Good evening, and thank you, Mr. Chair, and members of the committee, for the opportunity to be here tonight to discuss Bill Bill C-30 and its implications for the ag industry. We don't have a lot of time, so I'm going to focus on the areas that are priorities for our members.
Pulse Canada represents the interests of over 30,000 farmers from Alberta through to Ontario, and over 130 processors and exporters of pulses and special crops that are members of the Canadian Special Crops Association.
In the quarter that ended yesterday, March 31, our members who are participants in our performance measurement program received 49% of the hopper cars they ordered and 43% of the boxcars they ordered. Week to week, the aggregate order fulfillment range was between 20% and 60%. This represents a further deterioration of service relative to the first half of the shipping season. What's even more staggering is that during the first 30 weeks of the shipping season, 50% of the shippers in our program experienced weeks when they received no hopper cars at all.
With the introduction of Bill Bill C-30, the government sent a message to Canadian agribusinesses and their customers around the world that this type of performance simply isn't good enough. It's now clear that if service providers aren't prepared to meet the needs of the industry, there will be intervention.
With respect to some of the important and high-level components of the bill, I want to start by saying that we appreciate the commitment to advance the review of the Canada Transportation Act. With that we stress that, while we support the launching of the process more quickly, we still expect a comprehensive review that includes a thorough assessment of facts, broad consultation, and a commitment to act on the facts.
We also appreciate the strong statement made with respect to the importance of enhanced public performance reporting, and look forward to the expanded role of the grain monitor.
While I'm on the theme of having access to data on system performance and the importance of evidence-based action, I'd like to address an issue that is a top priority for our members right now. In an effort to prompt greater responsiveness from the railways to the needs of the grain industry, the government issued an order in council establishing targets of 5,500 cars per railway per week, and the requirement to move 500,000 tonnes of agriproduct per week. Bill C-30 will give the government the authority to continue to issue these orders through to August, and again into the fall peak shipping season.
Our members are being told by their railway partners that the order in council and subsequent measures will have a detrimental effect on their service, particularly through the eastern corridor to Montreal through to U.S. destinations and into Mexico.
With no additional rail freight capacity put into the system over this shipping season, and an OIC that establishes weekly car and tonnage targets, our members are being told that corridors that allow for tight cycle times and the greatest turn on assets will be prioritized.
Members are being told that they cannot service their customers in the U.S., Mexico, or through the eastern corridor and the port of Montreal.
While railways tell us this is the inevitable outcome of an order that has imposed ill-advised and unreasonable targets on the carriers, I'd like to direct your attention to some key facts that warrant your consideration.
On a Q3 earnings call in 2012, during a period of time when the government was considering the introduction of Bill C-52, CN reported:
On the asset side we’re moving cars 8% faster than last year. [...] In fact in September we set a record for car velocity reaching an average of 217 miles per day. These velocity gains are being achieved while handling record volumes. This quarter was our busiest of any third quarter in CN's history averaging over C$1.050 billion GTMs per day, up 8% from last year. So overall very solid performance on the operational side of the equation. [...] rest assured we've not lost any of our passion for...efficiency but at the same time we’re making a meaningful difference for our customers and our supply chain partners pushing forward on our Service Excellence agenda.
In the third quarter we met 96% of unconstrained orders placed by our customers and provided the cars on the day requested 89% of the time.
Within this report CN also specifically highlighted their enhanced service to the grain industry, proudly stating:
The trust and dependability we've developed to establish in this robust pipeline has allowed CN to sustain a record of spotting...in excess of 5,000 cars per week for the last six weeks, which is a record for CN.
While the railways would have their customers in other sectors as well as customers within agriculture believe that the OIC that establishes targets of just over 5,000 cars per week will have a negative and unanticipated consequence on their service, I would point out that you have evidence that they are capable of hitting these targets while achieving efficiency objectives and delivering a reasonable level of service to customers across all sectors and throughout the agriculture community.
That being said, in order to ensure that the OIC achieves its objectives and meets the needs of the grain industry, we know that it must go beyond establishing a broad target. It must also establish clear expectations for movement of all commodities through all corridors to all destinations, to ensure that the implementation of the order results in fair and equitable treatment to all shippers, be they small, medium, or large.
We recommend that a discussion be held immediately with Quorum, the official monitor of the grain handling and transportation system, so that additional guidance and direction related to the order in council and follow-up measures can be structured in a meaningful way to ensure that performance can be measured and monitored over the coming days, weeks, and months.
This leads me to my final point. As we head into an expedited consultation on regulations related to service level agreement provisions, it is absolutely imperative that the regulations be established with clear guidance in the legislation. Building on the language found in section 5 of the Canada Transportation Act, under our national transportation policy, we must state clearly that the system is in place to meet the needs of its users. This simple but extremely important statement is widely regarded by the broadest range of stakeholders in the shipping community as key to ensuring that service levels are established in a manner that supports the competitiveness of Canadian companies and the overall growth of the Canadian economy.
With that direction, we begin to break away from capacity and performance levels that place the efficiency of the rail network ahead of the needs of its customers. With that direction, we can begin to ensure that economic growth is not governed or constrained by the rail network. With that direction, we can get back to focusing on the top priority of every one of our members: to be and to be seen to be the most consistent and reliable supplier of the products that we produce and market to the world.
Thank you.