Jean-Denis Pelletier, a former Transport Canada commissioner, and myself. In the brief, we highlight the current situation in the airline sector.

In recent months, there have been many discussions, criticisms and complaints regarding air transportation. A number of events have made the headlines, notably cases of overbooking, flight cancellations and delays, failures in passenger care, long waits on the tarmac, and questionable business practices. There is a lack of information about passengers' rights, and pressure from airlines to withdraw advertising intended to inform passengers of their rights. All this is occurring at a time when airlines are raking in record profits.

We therefore feel that that short-term profits and share prices may count for more than client services. Passengers are treated like cargo. The lack of regulations leaves airlines with broad discretion in how they treat their clients. Air carriers suffer few to no consequences from their lack of service to passengers, which leads to general resentment and a loss of passenger confidence in the system.

For this brief, we first of all undertook a survey of our clients who had experienced problems with flights in recent years. We had more than 333 respondents. The following are the highlights from that survey. You can find them in appendix 6 of our brief.

First, we were surprised to learn that, before they heard of us, more than 35% of our clients were unaware that they might be entitled to compensation. Almost all passengers, more than 99% of them, feel that Canada should adopt regulations guaranteeing financial compensation for passengers whose flight is delayed or cancelled.

We also analyzed flight delays and cancellations in Canada, as well as trends in recent years. The following are the highlights from that study.

The number of delayed flights is increasing. The percentage of flights affected by delays of one form or another, in all time slots, went from 12% in 2014 to 15% in 2016. Canadian flight cancellations have also increased. They went from 1.2% in 2014 to 1.4% in 2016. That is a 16% increase. By comparison, with flights subject to European regulations, the rate is 0.4%, or four times less.

We clearly need a law and regulations that will set a minimum level of quality of passenger protection, thus bringing a significant citizen dimension to the liberalization of the aviation market. That means standardized Canadian protection for all users, incorporated into a charter of passenger rights.

Passengers are left to their own devices and do not know who they can turn to for help. They are grateful that there is now a company that can help them navigate their way through the system and obtain compensation. Some of our clients had already attempted the direct approach with the airline and were turned down.

While the Canadian Transportation Agency does have a mediation role, many of our clients prefer to use our services, thereby saving time and benefiting from our expertise to obtain a turnkey solution.

The new law and regulations resulting from Bill C-49 must include clear and unequivocal provisions that will reduce differences in interpretation resulting from the existence of gray areas. This new law will make it easier for passengers to assert their individual rights, and will help to restore traveller confidence.

We have therefore focused on current trends and best international practices in order to provide recommendations that will place Canada in the forefront of traveller protection.

The proposed amendments also take into account the financial impact on the airline industry and therefore anticipate measures to limit costs.

Here is a summary of the 15 proposals in our brief.

We propose: to declare Bill C-49 to be complementary to the Montreal Convention; to amend section 67.3, referred to in clause 17 of Bill C-49, by replacing “a person adversely affected” with “from or on behalf of a person,” consistent with section 156 of the current Air Transportation Regulations; to amend paragraph 18(2) of Bill C-49, regarding subparagraph 86(1)(h)(iii) of the act, to allow adversely affected persons to be represented by counsel, consistent with our constitutional rights; to enact clear rules on posting the rights and remedies of air passengers in Canadian airports, in particular, allowing companies and associations that defend passengers' rights to advertise in Canadian airports; to require airlines that deny boarding or cancel a flight to provide each affected passenger with written notice of the reason for the denial of boarding or cancellation. Carriers should also make an effort to inform passengers who reach their final destination with a delay of three hours or more of the reason for the delay; to establish more public monitoring of the management of Canadian airports; to apply or follow the European legislation regarding the minimum compensation to be paid in the event of a long delay, cancellation or denial of boarding. It would be helpful if the committee could provide Transport Canada, who will subsequently be writing the regulations, with clear guidelines on the criteria to be used, equivalent to the European guidelines; to define a long delay as being two hours for domestic flights and three hours for international flights; to establish minimum compensation equivalent to that for a cancelled flight for passengers whose flight is delayed on the tarmac for more than three hours, and require carriers to allow passengers to deplane after 90 minutes, in accordance with the carriers' tariff conditions, regardless of whether or not there are extraordinary circumstances; to apply the same right to care found in the European regulations for cases of denied boarding, cancellations or long delays. This care should apply even under extraordinary circumstances that are beyond the control of the airline; to define extraordinary circumstances as an event that is not inherent in the normal exercise of the activity of the air carrier concerned and that is beyond the actual control of that carrier on account of its nature or origin. We also propose declaring that the burden of proving the extraordinary circumstances is on the carrier; to declare that the limitation of action is equivalent to the three-year time limit applicable under common law in Canada; and finally, to make Canadian airports liable in the event of strikes, major renovations or technical failures that cause long flight delays or cancellations. This would entitle passengers to the same compensation and rights as passengers who have suffered damage caused by air carriers.

In conclusion, we firmly believe that the Canadian Transportation Agency and the government should adopt legislation that is as generous and transparent as that existing at the international level. More than anything, the law should be human and protective and should facilitate access to compensation. It should be a clear and unequivocal law that reduces gray areas as much as possible and leaves little room for interpretation.

This legislation is essential for restoring travellers' confidence in air carriers. These measures will allow us to follow best international practices and trends in consumer protection. They will enable Canada to become a leader in the protection of air passengers.

[The Chair, Liberal, Judy Sgro]

We are resuming our study on Bill C-49.

Thank you to our witnesses who are coming late in the afternoon of our fourth day of these hearings.

From Flight Claim Canada, we have Mr. Charbonneau, president and chief executive officer.

Please introduce yourself and take your 10 minutes for your presentation.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

While you're speaking of dialogue, I have just one last point. The minister is committed to the kind of dialogue that everyone's been talking about here. This is an iterative step. The dialogue will be going forward, even in the creation of regulations that will backstop some of the things that are positioned in Bill C-49, and also as we look forward and move to a system that works even better than one that we all have to admit is working very well.

[George Petsikas]

Not really. If I may, I would just add on to what Mr. Badawey was saying before.

In fact, I agree with you. For years—again, before Massimo's time, before he joined us—as head of the NACC I begged government for a strategic top-down integrated plan to help our strategic industry help this country succeed. That means a holistic, as Massimo said, approach. The minister said today it's a first step. Bill C-49 is not the basis for that holistic approach, and that's our problem, because there are a lot of issues that are on the table, especially infrastructure financing.

I'd just like to address the point made before when we talked about whether we are asking for a subsidy by the taxpayer to the industry to help us pay for those airports. I would argue that over the last 20 years there has been subsidization absolutely by the user towards the taxpayer. We are talking about airports that were transferred in the early nineties that had a nominal book value of about $1.5 billion. Today, we are talking about well over $7 billion paid in airport rents up until now into the federal treasury. It's not a bad return. Secondly, airports have had $18 billion in capital investments put into the ground, and that's been jobs, construction workers, downstream economic benefits, and billions and billions in terms of economic activity that's enabled by this infrastructure. It's all been paid for by the consumer, not the taxpayer, and this is an almost unique model in the industrialized world.

All we're saying is that it's time to have a look at that again, because we don't think it's helping us achieve what we can achieve or we could achieve, which is even greater things in terms of support in Canada in terms of economic growth, connectivity, trade and commerce, and competing with those global tigers out there who actually do get it when it comes to their aviation sectors. That's all we're saying, so let's go. I'm with you.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I just want to make a comment. We've been in this process for quite some time now, especially over this past week. As was mentioned earlier, this is not something that will be over tomorrow or next week or next month. This is an evolution of collaboration and, of course, partnership with all 338 members of the House, as well as the industry itself.

An assumptions report has been completed. It leads up to 2022. Within the report it recognizes the socio-economic, supply, and strategic factors. With that, it influences the forecasts of demand for air transportation—for example, gross domestic product, personal disposable income, adult population, economic outlet, airline yield, fleet route structure, average aircraft size, passenger load factors, labour costs and productivity, fuel costs, fuel efficiency, airline costs other than fuel and labour, passenger traffic allocation assumptions, and new technology. That's the basis of a strategic plan. That's the basis of next steps.

May I suggest the following? This committee is not going anywhere, at least for the next two years with the people around this table. Beyond that, there will probably be new people. The bottom line is that we have an opportunity here. Bill C-49 is the foundation that will be injected into the overall strategic plan as it relates to transportation. Let's all go back to our respective organizations and come up with tangible, pragmatic objectives attached to strategy. Let's attach actions to that, actions that are doable, actions that we can execute in the short and long term, based on the socio-economic, supply, and strategic factors I just outlined.

This is not done, gentlemen. Mr. Rock outlined 10 years ago that this was a challenge. I'm surprised it wasn't dealt with within that 10-year span. Unfortunately, it wasn't, but again, I don't want to talk about the past. I want to talk about the future. We have an opportunity here. Let's seize it and move forward with new recommendations, based on what you give us, in terms of the input we're looking for.

Again, Bill C-49 is here, but we have many days after that when we can help to strike that balance for people when it comes to performance, when it comes to passenger rights, when it comes to value, and when it comes to return, because we want you to do good just as much as you want to do good.

[George Petsikas]

May I answer that for you?

No, that is not what we were alluding to. We were actually talking about the system of governance, the way in which airports are managed, how boards of directors are formed and who has the right to appoint administrators to those boards. As you know, airport authorities are governed by a board.

We consider that the issue should be addressed, but Bill C-49 does not address it.

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

Mr. Bussières, at the beginning of your remarks, you said that Bill C-49 is silent on the matter of airport governance measures. Is that what you were alluding to?

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

Thank you.

Let me fire off a series of quick questions.

As I understand your comments, it is not your responsibility; it should be coordinated by the airport. At the beginning of your remarks, you said that Bill C-49 contains no airport governance measures. Is that what you were alluding to?

[Vance Badawey, Liberal, Niagara Centre, ON]

Let's work toward that future to ensure that strategic planning objectives and the actions that are attached to them, we can move forward on, including Bill C-49.

[George Petsikas]

In 2010, as head of the National Airlines Council of Canada, we coordinated with our member airlines the filing of tariff commitments in our tariffs, which are contractually binding. Unfortunately, this is one thing that we've messed up in terms of the public debate because we say there's nothing in Canada to protect the consumer of air travel, but that's incorrect. The largest airlines in this country, represented by the NACC, over 75% of the market, benefit from contractually enforceable tariff provisions regarding overbooking and procedures to be followed in that respect, including calling on volunteers, compensation to be offered, etc. Management of cancellations and delays with respect to duty of care, with respect to refunding of fares in the event that the delay exceeds a certain number of hours, that's in there. There are commitments with respect to baggage delivery. We already have a very clear framework on baggage compensation internationally.

In Bill C-49, I realize that we're trying to establish a clear framework for domestic compensation. We have no problem with that. However, my point is that these provisions have been in place since 2010. They're not widely reported, unfortunately, but what we're saying, for the record here, is that they are there and they provide very real rights for our customers and our consumers. As such, I have always said that we have a basis to work with and, if the minister and the government now wants to codify what we've already had in place since 2010, at least the four major airlines, then I'm there. We can do that. However, it was wrong to say that there was nothing to protect airline consumers in this country compared with the U.S., Europe, etc. That is wrong.

[Massimo Bergamini]

I'm not sure I have a simple answer to that question. Let me just say that there's no doubt that, from 1994 to today, with the devolution of the airports to local, not-for-profit authorities, we've seen massive user-funded investments that have given us enviable infrastructure. That's the good news.

The bad news is that the governance system and the policy framework have not kept up. This is fundamentally what we're talking about here. As this committee and this government embark on a quest to improve the air traveller experience, it really is important to look at the entire picture, all of the players and all of the elements that are at play that involve whether a passenger movement is successful or turns into a nightmare.

With respect to user-pay—and all we have to do is look at other modes of transport that are heavily subsidized—there's a modal equity debate that we should be having. I can tell you one thing: if we embraced the Emerson report recommendations, reversed some of these historical policies, turned some of that money that is currently being collected by governments and/or through users, and put it back into the system, I think we'd have a much healthier, much more competitive, and much stronger air transportation system. I would even argue that it would be a lot easier to find solutions to some of the issues that we are trying to address through regulation and Bill C-49.

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

Thank you.

Now I would like to talk to the CAA representative.

When I first saw your association's name on the witness list, I thought about my CAA card. I was wondering what the connection was between your association and our study, until I remembered that you are one of the biggest travel agents.

You said that Bill C-49 could be an obstacle for the air passenger bill of rights if there were not an efficient transition from the principles in the bill to specific regulations. We will see what happens in the coming months.

If I am not mistaken, you also said that some things are missing in the bill of rights or in the focus it is being given. As I see it, when we analyze a bill, it is just as important to analyze what may have been forgotten as what it contains. Could you tell me what is missing in these major principles that will form the basis of the future bill of rights?

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

Thank you, Madam Chair.

Welcome to you all, and thank you for joining us.

My first questions also go to the officials from Air Transat. Perhaps they had not finished their answer. My question is along the same lines.

In the United States, there is an immunization process for certain companies. I do not know whether Bill C-49 mentions harmonization, but perhaps you could list for us, in as clear and simple language as possible, what are the points of convergence and divergence from the immunization process that Bill C-49 is trying to establish.

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

I'm going to just jump in with having heard you say that you need a plan, because I'm short on time.

I can recognize that's not the norm. I used to take Air Transat to England when I was studying there, all the time.

Because of situations like that, we have introduced amendments in Bill C-49. I'd like to know how Air Transat is going to move with regard to the implementation of Bill C-49.

[Massimo Bergamini]

With respect to consultations, yes, on Bill C-49 but also on the industry cost structure. We've had discussions with the government, and not only with the current government but with previous governments. This has been a long-standing issue, of course.

The basic problem is not so much with a willingness and a general commitment on the part of Minister Garneau. Minister Garneau has told us, as I believe he has indicated to this committee, that he is looking at a phased approach. We note, however, that in November, when he unveiled his vision 2030 plan, the minister indicated that he was working towards a set of regulated performance standards for CATSA.

I can tell you that on budget day we were waiting very impatiently for the budget to be tabled so we could see what changes were actually introduced with respect to performance standards, which is a key element of the solution. Of course, performance standards without funding are meaningless. As you can imagine, we were disappointed. The budget was silent in that area.

The issue is not so much that there hasn't been consultation or there haven't been commitments. The issue is that there are competing political priorities that require the allocation of scarce dollars by this government and by all governments.

This is really fundamentally what we're saying: if you go with this as your first step, you run the risk of people saying, “Check, done, and we can move on to something else.” We believe it is fundamentally important to look at the complexity of the system and take an ecosystem or holistic approach to dealing with it, and that requires funding.

Thank you.

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

Thanks very much, Madam Chair.

I want to thank all of you for joining us today. I'll get right to my questions, since six minutes goes by pretty quickly.

We know that Bill C-49 is the result of consultations in response to the Emerson panel's review of the Canada Transportation Act, which was expedited by the previous government back in 2014. As was referred to by many of our witnesses, while they appreciate some of the things in Bill C-49, it misses the mark in many ways.

One of the things that I would like to pick up on would be the measures you've just identified that were in the Emerson report but are missing here. I would ask you to comment further on that. Were you consulted during the time when this bill was being contemplated? Were there measures you recommended to Minister Garneau to be included in Bill C-49?

[Massimo Bergamini, President and Chief Executive Officer, National Airlines Council of Canada]

Good afternoon, Madam Chair, members of the committee.

My name is Massimo Bergamini, and I am President and CEO of the National Airlines Council of Canada.

I want to thank you for the opportunity to appear today to provide my organization's perspective on Bill C-49.

But before I begin, allow me to say a few words about our organization and industry.

The National Airlines Council of Canada was created in 2008 by Canada's four largest airlines—Air Canada, Air Transat, Westjet and Jazz Aviation—to advocate for policies, regulations and legislation that foster a safe and competitive air transportation system.

Collectively, our members carry over 92% of Canada's domestic air traffic, and 65% of its international air traffic. They employ over 50,000 Canadians directly, and contribute to an additional 400,000-plus jobs in related sectors such as aerospace and tourism. According to the Conference Board of Canada, in 2012 our industry contributed almost $35 billion to Canada's GDP. Those are significant statistics that speak to the role that a strong, competitive aviation industry plays in ensuring Canada's economic prosperity.

More to the point of our discussion, commercial aviation has become the only practical way for millions of Canadians to travel to be with family, for work, or simply to explore our vast country, and travel they do. According to Statistics Canada, the total number of passengers emplaned and deplaned in Canada increased by some 30% between 2008 and 2016. There's no doubt that the era of elite jet-setters is long past.

Our members alone were involved in over 71 million passenger movements last year. As people now book flights as readily as they drive cars, air travel is becoming the domain of the middle class, not the 1%. For Canadians, flying is now part of daily life. It's the lifeblood of an open, diverse, and geographically dispersed society.

In our country the freedom to travel is considered a given. Air transport has become an essential link between people and communities. To quote the Emerson report:

Not only does air travel provide access and labour mobility to urban, rural, and remote locations in Canada, but airports and air carriers act as economic engines for communities and for the country as a whole....

This is why a competitive commercial air industry is so important. That is why this bill is so important, and that is why getting it right is also so important.

Unfortunately, we think the government's approach falls somewhat short of that mark.

The Emerson report recognized the complex interconnections that make up the travel experience and that contribute to our industry's global competitiveness. It proposed a three-pronged approach to addressing the major components of a competitive airline industry: cost, access, and the user experience. Bill C-49 addresses only one, the user experience.

For the government to lead with Bill C-49, absent economic measures to address the public cost structure issue, from our perspective, risks creating further economic imbalances that may eventually hurt those the bill is meant to protect.

To be clear, while we find that some aspects of the bill require clarification—you will find our recommendations in the technical annex to my remarks—we do not take issue with the bill or in any way oppose its adoption.

We are, however, concerned that the government's approach amounts to putting the cart before the horse.

Putting in place an economic penalty system as the framework for dealing with service issues, without addressing public cost structure at the same time, runs the risk of negatively affecting the industry and, ultimately, passengers.

As Mr. Lavin of IATA pointed out earlier, the international experience on this matter is instructive and should be noted.

As I said at the time of the bill’s tabling last May:

Our organization and members share and support Minister Garneau's commitment to ensuring that all air passengers have the best air travel experience possible and look forward to working with him and with the Canadian Transportation Agency to this end.

However, we also recognize that the air travel experience doesn't start with check-in and end with baggage pickup, and it doesn’t happen in an economic or systems vacuum.

There are a lot of moving parts in getting a passenger to destination. It involves the coordinated efforts of hundreds of dedicated people working in airlines, airports, air traffic control, air security, and border services. Every trip takes place within a complex web of systems, regulations, and costs. Each piece contributes to the outcome, and each must be considered when trying to improve service to passengers. There is no doubt that, sometimes in this complex system, capacity is stretched by unforeseen circumstances, mistakes are made, flights are delayed, luggage is lost, and connections are missed.

In 2016, there were some 2,800 passenger complaints made to the Canadian Transportation Agency, or about eight per day. Of these, 560 were either withdrawn or were outside of the agency’s mandate. Of the remaining complaints, 97% were resolved through facilitation. That is to say, the airline was informed of the complaint and reached a mutually satisfactory agreement with the guest without further agency involvement. Less than 1% went to adjudication.

Far be it from me to minimize the significance of these complaints, or the inconvenience that passengers experienced, but it is important to place those numbers in the context of a system that moves over 350,000 passengers per day, every day.

Clarifying and codifying the rights of passengers, as Bill C-49 does, is a positive measure, and it will lead to more certainty in the marketplace. Of that, there is no doubt. We are disappointed, however, that this measure was not introduced in conjunction with concrete steps to address the uncompetitive public cost structure faced by our industry or the systems bottlenecks caused by underfunding of air security and border screening.

The Emerson report recognized how mounting fees and charges, as well as delays in security screening, affect travellers and the efficiency of the industry. It recommended phasing out airport rents, reforming the user-pay policy for air transport, and putting in place regulated performance standards for security screening. Unfortunately, absent any provisions in the government’s five-year fiscal framework for additional spending in this area, Bill C-49 alone will do nothing to address the cost pressures on our airline industry or the systems bottlenecks outside of its control.

September is when the leaves start changing in Ottawa and when Parliament resumes sitting. It is also when budget deliberations get under way in earnest within government. It is our hope that when your committee has completed its study of this bill and is ready to return it to the House, you include a recommendation that the government begin taking immediate steps to implement the competitiveness provisions of the Emerson report in next year’s federal fiscal framework. Implementing the Emerson report recommendations on the air industry’s public cost structure as well as on eliminating passenger screening bottlenecks in parallel with the provisions of Bill C-49 would be a true game-changer for airlines, airports, travellers, and ultimately the country.

Thank you.

[Jeff Walker, Chief Strategy Officer, National Office, Canadian Automobile Association]

Thank you very much.

My name is Jeff Walker and I am the chief strategy officer at the Canadian Automobile Association, or CAA as most people know us.

Thank you very much for having us here today. We're looking forward to speaking today on Bill C-49, specifically as it relates to air passenger rights.

I'm going to begin my remarks by providing a little bit of background on our role in air passenger rights issues. As many of you probably know, CAA has been around for over 100 years. We were founded in 1913 and our major mandate at the beginning was road and driver safety, as an advocate for the consumer and the consumer interests around roads and driving. Today we have 6.2 million members from coast to coast and we offer a wide range of services that go far beyond that.

In fact, CAA is Canada's largest leisure travel provider and we have a large network of 137 stores across the country and online that provide services to members. We remain a not-for-profit, member-driven organization that is at its heart an advocate for the Canadian traveller.

Our agents at CAA work with air passengers every day and we understand this business very well. This allows us to take a strong and informed position in favour of air passenger rights while at the same time recognizing that the consumer interest is best served by healthy, competing airlines.

The passenger protection regime we have in Canada has been untouched for many years, leading to a widening discrepancy between how U.S. and European air travellers are treated on one side, and how Canadians are treated on the other. It's time we do better when it comes to protecting Canadian air travellers.

We do a lot of polling, a lot of member research. The work we've done in talking to members and non-members alike has found that over 90%—in fact, 91%—of Canadians agree that it's time Canada had its own national airline consumer code. We welcome and support Bill C-49 as it contains many of the improvements that we have been calling for over the last several years, and we believe it's going to be better for the travelling public. At the same time, the bill will only take us partway to where we need to be. The bill leaves the all-important details on treatment and compensation—for example, when and how much—to a future regulatory process, and we urge this committee to pay close attention to that process. A good-sounding bill will end up not meeting expectations if the end result is a coffee coupon and compensation for being bumped somewhere someday. We all have to work to make sure that doesn't happen.

Bill C-49 addresses some important areas such as covering all airlines, both domestic and foreign, as well as all passengers, non-Canadian or Canadian, to avoid situations where there is an unlevel playing field. It sets out minimum standards of treatment and compensation for key categories such as delays, cancellations, overbooking, and lost bags. It addresses the seating of families with children at no extra fee. It provides the CTA's ability to collect and monitor airline performance data as it relates to passenger handling, and it gives the agency the ability to extend decisions to other passengers on the same flight who are affected by the same incident.

