Evidence of meeting #34 for Agriculture and Agri-Food in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cars.
A recording is available from Parliament.
4 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
You are talking about idle stations, so the cost is related to having a person walk the switch once a week. A producer car station is basically a siding. The siding connects at both ends with a rail line. Every week we have a person who walks the switches and looks at them to make sure they're safe. Every month we have somebody who walks the track to make sure the track is safe, even though the sidings and these switches and tracks are never used.
So you have the cost of proactive maintenance reviews. When we find something defective on the switch, we have to pay to maintain it.
4 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
Can CN provide this committee with the actual accounting of the costs of maintaining these sites so that we can have a look and make some recommendations?
4 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
You are in the range of $8,000 to $12,000 per site.
4:05 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
The other thing that surprised me is that if a producer loads a car and it's faulty, if it leaks water through the hatches or grain out the chute, this is the producer's liability. Is that correct?
4:05 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
Anybody who loads a rail car, whether it's for pulp, grain, or anything else, would have a quick look at the car. I imagine a producer would do the same thing. He would look to see if the gate might be leaking. He would load the product. If, when he unloads, he finds that he has lost some product, he would file a claim with the Wheat Board and the Wheat Board would go back to CN.
4:05 p.m.
Liberal
4:05 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
When we have damage and a loss of product in transit, the facts will speak for themselves. We take it from there.
4:05 p.m.
Ian White President and Chief Executive Officer, Canadian Wheat Board
On the point about the grain companies, I honestly don't know the answer to it.
However, it may be that if a producer has to go a longer distance, then it may simply be more convenient to go to a local grain company rather than a longer distance to a site, so there could be an element of driving business toward local elevator sites. I really don't know the answer to that, because it does depend on exactly where the sites are and where the elevators are located. But there could be an element of that.
In terms of the recommendations, I think we would generally agree, as Mr. Hill has said, that there should be a different process. We haven't specified what that process would be, but I think we could work with the committee to look at what process would provide a greater period of notice and a greater period of consultation and then some other mechanism that would bring the issue to a head where there wasn't agreement.
4:05 p.m.
Conservative
4:05 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Thank you, Mr. Chair.
Am I mistaken, or were people from the Department of Transport supposed to be on the agenda?
4:05 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Fine. I just wanted to check that they were going to be here today.
Mr. Hill and Mr. White, you heard CN claim that 53 producer car loading stations were being closed because they were not being used. Did you at the Canadian Wheat Board check this, not necessarily at all 53 stations, to see if they were truly underutilized and to see if the numbers provided to the committee today by CN are correct? We are being told that 47 stations were not used at all during the 2008-2009 crop year, that 42 of the stations have loaded no cars for the past two years and that 39 of the stations have loaded no cars for the past three years.
Have you checked this yourselves? Do you have any explanation for us? Was it appropriate for CN to close those stations for the reasons they gave?
4:05 p.m.
President and Chief Executive Officer, Canadian Wheat Board
We don't doubt the statistics provided by CN. From our point of view, the issue is that the more you take away producer sites in an environment where farmers are continuing to load greater numbers of producer cars, the more you basically limit the opportunity for farmers in the future. Our view is that you shouldn't necessarily take recent past history into account when you're looking at what the future may be. There needs to be a good and reasonable network that farmers can access for producer loading sites.
4:05 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
In your opinion, do you think that closing those loading stations for those reasons—because that is the main argument—is a logical business decision? I heard Mr. Ruest tell Mr. Easter—if I am not mistaken about the numbers—that they would save from $8,000 to $10,000 per station by doing that. The reasons were not very clear. The cost was mainly due to the visual inspection that is done on foot by staff who have to make sure that the rails are in good condition.
Do you think that CN made a logical business decision in closing those stations because, according to them, they were no longer used?
October 22nd, 2009 / 4:10 p.m.
President and Chief Executive Officer, Canadian Wheat Board
I have no real information about the cost of maintaining these sites. I really don't know the answer to that. The issue seems to be between different points of view. On the one hand you have CN coming at this from a seemingly commercial point of view, while on the other hand you have the rights of producer cars, shippers, to have access to sites being put forward. I think there is a very definite point being put forward associated with those rights.
4:10 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Mr. Ruest, you stated earlier that the closure of 40 of those 53 sites would be delayed until 2010. Did I understand that correctly? When this was discussed at the last meeting, the minister's parliamentary secretary told us that there was good news because these stations would not be closed after all. In reality, if I understand correctly, this just means a postponement of a few months. The CN has no intention whatsoever of changing its decision and these stations will be closed anyway.
4:10 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
There will be a delay until the end of December for the 40 stations that have already been delisted. That was our commitment.
4:10 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
Yes, I mean this year. We are always open to looking at business plans with individuals or groups who may be interested in using those stations. During the delay period, the equipment will remain. We will do nothing that would exclude the possibility of using them again. The 40 sites whose closure will be delayed are not active. We are waiting for business plans until the end of the year. For 13 of those stations, we will start the process again on November 1st.
4:10 p.m.
Conservative
The Chair Conservative Larry Miller
Mr. Bellavance, if it's okay with you, Mr. Finn wanted to add something.
4:10 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
My seven minutes are almost up. I will not be long, Mr. Finn.
Fine, go ahead.
4:10 p.m.
Sean Finn Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
My comment is this. It is not purely for business reasons that we decided to take these stations off the list. You have to understand that these stations are linked to the main network, the main line, by a switch. Switches have to be inspected on a regular basis, but, most of all, the more switches there are on a main line, the higher the risk of a derailment.
You can imagine that, during the winter, snow accumulates on these switches. They have to be cleaned on a regular basis. Some have not been used for three years. When we make a business decision, the reason is to limit the risk of derailment due to a switch that has to be maintained although no car has not used it to go into the site for three years. So every switch on the main line represents a risk. It is not that it is unsafe, but there is the potential for derailment.
4:10 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
What do you think of Mr. Hill's earlier suggestion that there should be the same kind of notice that they have for track in urban areas? This is 12 months, not just 60 days. Currently, you publish a 60-day notice in local media. It is only today, after you have announced the closures, that you say that you are open to considering the options with producers. Why could you not have done the consulting prior and allowed more time so that these people could organize and discuss it among themselves, so that the community could decide whether it would be appropriate to keep the station open and functioning, or to decide that, in fact, it really had not been used in a long time?
I do not know why you would not be subject to the section of the act that Mr. Hill mentioned in his brief and that applies to urban areas. That period of time would be more acceptable and would allow for true negotiation and consultation on your part with the individuals concerned, rather than simply giving them 60 days' notice.