Evidence of meeting #29 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cars.
A recording is available from Parliament.
12:50 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
Where would the railways be on this? Should it be amended? Should there be level of service provisions? Should there be a review no later than six months after the passage of the bill?
12:50 p.m.
Vice-President, Transportation Services, Canadian National Railway Company
Mr. Easter, I'm not an expert in this end of the discussion. My understanding is that we, CN, and CP as well, I believe, had worked with a number of shippers and shipper organizations and agencies to try to find a commercial dispute resolution process that would address the very concerns that you're talking about, and that Wade and Rob have spoken about in terms of the balance and how these things would be arbitrated, discussed, and resolved in the future.
Again, I apologize, I'm not aware of where that process stands, if that process continues to be ongoing, or whether it's still an open discussion.
12:50 p.m.
Executive Director, Western Grain Elevator Association
I can respond to that.
What happened was that the minister invited CN to go back to their customers with some sort of commercial solution, and CN met with a number of the different associations that were part of this coalition with a proposed framework for commercial dispute resolution. They met with the WGEA. We assessed it. We realized that what they had initially proposed would do very little to give us anything further than what we have under the current CTA as it is, so we said this really wasn't good enough.
A requirement, by the way, that we were advised of by CN is that if we agree to the commercial dispute resolution process it means we stop pushing for the May 5 changes. To us that wasn't acceptable. We don't have a problem with commercial dispute resolution. We think it's an effective way to resolve disputes, but it needs an effective legislative backstop. The reason the railways were proposing it in the first place was under the threat of moving to an effective legislative backstop. So we felt that we needed the May 5 changes. We're not averse to working on commercial dispute resolution with the railways.
It's like the Court of Queen's Bench legislation. Let's say you have problems with that. You'd never have the government saying, “Well, we know there are problems with the court system, but we're not going to fix it. You guys should just get together, sit down with the party who is part of the problem, and try to resolve it.” It doesn't happen that way. You have effective legislative remedies and effective legislative backstop, and then if commercial dispute resolution is chosen by the parties, is developed and chosen by the parties as an alternative to using the legislation, then that comes out of it.
12:50 p.m.
Senior Vice-President, Western Region, Canadian National Railway Company
I have just one point here.
12:50 p.m.
Senior Vice-President, Western Region, Canadian National Railway Company
We weren't just talking about grain when CN and CP were putting this together. There were lots of associations.
Again, part of the challenge on the grain side is that there is legislation there that doesn't pertain to any other existing legislation, that doesn't pertain to any other commodity group. So it's difficult. And that's a big challenge. There's no doubt about it. But we did come forward with proposals and we have made good progress with many of the industry groups out there. But again, as I mentioned earlier, there was some introduction of some considerations for products moving to the U.S. And there wasn't a consensus there by the industry associations. So we still believe there's room for individual discussion and resolution on this with individual companies.
12:50 p.m.
Conservative
12:50 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
A number of people, Mr. Meijer particularly, earlier made a strong case for two-way benefits and liabilities. I've listened today, particularly to you, Mr. Marshall, and what I've really heard, I think, is a series of excuses rather than any vision. I've listed them. There are a dozen reasons why the system doesn't work here.
Two or three times you also mentioned that one of your concerns is that you don't have a commercial contract. I'm just wondering if that is the real reason we're having this discussion: you're resisting the obligation for services because your company doesn't see your relationship with grain as being a commercial contract. You've talked about being treated different legislatively. You talked earlier about one of the other commodities, that you have a contract on that and that's why you have benefits and liabilities on both sides of the issue. Is that how you see it?
12:55 p.m.
Senior Vice-President, Western Region, Canadian National Railway Company
Well, I see it as one of the differences; that is how I would describe it.
I apologize for bringing up facts, as you convey, that you determine to be excuses. I'm just trying to give the group here the benefit of some of the things that I live and breathe every day out there. I'm not saying there aren't things the railways can be doing better. I'm saying that we are part of a system, and we need to work as a system. It's an integrated system, and within that integrated system there are components that are different for grain than for other commodities. I'm just trying to relay the facts, how we have to deal with operating our business on a day-to-day basis.
12:55 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
Both national carriers deal with all those things on a day-to-day basis. I don't accept the fact that you're operating at about 25% to 30% less efficiency--in terms of stacking the cars, getting them in place--than the other provider right now. A couple of years ago it was the other way around.
I'm not sure why we have this happening, but there's a lot of frustration out there. As Wayne said, it's the primary producers who end up paying the penalty. They can't get their grain delivered. They pay the extra costs for that. It's frustrating for all of us who have to deal with the system year after year when things do not seem to be changing that much.
I just wanted to change the subject for a second.
Mr. Heney, you mentioned that the board uses only lakers when they're shipping their grain, and grain companies used ocean freighters.
12:55 p.m.
Chief Executive Officer, Thunder Bay Port Authority
That's generally so, yes. It's about 95% lakers for the Wheat Board, and the opposite condition for non-boards.
12:55 p.m.
Chief Executive Officer, Thunder Bay Port Authority
Well, there's an operating philosophy. First of all, the lakers service a couple of elevators in the river that are serviceable only by Canadian lake fleet, and that's Baie-Comeau and Port-Cartier. Those two facilities don't have rail access, so the lakers are an integral part of moving grain in the system.
The issue becomes the size of the lake fleet. It's been declining over the years as the grain has been declining through the port. There are now about 20 bulkers--they call them straight-deck vessels--that aren't self unloaders, and those are carrying 78% of the grain in Canada on the seaway. So you're down to these 20 ships. We don't mind those being used to capacity; the problem is that we don't want our capacity limited to those. We feel that we could do a lot more grain if there were a better availability of the ocean vessel coming directly into the port.
12:55 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
How many companies are providing that service on the lakes? Are there one or two primary companies?
12:55 p.m.
Chief Executive Officer, Thunder Bay Port Authority
There are two primary companies. Fednav is the largest. It's actually a Canadian-owned company with foreign-flag vessels. Canfornav is probably the second largest, and then there's a variety of smaller foreign operators, as well.
12:55 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
If I said I had someone approach me who said that they had offered laker services and their offer was rejected, would that ring true to you, that there could be other providers out there that are not being utilized, so the freight rates are not as competitive as they should be?
12:55 p.m.
Chief Executive Officer, Thunder Bay Port Authority
Well, certainly the ocean rates fluctuate quite a bit compared to lake rates, so how competitive they're going to be depends on the market. But you have realize that when you ship by ocean vessel out of Thunder Bay, you're not double-handling it. It goes in the vessel to its ultimate destination. When you travel by laker you have to pay that double handling and double elevation fee.
So a lot of increased efficiency could come to the port by using more of the ocean fleet.
12:55 p.m.
Conservative
David Anderson Conservative Cypress Hills—Grasslands, SK
With grain, you could be loading in freighters that wouldn't have to be reloaded or anything; it could just go to its market.
Which Canadian-owned company is that?
12:55 p.m.
Conservative
12:55 p.m.
Chief Executive Officer, Thunder Bay Port Authority
The Pathy family in Montreal.
12:55 p.m.
Conservative
The Chair Conservative Gerry Ritz
Thank you, Mr. Anderson.
Gentlemen, thank you so much for your presentations here today. It's certainly an ongoing target, as you've brought up a number of times. I'm sure we'll see you all again. I probably won't see you before Christmas, so have a great Christmas season.
This meeting stands adjourned.