However, the bill relies on a complaint from a passenger in order to trigger any action. We agree with Scott Streiner, who is the CEO of the CTA, and David Emerson, both of whom said in testimony earlier this week that the regime would be more effective if the agency could initiate its own investigations when it deems necessary and make industry-wide rulings on minimum treatment rather than restricting its findings to passengers on one specific flight.

It's worth noting that the CTA was able to initiate hearings in the Air Transat situation a few weeks ago only because it concerned an international flight. It just happened to fall into that space; otherwise, unfortunately it could not even have been dealt with in that context. The CTA wouldn't have had the authority, even under Bill C-49, to decide to hold a hearing into a similar situation if the flight occurred within Canada, nor will the CTA be able to examine any broader systemic issues that the CTA might note unless they come from a specific complainant. It might have to ask the minister for permission to investigate them.

Another matter worth noting is that in some circumstances, regulations are likely to set out clear rules, for instance, that for a delay of x hours within an airline's control, passengers might receive y in compensation. The current system would require a complaint from a passenger in order to initiate that payment. Airlines have this information though, and they know when they're offside, so why does this system have to wait for a complaint? Why not compensate proactively in these cases?

This is an important consideration in light of recent findings from the EU consumer association, which reports that only one in four EU flyers is getting the compensation they're due for lengthy delays because airlines are not required to proactively offer it. This would allow CTA to focus on more complex complaints.

The International Air Transport Association says 60 countries have some form of passenger rights legislation already in place. For too long Canada has relied on the airline's own policy, and a needlessly complex complaint process through the CTA. While the vast majority of air travel goes off without a hitch, a clear set of standards would benefit everyone from passengers to the industry, which will be able to compete on a level playing field.

However, as noted earlier, whether this new regime is effective will be dependent on the regulatory process. As a consumer watchdog, here are some of what CAA is looking for in this process.

First is clear, simple, and understandable terms and conditions that the average traveller can understand. Second is levels of compensation and minimum treatment that ensure travellers are well treated and that for the airlines, in the words of Parliamentary Secretary McCrimmon, “it's not worth your while…to treat people this way”. Third is proactive disclosure by airlines of a consumer's right to compensation and minimum treatment. Fourth is regular reviews to ensure that regulations and compensation levels remain appropriate, and finally, airline performance reporting with respect to the handling of passengers and luggage should be made public regularly. Sunshine is after all the best disinfectant.

We will be participating in the regulation-making process to be sure that consumer interests continue to be heard loud and clear. In order for Canadians to judge the new system a success, we need to make this right.

We urge this committee to stay engaged even beyond these hearings to make sure the eventual system is one that works well for all Canadian air passengers.

Thank you. I'd be pleased to take any questions.

[Neil Parry, Vice-President, Service Delivery, Canadian Air Transport Security Authority]

Thank you, and good afternoon, Madam Chair.

My name is Neil Parry. I am vice-president of service delivery at the Canadian Air Transport Security Authority, also known as CATSA. Thank you for the opportunity to speak with you today.

As many of you know, CATSA is an agent crown corporation, funded by parliamentary appropriations and accountable to Parliament through the Minister of Transport. CATSA is responsible for taking actions, either directly or through a screening contractor, for the effective and efficient screening of persons who access aircraft or restricted areas through screening points. Also, the property in their possession is controlled, as well as the belongings or baggage that they give to an air carrier for transportation.

CATSA, as the civil aviation security screening authority for Canada, is regulated by Transport Canada and is the designated national civil aviation security authority. CATSA is subject to domestic legislation, regulations, and procedures in the way that it conducts its business and screening. In this context, CATSA's mandate outlines four core responsibilities within the realm of aviation security: pre-board screening of passengers, screening of hold baggage or checked baggage, the screening of non-passengers, and the restricted area identity card program.

Given the nature of today's meeting examining Bill C-49, the transportation modernization act, my remarks will focus on the amendment associated with the Canadian Air Transport Security Authorization Act. Specifically, this relates to the cost recovery of security screening operations in airports across Canada.

Bill C-49 contains two changes to the CATSA act. These changes would formalize policy authority for cost recovery initiatives for designated airports that strive for expedited passenger screening and cost recovery for non-designated airports. These services would normally be beyond CATSA's mandate and would require authorization from the Minister of Transport.

Under the direction of Transport Canada, CATSA has undertaken two trials on cost recovery to date. In 2014, the Greater Toronto Airport Authority sought the approval of the Minister of Transport to purchase additional screening capacity directly from CATSA for pre-board screening operations. CATSA and the GTAA subsequently entered into an agreement, following authorization from the minister, that allowed us to effectively sell them additional screening hours. A similar trial agreement was entered into in June of this year, between CATSA and the Vancouver Airport Authority, for the same thing.

In 2015, Transport Canada amended regulations to allow non-designated airports to enter into cost recovery agreements with CATSA for the purpose of attracting new commercial routes and potentially enhancing economic development. These airports must meet the same requirements as a class 3 airport within Canada. To date, CATSA has entered into consultations and discussions with 12 non-designated airports and while the discussions have been productive, no agreements have been signed.

With those introductory remarks, I thank the committee. I would be happy to answer any questions related to the subject.

[Bernard Bussières, Vice President, Legal Affairs and Corporate Secretary, Transat A.T. Inc., Air Transat]

Thank you, Madam Chair and dear committee members.

My name is Bernard Bussières and I am the vice president of legal affairs at Transat. With me is George Petsikas, senior director, government and industry affairs.

Transat is honoured to be invited to appear before you today as part of your consideration of Bill C-49, Transportation Modernization Act.

Since we were founded in 1987, we have always worked diligently and proactively with government decision- makers, legislators, and regulatory officials in order to develop informed policy that supports growth in travel and tourism, which is an important industry in Canada. It is in this spirit that we appear before you today.

You should be in possession of our detailed corporate brief that we filed with the clerk earlier this month. We would like to use our few minutes this afternoon to offer some supplemental thoughts and reiterate some of our key points outlined therein, which we trust will add value to your deliberations.

To begin, we regard Bill C-49 as a first step in resolving certain challenges facing the airline industry, which is vitally important to Canada. Although the bill attempts to include some of the Emerson report recommendations, it does not address certain key aspects such as tax policy for the sector, cost competitiveness, the funding of air travel infrastructures, revision of the user-pay model, and airport governance.

We would ask the federal government to follow up on these aspects as soon as possible in order to thoroughly and comprehensively improve the policies that affect our industry and travellers alike.

With respect to the proposed airline consumer rights framework outlined in Bill C-49, Transat was one of the first industry stakeholders to publicly welcome this initiative after the tabling of the bill in Parliament. As we publicly stated at the time, we are fully prepared to work with government regulators and our industry colleagues to achieve a fair and balanced compensatory and duty-of-care framework that ultimately enhances the consumer experience.

We refer to our further caveats outlined in our brief, and reiterate support for the input that will be provided by our NACC colleague today.

Today we would like to focus on our main concerns about Bill C-49, specifically the provisions pertaining to air carrier joint ventures. At first glance, these provisions seem harmless, but they are not. I readily admit that they are obscure and complex. In our brief, we tried to explain in detail why they are in fact a long-term threat to healthy competition in our industry and to achieving a fair and reasonable balance between the public interest and the interest of airline customers.

We therefore invite the committee members to consider the following as they examine the amendments we are proposing to these provisions.

Transat is not attempting to be obstructionist with its approach in this case. There are indeed many reasons why airline joint ventures may result in more services, destinations, and other additional benefits for Canadian travellers, communities, and for the economy as a whole.

This, of course, is good, but we do not believe it should be achieved at any cost or risk to the consumer interest. Put simply, stated efforts by the government to rebalance the public versus consumer interest consideration in this case have resulted in the pendulum being shifted to the other extreme and to the ultimate detriment of fair competition.

The ubiquitous public interest standard, which is a common feature of legislation seeking to provide residual powers for ministerial authority to address a broad range of undefined matters and circumstances, is simply not sufficient as drafted here to justify the pre-empting of critical competition law oversight to these potentially anti-competitive agreements between competitors.

The conservation and coordination of critical functions such as route development, capacity deployment, fare-setting, etc., among JV partners should be considered as a de facto merger of these respective commercial entities. Existing law is sufficient to establish whether these types of agreements between competitors are in the public interest.

Indeed, we believe it is incumbent on those stakeholders who are advocating for joint-venture specific provisions to justify why they are in fact needed and why their commercial or corporate objectives are impossible to achieve without same.

It must always be remembered that past commissioners of competition have already expressed serious concerns regarding potential anti-competitive behaviour by airline joint ventures, especially in environments where they control high concentrations of market share. This is not just Transat waving the caution flag here.

Furthermore, and as indicated above, we recognize that there has often been a legislative and policy balance to be struck between the concepts of the public and/or national interest versus the narrower consumer interest that competition law primarily oversees. This balance has already been achieved in the transport sector through the merger provisions incorporated through the Canada Transportation Act, which were crafted at that time jointly by the commissioner of competition and the then Minister of Transport.

Therefore, instead of reinventing the wheel, we propose for greater clarity and consistency that these merger provisions be largely adopted for the review and approval of joint ventures. The process that we propose would be more transparent as the report of the commissioner of competition, and the decision to immunize a joint venture, would be made public.

It would provide a public rationale for the choices made by the Governor in Council, with input from all relevant departments, instead of granting the Minister of Transport sole responsibility for immunizing joint ventures in a decision that requires no publication.

This would result in a decision enforceable by both the commissioner of competition and the minister of Transport, who have different knowledge and responsibility with respect to the joint venture.

It would include a periodic review process to ensure that the consequences of the joint venture continue to justify immunity.

In closing, the need for a fair, transparent and public process regarding the immunization of airline joint ventures from competition is particularly important in the Canadian context, where the industry is dominated by one major carrier. We believe our proposal, which mirrors the current process for mergers in the transportation sector, meets these objectives.

Thank you for your kind attention and we look forward to answering your questions.

[Douglas Lavin]

I'm happy to answer. I don't see any circumstances whereby Bill C-49 by itself would reduce prices.

In terms of what we would have liked to see, again, the number one focus was costs. First of all, we're on record saying that we want an elimination of airport rent, but even a phase-out of airport rent would be useful. A reduction in the CATSA fee and more government investment in security would be good, as opposed to putting that on the backs of air travellers. We see a lot of evidence in the Emerson report talking about how CATSA could be reformulated to address the security lines issues and to change the one-size-fits-all.

There are all those different things, and those all impact on the competitiveness of the airline business in Canada. The minister said that ownership.... If you listen to his remarks and look at Bill C-49, the only thing he points to on reducing costs is ownership and control, which in theory would increase competition in the marketplace. Again, Mr. McKenna and I have both stated that we find that highly doubtful when the costs to doing business in Canada are so high. It is not ownership and control that are preventing airlines from coming in here and doing business.

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

I have just one more question. I want to go back to some of the observations I made around phase two. I cannot get away from that knowing what brought about the Emerson panel report was the fact that we expedited a statutory review. That statutory review takes place every 10 years.

If we're believing that phase two is going to happen anytime between now and 10 years from now, I'm interested to see how that's going to happen. It doesn't mean that you have to wait 10 years, but there's no requirement to do it. In fact, we've had witnesses recommend that we put back provisions in the bill that require a review of the changes that have been made because that's missing in Bill C-49.

What measures should have been put in this Bill C-49 to address the concerns you've raised about the costs that our air travellers incur, and do you see prices going down under any circumstances in Bill C-49 as it is?

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

Thank you, Madam Chair.

I would like to talk to Mr. McKenna for a few minutes.

You made some recommendations for future regulations, which are unfortunately not included in Bill C-49. I hope the Canadian Transportation Agency has heard you and that we can resume this discussion one day.

You also mentioned foreign ownership. In your opinion, there is no evidence that increasing foreign ownership would lead to the creation of low-cost airlines or to price cuts by current airlines.

I was surprised when you said that there is no reciprocity. I would ask you to elaborate on what you mean by that. Are you saying that we should have included such agreements in free trade accords, such as the one with the European Union? Is it on a case-by-case basis such that, for instance, a British investor could not invest in a Canadian company unless Canadian investors could also invest in Great Britain?

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

I have one final, quick question.

Are you in favour of the status quo or do you think Bill C-49 will improve the customer experience?

[Douglas Lavin]

Our experience in Australia, China, and other places, is lower ticket prices, lower delays, and lower cancellations by this approach.

If I can have just one minute I think it's important to recognize here that Canadians have passenger rights now. First of all, Canada is a signatory to the Montreal Convention, which put a maximum in terms of how much they are compensated for lost baggage and for cancellations. You already have those.

Secondly, the CTA—as Mr. McKenna mentioned—has their process. More than 95% of those complaints are resolved between the airline and the passenger. It is 95%. I think this transparency we're talking about in Bill C-49, absent the fees, would make the most sense.

[Douglas Lavin]

I guess I'm hesitant to second guess whether Bill C-49 could accommodate that. I think that's more your business than mine. All I can say is that the rents in particular have been a concern of the airline industry. For any airline that flies here, rents have been a significant barrier to, for example, Toronto or Vancouver becoming the global hubs that they would like to be. If you look at it, they've collected $58 billion so far and expect to collect $12 billion more in the future. We just find that is not competitive with the rest of the world. We are hopeful that, if you could accommodate that, certainly on the passenger rights side—I've stated our position quite clearly—I anticipate that we will work closely.

We have great respect for CTA and Transport Canada and hope that whatever they come up with post-Bill C-49 is reasonable. But the number one priority of the airlines and the passengers is the high cost of travelling in Canada.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Madam Chair.

My first question is for Mr. Lavin.

In your opening remarks, you said you hope airport fees will be reduced. That is important to you. You said that the minister has not included this in the first phase of Bill C-49. It is unfortunate that this bill does not go far enough.

Do you think measures could be included in this bill to reduce airport fees while also respecting the passenger bill of rights and passengers' wish for a better travel experience?

[Sean Fraser, Liberal, Central Nova, NS]

Okay. That's helpful.

Just bouncing around here, a number of the other witnesses discussed the importance of ensuring that the fines only pertain to what's within the airline's control. I think the minister this morning was fairly clear that this was his intention as well. Is there something in the language of the proposed Bill C-49 that has you concerned that this will not be the case?

Mr. Lavin, go ahead.

[Douglas Lavin]

Thank you for that question.

In terms of privatization—and I know that's not the subject of Bill C-49, but I know it's being considered—we are strongly concerned about privatization. There are easier ways to deal with rent than privatization. The government has collected so much rent that it is way beyond the price of the land that was turned over.

We have a significant concern with privatization because airports have a significant market power that they can abuse as part of any privatization. If privatization is pursued, we would need to see very strict regulation to ensure that they don't overcharge airlines for projects on which we have no ability to provide them some direction. We'd need an independent organization to appeal on those issues. No, we are opposed to it in the United States, and we're strongly opposed to it here.

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

Thank you.

I would open up my next question to any of the witnesses to answer. In your view, does Bill C-49 have the potential to increase or decrease the cost of air travel in Canada?

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

Thank you very much, Madam Chair.

I want to thank our witnesses for joining us today. I appreciate your testimony and look forward to all the questions and answers that we are going to hear over the next hour.

My first question will be for you, Mr. Lavin.

I think back to your opening remarks, and you referenced some of the key recommendations that were made by the Emerson panel in the CTA review to review and reduce some of the taxes in this industry. Then you went on to note that Minister Garneau had promised a reduction, and that Bill C-49 fails to address any of these costs. You also then went on to state that you were looking forward to phase two and being able to support the minister then in terms of when these things will come.

I want to clarify, is it your understanding that we'll be going through this process once again looking at Bill C-49 and then including some of the those changes? Am I hearing from you that we're going to be here again in a year or two?

[John McKenna, President and Chief Executive Officer, Air Transport Association of Canada]

Good afternoon.

My name is John McKenna. I'm the president of the Air Transport Association of Canada.

ATAC has represented Canada's commercial air transport industry since 1934. We have approximately 190 members engaged in commercial aviation, operating in every region of Canada.

We welcome this opportunity to present our comments on Bill C-49 as it addresses important issues of commercial aviation in Canada. Passenger rights, foreign ownership, joint ventures, CATSA, and the CTA have been subjects of debate for some time.

My comments, however, will address only the major themes of the bill as the applicability of the proposed measures will be determined only by the company regulations to ensue. These regulations, which will be developed by the Canadian Transportation Agency, are probably one year away.

As for foreign ownership of Canadian airlines, the minister claimed, in his November 3, 2016, speech before the Chamber of Commerce of Metropolitan Montreal, that increased foreign ownership “will lead to more options for Canadians, and allow the creation of new, ultra-low cost airlines in Canada”.

The presence of more airlines usually offers greater choice to travellers, but we have yet to hear convincing arguments supporting the claim that foreign investments will pave the way to ultra-low-cost carriers.

Contrary to what the government claims, increasing foreign ownership of airlines will not lead to the creation of ultra-low-cost airlines in Canada.

Lower operating costs to airlines, not the source of capital, are the key to lower costs to the travelling public. Only when the government decides to support, rather than bleed, the air transport industry will ultra-low-cost carriers stand a chance in Canada.

Increased foreign ownership of airlines can also lead to an increase in the export of profits generated in Canada to foreign interests rather than reinvestment in our industry.

This being said, we don't oppose the government's intention to allow foreign ownership of up to 49%. However, we ask that this proposed change be accompanied by reciprocity with our foreign partners. In other words, if we allow foreign investors to own a 49% stake in our airlines, we would expect to have the same privilege in their country.

I would be curious to know if our government has entered into discussions with our major trading partners on reciprocity in terms of increased foreign ownership of airlines.

Passenger rights is a popular theme in Canada, and the government wants to ensure that passengers are protected by law. Some of the measures the minister is keen to address include compensation standards for passengers for delays and denied boarding due to factors within the carrier's control, and lost or damaged baggage. The minister also wants clear standards allowing for children to be seated with parents at no extra charge, and for the transportation of musical instruments.

We appreciate that the government wants to help the travelling public navigate through simpler rules and have easier access to support in unfortunate circumstances where those standards are not being met.

Please bear in mind that over 140 million people travelled by air in Canada in 2016. The number of complaints filed each year at the CTA was well under 500. The reason I raise this is to give a perspective regarding the size of the problem. Of course some complaints remain at the airline level, but even then the vast majority of travellers have a good passenger experience.

We believe three major principles have to be incorporated in the passenger rights legislation.

A key principle of the bill is that the go-no go decision must remain with the pilot. The threat of severe, even unreasonable, financial repercussions should not be allowed to influence the pilot's decision.

Second, the compensation paid out to aggrieved passengers should be in line with the economic realities of travel in Canada. Unreasonable monetary compensation out of proportion to the magnitude of the carriers' revenue on any given flight could only result in a deterioration of our enviable air transport system, perhaps even including reduced service on some routes.

For example, air passenger rights in Europe are generous to the point that a passenger could receive compensation for a delayed flight which by far exceeds the price paid for the ticket.

Such practices can only lead to increased costs to airlines and to all passengers.

Shared responsibility is another major principle. You can't hold an airline accountable for events beyond its control, the minister has stated. Some of the measures we are looking at include compensation standards for passengers denied boarding due to factors within the carrier's control. We need a clear definition of what falls under a carrier's control.

While it may be a carrier's decision to cancel or delay a flight, the reason for doing so may be well beyond the carrier's control. Weather, ground delays as a result of de-icing pad congestion, snow clearance, congestion of the airport of destination, and air traffic control all affect an airline's decision. Also, some delays are safety related.

The safety of passengers is the utmost preoccupation of pilots and airlines. Safety-related delays should not result in penalties for the airlines. How such delays are managed by the airlines is what the law should address.

An additional principle is that a one-size-fits-all policy is so widespread at Transport Canada that Transport Canada's policy just can't apply here. You can't impose southern compensation standards as applied to Canada's largest airports to northern and remote airports.

Ease of compliance with the law, administration of complaints, and user-friendliness for passengers all depend on the complexity of the regulations which will accompany the proposed changes in the law.

We only ask that the government work collaboratively with stakeholders in the drafting of new regulations attached to the bill. Only then will the minister's objective of improving the passenger experience be met.

Thank you.

[Allistair Elliott]

Good afternoon. Thank you very much for the opportunity to appear.

We are pleased to be able to have a discussion with the members of the committee.

My name is Allistair Elliott. I'm the international representative for Canada for the American Federation of Musicians for the United States and Canada. As a professional musician over the last 40 years, I've travelled most of the world performing music. My performing career has been paralleled with my work for the Canadian Federation of Musicians, initially as an executive board member, then as president of the Calgary Musicians' Association, Local 547, of the AFM, since 1999, and now as an international representative for Canada.

I'm joined today by oboist, teacher, and my friend, Francine Schutzman, who played in the National Arts Centre Orchestra for 38 years. She's the past-president of the Organization of Canadian Symphony Musicians, and currently the president of the Musicians Association of Ottawa-Gatineau, Local 180, of the AFM.

We are here today to enthusiastically applaud the Honourable Marc Garneau and Transport Canada for the inclusion of musical instruments as part of passenger rights in Bill C-49, an act to amend the Canada Transportation Act.

The Canadian Federation of Musicians is the Canadian national office of the American Federation of Musicians of the United States and Canada. We are comprised of 200 local offices across North America, collectively representing a membership of approximately 80,000 professional musicians, 17,000 of whom live and work in Canada. We've been representing the interests of musicians for 121 years.

As the distinctly Canadian division of AFM and under the federal Status of the Artist Act recognition, the CFM negotiates fair agreements and working conditions covering all musical services within Canada. Our goal is to pursue harmonization with the United States' FAA Modernization and Reform Act of 2012, regarding the carriage of musical instruments on commercial air carriers. We have included our original submission to the Canada Transportation Act review in January 2015.

I just want to thank the Honourable Lisa Raitt—I know she was in this morning and she's not in this afternoon, but her colleagues can pass it on—for encouraging us to enter that submission a few years ago.

Following extensive advocacy to all the key stakeholders, we were very pleased to be included in the discussions on passenger rights and are looking forward to working together to develop regulations once royal assent has been received.

We would also like to thank Air Canada for leading the way as an airline and working closely with the CFM to provide better service to musicians. This summer, at the 4th International Orchestra Conference in Montreal, Air Canada was presented with the Federation of International Musicians Airline of Choice award for 2017.

We thank Air Canada and offer our congratulations.

Musicians travel for business with oddly shaped briefcases. Players of smaller instruments generally have no issues with stowing their instruments on board. The problems arise with larger instruments. Cellos are the ones that have the most problems. Many instruments are made of wood, fragile, and affected greatly by temperature, which in itself, can damage an instrument beyond repair. Instruments belonging to professional musicians are often old and very expensive. Cellists flying with their instruments typically purchase a second seat for that instrument, but are nevertheless sometimes told they may not take the instrument on board. That equals lost job opportunities, lost work, and lost income. Some of you may be familiar with a song called United Breaks Guitars. This song was generated by an incident in which a guitarist, Dave Carroll, was forced to check his instrument, which arrived at its destination in pieces.

