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.
4:35 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
It seems to be a trend that the producer car loading in total is going up.
4:35 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Okay. Thank you.
Now, for my next question, why would you not enter into some negotiations whereby these lines can basically be left mothballed? At some point in time, when the producers can demonstrate to you that they'll be used to a point that makes your investment in maintaining them worthwhile, why could you not come to some arrangement and change those switches so that you can overcome your concern about safety? Because you're looking at getting rid of a capital asset that's going to have value in the future. Could you possibly enter into those kinds of discussions with these fellows?
4:35 p.m.
Senior Vice-President, Marketing, Sales and Marketing, Canadian National
I think that's why we're in this moratorium period right now: to enter into discussions with whoever might come forward.
4:35 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Okay.
So let's follow along that line for one second. Did any of you from CN have any meetings with either the government or the Department of Transport about this specific issue before September? I know you had meetings, but was this specific issue about closing these lines raised with either the government or the Department of Transport?
4:35 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
No doubt, before we put the ads in the paper.... I don't have the details. There would normally be a dialogue, at least, to inform the department that we're doing this. If not, as we put the ads in for the 60 days, we would inform the department to go back and check to confirm that was done. Again, I think we could always give the notice to the department.
The real issue here—and I'll come back to the member on this issue—is that our number one concern was to get out to the communities and tell them that we are going to delist these sidings. We didn't say that we were going to lift the switch tomorrow morning--I want to be clear about that--but that we would delist the sidings and wanted to let them know in advance that this was going to happen.
But I'll have to get back to you about whether we specifically had direct discussions with Transport Canada.
4:35 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Either Transport Canada or the government before September: I need that answer. You're undertaking to provide that answer, are you?
4:35 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
Yes, sure. Absolutely.
4:35 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Okay.
Now I'll go back to my previous question. To what extent will your maintenance costs of $10,000 to $12,000 per line be reduced if you just say to these fellows, “We're not maintaining it and you have to establish a certain level of use before we'll maintain it for you to ensure its safety?”
What kind of reduction in your maintenance costs can you achieve? It would seem to me to be almost zero. We're talking steel on the ground here.
4:35 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
You're talking about a switch that has to be maintained. The delisted branch line would be something different, but let's talk about the 13 that are still there today. We have no choice but to maintain them at a level where we're sure we can put a rail car into the line without any impact.
More importantly, I repeat, these switches are on our main line. We have trains circulating at 40 or 50 miles an hour with 100 boxcars behind them, with products going coast to coast across Canada. We have to make sure this switch is maintained at the highest level.
4:35 p.m.
Liberal
4:35 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
It comes down to what we call spiking the switch, so it can't be reopened, which is not that expensive, but you still have to inspect the switch once a week. Because if for some reason that spike were to come out and that switch were to be open in a reverse position, and you have a freight train going down that line at 50 miles an hour, it's going to derail.
4:35 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Okay, so what does it take to look at a spike? Tell me. I want to know.
4:35 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
It's more than a spike. It's inspecting the branch line itself and inspecting the line. So if it remains open--I'll respond to your question--we can't stop at the switch. If it's listed, we have to go into the branch line and inspect it. So that's your question. We've already told you that it's between $8,000 to $12,000 a year to maintain the switch and also have the branch line accessible, i.e., snow removal and maintenance. Now I can't give you the exact number, but it requires--
4:40 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Well, I'd like you to give me the exact number. I'd like you to undertake that, because I want to know the whole process. I have to tell you that you're making what I believe is not a complicated thing sound complicated for the sake of your argument. That's how I'm feeling right now.
4:40 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
With all due respect, it's also about mitigating our risks so that we don't have a very unfortunate derailment of a freight train in the middle of the Prairies. That's just as important. I appreciate that service to customers is important, but that also has to be practice number one: making sure we have safe operations across the system.
4:40 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
I have a final question arising from what the chairman asked you. Are you prepared to enter into a protocol with these fellows where it is more easily established how much grain got put on and how much grain got taken off, so that they're not having to run around getting affidavits or hiring a lawyer to establish their case?
Are you prepared to do that? Are you prepared to talk to them about establishing a protocol to achieve that?
4:40 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
We have a claims process today at CN where--
October 22nd, 2009 / 4:40 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
The answer is that we have protocols today to respond to customers' claims--
4:40 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
Well, we'll check into that. If it's anecdotal, it's one issue, but today when customers have complaints about a product being lost or damaged, these people report to me, so I can tell you that today we have people who deal with claims. I will check tomorrow morning to ensure that we have some process--
4:40 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Mr. Finn, I've asked you a question. Are you prepared to talk to these fellows about a new protocol that is more easily put to use and more effectively maintained?
4:40 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
My answer is that I'll ensure that we have a protocol today that respects the right of a shipper to get indemnified for a loss of product. That's the answer. That's what it is today.
4:40 p.m.
Conservative
The Chair Conservative Larry Miller
Thank you very much.
We now move to Mr. Storseth for five minutes.