Evidence of meeting #21 for Agriculture and Agri-Food in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was capacity.
A recording is available from Parliament.
9:25 p.m.
President and Chief Operating Officer, Canadian Pacific Railway
I'll simply reiterate my point: bring all the players to the table. Compel all the players to come with the same commitment and the same expectation and we can solve this problem.
9:25 p.m.
President and Chief Executive Officer, Canadian National Railway Company
And set proper expectations.
9:25 p.m.
Conservative
The Chair Conservative Bev Shipley
Thank you very much, Madam Brosseau.
Now we'll go to Mr. Zimmer for the last questions, please, for five minutes.
9:25 p.m.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
Mr. Chair, I'd like to share my time with Mr. Dreeshen as much as I can.
We've talked before, Mr. Mongeau, about capacity issues. I have articles here that say the capacity issues existed well before the weather hit us in the fall. Further, since I've been a member of Parliament, since 2011, I've been hearing about shortages. Whether it's at mills or whether it's at grain terminals or wherever, it's been a shortage that has been ongoing.
The grain companies are not here right now. The terminal people are not here right now. You are. What are you prepared to do, if this situation happens again next fall, that this is not going to happen again? We live in Canada. Bad weather is a factor of life.
Not what the other guys are doing, not finger pointing; what are you guys going to do to assure Canadian grain farmers that this won't happen again?
April 1st, 2014 / 9:25 p.m.
President and Chief Executive Officer, Canadian National Railway Company
I can tell you one thing. We are about 3,000 carloads from moving the record amount of grain in our historical crop to date.
9:25 p.m.
President and Chief Executive Officer, Canadian National Railway Company
No, I'm getting there. By the time the year is over, we will have shattered all records ever in moving grain this year. I can tell you that, because we're almost there as we speak, despite a very difficult winter.
As for winter, every year we go back to the well and try to find ways to improve our resiliency. It's essential to our business agenda. That's the only way we can satisfy and maximize returns for our shareholders, and that's what we do every year. We run a very good railroad. CN this year performed the best on a relative basis even though we're the most northern railroad. BNSF experienced a far more consequential impact on its railroad. The eastern carriers, NS and CSX, with only snow to deal with, had more velocity reduction than CN did.
How we're doing is not perfect, and we can do a lot more year after year, but we actually performed, in the scheme of things, reasonably well in an extremely difficult winter.
9:30 p.m.
Conservative
9:30 p.m.
Conservative
Earl Dreeshen Conservative Red Deer, AB
Thank you, gentlemen, for being here today.
I have a couple of questions. When you're talking about 11,000 cars per week, I believe those are the numbers you said you could justify and be able to move without affecting any other commodities, yet we continue to hear stories about how you might not be able to move this, so we have to be worried because you're being pressured by the government to make sure you fill that mandate. Of course, if it is true, what you said, that this is what you could manage, why then are other suppliers suggesting you're not going to be able to move their products? Is this true that they are getting those kinds of messages?
9:30 p.m.
President and Chief Operating Officer, Canadian Pacific Railway
From CP's perspective, I think what people don't clearly understand is that this winter affected many other commodities than just grain. You have tremendous amounts of pent-up demand to move. You have more potash to move, you have more coal to move, and you have more merchandise business to move. With that pent-up demand, if I'm mandated to move at a normal run rate of 5,500 cars a week, there are not enough resources.
9:30 p.m.
Conservative
Earl Dreeshen Conservative Red Deer, AB
This is the situation, though. I mean these numbers did not just come out of the air. It was a situation where we were told, and we have been told, that you are able to manage the commitments you have for these other suppliers as well. They're getting these stories that, because of the grain and because you're being mandated through the government here, you cannot fulfill—maybe not the surge capacity that they might expect, or whatever—but it seems as though there's a bit of a disconnect and they were getting these kinds of messages that are suggesting that, hey, whatever you're doing is because this part is being regulated and therefore we're having troubles there.
9:30 p.m.
President and Chief Executive Officer, Canadian National Railway Company
Let me explain it to you this way. As long as things are in sync and we're now in the spring and summer months, the 11,000 is something we can do. What happens if you're in the winter and everything goes down by 10% to 20% for a week or two weeks? What do you do during that week? What happens if you have a derailment that takes away your railroad for two days? What do you do in the next five days?
I think other customers have a legitimate concern that a weekly quota could impact other commodities.
9:30 p.m.
Conservative
Earl Dreeshen Conservative Red Deer, AB
Understood, but right now we're not in the situation where we have to deal with the winter, so I think these kinds of issues and things that are being mentioned are a concern.
I also heard you, Mr. Creel, say that if there's an 80 million tonne crop, you are ready to roll with that. With the marketing freedom, with our free trade agreements that we're looking at, we're looking at the next five to ten years as constantly requiring improvements. I'm just wondering whether you're looking at that, because you're going to be making money for your shareholders if you are. I'm just wondering how we can kind of fit this so we can get to see some certainty in here.
If I have time for the last question, which I'm sure I don't, you said one of the five terminals is working 24-7. I'd just like to know which it is.
9:30 p.m.
President and Chief Operating Officer, Canadian Pacific Railway
We'll share that with the minister's office. I think that would be appropriate in fairness to the grain companies.
Turning quickly to a couple of your points, for the record, I didn't say that this grain supply chain could handle 80 million tonnes. It's going to take tremendous collaboration. It's going to take all parties at the table to even get close to moving 80 million tonnes.
The second point is that what we all need to remember, and what our customers have to remember, a lot of these same customers, is that this is a North American rail industry. Other than exporting off the west coast or through Thunder Bay, Canadian customers are shipping to a place called Chicago. Chicago and the North American rail industry is in the worst shape it's been in my two decades of railroading. It's in complete gridlock.
We've been criticized by grain companies, by customers, for not driving more cars into that black hole. If we were to do that, we'd be shipping fewer cars overall for the Canadian grain. It would be the irresponsible thing to do. That's the significant difference that's dragging these networks down and keeping all customers from being able to move at the level we've been mandated to, which is a normal, non-winter, in sync rhythm for the operation, to Claude's point.
9:30 p.m.
Conservative
The Chair Conservative Bev Shipley
Thank you very much.
I want to thank the witnesses for coming out and being part of the chain in terms of the moving along of Bill C-30.
With that, I want to thank the witnesses again. Committee members, before you leave, I like to tell you that tomorrow I would like to have about 10 minutes at the end of our meeting for some in camera discussion about where we're going next week. Thank you very much.
The committee is adjourned.