We applaud the steps that have already been taken to ease the problems of musicians travelling with instruments and we thank CATSA for working with us directly on some initiatives. There's still much work to be done. What we need is a well-advertised, industry-wide policy, so that musicians may plan accordingly for business travel with the tools of their trade and the confidence they will make the job interview or performance on time and without incident.

I'd like to conclude with comments made recently by one of our more high-profile member musicians, Dr. Buffy Sainte-Marie, on the floor of the Senate of Canada, when she was given special recognition for her contribution to Canadian music. During her remarks, she asked that the government help connect the dots so that musicians could travel with their instruments. She cited an example where she was charged overage fees of $1,376 for an underweight guitar and a suitcase.

Musicians have long had difficulties transporting the tools of their trade, which are often very expensive and irreplaceable. On behalf of all musicians across Canada, we thank you for this inclusion, we applaud your efforts, and we look forward to working closely with you to develop regulations that will be effective for everyone.

Thank you.

[Glenn Priestley, Executive Director, Northern Air Transport Association]

Thank you, Madam Chair.

To the committee, thank you for having the Northern Air Transport Association here. My name is Glenn Priestley and I am proud to be the executive director of NATA.

Our membership is representative of all aspects of northern and remote air operations. Our operators are committed to the highest possible standards and co-operating with all government agencies to achieve this standard with rules and recommended practices that make sense and support the Canadian aviation industry.

I would like to take the opportunity to thank the committee and staff for including NATA, including northern and remote operations across Canada on these important discussions on the legislation contained in Bill C-49. Too often, aviation policy is formed with a focus on southern Canadian air services. There has been a genuine effort by this government and various committees like TRAN to understand the unique issues associated with northern and remote aviation and we thank you for that.

Bill C-49 is a large bill that has three sections that concern the Canadian aviation industry. For this briefing we'll be focusing on the passenger bill of rights legislation from the perspective of the northern travel experience. We'll be looking to ATAC as our senior association. We'll be looking at all of the aspects, but I'd like to focus on the passenger bill of rights, if I may.

The management of passenger safety and the overall cost of the travelling experience is a complex and daily issue for northern operators. Long-term commitment to isolated communities with initial and ongoing investment in newer aircraft and facilities creates a special bond between the air carrier and customer. The relationship is more like a partnership, and a unique aspect of all northern operators is significant commercial partnerships with many first nation and Inuit governments. These relationships provide a recognition of the needs of communities and individuals.

Examples of this recognition would be the reserved seating section to community elders located in most northern airport waiting areas. Northern operators have had to find solutions to operational problems that simply do not exist in the south. Examples include long-range flight planning with limited information and support, creating the need for contingency planning to ensure the safety of the travelling public.

This committee had a substantial focus in its June 7, 2017, report on aviation safety in Canada regarding the lack of northern aviation infrastructure needed to improve the travel experience and improve overall system safety and service reliability. The northern focus concluded with the following recommendation, “That Transport Canada develop a plan and timeline to address the specific operating conditions and infrastructure needs of airlines serving Northern Canada and small airports.”

Referring to the Canada Transportation Act amendment to include passenger rights legislation, the Northern Air Transport Association is very concerned with the generalities and the wording, and the increase in regulatory authority that these amendments and others will provide to the Canadian Transportation Agency.

To be clear, NATA agrees that fare-paying passengers have rights. However, there are concerns that because of problems that have been manifested in southern Canada and internationally, northern air carriers are going to be burdened with one-size-fits-all. NATA members are currently very engaged on flawed regulations that were developed this way regarding flight and duty time rules for flight crew.

Here is our summary.

NATA agrees that the travel experience should be as transparent as possible with expectations clearly stated.

NATA does not agree with any minimum standard of compensation in the regulations, as there are simply too many variables.

NATA does agree with the procedures that provide passengers with essential notice for any unscheduled occurrence that causes delay.

NATA agrees every air carrier continue to maintain some form of operation control manual for these and other procedures associated with carriers of passengers and their carry-on-board items as well as checked baggage.

NATA is concerned with the blanket amendment that empowers the minister to give the CTA extra-regulatory authority without consultation.

In summary, the Northern Air Transport Association has an excellent service record with its passenger management, challenging flight environments, and difficult locations. Northern operators pride themselves on a tradition of providing hot meals, for instance, on many flights included in the price of the ticket. Northern operators are invested in the community in a different way than southern operators, which is easy to explain.

NATA agrees passengers have rights. Our operator members have been respecting all their customers for a long time with recognition for special needs and unique cultures. NATA is proud to be an original member of the CTA's accessibility committee, an important forum that provides guidance to our members on how to make a good system better in the movement of all passengers.

Any passenger bill of right needs to recognize existing industry efforts regarding passenger safety. We encourage a new air carrier-centred conflict resolution model to be developed to replace the current CTA model that inhibits consumers' participation.

Thank you.

[Douglas Lavin, Vice-President, Members and External Relations, North America, International Air Transport Association]

Madam Chairwoman and honourable members, I appreciate the opportunity to appear before this committee as it considers Bill C-49.

My name is Doug Lavin, and I am the vice-president for member and external relations for North America for the International Air Transport Association, or IATA.

IATA is a Canadian corporation created by a special act of the Canadian Parliament, representing the interests of 275 airlines in more than 117 countries around the world, including Air Canada, Air Transat, Cargojet, and WestJet. As such, IATA has a significant interest in the proceedings of this committee on Bill C-49.

I have submitted my written comments on Bill C-49 for your consideration in advance of today's hearing, but I'd like to take my time this afternoon to highlight several points included in that submission.

First, it is important to note that a key recommendation of the 2016 Canada Transportation Act review was to reduce the high level of government taxes and fees on Canadian air transportation because of their significant negative impact on both airlines and passengers. Specifically, the CTA review recommended a phasing out of airport rent, a reform of the user-pay policy to prevent the government from collecting taxes in excess of its investment in services and infrastructure, and a reduction in the air traveller security charge.

In announcing the government's transportation policy, Minister Garneau promised a reduction of what he characterized as a “litany of fees and charges” on air travel. In fact, this morning he mentioned that he had travelled the country in preparation for Bill C-49, and the number one issue he heard about was the high cost of air travel.

IATA was therefore disappointed that Bill C-49 fails to address any of these cost issues—no call for a reduction in rent, taxes, or fees.

To be fair, Minister Garneau has promised to address these cost issues in phase two of the government's vision for the future of Canadian transportation. We look forward to supporting Minister Garneau and his team in this second phase.

I believe my airline and trade association colleagues who have testified before you yesterday and this afternoon are better equipped than I am to address the issues of airline ownership, joint ventures, and CATSA cost recovery set forth in Bill C-49. I'd like to focus my remarks on Bill C-49's call for the Canadian Transportation Agency and Transport Canada to develop enhanced air passenger protection regulations.

IATA is currently working with approximately 70 governments that have either implemented or are considering implementing air passenger rights regulations. As you would expect, some governments have done a better job than others in this regard. We have seen two primary approaches to these passenger rights regimes.

The first approach is that government steps in and dictates how airlines should treat their passengers. This model is best seen in the approach taken by the United States and the European Union, where regulations impose stiff fines if airlines do not meet government-imposed requirements as to how passengers should be treated in the case of delay, cancellation, or lost baggage.

For the most part, these fines are punitive in nature, as they go beyond the cost of the delay or cancellation to the air passenger. We see a number of challenges to this approach.

First, it is difficult to define in regulatory terms exactly how to treat passengers in any given circumstance. Each irregular operation presents a different set of facts that are difficult to anticipate, much less to regulate. In Europe, for example, the courts stepped in to interpret the intent of the European passenger rights regulations, which more often than not resulted in contradictory interpretations and confusion on the part of airlines and passengers alike.

Second, the most well-intentioned government regulators can sometimes do more harm than good when attempting to protect passenger interests. For example, in the United States the rule against lengthy tarmac delays has resulted in increased flight cancellations, which often prove to be more inconvenient to passengers than the tarmac delay itself.

In 1987, Canada deregulated the commercial airline industry based on the belief that the free market, rather than government regulation, would produce better results for airline passengers. There is little evidence to suggest that this assumption was incorrect then or now. We know that rare tarmac delays or lost luggage occasionally cause inconvenience for air passengers. However, the answer is not always government second-guessing airlines when the competitive market, and more recently social media, already provides them with all the incentives they need to treat their customers as well as possible.

While Europe and the U.S. passenger rights approach have been copied by some governments, other countries have taken a second approach that I believe this committee and Canadian regulators should consider.

Under this approach, governments do not impose strict passenger rights rules with accompanied fines or penalties. Instead, they put measures in place to ensure that air passengers are fully aware of their rights before they purchase their ticket, leaving it up to passengers to decide what level of service they're willing to pay for.

Australia is a good example of this approach. In addition to adopting a broad consumer rights law covering all industries, the government has worked with the airlines to develop customer charters that outline each passenger's service commitments and complete handling procedures. China and Singapore have also chosen this focus on transparency rather than imposing punitive measures, and have seen positive results in terms of on-time performance, lower cancellations, and lower airfares

It is interesting to note that last year, the Canadian Transportation Agency took a step in that direction when it requested and received voluntary commitments by Canadian carriers to publish their tariffs and contracts of carriage in clear language on their respective websites.

Bill C-49 seeks to combine both approaches to this passenger rights issue. On the one hand, it requires airlines to make terms and conditions of carriage readily available to passengers in clear and concise language. IATA supports this transparency. Bill C-49 goes on to direct CTA and Transport Canada to develop regulations with minimum standards and compensation for passengers during irregular operations. IATA has significant concerns regarding this approach, particularly if the fines are prescriptive in nature.

If Bill C-49 remains as is and CTA and Transport Canada follow the U.S. and EU approach, we urge these regulators to follow several principles to promote clear and fair regulation. These include guarding against unintended consequences and including provisions to fix them when they arise, as well as ensuring that the benefits outweigh the costs of regulation. Compensation should be equivalent to the cost of lost time and property to passengers and not be punitive. We need to ensure that any customer service requirements apply to all parts of the air transportation ecosystem rather than just airlines, and that fines are only imposed on actions within the airline's control. Finally, passenger rights rules should not be extraterritorial in nature.

Thank you for your consideration. I look forward to answering your questions.

[The Chair, Liberal, Judy Sgro]

I am calling our meeting back to order, our study of Bill C-49.

Apologies that we're a few minutes behind schedule, but welcome to all of you who are here.

If you would like to start by introducing yourselves, we will start with Mr. Lavin.

You have 10 minutes for your comments.

[Ryan Greer]

I think that's a bit of a broad statement.

Our membership is very wide and has a lot of different interests within the Canadian chamber. There are some aspects of Bill C-49 which we view as good and necessary, and we are still waiting to see some of the details.

There are other issues, on the rail side, where we're not as certain. Often the chamber, with the size and scope of our network, comes at it from a broad approach, and we have some broad concerns about the creeping regulation into the sector and what that may mean for investment, for productivity, and for the effectiveness of all Canadian supply chains.

We like a lot of what's in Bill C-49. With some parts, we still need to see what's in the regs, and there are other parts where we have some concerns.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Madam Chair, I have a very quick question. Thank you for letting me ask it.

My question is for the official from the Canadian Chamber of Commerce.

Here is what I understood from your comments today. On the whole, your members are satisfied with Bill C-49. Have I understood you correctly today?

[Anthony Durocher]

Once again, from the Competition Bureau's point of view, our role is clearly defined in Bill C-49.

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

So the answer is no. On the other hand, it is very easy to lobby a minister's office. That is even part of lobbyists' work. I have the feeling that the measure in Bill C-49 that gives the minister this new power is probably the result of lobbying.

So I come back to the same question. By virtue of his new powers, can the minister circumvent all the Competition Bureau's work?

[Ryan Greer]

As Bill C-49 is currently drafted, both major class Is stand to lose some business in southern Alberta and southern Manitoba. That's what the current exemptions of the bill provide in Ontario, British Columbia, and Quebec.

I think my comment in my remarks was that in the absence of those exemptions, both those railways would stand to lose a significant amount of rail business, and then Canada would lose a significant amount of port business in both Vancouver and Montreal. As it currently stands, there will be a loss of traffic. The railways would have to give you a more precise description of what that loss of traffic in Alberta and Manitoba will be. With the exemptions, which would be maintained, a massive loss of traffic in some of our major centres won't be had.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you to our witnesses for appearing. I appreciate the candour of your opening remarks and testimony.

In addition to failing to introduce market forces in grain handling in Canada by lifting the maximum revenue entitlements, thereby failing to address the underlying cause of the grain-shipping crises over the last 20 years, based on your testimony it looks like the government is also weakening the competition in another area by weakening the power of what is a law enforcement agency, the Competition Bureau.

I found it really interesting that in your opening remarks, Madam Fisher, you elaborated at length about the bureau's 2011 case where you went after Air Canada and United Airlines and their proposed joint venture, and ultimately required that they exempt 14 transborder routes from the joint venture in order to ensure greater competition for Canadian consumers and ultimately lower prices for Canadian families.

It's clear to me that the bill in front of us today weakens the bureau and weakens law enforcement by introducing a new process that would allow the minister to essentially bypass the bureau. Had the 2011 case been introduced under this proposed law, it's clear to me what would have happened. Air Canada and United Airlines would have applied directly to the minister for this new process and very likely the minister would have approved the joint venture, possibly without the exemptions for the 14 routes. That ultimately would have led to less competition and to higher prices for Canadian consumers.

I think it's safe to say that Bill C-49 weakens law enforcement. It weakens the powers of one of our premier law enforcement agencies when it comes to competition. Would you agree with that statement?

[Ryan Greer]

Just to step back to one of your earlier questions about the cost of air travel in Canada, I think all of these extra taxes and fees and the airport rents are one of the reasons why it is more expensive to fly in Canada. Obviously there's the density of our population, but there are also our carriers that serve a lot of routes that aren't as profitable, including into the north, where some of their bigger haul routes actually can cross-subsidize and get into smaller communities the flights that may otherwise not make commercial sense for them. I expect that there is some cross-subsidization when it comes to making sure that Air Canada, WestJet, and other carriers are actually getting into smaller communities where there's maybe not a lot of potential to make money.

The user fee principle built into air travel makes sense, but again, only if those fees are used for what they're determined for. The problem with the air travellers security charge is that not all of that money is put back into CATSA screening. One of the things that Bill C-49 will do in allowing airports to contract out new services from CATSA is that inevitably those authorities will end up recouping those costs through their landing fees and other mechanisms, which are then built into ticket costs. That means consumers could end up double-paying for security fees. They're paying the air travellers security charge, and then they're going to be paying whatever fees end up getting built into tickets because of these additional costs that are being contracted out.

We think it's time for a review of all of the government-imposed costs. We're not saying to get rid of all of them. We're not saying that there shouldn't be a security charge. We're saying to make sure that we're accountable for how those fees are used and that they're invested in what they're supposed to be invested in. Also, then, there's looking to see if there are ways in which we can make the sector as a whole more competitive. Again, airport rents are an area where we impose very high costs, which then of course have to be recouped through the end users.

[Vance Badawey, Liberal, Niagara Centre, ON]

My last question is for Mr. Schaan.

Over the past week, I've really tried to attach Bill C-49 to the bigger picture when it comes to the transportation 2030 strategy. That, of course, has a balance attached to it when it comes to customers, especially with air, in terms of their rights, as well as with business, with industry, with really injecting this bill into that strategy with respect to trade corridors and enhancing those trade corridors when it comes to our infrastructure investments following those recommendations and strategies. How do you see this, as well as the bigger strategy, actually fitting into the overall strategy to bring Canada to a better performance globally?

[Ryan Greer]

Yes, thank you for the question.

You've raised what is one of, I think, a few different challenges with the current CATSA funding model and how CATSA operates as a whole. At its most basic level, the fact that we have an air traveller security charge, which funds general revenues of the government and not all of which is put back into security services—it does fund other things, but the fact is that not all of that is reinvested—already puts CATSA on its back foot when it comes to meeting its obligations in airports. I think that's one of the reasons that Bill C-49 in the interim seeks to allow airports to set up these arrangements.

As I said in my remarks, I think the ability of airports to enter into these arrangements should be viewed as a stopgap at best, and a band-aid, until the CATSA funding model can be dealt with in a more reasonable manner. It's not just airports in Quebec; it's small and medium-sized airports across the country, especially for peak tourism season. They get demand for some very high-end travellers or people on charter flights who want to come and spend a lot of money in their community, but for scheduling reasons, they have trouble getting CATSA staff, or funding reasons.

I think you've identified an inequity that is worth having a discussion about. However, before I think that can be addressed, the overall CATSA funding model and how the air travel security charge is actually used to fund CATSA is something that needs to be dealt with because now, as we're seeing, some of the big airports can't meet all their obligations with CATSA's current service provision. They're having to contract for additional provisions at Pearson and another airport.

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

You can see the problem though. Competition has quite a clear meaning to all members of the public. Public interest, however, is vague, to say the least.

I will now turn to my second topic before my time runs out. I would like to speak to the official from the Canadian Chamber of Commerce. I will offer a different example this time. I think we are more likely to agree on the issue of economic development.

In my riding of Trois-Rivières, there is a regional airport that has expanded steadily over the years, first to accommodate those travelling for pleasure, then for a pilot school, an aircraft painting company and now to perform maintenance on some Air Canada aircraft. In short, there has been steady investment in an airport that is growing and contributing to regional development. There are even agreements with airline companies to schedule charter flights.

There is a problem, however, since Bill C-49 stipulates that if we want access to security measures for international travel, we have to pay for them ourselves.

With regard to regional economic development, does it seem fair to you that there should be two types of airports, those for which the cost of services is covered and those that have to pay to offer the same services to their customers?

[Anthony Durocher]

As to Bill C-49, if the transport minister deemed something to be in the public interest, that would indeed be the case. It would be left to his discretion, while also bearing in mind the analysis by the Office and the Commissioner.

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

Madam Chair, I will limit myself to two topics in order not to go over the five minutes I am allowed.

My first question is for Ms. Fisher or Mr. Durocher.

Your presentation about the Competition Bureau was very well done, although it was a bit technical. For those who are following our work, I will try to be as clear as possible.

You mentioned the example of a potential joint venture between Air Canada and United Continental. After a series of negotiations and studies, the Competition Tribunal systematically blocked this agreement. It did not come to pass.

As I understand it, in view of the powers devolved to the minister in the current Bill C-49, that is over, the Tribunal will no longer be able to block anything. At most, it can recommend that the minister do so. If the minister decides otherwise on the basis of poorly defined public interests, there is no further recourse.

[Mark Schaan]

Public interest considerations can mean a number of things. The way Bill C-49 is laid out is there will be a guideline-setting process that will essentially be open for consultation to allow for parties to help inform that, but that can include things like safety, tourism, connectivity, economic benefits, and a number of other considerations that potentially provide both increased economic impact and connectivity for Canadian passengers.

[Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry]

I'll start, and my bureau colleagues may want to intervene.

One of the reasons we introduced the joint venture provisions in Bill C-49 as they are now is that currently joint ventures in this country actually don't have any set timelines necessarily, because they are subject to the commercial collaboration provisions of the Competition Act, which the commissioner of competition can initiate at any time and invoke a review of at any time. That does not allow for any certainty or predictability for proponents unless it's a notifiable merger.

We've taken the merger provisions that currently live under the CTA, which allow for a public interest consideration, and we have actually made those timelines more explicit and shorter. If I take the merger timelines, for instance, it's important to think about the time that leads up to a merger notice being given, but essentially you can take that same time frame and, say, 42 days to inform parties, and, where there is public interest, another 150, and then there's a TBD on all of the steps that follow thereafter.

With respect to the joint venture provisions, one point I want to clarify is that the 120 days for the commissioner of competition are parallel to the 150 days for the minister of transport. Really, in this particular set of time frames we are trying to balance providing predictability and certainty with the need for a robust competition consideration by the commissioner of competition and a robust public interest consideration by the minister of transport. We actually think this particular measure right now allows for an international competitiveness that Canada currently can enjoy like its other comparators.

To your point on the two-year minimum immunity period, I would stress that it's a two-year minimum period, so unless it is otherwise stipulated in the terms and conditions, joint ventures will not have an expiry date and will continue to operate in perpetuity while being monitored annually. That being said, we believe the two-year minimum is sufficient. It's worth noting that in other jurisdictions, such as the United States, antitrust immunity can be reconsidered at any point by the transportation authorities, and so there is actually no certainty to pardon. Therefore, in the joint venture provisions in Bill C-49, we've tried to provide for a balanced and thoughtful consideration of competition and public interest considerations and as much predictability and certainty to parties as possible while ensuring that at all times there's due process.

[Ryan Greer]

I think we all appreciate the challenge of continuing your work on a difficult day like today, so thank you for having us here.

Thank you for inviting the chamber to take part in your study on Bill C-49. The package of legislative amendments before you affects chamber members of all sizes across our network of 200,000 members.

I'd like to start by commending Mr. Emerson and the review panel for their work on the Canada Transportation Act review report. The report is a comprehensive landmark piece of work. It made important recommendations toward helping to modernize Canada's trade and transportation networks. Bill C-49 touches on some key issues raised by the review.

The lens by which the chamber considers the individual components of Bill C-49 and offers comments is how we see the proposed changes affecting Canadian competitiveness overall. I'll start briefly on the rail side before jumping over to a few remarks on air travel as well.

Canada's historical trend of privatization in rail is a tremendous success story that has resulted in significant private sector investment leading to some of the lowest freight rates and highest levels of service in the world.

To that end, the chamber offers caution about the urge to expand regulation into Canada's supply chains. In a global economy where connectivity has become a key determinant of economic performance, the objective of any transportation system reform should be on continuous improvement to the efficiency of our supply chains. This was a major theme of Mr. Emerson's review.

The network nature of these supply chains, including our rail system, is such that providing a regulated advantage to one customer, one sector, or one part of the network will inevitably take something away from other parts of the network. This is one of the reasons that the last two Canada Transportation Act review panels, in 2001 and again in 2016, recommended against increased interswitching limits and maintaining a system based principally on commercial relationships and market forces.

Specifically, the chamber has concerns about the proposed new long-haul interswitching provisions. I think we should be wary of unintended consequences, including disincentives to investment and reduced productivity. In particular, the economics around remote branch lines serving resource industries is already difficult. LHI could threaten to reduce the income that railways make on these lines, which makes their future even a little more perilous.

Another consequence of long-haul interswitching is allowing U.S. railways to take advantage of Canadian lines without reciprocity. As currently drafted, Bill C-49 includes some geographical exemptions for U.S. access and, at a minimum, those exemptions should be maintained. Without the exemptions, Canada would stand to lose a large amount of rail and port business to the U.S., particularly through Vancouver and Montreal.

Broadly, supply chain competitiveness is better served by having a commercial marketplace that has sufficient provisions in place to protect customers in the event of a dispute. Bill C-49 does include some reasonable amendments to existing dispute resolution mechanisms.

On the issue of level of service decisions from the CTA, the chamber would suggest that the CTA should take into account the impact of decisions on all aspects of a supply chain and not just a single customer in making their decisions.

Moving on, we are supportive of provisions in the bill that will change the framework of the maximum revenue entitlement to remove some of the disincentives that have discouraged the acquisition of new hopper cars. We are also supportive of the measures for supply chain data transparency and some of the additional steps that the government has already taken in this regard.

We also support Bill C-49's provisions on locomotive video and voice recorders, including the proactive use of this data by railway companies. The minister has repeatedly said that his number one priority is safety, and this will help accomplish that.

Last, on rail, the chamber is supportive of increasing the individual share ownership limit for CN from 15% to 25%. This is an issue for fairness compared to other carriers and other modes and is important for accessing the necessary capital for long-term investment for the railway.

Moving on quickly to the air transportation sections of the bill, the chamber is supportive of a new framework for consumer rights. The current complaint-based system is a bit of a mess. It leads to inconsistent application of rules between carriers. A simplification and standardization of those rules is overdue, both for those travelling on the airlines and the airlines themselves. Like all business, our carriers can operate more effectively and efficiently when they have greater certainty of the environment in which they're operating.

As regulations under the framework are developed, we'd recommend that they clearly reflect the fact that airlines are one part of the air transportation system. For instance, security screening delays remain one of the top complaints from air travellers.

The bill also requires more information and data regarding air carrier service. I would offer that increased data requirements should not be limited to our carriers, but specifically include government entities within the network that affect system performance, including CBSA and CATSA.

We are also supportive of the joint venture provisions in the bill and setting up the new approval process for the minister of transport. Moving the authority or creating this new process will allow joint venture decisions to be made with a broader public and economic interest in mind.

We do recommend that some of the joint venture provisions in the bill be amended. Specifically, the allowance of a ministerial review of a joint venture after two years following its approval should be lengthened. The two-year clock begins following the ministerial approval of the joint venture, not from when the joint venture actually commences its operation. Once it's actually off the ground, so to speak, we believe that the two-year time frame will probably not provide sufficient enough time to test the joint venture in the market.

The chamber is also supportive of the CATSA cost-recovery section of this bill, with the major caveat that this is very much a band-aid solution, while the government continues to correct or tries to correct the CATSA funding model. We must look to end the chronic underfunding of CATSA to ensure that air travellers can receive the efficient screening services that they are already paying for on their tickets.

We are also in favour of the foreign ownership provisions for airlines in this bill. The minister has stated that the objective of this change is to help promote more competition and bring down airfares. I would just add that if Canada wants to get serious about lowering airfares, it is time to review the government-imposed costs on ticket prices. This of course includes airport rents, security charges, Nav Canada fees and other taxes, all of which impact the competitiveness of Canadian air travel.

I'll wrap up by commending the minister, his team, and the department for the work they've put into transportation 2030 and Bill C-49, and this committee for all the work that you are doing this week. As the minister said this morning, Bill C-49 is only the first step in a long-term transportation plan and the Canadian Chamber of Commerce looks forward to continuing to work with the government on improving Canada's trade and transportation competitiveness.

Thank you.

[Melissa Fisher, Associate Deputy Commissioner, Mergers Directorate, Competition Bureau]

Madam Chair, my name is Melissa Fisher. I'm the associate deputy commissioner in the mergers directorate at the Competition Bureau. I'm joined today by my colleague, Anthony Durocher, the deputy commissioner of the monopolistic practices directorate at the bureau.

Also present is Mark Schaan, director general of the marketplace framework policy branch at Innovation, Science and Economic Development Canada. He is in charge of competition policy, while the Bureau carries out the independent enforcement function.

I understand that the committee has questions about changes in the bureau's role in relation to the review of arrangements between air carriers, as set out in Bill C-49.

I'll begin by providing some context about the bureau and its mandate. I will then speak to the bureau's experience in reviewing agreements and arrangements between air service providers. Finally, I will address the provisions of Bill C-49 that would impact the bureau's role in examining these types of agreements or arrangements.

The Bureau is an independent law enforcement agency that ensures that Canadian consumers and businesses prosper in a competitive and innovative marketplace that delivers lower prices and more product choice. Headed by the Commissioner of Competition, the Bureau is responsible for the administration and enforcement of the Competition Act and three of Canada's labelling statutes.

The act provides the commissioner with the authority to investigate anti-competitive behaviour. The act contains both civil and criminal provisions and covers conduct such as false and misleading representations, abuse of a dominant market position, mergers, and price-fixing. Civil matters are resolved before the Competition Tribunal, a specialized adjudicative body that comprises Federal Court judges and laypersons with expertise in business, commerce, or economics, whereas criminal matters are resolved before the courts. The act also provides the commissioner with the ability to make representations before regulatory boards, commissions, or other tribunals to promote competition in various sectors. The basic operating assumption of the bureau is that competition is good for both businesses and consumers.

Today I am here to talk about the bureau's role in reviewing arrangements between air carriers and how that role would change if Bill C-49 were passed.

The bureau has a significant amount of experience reviewing arrangements, including mergers and joint ventures, in the air transport sector. From the development of the first broad airline alliances in the late 1990s to the acquisition of Canadian Airlines by Air Canada in 2000 and the entry, and sometimes exit, of a number of carriers since then, the bureau has examined a variety of arrangements between air carriers that could harm businesses and consumers who rely on air services through increased prices and reduced choice.

Notably, in 2011, the bureau challenged before the tribunal a proposed joint venture between Air Canada and United Continental that involved co-operation on certain key aspects of competition, including pricing, capacity setting, frequent flyer programs, and revenue and cost sharing. After conducting an in-depth review, the bureau determined that the proposed joint venture would have resulted in the airlines' jointly monopolizing 10 key Canada-U.S. transporter routes and substantially reducing competition on nine additional routes. In turn, this would have likely led to increased prices and reduced consumer choice. Ultimately, the bureau reached a negotiated resolution with the parties. The consent agreement entered into prohibits Air Canada and United Continental from implementing their joint venture agreement on 14 transborder routes.

The Air Canada-United Continental matter is an example of how the bureau might review an air services arrangement under the Competition Act. The bureau typically examines this type of arrangement in the context of either the merger or the competitor collaboration provisions in the act, depending on how the arrangement is structured. These arrangements can have positive effects, such as increasing efficiency and competitiveness, in turn allowing Canadians to benefit from lower prices and better product choice. However, they can also raise competition concerns. If the commissioner determines that an arrangement is likely to result in a substantial lessening or prevention of competition, which is the statutory threshold, he may, subject to an exception for notifiable transactions under the act, challenge it before the Competition Tribunal, or alternatively, seek a consensual resolution with the parties in the form of a consent agreement.

With respect to the factors considered in reviewing mergers or agreements among competitors, the bureau undertakes an exhaustive, fact-intensive and evidence-based review, including quantitative analysis. In analyzing an airline joint venture, the bureau will focus on routes where there is overlap or potential overlap in the service by the parties.

In particular, the bureau typically considers whether the joint venture partners provide competing air passenger services on specific origin-destination city pairs, such as Toronto to Chicago or Winnipeg to North Bay. The bureau also assesses whether consumers view, for example, non-stop or one-stop service, or business and leisure travel as substitutes for one another. The bureau also considers whether there are competitors serving the parties' overlapping routes, any barriers to entry, and whether existing or potential competitors may constrain the ability of the parties to the arrangement to raise prices.

A joint venture that reduces the number of competitors or potential competitors on an already concentrated route will raise concerns. For any particular overlapping route, the bureau will want to ensure that consumers have access to competitive prices and services, and that a proposed arrangement would not result in any route being captive to one or more airlines with enhanced market power.

To assess the competitive impacts of a proposed joint venture, the bureau can require significant amounts of data and other market information from the parties to the joint venture and other market participants. This information is necessary for an informed and credible review based on sound economic principles. The bureau may seek such information on a voluntary basis from the parties to the arrangement, from third parties with knowledge of the industry, or from consumers. At times, it may also seek the issuance of a court order requiring that certain information be produced.

Bill C-49 establishes a new process for the review and authorization of arrangements involving two or more transportation undertakings providing air services. This process will cover all types of arrangements among air carriers, other than arrangements that would be considered notifiable transactions under the Competition Act. Notifiable transactions are transactions that meet specific financial thresholds regarding the size of the parties and the size of the transaction, and that cannot be completed until the commissioner has had an opportunity to review. Notifiable transactions have been subject to a potential public interest review by the minister of transport since 2000.

Bill C-49 proposes a new process for arrangements involving air services that will enable air carriers to voluntarily seek authorization of a proposed arrangement from the minister of transport. The commissioner will receive a copy of any notice of an arrangement that is provided to the minister, along with any information required by the guidelines.

If the minister determines that the proposed arrangement raises significant considerations with respect to the public interest, then the commissioner is required, within 120 days of receiving the initial notice, to report to the minister and the parties on any concerns regarding the potential prevention or lessening of competition that could occur as a result of the proposed arrangement. A summary of the commissioner's report may be made public. I would note in this respect the bureau's ongoing commitment to transparency within the limits of our confidentiality obligations, and that this commitment would continue under this process as well.

The bureau will carry out its usual competitive analysis, but to the extent that the arrangement raises competition concerns, it will not have the option of settling those concerns with the parties directly through the negotiation of remedies or by applying for a remedial order from the tribunal. The final decision in these matters will rest with the minister of transport, and the minister will consult with the commissioner on any remedial measures relating to competition.

In cases where the parties do not seek an authorization from the minister, or where the minister does not trigger a public interest review, the bureau will assess the arrangements under the Competition Act in the usual manner and without any change from its current process. The bureau will make its staff available to consult with the minister of transport to develop guidelines as required by the bill, and is committed to working with transport, including taking steps to ensure that the guidelines require parties to produce the information that the bureau needs to undertake an informed competition analysis.

While the bureau and the minister will work together to share information, the bureau's review of arrangements will remain separate and independent from the public interest review conducted by the minister.

[The Chair, Liberal, Judy Sgro]

Basically, your time is up, Mr. Hardie.

Minister Garneau, thank you so much for spending two hours with us. I think you will have heard that the committee has functioned extremely well, and I believe we all have the very best interests for Canada in mind and we are working very well together to ensure that Bill C-49 is the very best it can be.

Thank you to you and your staff for being here.

[Lisa Raitt, Conservative, Milton, ON]

It's back to me again, Minister. It's more like a conversation than it is anything else, I think. The officials around you are probably thinking that this feels like the briefings they used to give me all the time in terms of questions.

Briefly, I want to say that I understand—I know that I'm talking to somebody who understands this—that there is a delicate balancing act when it comes to the portfolio. In the air sector you have to balance airlines, airports, and consumers. You have the bill of rights with that one. In marine you have cargo carriers, ports, shippers. All those guys are important.

In rail you have a different balancing act. It's a very difficult one, I will tell you. You know it's difficult. On one side it's farmers, forestry, mining, containers, and all that. On the other side it's rail companies, and then throw in a little dash of unions. It's a very difficult area. Any time you move off the status quo, which Bill C-49 does, you're going to have people who are winners and people who are losers. Our attempt here is to try to figure out what the best balance is.

I'd like to go back to something you said to I think Mr. Sikand or Mr. Fraser. It had to do with whether or not we need in Bill C-49 the ability, again, for the CTA to do self-implementation. This time I'll give the example of forestry, which is very different.

FPAC came to this committee and asked to have the ability for the agency to intervene so that they will be able to study something. I think it comes from a real place, because as my colleague Mr. Chong pointed out, we have seen this movie before in terms of having emergencies in the transportation of grain and transportation of commodities. Sometimes the politics that invariably are in a minister's office can cloud the quickness by which you can make a direction for a study to happen. It happens in all parties. It's not a partisan issue here. This happens in all parties.

I'm trying to understand, Minister, why you don't think it's a good idea for the CTA to have that experience, to be those people who are the knowledge people in the business, seeing a certain situation happening again where they can actually take action and get in there quicker in order to resolve these disputes because they have the ability to look at it themselves.

That's an area where I'm really concerned about the balance. I don't see the purpose in having the minister hold the only power to start off an investigation by means of a notice of direction. I have used that and you have used that in the past, but we're not always going to be.... I'm not going to be the transport minister, and one day you won't be the transport minister. We have to make the system work for everybody forever.

You have to bear in mind that sometimes ministers just won't take action, so why not have the CTA have that power?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

The short answer is yes. We're always looking at how we can improve transportation, and it is—as you know very well, because you have been particularly focused on it, as I know it's a strong interest of yours—a very complex set of files, and when we do come forward with a project like Bill C-49, which does actually have concrete measures in it, there's a tendency to ask about the stuff we didn't put in there. We're working on it. We're working on a whole bunch of things ultimately to make transportation safer, greener, more innovative, and economically as efficient as possible. All of these things touch on that. We continue to work at Transport Canada, and I want to give a shout-out to my ministry. We have more than 5,000 people who are very competent people and who are working very hard to try to make our transportation system the best in the world, and we are the best in the world on some of it.

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Chair, I have to say, it's been an enjoyable process, as I said earlier, because not only are we dealing with how Bill C-49 is going to enhance the overall transportation strategy and transportation 2030, but what we also accrued over the last few days was, I'll use the word “residual” discussion, dialogue, and therefore objectives. We spoke about asset management and how overall within the transportation 2030 recommendations and the movement of that it's going to breathe, how it then lends itself to integrating our distribution and logistics system, and the integration of transportation between the four methods of transportation—road, rail, water, or air—how they come closer together.

As we look at the Emerson report and now bring it into a manner of being pragmatic and really take on some of the recommendations that Mr. Emerson made, with that is the...I won't say smaller in terms of size, but I'll say they don't recognize in the Emerson report how we now have to bring things like short-line railways into the bigger picture. It will be my intent today to actually ask for a report, to then proceed with recommendations, all of us working together as we have been for the last few days, to look at short-lines as becoming a larger part of the overall integration of those transportation methods.

I have to zero in on one question, Minister, and I fully respect the efforts that all governments in the past have made with respect to the passenger bill of rights. I have to ask, one, how it evolved. Two, and most important, and I know the NDP put forward a private member's bill in the last session, how does the passenger bill of rights proposed now, differ from the previous approaches and the previous dialogue that we had with the industry, differ from the PMBs and the discussion of past Parliaments? How is this approach now different and how is it going to be more pragmatic, workable, and of course, advantageous to the priority, the customer, the passenger?

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Okay.

Will your party be open if the NDP puts forward amendments to improve Bill C-49 and clarify compensation measures, specifically as regards overbooking in order to limit the removal of passengers from aircraft, for example? Can we expect your government to take a collaborative approach?

[Sean Fraser, Liberal, Central Nova, NS]

On the issue of short-line railroads, we've heard a number of witnesses. Though it didn't necessarily relate specifically to provisions included in Bill C-49, we talked about the economic importance of short-line railroads to their communities in representing an area that's defined by small towns and rural communities in a province that's really only served by short-line infrastructure.

I'm curious as to whether the rail corridor funding available through your portfolio would help short-line railroads accomplish what they need to in order to ensure they're serving these smaller communities.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

There is no mention in Bill C-49 of discontinuing rail lines or of allowing a railway company to discontinue an existing line within 60 days. If a line was active, however, the service level could be raised by the Canadian Transportation Agency. In many cases, the lines that railway companies decide to shut down have not been used for a number of years. It costs them money to maintain those lines. The bill does not cover this issue, but if a line is in active use, it is certainly in the interest of our category 1 rail companies to maintain it, as that gives them better access to transportation business.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you for your question, Mr. Graham.

When I was in opposition, I became aware of the issues with the Mont Tremblant International Airport. The issue at that time was the availability of CBSA services for incoming flights, usually charter flights with American passengers on board.

Bill C-49 addresses increasing refundable fees for airports that need this service in order to expand. There are a number of small airports all over Quebec and elsewhere that do not have that service and would like to, but they are not designated airports. In fact, this has been available for a while. What is new in a sense is that major airports, such as the Toronto airport, want to pay for additional CATSA resources in order to speed up security screening.

This bill seeks to increase CATSA services for airports that choose to do so. It will not remove services that already exist.

[David Graham, Liberal, Laurentides—Labelle, QC]

Thank you, Minister Garneau, for taking this significant step in modernizing the framework that governs transportation. From what the witnesses have said, Bill C-49 is very positive on the whole, but I would like to clarify a few points with you.

The Mont Tremblant International Airport in La Macaza is located in the riding of Laurentides—Labelle, which you know well. Commercial service is seasonal and is not very reliable. There are already problems with CBSA services, which are offered under a cost-recovery agreement. This has effectively killed international flights, since the costs are more than $1,000 per incoming international flight.

CATSA fees are currently the same as at other airports with a fixed cost per passenger. Can you reassure us that the cost recovery rates proposed by CATSA will not hurt small airports such as the one in La Macaza and small airports that are essential to survival in the North?

[Lisa Raitt, Conservative, Milton, ON]

I have one last question.

On the topic of the cameras in cabs, I have a quick story. On my first day on the job that you now hold, which I was honoured to hold for a while, I was told I needed to have an emergency meeting with the major rail line in the country, which I did. Minister, the very first topic they brought up was the notion of having these cameras in the cab. It was something that took a lot of my time and energy over the last two years. However, I was always troubled by one particular issue, and I don't have clarity on it from your Bill C-49. It has to do with the utilization of this information for purposes other than safety management.

Your speech is clear. Your speech says very clearly that this is about safety management, that proactive safety management is what the tapes are going to be for. This week in testimony, rail companies and transport officials indicated that the tapes could also be used for discipline, which is where I have concerns.

Can you help me understand whether or not we are going to be allowing CN and CP, and any other rail company that puts cameras in the cabs, to utilize them for non-safety related disciplinary purposes?

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

Mr. Garneau, you visited Rouyn-Noranda recently and made an announcement about the airport. The airport expansion should sort things out, but right now Air Canada is the only carrier with flights to Montreal, meaning that there is no competition and the fares are very high. It could easily cost me $1,200 to fly from Ottawa to Rouyn-Noranda return, even though the distance between the two cities is less than 500 km as the crow flies. This shows that the lack of competition has a huge impact on prices.

In Bill C-49, however, you are giving yourself the power to approve joint ventures between air carriers even if the Commissioner of Competition is of the opinion that the agreement will weaken competition and increase costs for passengers.

Once again, Air Canada's profits seem to take precedence over consumers' rights. After introducing a bill that cost 2,600 workers in Quebec their jobs, you are at it again with a bill that removes powers from the Commissioner of Competition.

Moreover, the register of the Office of the Commissioner of Lobbying of Canada shows that Air Canada has been in contact with your government numerous times to discuss the legislative framework for international air carrier joint ventures.

In short, it looks like Air Canada is pressuring your government to weaken the powers of the Commissioner of Competition and passenger rights. Air Canada's lobbyists must be proud to have your support.

I would like to know how diminishing the powers of the Commissioner of Competition will serve air passengers.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Minister, from what I understand, Bill C-49 does not have enough teeth and is just so much window dressing. I will quickly go over three elements I would remove from this bill.

First, the Canadian Transportation Agency will establish rules about the charter of passenger rights. A bill is drafted and action is urgently needed, but the agency will be given the responsibility to write the regulations.

Second, guidelines are included for joint ventures by increasing foreign ownership to 49%, but the minister will have the power to oversee and authorize that. So what will be the point of the legislation once it has been adopted?

Third, railway companies will have to provide on the Internet information on those of their lines that are operational and those they no longer use. What is the benefit of that for Canadians?

With all due respect, Minister, I feel that this bill is empty; it is just window dressing.

What do you have to say to that?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I can't say this with complete certainty, but I think that Transport Canada is the department with the most responsibility when it comes to implementing regulations. Our department is very technical. Transportation regulations are complex. At Transport Canada, we are used to those processes.

I think that Bill C-49 expresses what we want to do, while mandating the Canadian Transportation Agency to do what I mentioned. Next year, when we present this charter of passenger rights, I believe that most Canadians will agree that it reflects the intent of Bill C-49. I am confident about that and will make sure to do what is necessary, since our department will have the last word in terms of what will be proposed.

[Joël Godin, Conservative, Portneuf—Jacques-Cartier, QC]

Thank you, Madam Chair.

Minister, thank you for being here this morning and for participating in this exercise.

We all have the will to create laws that will improve the lives of Canadians. I think that is your intent with Bill C-49.

I will repeat the expression used earlier by my NDP colleague and say that, as far as I understand, the bill has a philosophical intention. I would like us to go further and implement more concrete measures.

You want to bring into force legislation whereby the Canadian Transportation Agency would draft the charter of passenger rights. I find that, by doing so, you are just delaying. The situation could already be described in the legislation. I think that the bill is very broad. I'm under the impression that the government is stalling.

If the House of Commons passes this bill, I would like Canadians to feel that their quality of life has finally been improved. But that is not how I see this bill.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Minister, for that answer, but with respect, I think the best investment incentive you could provide to the industry to ensure that the capacity is there particularly during peak times to move grain to tidewater is to move to a system where commercial forces can play a much greater role. I think that's the one big flaw in this bill that has not been addressed. I think we will be revisiting, in a crisis situation, the fact that western Canadian grain farmers cannot get their grain to tidewater when they need to. I think that's the major flaw in this bill.

I applaud you for the other initiatives that you've taken in this bill, but this is clearly an issue. It's not an issue that's new. It's an issue that's been around for the better part of two decades. We have two reports now, one commissioned by a Conservative government and one commissioned by a Liberal government, that have both concluded that the government should lift the maximum revenue entitlements and move the system slowly and gradually to a commercial basis to address this fundamental problem.

You know, in the 2001 report, it says, and I quote, the “failure to move quickly enough to a system where commercial forces are allowed to work” resulted in a crisis in the grain industry in terms of moving grain. The same conclusions were made in the report that David Emerson was involved with in February of last year. We know what the root problem is, and Bill C-49 does not address it.

Thank you, Madam Chair.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Madam Chair.

Thank you, Minister, for appearing in front of committee.

Minister, I think we would all agree that the privatization of Air Canada in the 1980s and the subsequent privatization of Canadian National Railway in the 1990s, along with the deregulation of parts of the transport system in allowing commercial forces to play a greater role in that system, have been successful. It's better for consumers and customers and better for companies.

What I don't understand is why the government didn't move in Bill C-49 in that direction for the movement of grain. We've had an ongoing crisis in the grain handling industry. This is not new. We had one in 2013-14 under the previous Conservative government. There was one in 2001 under a previous Liberal government. The crisis is only going to get worse. In fact, projections are that the amount of grains and oilseeds produced in Canada is going to continue to increase as a result of advances in crop science and techniques.

Both the June 2001 report, which was commissioned by a Liberal government, and the February 2016 report, commissioned by a Conservative government, recommended that we move toward a commercial grain handling system, and that we lift, over a period of time, the maximum revenue entitlements.

Maybe you could tell this committee why the government didn't move on those recommendations in this bill, particularly in light of the fact that two reports have now recommended that the government move on it, that we've had a number of crises in the grain handling industry over the last two decades, and that it's only going to get worse going forward as production continues to increase.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Of the short-line railways in this country, there are about 20 that come under federal control, and there are about 30 that come under provincial control. They carry products in this country. I think the total of rail transportation by short-lines is 12%. We did consult the short-lines in the development of Bill C-49, and their input is reflected. They are not subject to long-haul interswitching orders or to the new data requirements, as they were considered too burdensome for them.

Many of the concerns raised by short-line associations relate to infrastructure investment and are beyond the scope of Bill C-49. What I'm saying is that the short-line railways here don't have the funding, the capital, the deep pockets, that class I railways have. They are mostly concerned about that, and that is not addressed in Bill C-49.

Short-lines are eligible, on the other hand, to apply for funding under the national trade corridors fund which was announced in July 2017. However, it's true to say that projects involving regional short-lines tend to be to rehabilitate them rather than to eliminate bottlenecks. It's a little bit of a challenge with them.

We are looking at short-lines, though. We realize that they're an important element of the railway system. They're just not covered specifically in Bill C-49.

[Vance Badawey, Liberal, Niagara Centre, ON]

I want to touch on something that I think Ms. Raitt was trying to touch on, but she ran out of time: the impact of Bill C-49 on short-line railways. We heard a lot about—and I recognize this from my past experience in my former life—how it can be somewhat challenging, in both the operational side and the capital side of short-line railways, to really augment or be a part of the overall transportation system, especially working in tandem with the main lines. How will Bill C-49 and/or any regulations or recommendations that might come out of this process contribute to the overall health of our short-line railways?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you, Mr. Badawey, for your question.

As I mentioned and as I think I emphasized in my opening remarks, Bill C-49 is a first step because, as you know, transportation 2030, which I outlined about a year ago, is much broader than simply the measures that are contained in Bill C-49. The Bill C-49 measures are an important first step to address a number of particularly important matters. The charter of rights for passengers is long awaited and has not been done in the past.

With regard to the modernization of freight rail, I can't emphasize how important that is. We need to improve safety on our railway systems because there are still too many derailments occurring.

As you know, there are five themes in transportation 2030. One of them is the air passenger experience. It also talks about green transportation and about innovative transportation. It talks about safety in all the forms of transportation, many of which are not addressed in Bill C-49. There is still much more work to do, and that is part of our ongoing work with respect to achieving the aims of transportation 2030, so there will be more projects that will be coming forth.

A simple example is that we have heard from air passengers that it takes too long to go through security at airports. That is still very much something that is on my mind, and it is part of the traveller experience.

We've heard that we need to make transportation greener in this country, and this is a commitment of our country.

There will be more on those as we go along as part of our mandate.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Minister, thank you for being here this morning.

I am quite pleased and quite excited that the priority that we've established through your leadership is that of balance. We're balancing safety along with value return within the business community, and we're really listening to those thoughts that have come from all sectors.

One of the pillars contained within the government's transportation strategic plan places a strong emphasis on trade corridors, a catalyst to better position Canada to capitalize on global opportunities and to highly perform globally. We get that. However, I want to dig a bit deeper, especially with respect to the question that Mr. Fraser asked. We want to ensure a disciplined asset management plan, both operating capital.... In turn, we want to develop stronger trade-related assets—rail, marine, road, air—that will coordinate and contribute to support Canada's international competitiveness and therefore trade and prosperity. We see Bill C-49 as a component of that; there's no question.

In your own words, how do you see Bill C-49 building itself into the overall strategic plan, transportation 2030, and then ultimately becoming more of a mechanism to be better able to implement that overall strategy?

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

I understand.

I will now move on to something else.

When the Commissioner of Competition blocks a joint venture, as he did a few years ago, I feel protected as a consumer. I tell myself that the Commissioner of Competition had his reasons to say that the agreement was not good for the consumer. However, in Bill C-49, the commissioner's powers are relayed to advisory powers, and the minister can bypass them. That worries me.

Why is it necessary for the minister to be able to ignore the Commissioner of Competition's recommendations?

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

Thank you. I understand that process.

When I say that this is an omnibus bill, it's because I think that different types of transportation could have been split up, and we could have started working on the charter much sooner, with the process you are proposing. As things stand, it will not be done before 2018, if everything goes well.

However, we are not reinventing the wheel. Similar charters exist elsewhere. The European charter, among others, is a very effective model. It was used as the basis for an NDP bill, which you endorsed.

Does that mean we won't be able to make any amendments to Bill C-49 that would provide specific guidelines and could at least inform the thinking of the consultation that will begin after the royal assent?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

That is extremely important to understand. We never intended to include the charter's contents in Bill C-49. The goal was to mandate the Canadian Transportation Agency to make regulations, so that we would have the flexibility to make adjustments much more quickly in the coming years.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you for the question, Mr. Aubin.

First, I want to clarify that this is not an omnibus bill. In fact, 90% of the content of Bill C-49 has to do with the same piece of legislation, the Canada Transportation Act.

Second, as I very clearly explained, when it comes to the future charter of passenger rights, we decided that a regulatory process would be much more effective. So instead of including the charter's contents in the bill, we have mandated the Canadian Transportation Agency to prepare the charter, which will ultimately be submitted for my approval and will then be published as a regulation.

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

Thank you, Madam Chair.

Good morning, Minister. I have an omnibus list of questions to match Bill C-49, so let's try to be efficient. I will ask you short questions that you could answer briefly.

Let's begin with the charter. For at least a year and a half, I have been hearing you speak in some detail about rights that should be guaranteed under that charter. So why is Bill C-49 full of philosophical intentions with regard to a future consultation, instead of a true charter we could vote on?

[Sean Fraser, Liberal, Central Nova, NS]

Finally, we have about two minutes to go, and I'm curious as to your thoughts more generally speaking. This bill has a number of measures that impact the efficiency in our national transportation system. We're dealing in an era of international trade. I find that back home in Nova Scotia it's a difficult conversation to have and to say that “these trade deals, these investments in a national transportation corridor are going to make government and the economy work for you”. That's what people care about.

Could you perhaps elaborate on how some of the measures in Bill C-49 are going to create jobs for the fishermen in getting their product to market in my riding and for the manufacturers and the farmers not just in my community, but in communities like mine? How is this going to make a difference in the lives of the people we represent?

[Sean Fraser, Liberal, Central Nova, NS]

With the exemptions given to two airlines previously under more or less the same rules that are being implemented through Bill C-49, are you seeing action in that direction already?

[Marc Garneau, Liberal, Minister of Transport]

Thank you, Madam Chair. I'm delighted to be here. I've been looking forward to this for a long time.

Madam Chair and honourable members, I am pleased to meet with the committee today to talk about Bill C-49, the Transportation Modernization Act.

I would like to thank the committee for studying the bill before the House is scheduled to resume. That is very much appreciated. I know that you've had three very busy days.

A strong transportation system is fundamental to Canada's overall economic performance and competitiveness. This bill, once passed, would make amendments to the Canada Transportation Act and other related legislation that would position our country to capitalize on global opportunities and make improvements to better meet the needs and service expectations of Canadians.

The measures included in Bill C-49 reflect what Canadians told us they expect during the extensive consultations we undertook last year. We held more than 200 meetings and round tables across the country with transportation and trade stakeholders, indigenous groups, provinces and territories, and individual Canadians to hear their views on the future of transportation in Canada. Our work is aimed at creating and facilitating the conditions to achieve long-term success, and this is precisely what this bill proposes to do.

Bill C-49 is an important first step, and I emphasize “first step”, towards delivering on early and concrete measures in support of transportation 2030, which is the strategic plan for the future of transportation in Canada. This bill focuses on our immediate priorities in the air, rail, and marine sectors. It aims to implement a series of measures to promote an integrated transportation system that is safe, secure, green, and innovative, and that will contribute to our economic growth and a cleaner environment, not to mention the well-being of Canadians when they travel.

The concerns of Canadians have been highlighted in recent months with the much-publicized cases of unacceptable treatment of air travellers both in this country and elsewhere. Bill C-49 proposes to mandate the Canadian Transportation Agency to develop, in consultation with Transport Canada, new regulations to enhance Canada's air passenger rights. These new rules would ensure that air passenger rights are clear, consistent, and fair for both travellers and air carriers.

Some examples of issues the new regulations would address include denied boarding in cases of overbooking, delays, or cancellations; lost or damaged baggage; tarmac delays beyond a certain period of time; seating children next to a parent or guardian at no extra cost; and ensuring that carriers develop clear standards for transporting musical instruments. Clear information will be provided to travellers in plain language about carriers' obligations and how to seek compensation and file complaints.

Under this proposed legislation, Canadians and anyone travelling to, from, and within Canada would benefit from a uniform, predictable, and reasonable approach. My objective is to ensure that passengers would have a clear understanding of their rights as air travellers while ensuring that this new approach would not negatively impact access to air services or the cost of travel.

I've been clear that regulations would include provisions whose intent would be that any denied boarding due to overbooking is done voluntarily and that under no circumstances someone be involuntarily removed from an aircraft after they have boarded. As Canadians, we expect that air carriers serving our country treat their passengers with the respect they deserve and that they live up to their commitments.

This bill also proposes that regulations be made to require data from all air service providers to be able to monitor the air traveller experience, including compliance with the proposed air passenger rights.

The legislation also proposes to liberalize international ownership restrictions from 25% to 49% of voting interests for Canadian air carriers, with accompanying safeguards, while retaining the 25% limit for specialty air services.

These safeguards limit a single international investor to hold no more than 25% of the voting interests of a Canadian air carrier, and no combination of foreign air carriers could own more than 25% of a Canadian carrier.

The direct impact of higher levels of international investment would be that Canadian air carriers or companies wishing to create new air services would have access to a wider pool of risk capital. Consequently, that pool of capital, from both international and domestic sources, would allow the Canadian air sector to become more competitive, and would lead to more choices and to lower prices for Canadians.

Another improvement in the bill is that it proposes a new, streamlined and predictable process for the authorization of joint ventures between air carriers, taking into account competition and wider public interest considerations.

In Canada, air carrier joint ventures are currently examined from the perspective of possible harm to competition by the Competition Bureau, under the Competition Act. Unlike in many other countries, notably the United States, Canada's current approach does not allow for the consideration of the wider public interest benefits with respect to specific routes. Furthermore, the bureau's review is not subject to specific timelines.

This raises concerns that the current approach to assessing joint ventures may make Canadian carriers less attractive to global counterparts as joint venture partners and may be limiting the ability of Canadian carriers to engage in this industry trend.

The bill proposes measures that would allow the Minister of Transport to consider and approve air carrier joint ventures, where it is in the public interest, taking into account competition considerations. The minister would work in close consultation with the Commissioner of Competition to ensure that he or she be properly informed regarding any concerns with regard to competition. Air carriers that would choose to have their proposed joint ventures assessed through the new process would be given clear timelines for an expected decision.

Globally, airports are making unprecedented investments in passenger screening to facilitate travel and gain global economic advantages. Canada's largest airports have also expressed an interest in investing in this area, and smaller airports have shown interest in obtaining access to screening services to promote local economic development.

The bill would create a more flexible framework for the Canadian Air Transport Security Authority to provide screening services on a cost-recovery basis, supporting efforts to maintain an aviation system that is both secure and cost-effective.

Bill C-49 also proposes significant enhancements to increase the safety of the rail sector in order to build a safer, more secure rail transportation system that Canadians trust. As you all know, rail safety, as I've said many times, is my number one priority.

The proposed modifications to the Railway Safety Act would mandate the installation of voice and video recorders to strengthen rail safety by providing objective data about crew actions leading up to and during a rail accident or incident. Beyond that, the requirement would also increase opportunities to analyze identified safety concerns to prevent accidents from occurring.

This would not only require companies to install the recorders, but it would also limit how the recorded data could be used, within strict criteria. For instance, the Transportation Safety Board would have access to the recorded data for post-accident investigations. Transport Canada and railway companies would also have access to the data for proactive safety management and for following up on incidents and accidents not investigated by the Transportation Safety Board, but under specific conditions. The specific limits on the use of the data are designed to maximize the safety value of this technology while limiting its potential to infringe on employees' privacy rights.

Canada's freight rail system is critical to our economy. Bill C-49 would strengthen that system by enhancing its transparency, balance, and long-term efficiency. Let me highlight key examples.

Under this bill, shippers could seek reciprocal financial penalties for breaches of their service agreements by the railways. They would have fair access to more timely processes for settling service and rate disputes. More shippers would be eligible for the streamlined final arbitration process in particular. Further, new measures would ensure that the agency offers shippers informal dispute resolution options as well as guidance.

The bill would also introduce a new measure, long-haul interswitching, to give captive shippers across regions and sectors access to an alternative railway. Rates would be set based on comparable traffic, with the agency having discretion in determining comparability. The bill would modernize key grain measures, such as the maximum reserve revenue entitlement, to promote railway investments—and that's a key feature—and ensure that interswitching rates are updated regularly and compensate railways adequately.

Further, Bill C-49 would enhance sector transparency by requiring large railways to report some performance, service, and rate data about their Canadian operations. Transport Canada would have the authority to publicly report rate trends.

With these and other measures of this bill, we are taking important steps to ensure that Canadians have the freight rail system they need now and in the years ahead.

These aren't the only ways that we propose to improve trade to global markets. Bill C-49 would also amend the Coasting Trade Act and the Canada Marine Act to enhance marine transportation and to allow access for marine-related infrastructure funding. Specifically, amendments to the Coasting Trade Act would allow all vessel owners to reposition their owned or leased empty containers between locations in Canada using vessels of any registry. This would support greater logistical flexibility for industry. In addition, modifications to the Canada Marine Act would permit Canada port authorities to access the Canada infrastructure bank for loans and loan guarantees to support investments in key enabling infrastructure.

In conclusion, I believe that this proposed legislation advances important actions that will help to bring Canada's transportation system into the 21st century. Ultimately, we do need a system to meet the demands of today's economy so that we can keep Canada's travellers and cargo moving efficiently and safely. Passage of this bill as soon as possible this fall would represent a critical milestone in achieving tangible improvements to our national transportation system that will benefit Canadians for decades to come.

Thank you for your attention. I now look forward to answering your questions.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I'm calling to order meeting number 70 of the Standing Committee on Transport, Infrastructure and Communities. Pursuant to the order of reference of Monday, June 19, 2017, we are considering 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.

This is day four, I'd like to say to the minister, that parliamentarians have been here along with Hill staff to deal with Bill C-49. We're very pleased to see, Minister Garneau, that you and your staff have joined us. I'm going to turn the floor over to you for your opening remarks.

[David Rheault]

In our submission before the panel, this is a point that we made, that you have to have a direct interest to be entitled to file a claim. That's a principle that we submitted to the CTA review panel. This principle is included to a certain extent in Bill C-49, and we're comfortable with that, although we have proposed some amendments to give it more clarity.

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

Okay.

You've also stated in your submission that changes would be required to the definition of “Canadian” in Bill C-49 to ensure that the policy objectives underlining the new foreign ownership rules are met. Can you tell us more about that? How would you want to see that definition change?

[David Rheault]

I'm sorry if I didn't express myself clearly.

Basically what we said is that the way the balance will be struck will depend on what the regulation is and at what level of compensation and in which circumstances you will apply it. What we say in our submission is that you have to be conscious, when you establish those levels, that they might have an impact on competitiveness.

When Bill C-49 was tabled, all public statements from the minister were clear that the intent was not to put at stake the competitiveness of the air industry. This is a message that is well noted by us, because we operate in a very complex and competitive environment and we want to make sure that the regulations that will implement Bill C-49 take that message into account.

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

I'm going to see whether I heard you correctly.

You believe that Bill C-49 does strike the right balance in terms of continuing to ensure that there is a competitive advantage for your airlines.

[David Rheault]

No, we don't believe that. What we basically say in our submission is that we are in a very competitive environment, which is worthwhile, yet the principle of Bill C-49 to have some established compensation and a certain regime also has to take into account the broader issue of the competitiveness of the industry.

This is a submission we would be making in the consultations for the drafting of the regulation, because we believe that the regulation should take into account also the competitiveness of the industry and the circumstances in which these regulations should be applicable when you compare them with what has been done in other jurisdictions.

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

Wow. I didn't realize it was my turn already. Thank you very much for that.

I want to ask a question of Air Canada.

In your submission, on your last page in your conclusion, you state:

Air Canada, therefore urges caution and asks the government to strike a balance with the implementation of Bill C-49 so as not to put Canada or Canadian airlines at a competitive disadvantage.

Do you believe that Bill C-49 has done this?

[David Rheault]

To answer that question with respect to Bill C-49, I think the review regime that is proposed for joint ventures is very positive. This can help to develop Canadian infrastructure and develop new gateways through Canada to open our country to the world and enhance the movement of passengers and goods.

[Vance Badawey, Liberal, Niagara Centre, ON]

That's a good point. I'll put out the request that you folks go back, and when we take this to the next level—pass Bill C-49—start looking at satisfying some of the recommendations that are contained within the strategy overall and at how the airline industry can integrate data, or logistics and distribution of goods globally, or even the movement of people. How can you participate and as an enabler add to Canada's being better positioned because we have that proper transportation infrastructure in place?

Thank you for that.

[Vance Badawey, Liberal, Niagara Centre, ON]

Good. That's a careful answer. Thank you.

Going to the business part of it, right now, as I mentioned earlier in this dialogue from the past few days, we've been teasing out not only those issues having to do with Bill C-49, but ultimately ways that Bill C-49 can contribute to the broader national transportation strategy, especially the strategy that has been outlined by the minister—the trade corridors strategy not only for moving goods but also moving people globally.

How do you see this bill, from the standpoint of your industry, being integrated with other methods of transport in the movement of people and goods to better position Canada with respect to that resource being available to the consumer, to the customer, whether it be business or the daily traveller?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I thank you for coming out tonight. I don't want to necessarily get into what's happened. I want to get more into what's going to happen moving forward.

Two of the themes we've really concentrated on in the last couple of days have to do with both safety as well as business. How do we become more of an enabler for you to be more competitive and to add more value and better service to the customer?

I want to start off with the safety part first. We talked with the rail industry about video-voice recorders. You obviously know what's happening there with Bill C-49 and what it's recommending.

My question to you is with what you have now in your industry, which is not necessarily a video recorder but a voice recorder, do you find that with that in place—and although it's not accessible, I get that, but it can be, if you really wanted it to be with new technology—you can use the voice recorders when it comes to safety, when it comes to prevention of and when it comes to reaction to?

Have flight recorders, voice recorders, served or would the airlines request further capacity or capabilities with those flight recorders?

[Martin Shields, Conservative, Bow River, AB]

With Bill C-49, do you see an increase in that cost to the passenger at the end?

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

Thank you. I'm certainly interested in receiving your brief and your recommendations.

In the one minute I have left, I will turn to the representatives from WestJet.

At the Trois-Rivières regional airport, which is located in a municipality I represent, there have been plans for charter airlines heading south. However, it was impossible to carry them out because the security measures were not available. Those measures could have been available had the associated costs been paid, as mentioned in Bill C-49.

Do you agree with this double standard for airports, meaning that some have the services covered, while others have to pay for them?

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

We can agree that it is not always a team effort. The commissioner has an advisory role.

I will now turn to you, Ms. Pavlovic. I quite agree with you that Bill C-49 does not have a passenger bill of rights, but outlines the general principles that might lead to the creation of one.

In your opening remarks, you said that there were omissions, even in the general principles that must guide the Agency in its consultations. What aspects are missing from Bill C-49?

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

Thank you, Madam Chair.

My thanks to all the guests for joining us this evening.

Many aspects of Bill C-49 bother me, some of which deal with the air component.

My first question is for the Air Canada officials, not as a way to single out the company, but because the example I have in mind directly concerns them.

A few years ago, a joint venture agreement between Delta and Air Canada was being negotiated, if memory serves, and it was blocked by the Commissioner of Competition. The Commissioner of Competition ensures the safety of consumers and travellers. If the commissioner says that this agreement is not in their best interests, I'm fine with that.

In Bill C-49, the role of the Commissioner of Competition becomes advisory and the minister may decide to override his recommendations for reasons he deems valid. Does this mean that it would be possible to establish joint venture agreements—to which I'm not fundamentally opposed—that the minister deems valid, but the Commissioner of Competition does not?

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

In my last minute and a half, I'll pose this question, and if you don't get time to answer it fully, I'll come around to it in another round of questioning. I'll pose it to both of you.

With an eye on the consumer, what other measures could the government have included in Bill C-49 that would have helped or lowered the overall cost of flying in Canada?

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

Thank you very much, Madam Chair, and thank you to our witnesses for joining us here this evening. It's good to change our focus now and discuss Bill C-49 within the context of our aviation industry.

Similar to our earlier hearings, we do appreciate your being here to provide your comments to the committee and ensure that we have the information we need to reach our goal, which I think is a shared goal, of ensuring that Bill C-49 strikes the right balance in meeting the needs and concerns of both the airlines and the customers they serve. I'm going to dig in quickly to the questions I have, because I know that the five or six minutes I have goes by very quickly.

First, to Air Canada, regarding the cost of screening at airports, are you concerned that the proposals in Bill C-49 amount to what we could call an extra tax on the flying public?

[Professor Marina Pavlovic, Assistant Professor, University of Ottawa, Faculty of Law, As an Individual]

Good evening, Madam Chair, and committee members. I would like to acknowledge that we are on unceded Algonquin territory.

Thank you for the opportunity to present and to bring a research perspective to the discussion of Bill C-49, particularly to the section on an air passenger bill of rights, which is undoubtedly an issue of importance to Canadians.

I am an assistant professor at the common law section of the faculty of law at the University of Ottawa, and my area of expertise is consumer rights in the contemporary cross-border network digital economy. My work covers areas such as consumer protection, dispute resolution, and access to justice. I am also a consumer groups' appointed director at the board of the Commission for Complaints for Telecom-television Services, CCST, which is Canada's communications industry ombudsman. However, I appear in my personal capacity, representing my own views.

Most recently, my work has focused on the wireless code, a bill of rights for Canadian wireless consumers, as well as dispute resolution, including ombuds schemes for consumer complaints. It is my expertise in these broad areas of consumer protection, particularly with the wireless code, that I'm bringing to the table.

While the telecommunications and air travel industries are definitely very different, there are significant parallels when it comes to consumer rights and consumer redress. My comments will focus on clauses 17 to 19 of the bill, which deal with the proposed regime to establish an air passenger bill of rights.

I will focus my remarks around three topics: the need for this bill of rights, the passengers' rights or carriers' obligations in the bill, and redress mechanisms related to the rights in the bill.

As to the need for the bill of rights, the current regime of complicated tariffs and related individual carriers' contracts is overly complex and ineffective. Consumer rights regarding air travel are varied and fragmented. They depend on a number of factors, and it is difficult, if not impossible, for consumers to know ahead of time what rights they have and what the appropriate redress mechanisms are. Market forces alone cannot resolve this issue. Canadians need an air passenger bill of rights that will provide uniform, minimum rights for consumers, or conversely, set minimum obligations for the carriers.

Similar regimes for air passenger rights exist in other jurisdictions, and in Canada they exist in other industries as well. As I already mentioned, as an example, the wireless code sets a mandatory code of conduct for the wireless service providers, and a recently established television service provider code sets minimum rights for consumers with respect to television services.

A mandatory code that would apply to the industry as a whole is the appropriate way to set minimum consumer rights. It is to the benefit of consumers, and it is to the benefit of the industry. For consumers, it provides a clear set of rights that are found in a single place. A clear set of rights builds and enhances consumers' trust in the industry. It also promotes competition in the marketplace. It offers the carriers an opportunity to distinguish themselves from the competition by setting higher levels of customer service. The bill of rights is the floor; it is not the ceiling.

This brings me to my next point on the actual passenger rights or carrier obligations in the bill. Bill C-49, in effect, does not establish the bill of rights for consumers. Proposed subsection 86.11(1) would set the broad parameters of issues that the future bill of rights in the form of regulation must cover. It is the foundational step for the bill of rights to come. These parameters, the list of issues that the bill of rights should cover, are thorough but the list is not an exhaustive one. It provides for ministerial discretion, both in breadth and in coverage, as well as in the form of future regulations.

Passenger rights on the list are similar to the rights in other regimes and correspond generally to the most common types of complaints that are increasingly being reported by the media. However, there may be other kinds of disputes about which we have not yet heard. It is therefore imperative that the list stay as is or be expanded. Similarly, the committee should not decrease the list. By doing so, certain rights would be chipped away, creating a multi-tier system, which is what we have today. That also includes the geographical scope to cover claims that include flights to, from, and within Canada.

Proposed subsection 86.11(4) provides that the rights form part of the carriers' tariff, unless carriers offer more advantageous terms. The spirit of this provision is that the bill of rights would set the minimum standards, and that the carriers may adopt a suite of rights that goes beyond this.

My concern, however, is with the drafting, which leaves a lot of discretion and does not provide information on who will assess—and when, how, and how frequently—whether individual carriers' terms meet the obligations of the bill of rights, exceed them, or are actually below them. The wireless code uses wording that in my view is clearer and more precise and does not leave room for discretion. It is a mandatory code of conduct for providers of certain regulated services.

My view is that this provision ought to be redrafted to ensure that the rights under the bill are always included in the tariff, so as to avoid case-by-case assessment, as well as that consumers cannot waive those rights by contract.

You may have heard or will hear concerns about the form and process by which the bill of rights will come into existence, from a broad list of topics in Bill C-49 to a detailed set of rights. I believe the Canadian Transportation Agency is best placed to lead this. However, it is imperative that the process be open and inclusive and offer an opportunity to all stakeholders, including individual consumers and public interest organizations, to participate in creating the bill of rights. A similar process before the CRTC, the Canadian Radio-television and Telecommunications Commission, has been used for both the wireless code and the TV service code, and it has worked very well.

I also believe that regulations, rather than an act, provide a more appropriate mechanism for the bill of rights. I have, however, some concerns about the timelines and the feasibility of getting a broad list of topics into the actual bill of rights. It is subject to political will, and sometimes priorities shift. There have certainly been instances in which the legislation required a regulation of this type and there have been years if not decades without it. I'm not suggesting a specific timeline, but I invite committee members to consider the impact of any delays.

Lastly, I would like to briefly address consumer redress under the new regime.

A bill of rights and an effective redress mechanism are essential components of a robust consumer protection regime. A set of rights without an effective redress mechanism is ineffective, in the same way that a redress mechanism without a clear set of guiding principles leads to different outcomes and creates different rights.

Under the proposed regime, the CTA retains its role as dispute resolution provider for air passenger claims. It will not be able to do that effectively without a significant change of its processes and staffing. While this is not on the table before you right now, I also invite you to consider whether there are aspects of Bill C-49 that may actually relate to this.

I strongly believe that proposed section 67.3, which provides that only an affected person can file a complaint, is very limiting. There is a significant body of empirical research that it is consumers themselves who pursue claims, mainly because the value of the complaint does not justify the transaction costs. Actually, very commonly the transaction cost is much higher than the value of the complaint itself. However, there is also research in consumer literature that provides that it is important to allow other parties, such as public interest organizations, to have standing to file complaints, perhaps as a mechanism to challenge systemic problems. I strongly believe that proposed section 67.3 should be amended to allow third parties to file claims.

Concerning the collective aspects of consumer claims, there are complaints that will be highly fact-specific to a single consumer but that there are events that will affect a number of consumers, most commonly all of those who were in the affected aircraft. Proposed section 67.4 gives CTA discretion to apply the decision to all of those affected, but it is not clear whether there will be a specific mechanism to trigger it or whether they would do so on their own.

Finally, proposed subsection 86.11(3) provides what is a common provision in other jurisdictions and other dispute resolution schemes, that consumers cannot double dip and obtain compensation for the same events through different compensation schemes.

In its brief, Air Canada proposed that this provision be significantly limited. My strong view is that the provision as it stands is broad enough to allow CTA to craft a rule to avoid this. For example, CCTS, the Canadian communications ombudsman, has a rule along those lines in its procedural code.

I hope that these comments and recommendations will be useful to the committee. I would be pleased to provide to the members a policy brief summarizing my key points and recommendations and any relevant documentation that may help you navigate—no pun intended—these issues and understand them from not only the industry's perspective but from the perspective of consumers who are your constituents.

Thank you for this opportunity. I will be happy to answer any questions.

[Lucie Guillemette, Executive Vice-President and Chief Commercial Officer, Air Canada]

Good evening, Madam Chair.

Good evening, members of the committee.

My name is Lucie Guillemette and I am the executive vice-president and chief commercial officer at Air Canada.

I am joined by my colleagues David Rheault and Fitti Lourenco.

We are here today to speak about the modernization of the Canada Transportation Act, specifically the intent to improve the traveller experience.

Air Canada is Canada's largest airline. In 2016, Air Canada and its regional partners carried close to 45 million passengers, and operated on average 1,580 scheduled flights each day, offering direct service to more than 200 destinations on six continents.

Since 2009, Air Canada has grown by more than 50%, extending the reach of its global network and achieving its ambition to become a global champion.

We employ 30,000 people and 3,000 of our employees were hired in the last three years alone, providing a significant boost to job creation in this country.

Headquartered in Montreal, Air Canada operates four hubs: Pearson airport in Toronto, Vancouver airport, Trudeau airport in Montreal and Calgary airport. We open Canada to the world and provide travellers unparalleled international access.

We've launched new training programs for front-line staff, introduced on-board customer service management programs, improved and clarified our customer service plan, and created new policies for family seating, family check-in at airports, and the carriage of musical instruments. We have also pioneered flight passes and branded fares, offering more choice and flexibility to our customers, who can select the attributes and features that are most meaningful to them.

We recognize that valuable services and features for leisure vacationers vary significantly from those for business passengers, and we aim to meet the needs of all our customer segments, domestically and internationally.

The airline industry is extremely competitive, and we view service as an important differentiator. Financial stability and sustainability has allowed us to invest significantly to improve passengers' experience. For example, we have renewed our fleet and acquired modern aircraft, such as the Boeing 787 and the Bombardier C series. We've reconfigured our cabins, introduced a new premium economy cabin, and improved the inflight entertainment systems. We've invested in a new website and have developed new applications that simplify the passenger experience.

For all our efforts, we are very proud to have been recognized by Skytrax as the best in North America and to be the only international carrier in North America to receive a four-star ranking. I can assure you that we are committed to continuing our efforts to improve the experience of our passengers on the ground, in flight, and post-travel.

In the current regime, carriers have different standards and offer different compensation in a system based on complaints. Having a clear set of standards for all carriers would be appropriate, without, however, imposing an undue financial burden on carriers or limiting their ability to distinguish themselves through the customer service policies they offer.

Although Bill C-49 takes positive steps in laying the groundwork for the regulatory process, we have concerns, and I would like to address a few now.

Number one is simplifying the regime. The proposed regime would be applicable for flights to and from Canada. This creates complexity for carriers and confusion for passengers, since other regimes are applicable in other countries, which could provide for different rules, different exemptions, and different levels of compensation. For example, in a situation of denial of boarding on a flight departing from the United States to Canada, should we apply the Canadian or the U.S. regime? To simplify the regime and make it effective, we suggest that it be limited to flights departing from Canada, as the American regime is limited to flights departing the United States.

We also submit that in the case of code-share flights, the claim shall be made with the operating carrier, as in the European regime. These adjustments would simplify the regime for carriers and passengers, allow for the speedy and timely issuing of compensation, and avoid the risk of double compensation.

Second, on baggage liability, Air Canada agrees with the principle of harmonizing the rules of liability related to baggage. The bill should, however, acknowledge that passengers are already protected by the Montreal Convention, in the case of international travel, which provides clear and consistent rules that are applicable internationally. We therefore submit that the rules provided in the bill should be limited to domestic travel and harmonized with the rules of the Montreal Convention. This would also simplify the rules for carriers and avoid confusion for passengers.

Number three, apply one decision to all passengers on the same flight. In its current form, the bill could also allow for a generalized type of compensation, which would fail to consider the particular circumstances of each passenger. For example, if one passenger submits a claim and is compensated for a delayed flight, the same claimant compensation could potentially be applied to all passengers on that flight. The decision to extend compensation to other passengers should not be arbitrary, but should take into account each passenger's individual circumstance. A connecting passenger who arrives late on the first leg of the trip but catches the next flight is not ultimately delayed.

Number four is on future amendments. Future changes should be transparent and involve all stakeholders, including passengers and carriers. As it stands, Air Canada is concerned that the bill could give the Canadian Transportation Agency powers to create regulations outside of the specific situations provided in the bill. We ask that the committee clarify this language to specify that the regulatory power of the CTA is consistent with the scope of the bill.

Number five is joint ventures and foreign ownership. The amendments to how joint ventures are examined by the government are very positive. In our own experience and from other examples around the world, joint ventures are innovative ways for carriers to expand their networks, add new destinations for passengers, find efficiencies, and offer more pricing options for passengers. Joint ventures allow us to develop the Canadian aviation infrastructure by building international superhighways.

While giving the Minister of Transport the ability to consider joint ventures is excellent, as his department is best-equipped to understand the complexities of our industry, some of the amendments are not in line with best practices around the world. One example is the ability for the minister to review a new joint venture at the two-year mark from approval. The initial period of any joint venture is devoted to better co-operation between partners while the most important changes that pertain to network and fares take more time to implement. We propose that the term for review be lengthened and start from implementation versus approval of the joint venture.

The bill also suggests sanctions that are too punitive, given the commercial nature of JVs. Indeed, the sanction of imprisonment could dissuade a potential partner from even considering the possibility of a joint venture. These issues alone could be a significant barrier to make any use of the benefits of the bill. We ask that the committee consider the suggestions in our submission carefully on this issue.

With respect to foreign ownership, Air Canada is supportive. However, we ask that adjustments be made so that foreign investors cannot negatively influence Canadian carriers or circumvent the spirit of the bill. We also recommend changes that would allow for a ready implementation of the new ownership structure.

Finally, I would like to stress that we operate in a very complex environment. The collaboration and efficiencies of many other stakeholders are instrumental to the overall improvement of the traveller experience. These include airports, CATSA, CBSA, and Nav Canada.

Unfortunately, the airline is too often left to manage all of the negative consequences, but we do it because it is the right thing to do for our customers. While the bill would require carriers to provide the CTA and Transport Canada with data, I would submit that all other agencies and organizations required and involved in the transportation system should be equally accountable for their operations, and submit data in a public and transparent manner.

We also invite the government and the committee members to study the measures that could be implemented, so that all government-controlled agencies contribute to the improvement of the traveller's experience and support the growth of traffic by Canadian carriers. After all, we are powerful economic enablers. If the world indeed needs more Canada, we want to bring it to them.

I thank you for the opportunity to present our views. We look forward to your questions.

[Mike McNaney, Vice-President, Industry, Corporate and Airport Affairs, WestJet Airlines Ltd.]

Thank you Madam Chair and members of the committee for the invitation to speak with you this evening.

My name is Mike McNaney and I am vice-president of Industry, Corporate and Airport Affairs at WestJet. Also with me this evening is my colleague, Lorne Mackenzie, senior manager, Regulatory Affairs.

On behalf of over 12,000 WestJetters, we are pleased to participate in your deliberations with respect to Bill C-49 and the critical role that companies such as WestJet play in connecting the economies and people of Canada to each other and the rest of the world.

Our investments and growth over the last 21-plus years have led to downward pressure on airfares, market stimulation, and incredible job creation in many sectors of the economy, including aerospace, tourism, and regional economic development.

Our success in a very tough, low-margin industry is a testament to our frontline employees who strive every day to provide our guests with quality service.

Our award-winning culture of care and guest service is a source of tremendous pride. It is not just what we do; it is who we are, and it influences our approach and our respect for the obligation we have to ensure our social and economic licence is strong.

In addition to various awards over the years, this year we were very pleased to be recognized by TripAdvisor as the best airline in Canada and a Travellers' Choice Award winner for mid-sized and low-cost airlines in North America. As members know, this award is based on authentic reviews by the travelling public.

Before providing you with an overview of our views on the legislation, I want to provide a broader context of WestJet operations today.

WestJet is in the midst of an extraordinary evolution from the carrier that launched in February 1996 with 200 employees, three aircraft, and five destinations, all in western Canada. In 2016, we carried over 20 million guests. Getting 20 million-plus guests where they need to be, safely and on time, is a logistical and operational challenge. Things will go wrong, and we do our best to get it right when they do.

We operate approximately 700-plus flights a day, carrying approximately 70,000 guests daily, with a WestJet plane departing approximately every two minutes. Our current fleet consists of 161 aircraft, including Bombardier Q400s, as well as narrow body and wide body aircraft from Boeing. This year we begin taking delivery of the newest version of the 737, the 737 MAX, and in 2019 we take delivery of our first 787 Dreamliner. With respect to the Toronto-manufactured Bombardier Q400, next year we will become the third-largest operator in the world of Q400s with the delivery of our 45th Q400 aircraft.

Based on our most recent economic impact study, utilizing our 2016 operating data, our investments and growth strategy in 2016 has supported over 153,000 jobs in Canada, a labour income in excess of $5.3 billion, over $12 billion of GDP expenditure activity, and an aggregate economic impact greater than $17.3 billion. These employment and economic benefits accrue throughout the country.

In terms of communicating with our guests, we are continuously working to find innovative ways to effectively meet their needs. In April 2016, we became the first Canadian carrier to move its social media team to a 24-7 operation, open 365 days a year. We took this step in recognition of the fact that more and more consumers utilize social media to communicate with companies in real time. Our social media response team now sits in our 24-7 operations control centre to respond to guest questions and concerns in the moment. We also still maintain the more traditional communication means of email and phone contact for guests who wish to reach out to us through those means.

The operations control centre, or OCC, is responsible for all facets of our daily operations: flight schedule, crew scheduling, maintenance, responding to weather, operational delays, and guest services. The composition of this team includes experts from all areas of our business. To say this service has been well received would be an understatement. How our guests interact with us on service issues and questions is now 57% through social media, 34% through email, and 9% through telephone.

In the last year, we have also made the following enhancements, in co-operation with the Canadian Transportation Agency. We developed and posted on our website a plain-language, searchable summary of the provisions of our tariffs related to events most likely to be of concern to travellers, such as denied boarding, flight delays, and misplaced baggage. We placed a full page article on our inflight magazine describing our customer service department and how our guests can get information on their rights should something go wrong. We added a link to every electronic itinerary to make our guests aware of their rights and where to go for additional information.

That brings me to the aspects of Bill C-49 dealing with passenger protection. WestJet supports these provisions and the broad framework the bill sets out to create.

I do want to note for the committee that WestJet currently has enforceable penalties for many of the areas in which the legislation calls for enhanced regulation. These include lost or damaged baggage, delays and cancellations, and tarmac delays. Our obligations are outlined in our tariff, which is accessible online and is used by both us and the CTA to resolve complaints.

Bill C-49 will bring uniform standards to all of these issues, and we are supportive of that action.

Within the context of rights and obligations, I would like to encourage the committee to more broadly examine the role of our partners in the travel supply chain. This would include airports, air traffic control, border services, immigration, aviation security, as well as Transport Canada. Our performance is scrutinized by Parliament and the public, and rightly so. However, all these organizations should have the same performance reporting requirements, as well as overall accountability for the services they provide.

You will no doubt have seen media reports over the past several weeks concerning breakdowns of airport baggage systems, understaffing at air traffic control centres, CATSA funding shortfalls, and delays in processing security clearances for aviation employees. How will all these elements of the supply chain, all of which are critical for operations and all of which are completely outside the control of an airline, fit into the new regime established by Bill C-49, as far as accountability is concerned?

Concerning joint ventures, WestJet supports in principle the Government of Canada's approach to airline joint ventures. Airline partnerships are a critical component of our business model. WestJet does not belong to an international alliance. What we do have is 45-plus code-share and interline partners who are all offering greater choice and flexibility for Canadians. These partnerships, coupled with our domestic and international networks, are bringing tourists to all parts of Canada and providing the international connectivity our economy needs.

While we support the JV policy initiative, we have questions that we are discussing with Transport Canada as we seek further clarification on certain points.

With respect to foreign ownership, the foreign ownership provisions outlined in Bill C-49 are ostensibly already in effect, with exemptions granted to two potential ULCCs. Our policy preference with respect to foreign ownership is that any change in the limit should be on a reciprocal basis, particularly with respect to the United States. The government has opted for a unilateral approach, and obviously we respect the government's decision.

Within the context of this unilateral policy change, we believe it is critical to ensure that Canada maintain a strong “control in fact” test. This is a test administered by the Canadian Transportation Agency to ensure that new carriers are controlled and run by Canadians. We believe that Canadian carriers should make their network decisions in Canada for the benefit of Canadian communities, the travelling public, and workers.

I would also like to remind members that we have recently announced the creation of our own ULCC. This was done without foreign investment or any proposed policy change. The objective is straightforward: to provide Canadians with more choice for their travel dollar. We are engaged with both the CTA and Transport Canada on the necessary regulatory approvals to commence service in mid-2018.

With respect to the CATSA provisions that will allow small airports to purchase CATSA services and large airports to top up services, we consider these measures to be stopgaps.

Delays caused by factors such as passenger screening are becoming more and more frequent in our operation. It is a disturbing trend. From a policy perspective we have been frustrated for several years by the government's unwillingness to fully allocate funds collected from the ATSC and tie these funds directly to screening services, the services our guests are paying for when they pay the air transport security charge.

The provisions in Bill C-49 are a stopgap measure that will allow the industry to spend more money to provide services that we believe the ATSC should be covering. We have recommended comprehensive reforms to the funding model and governance of CATSA. We urge this committee to recommend that all money collected from the ATSC be allocated to screening services at Canada's airports.

Before concluding, I want to briefly comment on another aspect of commercial aviation that is certainly of interest to consumers and Parliament. You may have seen the news from StatsCan last month that base air fares in Canada, domestic and international, were on average down 5.4% in 2016 as compared with 2015.

At WestJet, our average fare in 2016 was $162, down $13 from 2015. Our average fare in the first six months of this year was $158, a further drop from the first six months of last year. To provide perspective on these numbers, our average profit per guest in the first six months of this year was $8.34. I provide these figures to give context when discussions turn to the concept of financial penalties.

In conclusion, WestJet recognizes that Bill C-49 has the potential to benefit the aviation industry and Canadian consumers. We look forward to participating in upcoming sessions with the committee in order to improve the overall travel experience for Canadians.

[The Chair, Liberal, Judy Sgro]

I'll call back to order the meeting on our study of Bill C-49. We welcome representatives from Air Canada and WestJet Airlines, as well as an assistant professor from the University of Ottawa.

Mr. McNaney, would you like to start off?

[James Given]

It's still a cabotage run, and under the definitions of cabotage that are there, that's cabotage. That's considered cabotage, because you're moving something between two Canadian ports.

This has to be perfectly clear. That shipowner still has the ability to move that. All he has to do is apply for a waiver, which he'll get if no Canadian shipowner wants to move that particular container.

If you look at all of these years where it's been done by rail and truck, why all of a sudden is it open? Under CETA, it was open for certain reasons, and I believed the reasons that I was told. There were compromises made. It was a negotiation. That's what was done. However, to open it more, to liberalize it more under Bill C-49, is opening the gate to any flag, to any rogue owner, and anything that they want to do.

Concessions were made in a trade negotiation. We all understand that. Concessions are made every day. How they got to that concession...like I said, it was explained to me and I accepted it. Now it's a conscious choice of whether we open it up to more cabotage. We're not in a negotiation with anyone but ourselves right now on what we're going to do with cabotage.

[David Graham, Liberal, Laurentides—Labelle, QC]

In the circumstances of this bill, C-49, what we're talking about moving is empty, not loaded, containers. If I—

[Martin Fournier]

Yes, most empty containers are moved by train, not by ship. The problem with Bill C-49 is that it is widening the crack that was opened with the economic agreement with Europe. Even before that agreement, we had discussions and we were asked what we thought about the possibility of allowing empty containers to be shipped on foreign vessels. We said no to that. It was all forgotten, then the question came up again with CETA. Then there was the agreement on shipping empty containers, on bulk shipping, on loaded containers between Montreal and Halifax, and on dredging. Now there is talk about the shipping of empty containers being open to everyone. In some ports, questions have been asked about the fact that it is just between Montreal and Halifax and why it is not possible for other ports, like Quebec City and Sept-Îles. In addition, other countries are asking why shipping empty containers would not be open to them as well, now that it is open to the Europeans.

As you can see, the crack is being opened, one change at a time. That's exactly what is happening. That is what we were afraid of at the outset when the issue of transporting empty containers was raised for the first time.

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

Earlier today we heard that most empty shipping containers are moved from port to port by train or truck and not by sea. Would you confirm that? If this is the case, how does Bill C-49 impact Canadian seafarers' jobs?

[Martin Fournier]

There was no consultation on Bill C-49.

As we mentioned, there were consultations about the economic agreement with Europe from the time when it was signed. Before it was signed, there was no national consultation with industry. We know that international companies were consulted, but not the industry in Canada. So we can say that there was not really any consultation in that respect.

Once the agreement was signed, a working group met for almost two years. Almost everyone involved took part. Certain things that we asked for on a number of occasions appeared in Bill C-30. However, the main request was to establish this single body, and that was completely forgotten.

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

Bill C-49.

[James Given]

Are you talking about CETA or Bill C-49?

[James Given]

I am going to try to give you an answer without giving you an answer.

I've had many meetings. Everyone of course knows my concerns when it comes to cabotage, and Bill C-30, and CETA, and Bill C-49, and China and whoever the hell else we have on the list, but when it comes to consultation, this is part of the consultation process.

[James Given]

We've proven that they don't follow the same regulations when they're in Canada. There are two issues at play. The ship gets a coasting trade waiver. That covers the ship. The crew then apply for work visas through the temporary foreign worker program.

There are two separate issues. When we look at Bill C-30, as with Bill C-49, nothing is changing when it comes to the provisions under the immigration act for that crew. The problem is that the crew members are never told what their wages are supposed to be. They're never told what their rights are when they're working in Canada, because under the TFW program, for all intents and purposes, they're Canadians. They're never told any of this, and they're paid their regular wage, which is $2.50 or $1.90. They're paid that until someone catches them. Also, there's no enforcement. No enforcement officer goes down unless they get a call. If you're a foreign crew member and you don't know that, or you're too afraid to call because of repercussions, you're not going to make that call.

We've had some very good discussions with the ESDC over the last little while where we're going to change some of that process. However, ESDC was also very clear with us that it doesn't chase a shipping company around the world to try to collect our tax, because they should be paying taxes while they're in Canada. The taxation issue on a foreign ship is a big one, along with crew costs.

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

Thank you, Madam Chair.

My thanks to each one of you for being here.

I confess that I do not have a lot of questions on the basic content of your testimony, because I share your position. However, I do have some questions on the industry, so that I can understand it better.

I would like to explore the issue of the Canada Infrastructure Bank that Mr. Badawey was talking about. It seems to be well-received, since it is seen as a source of funding. However, the information we have at the moment indicates that port projects to be funded by the Canada Infrastructure Bank would be for $100 million and more.

In the port in the city I represent, Trois-Rivières, projects of $100 million and more are very rare. Perhaps the port of Vancouver has some that go over $100 million, but the Canada Infrastructure Bank is of no use with projects with a budget lower than that.

Is this not another case of what looked great the night before does not look at all good in the morning, as seems to be the case with Bill C-49? Or do you have projects that are worth that much?

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I have to say as well, thank you, folks, for coming out today. You represent the “how” of executing trade quota strategies. I again want to thank you for that, for being here, but as well for the future efforts you guys are going to participate in to really ensure that those strategies are put in place and executed.

Mr. Given, you answered the first question I was going to ask, and that was on labour conditions. I've always looked at things under a triple bottom line lens: economic, environmental, and social. In your opening dialogue you talked about the economics of this issue. You talked about, to some extent, the environmental side of it as it relates to an integrated transportation network that includes shipping, which of course is the most environmentally friendly mode of transport. The last part was social and labour, and of course you touched on that.

The next part I want to touch on, the question to all of you, is how then the dollars follow the strategy. Currently, as part of Bill C-49, we are looking at positioning Canadian ports to be allowed to access the Canada infrastructure bank, which includes financial instruments to help fund expansion, sustainable infrastructure projects—somewhat the business you're in, Ms. Clark—to ensure that dredging occurs in those areas that need to be expanded upon for bigger vessels with a lot more draught needed. Do you feel that this will be of assistance to Canadian ports being more competitive? That's my first question.

I want to expand my question to also include, not just Canadian ports, but the world of ports. There's an anomaly that we call the St. Lawrence Seaway. I say anomaly because, at least in my part of the world, the Welland Canal, albeit a port, is not technically considered a port.

To some extent, when it comes to its management of asset, in my opinion, it's not up to par, not being abided by. Therefore my question is, when you take all of that into consideration as part of the whole network, do you think, firstly, that under Bill C-49 it is appropriate to have those dollars available to the Canada infrastructure bank? Secondly, is it appropriate to have investment dollars at the ready to expand the St. Lawrence as well as the Welland Canal?

[Martin Fournier]

At the beginning, when we heard what was included in the economic agreement with Europe, one of our concerns was that it was going to open a crack in the Coasting Trade Act. We were afraid that the crack would grow bigger. Bill C-49 shows that our fears were justified, because we are told that opening the Coastal Trade Act to the shipping of empty containers does not just apply to European vessels, but also to vessels of all flags.

So we can already see the crack getting bigger. What is coming next? We do not know, but we are expecting other demands along those lines that will widen even more the scope of the concessions that have been made as part of the agreement with Europe.

[Martin Fournier]

No, we were not consulted about Bill C-49.

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

Would anybody else like to provide an answer?

No? Okay.

I thought I heard one of you say that you had received assurances that the Coasting Trade Act would not be amended during the review of the Canada Transportation Act. Were you consulted, then, on the amendments that you see in Bill C-49?

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

Thank you very much, Madam Chair.

I want to thank our witnesses for joining us today. It is good to turn our attention to another part of Bill C-49 which sees the Coasting Trade Act amended.

I have a couple of questions. They're probably broad questions that any one of you could answer. The first is, can you identify for this committee how Bill C-49 goes further than Bill C-30?

[Martin Fournier, Executive Director, St. Lawrence Shipoperators]

Madam Chair, ladies and gentlemen members of the committee, thank you for giving us an opportunity to share our comments and concerns with respect to Bill C-49, and more specifically the amendments proposed to the Coasting Trade Act.

I will introduce myself. I am Martin Fournier, Executive Director of St. Lawrence Shipoperators, an association whose mission is to represent and promote the interests of Canadian ship operators in order to support their growth and ensure the development of shipping on the St. Lawrence River.

St. Lawrence Shipoperators consists of 15 members—15 Canadian ship operators that have a fleet of more than 130 vessels that employ Canadian sailors. The fleet navigates the St. Lawrence River, the Great Lakes and the east coast, in addition to serving the Atlantic and Arctic provinces. Our members provide thousands of people with quality jobs and generate significant economic spinoffs in Canada.

According to a study carried out by the Council of Canadian Academies, the Canadian shipping industry employs between 78,000 and 99,000 individuals and generates between $3.7 billion and $4.6 billion in employment income. Just the activities of the inland fleet, which operates on the St. Lawrence River and in the Great Lakes—the area generally covered by our members—create more than 44,000 direct jobs and generate more than $2 billion in provincial and federal revenues. Therefore, the domestic marine industry plays a a key role in the competitiveness and prosperity of Canada and of the entire North American economy.

It is important to point out that marine transport operations between various Canadian ports are covered under the Coasting Trade Act, whose aims include supporting domestic marine interests by reserving the coasting trade of Canada to Canadian registered vessels. That information comes directly from Transport Canada's website. Among other things, the act stipulates that transportation between two Canadian ports must be provided by Canadian-flagged vessels with Canadian crews.

In the United States, since 1920, the Merchant Marine Act, better known as the Jones Act, has been protecting the U.S. domestic marine industry by ensuring that coasting trade is handled by U.S.-built vessels that are U.S.-flagged and U.S.-owned, and are operated by U.S. crews. Many other countries around the world, including European countries, have laws that protect their market.

It should be noted that, during the negotiations that led to the economic agreement with Europe, countries of the European Union did not open their market to Canadian ship operators. Only Canada agreed to concede a portion of its market, with no reciprocity.

When a country opens its market to foreign partners that do not operate based on the same rules and are not subject to the same requirements as Canadian ship operators with Canadian-flagged vessels, that favours foreign ship operators at the expense of the very competitiveness of our ship operators and domestic interests.

According to a study carried out in 2015 by Ernst & Young and Innovation maritime, the crew costs for European vessels authorized to operate in Canadian waters under the economic agreement represent only 30% of the costs of a Canadian crew. The wage gap between Canadian crews and crews from other countries, including those provided for under Bill C-49, will be even larger.

This is the second time in less than a year that amendments have been proposed to the Coasting Trade Act. The first time was under Bill C-30, which concerns the implementation of the economic agreement with Europe. The second time was through this bill, which makes certain concessions for the European Union that are criticized by the domestic marine industry.

Canada must also take action to protect its marine industry and refuse to give up its market to foreign companies. This is a matter of the vitality and sustainability of Canada's domestic shipping industry.

I want to mention that, during the latest electoral campaign, the Liberal Party wrote to us that it had no intention of amending the Coasting Trade Act and even recognized the importance of the act for the market. St. Lawrence Shipoperators feels that free trade agreements generally benefit the Canadian economy and supports Canada's efforts to increase trade and the competitiveness of its economy. However, we are concerned about the consequences of loopholes in the Coasting Trade Act and concessions made in trade agreement negotiations that affect the domestic marine sector.

St. Lawrence Shipoperators and its members, as well as a number of stakeholders and industry representatives that participated in the work of the industry-government working group on the implementation of the economic agreement, have repeatedly expressed their concern with regard to the system's effectiveness and the measures currently in place to monitor and effectively control foreign vessels' coasting trade activities. Many examples and situations justify those concerns. The addition of new coasting trade activities in the economic agreement or any further opening of the Coasting Trade Act is of little comfort in that regard.

We have requested the establishment of an oversight system on a number of occasions. The request was also made to the Standing Senate Committee on Foreign Affairs and International Trade, which studied Bill C-30. There was even a recommendation to that effect.

So it is essential that an oversight system be established and that it include all the government departments and agencies involved, meaning Transport Canada, the Canada Border Services Agency, the Canadian Transportation Agency, Immigration, Refugees and Citizenship Canada, and Employment and Social Development Canada.

St. Lawrence Shipoperators has always been opposed to any opening of the Coasting Trade Act that would allow foreign vessels to transport cargo between two Canadian ports. Unfortunately, we are witnessing a gradual erosion of the act.

This market is reserved for Canadian vessels that, pursuant to regulatory requirements and Canadian standards, are designed, built and refined to handle the numerous challenges of navigation in Canadian waters and waterways. With their adherence to those standards, some of the highest in the world, Canadian vessels are making navigation safe and protecting the environment. These national vessels are operated by crews that are solely and exclusively composed of Canadian mariners, who are among the best qualified and best trained in the world. They are knowledgeable of and experienced in navigation in Canadian waters and they are aware of the challenges inherent in sailing here. Reaching those high standards ensures greater safety and respect for the environment. But that comes with significant operating costs that Canadian shipowners must bear, unlike many other foreign owners.

The particular circumstances of the Great Lakes and the St. Lawrence Seaway, economically and in terms of both maritime and environmental safety, requires that the protection measures, of which the Coasting Trade Act is part, must be maintained.

So it is important to preserve maritime jobs and the expertise that has been built in Canada over centuries. Opening the Coasting Trade Act is risking the loss of priceless knowledge and economic wealth that is of direct benefit to companies and workers here.

For those reasons, St. Lawrence Shipoperators and its members oppose any opening of the Coasting Trade Act and any change to it. We are asking for a single body to control and oversee cabotage activities to be conducted in Canadian waters by foreign vessels.

Thank you.

[Sarah Clark, Chief Executive Officer, Fraser River Pile & Dredge (GP) Inc.]

Thank you.

Good afternoon. My name is Sarah Clark, and I serve as president and chief executive officer of Fraser River Pile & Dredge, located in Vancouver, British Columbia. Our company proudly conducts dredging operations in B.C. and across the country. I would like to thank the chair and the honourable members of the committee for hearing us today.

I'm actually here to speak to you on behalf of a coalition of dredging companies that operate from coast to coast. I'm going to share my time today with my friend and colleague Jean-Philippe Brunet, the executive vice-president of corporate and legal affairs for Ocean group of Quebec. We sincerely thank you for the opportunity to present our views on the consequences of amending the Coasting Trade Act as outlined in Bill C-49. For us, this is a fresh opportunity to be heard on the impacts of the amendments to the Coasting Trade Act, an opportunity we previously had in respect to amendments to the same act, under Bill C-30, the Canada-E.U. comprehensive economic trade agreement implementation act.

To be very clear from the onset, the Canadian dredgers are eager to compete in a marketplace fuelled by healthy trade relationships. We simply ask that we continue to compete on a level playing field, where risks and opportunities are equal for all. Unfortunately, CETA was a bad deal for Canadian dredgers. There's no reciprocity for us in the European market, but there's streamlined access for Europeans in the Canadian market. We therefore submit that Bill C-49 represents an ideal opportunity to address this inequity and provide workable policy solutions.

Let me say a few words about the dredging industry in Canada and the critical role it plays for Canada as a maritime and trading nation. Ours is a geographically expansive country that relies on a complex transportation network to move people and goods. As stated by Minister Garneau on May 16 of this year, Canadians rely on the economically viable modes of transportation to travel and move commodities within the country, across the border, and to our ports for overseas shipments. At his announcement regarding the trade and transportation corridors initiative on July 4, Minister Garneau highlighted the digging of deepwater ports as being critical to the development of Canada's north, underscoring the essential role dredging plays in the creation and maintenance of our transportation network and, as a result, our national and economic sovereignty.

Opening routes to Canadian and international shipping vessels brings consumer goods to Canadian markets and takes our export products around the world. Without dredging, ports in major cities across the country would be inaccessible to global trade and transportation. Industry operations, both coastal and inland, would not be able to function. The companies that comprise our coalition actively comply with rigorous government regulations concerning labour, environmental protection, safety, and operating standards while regularly submitting to routine major inspections that are amongst the most rigorous in the world. Canadian dredging companies also provide well-paid, middle-class salaries, which in turn fuel local economies across the country.

We are here with you today to do our part to ensure that the Canadian dredging industry is provided a level playing field on which to compete sustainably and responsibly, to create more jobs, and to continue to contribute practically to Canada's economic success. Unfortunately, these important goals have been put at some risk by the effect of the proposed amendments to the Coasting Trade Act contained in Bill C-49. Proposals in Bill C-49 are of course contingent upon the coming into force of elements of Bill C-30 on September 21, 2017. We understand that the spirit of CETA reflects the wishes of both governing bodies and peoples to create better economic ties and a more prosperous future. We support the government's effort to expand trade and to make our economy as vibrant as possible. At the same time, we wish again to express our concerns about the negative impact. We believe the amendments to the Coasting Trade Act contained in Bill C-30 unfairly advantage foreign dredging companies at the expense of Canadian firms, Canadian workers, and ultimately, Canada's transportation infrastructure. Bill C-49 builds on a foundation laid by Bill C-30 that is highly problematic for Canadian dredgers.

As I've said, we are fully prepared to compete. We do so every day in our industry, both in Canada and abroad. Under CETA, there was no negotiated reciprocity for our industry.

CETA opens up the Canadian market to European firms while keeping the European market closed to Canadian dredging firms. This would normally be considered an unpleasant by-product of doing business in the global market, but several factors intervene to create a situation where non-Canadian firms could gain a structural and market advantage over Canadian firms. If a level playing field is not created and maintained, Canadian dredging companies will face structural disadvantages when bidding on contracts, as we pay market rates and benefits that reflect the skills of our crew members in Canada.

For example, foreign crews are typically compensated at about a third or less of the rates we pay. In 2015, the average monthly salary for a chief engineer on a Canadian vessel was $15,000 U.S., while the same position on a Dutch crew was about $7,000 U.S. As salaries represent about one-third of our vessel's operating costs, non-Canadian companies will operate at a significant advantage over Canadian companies, leaving Canadian seafarers out of work. In this scenario, the playing field is inherently uneven, to the detriment of Canadian companies, and, ultimately, to our employees and their families.

Prior to Bill C-30, foreign-flagged vessels were required via the Coasting Trade Act to obtain a coasting trade licence. Jim outlined that process very well in his presentation, which would include paying duties, and following shipping conventions, worker visa requirements, and employment standards. However, even that structure faced monitoring and enforcement challenges. Under CETA, non-Canadian dredgers will have greater access to our waters, and therefore greater opportunity for non-compliance.

Before making our key recommendations, I will now ask my colleague, Jean-Philippe Brunet, to say a few words about Quebec in particular.

[James Given, President, Seafarers' International Union of Canada]

Thank you very much, Madam Chair. Thank you for having us here today, members of the committee.

My name is Jim Given. I am the president of Seafarers' International Union, and I'm also chair of the Cabotage Task Force worldwide for the International Transport Workers' Federation. .

The SIU is concerned about the proposed amendments to the Coasting Trade Act that build upon amendments to the act put forward through the CETA implementation bill, Bill C-30. They will allow, for the first time, foreign vessels to engage in maritime cabotage without first having to obtain a coasting trade waiver.

The Coasting Trade Act requires that no foreign ship or non-duty ship engage in cabotage without a licence. The broad definition of coasting trade under the act means that maritime activity of a commercial nature in Canadian waters is restricted to Canadian-flagged vessels, including the carriage of goods and passengers by ship from one place in Canada to another. Under the current system, a foreign ship may be imported into Canada to engage in coasting trade if the Canadian Transportation Agency, on application, determines that no available or suitable Canadian-flagged or Canadian-crewed vessel can be used for the required operation.

Changes to the Coasting Trade Act by Bill C-30 will now allow foreign ships owned by European Union citizens or flagged by a European Union member state to engage in the following cabotage activities without a coasting trade waiver: transporting empty containers between two Canadian ports, dredging activities, and the carriage of goods between the ports of Halifax and Montreal as one leg of the importation or exportation of goods to or from Canada.

In addition, subclause 70(1) of Bill C-49 would further amend the Coasting Trade Act to allow any foreign vessel, regardless of flag, to perform the repositioning of empty containers between Canadian ports without obtaining a coasting trade licence.

As a labour union that represents Canadian seafarers working in the Canadian seafaring industry, the SIU cannot support these amendments, because they actively undermine legislation in place to support the domestic Canadian maritime industry and Canadian shipowners.

We strongly support maintaining the current coasting trade waiver system, which already includes a waiver system for foreign vessels. This method ensures the fair practice of giving Canadian shipowners who employ Canadian seafarers the first right of refusal for any available work.

The SIU has previously stated that giving away cabotage rights to the European Union through CETA was an unnecessary concession that has the potential to cause harm to the Canadian seafaring industry.

Canada already has a liberalized version of maritime cabotage, and further relaxation of these restrictions, specifically those involving dredging and feeder services between Canadian ports, does not benefit Canadian shipowners or Canadian seafarers who depend on competitive Canadian labour and domestic market trade for their livelihoods.

Further to these issues are the specific concessions allowing both first and second registry vessels to gain access to the Canadian market. As announced by Minister Garneau, the proposed amendment to allow the movement of empty containers by any vessel, regardless of flag, was done at the request of one shipping federation in Canada, which represents very few or no Canadian-flagged shipping operators. While the SIU does not speak on behalf of Canadian shipowners, it is troublesome to us and our membership that the majority of proposals and concerns from Canadian shipowners and Canadian seafarers appear to have been ignored in favour of one organization representing global shipping agents in Canada.

The domestic maritime industry is a source of direct and indirect employment for over 100,000 Canadians. When discussing global shipping, it is important to distinguish that the Canadian vessel registry, or Canadian first registry, is much more advanced in terms of working conditions and requirements than the majority of global maritime flag states. Global shipping is a highly unregulated industry and one that has seen deteriorating labour and wage conditions define it increasingly over the years. For example, some first registries, and many second registries, are qualified by the ITF, the International Transport Workers' Federation, as being flag of convenience vessels. What this translates to is an underpaid and under-represented work force of mostly third world seafarers who work in an unsafe and unregulated industry with few to no working regulations in place.

In Canada, a maritime accident involving an FOC vessel could lead to months or even years of trying to track down the true owner just to begin the process of seeking compensation, which we know, through experience, is never actually achieved.

Second vessel registries are so under-regulated that a vessel registered in a second registry of an EU country is not even permitted to operate cabotage inside its own flag state. Allowing second registered vessels to operate cabotage inside another country's domestic market is not a common practice and not one Canada should be responsible for initiating.

This is a major global issue that has yet to be dealt with in a sufficient and acceptable way to secure the safety and well-being of all seafarers. To allow this sort of shipping to take place, unrestricted, inside Canada’s domestic maritime industry would be unprecedented. The SIU of Canada is actively involved in securing the rights of all seafarers working in Canada. We will work diligently to ensure that any foreign vessel brought into Canada to operate in Canadian cabotage is in compliance with federal standards of labour, and ensure that foreign crews are being paid the prevailing industry wage and being protected as stipulated by the temporary foreign worker program.

We remain concerned about oversight when it comes to foreign vessels operating in Canada. Establishing an effective monitoring and enforcement regime will be essential to ensure full compliance with the conditions and requirements of the new market access provisions of the Coasting Trade Act. In order for Canadian domestic stakeholders to remain competitive, there must be a system to ensure that foreign operators are strictly adhering to Canadian rules and standards, including labour standards and prevailing wage conditions for the crew, and not flag state law.

Again, the SIU's priority is to ensure that Canadian workers have opportunities for employment in the Canadian maritime industy. We believe the proposed amendments to the Coasting Trade Act contained in Bill C-49 undermine the importance of maintaining cabotage restrictions in place to protect Canadian maritime transportation, strengthen commercial trade, and maintain a qualified pool of domestic maritime workers. While securing employment opportunities for Canadian seafarers remains the primary mandate for the SIU, we also have a responsibility to ensure that all seafarers, both domestic and foreign, are properly treated. Canadian seafarers have an international reputation for being the most well-trained and highly qualified maritime workers in the world. As such, Canadian seafarers and Canadian vessel operators should reserve the right to retain the first opportunity to engage in any domestic maritime operations prior to permitting access to foreign operators.

We remain committed to working with our partners in government in order to establish a workable and acceptable solution to the growing amount of trade in Canadian ports. We believe Canada’s international trade ambitions can be achieved while supporting a strong domestic shipping policy that does not facilitate unrestricted market access to foreign vessel operators. Without a strong Canadian domestic fleet crewed and operated by Canadians, our country would be dependent on foreign shipping companies to move goods to, from, and within Canada, with no commitment to uninterrupted service.

On behalf of the Seafarers’ International Union, we once again thank the committee for having us here. I will close by saying that this is a very welcome change to be sitting at this table in front of the committee. We thank you for that.

[The Chair, Liberal, Judy Sgro]

Could all the members please take their seats? Thank you very much.

Welcome to our next witnesses. We will very much appreciate listening to you and having your very helpful comments, I hope, on Bill C-49.

We will open the floor with the Seafarers' International Union of Canada. Mr. Given, would you like to start off?

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

Thank you, Madam Chair.

I would like to continue the conversation with Mr. Tougas.

It seems to me that you quietly debunked a myth, in your opening remarks, and I want to make sure that I have understood correctly.

You say that we are not in a process of harmonizing the U.S. system and the Canadian system. At most, Bill C-49 helps us compare ourselves to what is being done in the United States, and my understanding is that this is not really beneficial.

Is that the idea behind what you said?

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

Yes, it does. Thank you.

On a different note, you would really have to be psychic to know what recommendations will be unanimously supported in this committee over the next few weeks. There are many proposals on the table. Nearly everyone agrees that the legislation should be reviewed on a regular basis. Some have suggested that this be done every two years, and others, every four years.

I would like to rephrase the question. Once Bill C-49 has been passed, regardless of the amendments made to it, how much time do you think will be needed to measure its effectiveness? In other words, should the first review of the legislation be done after a year, two years, three years or four years? Then, we could establish the cycle.

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

Thank you, Madam Chair.

I thank the witnesses for joining us.

I would like to begin the conversation with Mr. Harrison.

In your opening remarks, you provided us with a new perspective. For a few days, we have been hearing many producers of grain and ore complain about railway companies. People are saying that those types of productions are growing, that they are trying to export more to international markets and grow the economy. This afternoon, you are bringing us the notion of just-in-time production, the concept involving smaller productions. You are saying that most mills are not equipped to receive many cars.

Does Bill C-49 provide any benefits for you? I will let you tell me, but I am under the impression that railway companies would perhaps have to offer you different treatment than the one large productions get. Am I mistaken?

[François Tougas, Lawyer, McMillan LLP, As an Individual]

Thank you for the invitation to appear before the committee today.

I should start by commending the members for their non-partisan approach to this bill, as well as for their fortitude, doing this all week long, and the hours that you're maintaining.

I'm here in my capacity as counsel to shippers, railways, governments, intermediaries, and investors in the areas of rail law and policy. My credentials are attached to my formal submissions.

I should say also that my comments today are informed by more than 60 negotiations and processes with the Canadian National Railway Company and Canadian Pacific. I'm speaking from the position of having seen these negotiations and processes among different categories of commodities as well as railways. Transport Canada consulted with me extensively in the run-up to Bill C-49. Unfortunately, Bill C-49 leaves many shippers without access to a viable remedy. While I have many things to say about the act and the bill, I'm going to confine my remarks today to two areas in particular on data disclosure and rail service, and I'm also going to try to address some points that have arisen since the beginning of the week.

My first point is on costing data. Bill C-49 looks to gather some data similar to that available in the United States. However, the bill will not change the fact that data about CN and CP is much more readily available to shippers in the States than to shippers in Canada. Shippers in the States have access to detailed rail costing data to calculate a carrier's costs of transporting goods, without invoking a proceeding before the U.S. Surface Transportation Board.

Rail carriers in the States are required to report detailed financial and statistical data, which is available publicly on the STB website. CN and CP must provide these reports to the STB too, but Canada does not require it, so shippers in Canada are at a considerable disadvantage in relation to their U.S. counterparts. The STB established the uniform rail costing system, URCS, to “provide the railroad industry and shipper community with a standardized costing model [that can be] used by parties to submit cost evidence before the Board.” Shippers can, by this and yet other means, assess the freight rate competitiveness of CP's and CN's American operations, but not their Canadian operations.

In Canada, the only situation in which a shipper can get rail cost data is in the confidential final offer arbitration, FOA, process. FOA has become increasingly difficult to use for a number of reasons. As you've heard already from other witnesses, an FOA arbitrator has the right, under the act as it presently stands, to get information from the agency but generally will not do so without first getting that class I rail carrier's consent. That's the problem that I think you have an opportunity to fix. CN and CP can merely refuse to consent, leaving the arbitrator in such cases without a critical piece of evidence to make a final offer selection between the shipper's offer and a carrier's offer. In this manner, CN and CP can neuter the FOA process, making it less available and less viable.

While shippers in Canada should have access to the same quantity and quality of information available to the shippers using CN and CP services in the States, for now, I'm advocating something simpler; just require CN and CP to co-operate with the agency in providing the cost of shipments that are submitted to final offer arbitration. I have some recommended language there before you. This committee is already amending subsection 161(2), so this would be the addition of a paragraph (f). It would just add one more item to the list of items that a shipper has to submit to start a final offer arbitration. With this amendment to the act, the FOA process has a better chance of avoiding disputes, reaching good conclusions, and satisfying the parties.

I'll move on to performance data. Railway performance data is also not available in Canada. Bill C-49 proposes to compel the disclosure of a subset of certain U.S. information. As a result, U.S. shippers will end up with more data about CN's and CP's operations than shippers in Canada. Ideally, each class I rail carrier would submit all data from every waybill, including the information required by proposed subsection 76(2), which is dedicated right now just to the LHI remedy.

This information is readily accessible to the rail carriers in real time and is easily transferable. That would allow any so-inclined shipper in Canada to assess the extent to which a rail carrier is providing adequate and suitable accommodation for its traffic without having to resort to a legal process, which is what is required right now.

Currently the agency and arbitrators must determine service cases in the absence of performance data. The creation of a database and publication of all waybill and clause 76 information would settle or eliminate many disputes. However, I propose something more modest. I propose three things. First, give the agency the authority and the obligation, as it has for other parts of the act, to make regulations in this area, given its wide-ranging expertise. Second, require service performance information for publication for each rail line or subdivision. System-wide data as presently contemplated by Bill C-49 will do nothing to identify service failures in any region or corridor, much less those faced by any shipper. Third, Bill C-49 seeks to limit commodity information. I've added paragraph (11) to current subclause 77(2)—you can see the language before you—to require each class I rail carrier to report their service performance in respect of 23 commodity groups, just as is required by the STB of CN and CP in the United States—no difference.

Moving on to service levels, both the level of service complaint remedy and the SLA process were designed, along with the statutory service obligations, to compel railways to do things they would not otherwise do. The agency has done an admirable job of determining the circumstances in which it will determine whether a rail carrier has fulfilled its statutory service obligations. This is not a system that needs any further inclination toward rail carriers, which have been performing very, very well financially. Only the most egregious rail carrier conduct gets attention from shippers, which are otherwise prone to sole-service providers and very reluctant to bring proceedings.

Personally, I would not have amended the LOS provisions, but if it must be done, I'd make a few changes—three of them, in fact.

First, I'd change the opening words of proposed subsection 116(1.2), as presently contemplated in Bill C-49, to reverse the logic. Right now, it doesn't say what happens if a rail carrier doesn't provide the highest level of service they can provide. I would reverse the finding requirement so that the level of service is no less than the highest that can be reasonably provided in the circumstances.

Second, Bill C-49 would require the agency, in both the LOS and the SLA process, to consider the rail carrier's requirements and restrictions, which are all outside the control of the shipper and well within the control of the rail carrier. For example, a rail carrier decides how many locomotives to acquire, whether to terminate thousands of employees, eliminate or reduce service, limit infrastructure, or invest in technologies. It is entirely inappropriate for the agency to have to determine whether a shipper should receive a portion of the capacity that has been restricted by decisions of a rail carrier. I would strike the offending provisions entirely, just as you have it before you there.

Third, Bill C-49 imposes an obligation on an arbitrator to render decisions in a balanced way. Now, I would have thought they were already doing that. They enjoy a reputation for fairness and impartiality, and they have enjoyed deference from the appellate courts. Arbitrators are rarely appealed. There's no need for such a provision. The SLA process exists precisely because a rail carrier will not provide what the shipper requires. If it turns out, upon examination, that a shipper doesn't require the service it seeks, the shipper won't get it. That's what the agency will decide. I would strike that proposal altogether.

I've been asked a few times, and contemplated that this would arise, which one of these I would take if I could only take one. Well, it may be that the LHI provisions, if they're amended in accordance with the requests of various parties who've appeared before you, will be helpful to some people. But for sure I would make sure that my priority one amendment is made—that is, demand and require of a railway that it provide its consent to a rail carrier costing demand by the shipper in the FOA process.

Finally, we should return to a periodic review of the act. I would recommend at least every four years. I heard Mr. Emerson say two, and I'd be content with that too.

Thank you very much.

[Steve Pratte, Policy Manager, Canadian Canola Growers Association]

Thank you.

Just very briefly, Bill C-49 attempts to address several long-standing issues in the rail transportation marketplace. You've heard from grain sector representatives, including grain shippers and farm groups, yesterday and this morning, regarding their perspectives on various commercial and legal aspects of the bill, including around reciprocal penalties, long-haul interswitching, and other elements. You've clearly heard from witnesses in other sectors that Canadian class I railways are in monopoly positions. Most grain shippers are served by only one carrier and are subject to monopolistic pricing and service strategies.

The grain sector, from farm groups through the value chain to exporters, has been consistent in its discussions with government since the 2013-14 transportation crisis, and there's been a consistent message. Canada must address the fundamental problem of railway market power and the resulting lack of competitive forces in the rail marketplace. In our view, the government has a clear role to establish a regulatory structure that strikes a measured and appropriate balance and, to the greatest extent possible, creates the market-like forces that do not exist, which in theory should create more market-responsive behaviours of all participants.

This is the reality, a long-standing fact that has led to over a century of government intervention to varying degrees in this sector. Bill C-49 is the current approach before us to bring a more commercially oriented accountability into this historically imbalanced relationship. Bill C-49 appears to make progress in several areas towards this goal, and does reflect a consideration of what Canadian rail shippers and the grain industry have been telling successive governments for years about the core imbalanced relationship between shipper and railway. For that, we thank you.

In our view, the true impact and success of this bill and the measure of its intended public policy outcomes will only really become apparent and known once the shipping community attempts to access and use the remedies and processes this bill will initiate. As Bill C-49 was designed to balance two competing interests—that of the shipper and that of the rail service provider—a true measure of success will likely take several years to fully gauge and appreciate.

In closing, two areas that CCGA would like to briefly highlight, from a farmer's perspective, are the themes of transparency and long-term investment, specifically as they relate to data disclosure and the economic regulatory environment of grain transport in Canada.

One element of Bill C-49 that is of particular importance to farmers is the issue of transparency.

The publication of new railway service data, received by the minister of transport or the Canadian Transportation Agency, is important not only for stakeholders and analysts monitoring the functioning of the grain handling and transportation system but also for government itself—for the twin functions of on-going monitoring and assessment of the system, and when required, the ability to develop prudent public policy and advice to the minister in times of need.

This new information, in conjunction with the comprehensive reporting of the existing grain monitor program, will provide farmers with valuable insights into the performance of the system. As the bill currently reads, clauses 51.1, 77(5), and 98(7) specify timelines associated with this reporting. CCGA would respectfully submit that these timelines are too lengthy and that consideration should be given to shortening them.

In addition, the new proposed annual railway reports to the minister at the beginning of each crop year, contained in clause 151.01, are very positive. CCGA would respectfully submit that the minister of transport consult with the minister of agriculture as to what those reports could specifically contain to be of greatest utility to both government and grain stakeholders.

Lastly, modernizing the economic regulatory environment to stimulate investment, such as the suite of actions aimed at the maximum revenue entitlement, is well intentioned.

One of these policy objectives is to spur investment in grain hopper car replacement by the railways through the calculation of the annual volume related composite price index, as effected by clause 151(4).

CCGA would submit that consideration should be given to having the Canadian Transportation Agency closely monitor these actions and, during its annual administration of the MRE, include a summary comment within its determination.

We appreciate being here to address the committee this afternoon, and we do look forward to the question period.

[Jack Froese, President, Canadian Canola Growers Association]

Good afternoon, Madam Chair and members of this committee.

I am Jack Froese, the president of the Canadian Canola Growers Association. I farm at Winkler, Manitoba. Thank you for inviting me here today to speak with you about Bill C-49, the transportation modernization act.

CCGA is a national association governed by a board of farmer directors who represent the voice of Canada's 43,000 canola farmers from Ontario west to British Columbia. In any given year, over 90% of Canadian canola, in the form of raw seed or the processed products of canola oil or canola meal, is ultimately destined for export markets in more than 50 countries. We are the world's largest exporter of this highly valued oilseed.

Canola farmers critically rely on rail transportation to move our products to customers and keep those products price-competitive within the global oilseed market. Farmers occupy a unique position in this grain supply chain, and that is what fundamentally differentiates this supply chain from other commodities. Farmers are not the legal shippers, but we bear the cost of transport as it is reflected in the price we are offered for our products from the buyers of our grains and oilseeds, who are the shippers.

Simply put, farmers do not book the train or the boat, but they pay for it. Transportation and logistics costs, whatever they might be at a point in time, are passed back and paid for by the farmer.

Farmers independently strive to maximize both the quantity and quality of their production each year. Once harvested, they sell their grain into the system, based on their particular marketing plan, with the overall goal of capturing the highest possible prices at a given time in a dynamic and ever-fluctuating global commodity market.

Transportation of grain is one of several commercial elements that directly affect the price offered to farmers in the country. When issues arise in the supply chain, the price that farmers receive for their grain can drop even at times when commodity prices might be high in the global marketplace.

In periods of prolonged disruptions, space in grain elevators becomes full and grain companies stop buying grain and accepting deliveries. This can occur even when the farmer has an existing contract for delivery, seriously affecting farmers' ability to cash flow their operations. This is a major reason that western Canadian farmers have such an interest in transportation. It directly affects personal farmer income, and beyond that, they critically rely on the service of Canada's railways to move grain to export position. We have no alternative.

It is a complex system, transporting western Canadian grains an average distance of 1,520 kilometres from the Prairies to tidewater, but we need to make it work to the benefit of all parties and the broader national economy as a whole.

The competitiveness and reliability of the canola industry, which currently contributes over $26 billion annually to the Canadian economy, is highly dependent on this supply chain providing timely, efficient, and reliable service. In terms of direct impact on Canadian farmers, canola has been the number one source of farm revenue from crops every year for over a decade. It is a major contributor to grain farmers' profitability.

The 2016-17 crop year that just passed at the end of July set new record levels of canola exports and domestic value-added processing. Strong performance by the railways absolutely supported this achievement. Overall, it was a banner year for railway movement of grain and its products.

That stated, we need to remain future-oriented when we consider public policy changes. The last several years of reasonably good overall total movement and relative fluidity of the supply chain should not lessen our focus on seeking to improve, as fundamental issues still exist beneath the short-term positive headlines.

Spring 2017 saw a record level of canola planted in Canada, the largest single field crop in the country, for the first time surpassing wheat. The most recent, late August, government estimates of production for this fall is 18.2 million tonnes, down slightly from last year due to challenging weather, but still surpassing the five-year average by over one million tonnes.

We are an optimistic and goal-oriented industry with a record of achieving success. When we look forward to 2025, we see demand for our products rising further, both domestically and internationally. In this future, rail transportation will be even more important as our industry strives to reach our strategic goal of Canadian farmers sustainably producing 26 million tonnes of canola every year.

To support this, Canadian farmers and the industry will need an effective and responsive rail transportation system, not just for transportation of the current crop sizes but for those of the future. Moreover, farmers will not be able to capitalize on the opportunities from Canada's existing and future trade agreements without a reliable and efficient rail system that grain shippers and our global customers have confidence in. That is a key point: with such a strong reliance on exports, we do need to remain cognizant of the customer service aspect of our export orientation in the agricultural sector.

Canadian canola and other grains are well known for their quality characteristics and sustainable supply, which are market differentiators. But at the end of the day, they remain fungible commodities, and alternatives exist. The reliability of our transportation system affects buyers' confidence in the global Canadian brand. We know, because we hear directly about it.

For the remaining comments, I'll defer to Steve Pratte.

[Gordon Harrison, President, Canadian National Millers Association]

Thank you very much for the opportunity to appear. It's greatly appreciated. We are very happy to be here after requesting to be here.

The Canadian National Millers Association is Canada's national not-for-profit industry association representing the cereal grain milling industry. Our member companies operate milling establishments across Canada, and a number of them operate establishments in the United States or have affiliated companies with milling facilities in the U.S.

By virtue of where the Canadian milling industry capacity is situated and the regional markets served, the Canadian industry can quite correctly be described as a participant in a North American industry. It is a North American market for this industry, and the industry is integrated much like the rail transportation networks are throughout North America.

We are, however, an independent Canadian not-for-profit organization. We do not directly represent members of the U.S. milling industry except for those who are members in good standing of the CNMA by virtue of their operating facilities in Canada.

In light of the few minutes that are available for everyone to speak, I'd like to start by advising the committee at the outset that the CNMA supports the recommendations that are set out in the amendments to the bill as submitted and presented by the Western Grain Elevator Association. Members of the WGEA are the predominant link between grain producers and our member grain processors and others who are processors in Canada. This is the case for the majority of wheat and oats milled in western Canada.

I would like to touch upon a number of points as context for the committee's consideration of all the submissions you've heard. They are the following.

Our members are primary processors of wheat, oats, rye, and other cereal grains. By “primary processors”, we mean the step in the supply chain at which grain is transformed from a commodity that generally is not consumed to commodities that are consumed and are ingredients in food products and other products at the consumer level.

Top of mind for most people who think of foods that contain such ingredients are bread, other bakery products, pasta, breakfast cereals, and cookies, but I'd like to emphasize that you'll find wheat flour and other products of grain milling in products that are in every aisle of the grocery store, including pet foods, which contain products of grain milling. There are many products that contain or are derived from milled grain products. Those milled grain products are derived from grains across Canada, but predominantly the grains that are produced in western Canada.

There are also very few food service chains or restaurants, if any, whose menus are not largely based on foods based on cereal grains and manufactured from the products of grain milling. During the duration of these hearings, I was reflecting on this. I think Canadians will have consumed approximately 200 million meals containing bakery products, pasta, breakfast cereals, and snack foods, which in turn contain other products of grain milling.

These businesses, from the very largest to the very smallest, operate on a just-in-time delivery basis. The major manufacturing companies or the further processors of milled grain products—such as bakeries for frozen bakery products, or pasta, but principally those further processing manufacturing industries—have only a few days of ingredients in stock, and not just wheat flour and other milled grain products, but all grain products. In that sense, the supply chain beyond the milling industry operates on a just-in-time delivery basis, just like the automotive industry.

The CNMA's interest in rail transportation policy in Bill C-49 is that the cereal grain milling industry is heavily reliant on rail transportation, not only for inbound unprocessed grains but for outbound processed products. Two-thirds of Canada's wheat milling capacity is located off the Prairies, outside of Alberta, Saskatchewan, and Manitoba, and is situated in B.C., Ontario, Quebec, and Nova Scotia primarily. These mills require rail service to receive approximately three million tonnes of wheat and oats annually. This represents a very predictable demand for rail transportation: in my estimate, 34,000 cars annually for inbound grain, and perhaps another 6,000 to 10,000 cars for the movement forward of milled grain products and by-products.

This demand doesn't fluctuate significantly by crop year, is not variant on the size of the Canadian crop for any commodity. Rather, it can be easily forecast a year in advance because it's based on a domestic and a nearby export market, the United States of America.

Having noted some of the ridings held by committee members, it might interest you to know that during the dramatic shortfall in service in the 2013-14 crop year, there were mills in Mississauga, Montreal, and Halifax that actually ran out of wheat, in some cases more than once. That meant that major bakeries were within two to three days of running out of flour, and major retail grocery establishments probably within four to five days of running out of bread on shelves.

In hindsight—and that is now a long time ago and we're not here to whine about what happened back then—we came very close to having a serious interruption in our grains-based food supply. How would we have explained that to Canadians who had gone to the store and found no bread, or to fast-food restaurants which would have had nothing to put their ingredients on in those menu servings?

Other than the extended switching rights, the provisions of the Fair Rail for Grain Farmers Act did not recognize or assist the rail service requirements of Canada's milling industry. The same can be said for U.S. establishments. In fact, that intervention provided an impediment to service to our industry. As we see it, there are no provisions of the CTA that presently speak to the very predictable and forecastable service needs of the Canadian milling industry, and in most respects the same can be said about the amendments proposed by Bill C-49. The act, as it exists and even as amended, doesn't really speak directly to or recognize the needs of domestic processors.

Those processors really do not have the capacity to receive and unload grain in the way that grain elevators have on the way to export markets. Almost all mill locations are urban. They're in multi-mix environments, in some cases surrounded by residential development, commercial development, and they are equipped to handle only a few cars at a time. The largest capacity of a mill that I'm aware of, without using a transfer elevator nearby, is about 15 cars at a time.

In regard to Bill C-49, it really remains important that under the amended act the definition of “shipper”, as I understand the proposed amendments, will remain, “a person who sends or receives goods by means of a carrier or intends to do so.” That's an extremely important aspect of the legislation as it exists today, and that does ensure that processors, including millers, have access to the benefits of the same provisions of the act.

The key point I want to make is that grain rail service is not only about moving grain to port for onward movement to export markets. It's about moving grain to mills in Canada and the United States, meeting the needs of Canadian and U.S. consumers. The Transport Canada question-and-answer document that was circulated about 10 days ago speaks of global markets. I want to emphasize that North America, Canada and the U.S. combined, is a global market of 400 million people. From our investigation, the recommendations of the WGEA and those carefully considered points of the crop logistics working group will go a long way to meeting the substantial improvement that is described by the WGEA in these amendments. We are supportive of those recommendations.

I must emphasize, however, neither their submission, nor any other that I've read to date, speak to the importance of rail service to cereal grain milling establishments. There are actually many, and the Canadian population relies upon the timely operation of those facilities and the delivery of foods from those facilities.

I've provided some very brief correspondence to the Honourable Marc Garneau, to the clerk, which I gather will be subsequently distributed once it is translated.

Thank you for your attention.

[The Chair, Liberal, Judy Sgro]

We're calling the meeting back to order as we continue our study of Bill C-49. We have with us at this panel François Tougas, appearing as an individual, the Canadian National Millers Association, and the Canadian Canola Growers Association.

I welcome all of you. Thank you for coming.

Who would like to start off? Go right ahead, sir.

[Vance Badawey, Liberal, Niagara Centre, ON]

As I stated yesterday, Bill C-49 is meant to be injected into the overall transportation strategy establishing, of course, one of the five pillars that Minister Garneau has announced, which is trade corridors. The more information we can have about what your needs are to make more robust the opportunity for our participation and performance in a global economy, the better. Since, as you stated earlier, you are a part of it, we need to hear what those needs are. That way, when we are actually making the infrastructure investments, they will be made appropriately, for better value and a better return, to therefore position Canada better on the economic global stage than is the case today.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair Sgro. I have a question to the shippers with respect to the discussion we've had on Bill C-49 about operational remedies, when moving containers around utilizing marine resources.

I want to touch on one thing that we haven't touched much on for the last couple of days and that may be very relevant to you. That is the capital side of shipping, and the Shipping Federation's opinion and recommendations on the overall system when it comes to both salt water and the Great Lakes.

What is your position on Canadian ports being allowed to access the Canada infrastructure bank and the financial instruments contained within the infrastructure bank to help fund expansion projects? Will this be helpful, in your opinion, in making Canadian ports more competitive?

I want to expand that question to also include not only Canadian ports that are designated as port authorities, but also the St. Lawrence Seaway itself on the Great Lakes. Is there opportunity, in your opinion, to expand on the capital side to enhance the business opportunities for yourselves, speaking on behalf of your organization, as well as for others who ply the waters of Canada and those beyond the borders of Canada?

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

Thank you very much, Madam Chair.

My next set of questions will be for the Mining Association.

Mr. Gratton, I want to ask you a question around the three-week delay in providing data. Earlier this week, we heard testimony that Canadian railways already provide more detailed information in regard to the operations happening in the United States. They provide that on a weekly basis.

I'm wondering if the present government, with Bill C-49, should have moved to more closely align the railways reporting requirements in Canada with those in the U.S.