Agriculture Committee on April 7th, 2014

[Malcolm Allen, NDP, Welland, ON]

The response from the parliamentary secretary I'll take as a “no” to the subamendment, so I'm not going to propose it. We'll let it go.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

That's fair.

Actually, I was going to point out, Chair, just to follow up on Mr. Eyking's question, that as I said in my earlier remarks, this deals with service-level agreements, which are between shippers and the rail companies. What's been happening is that the grain companies, or the shippers, have been losing money and that loss has been passed on to the farmer. The point is that if the shipper is not losing money because of something that had to do with a service-level breakdown by the rail companies, he's not passing that on to the farmer because there was no money lost there. The rail company is paying for the loss to the shipper. The shipper doesn't have to pass it on. He didn't incur a loss. In the end, it was paid for by the rail company.

Then as I think Mr. Meredith said, under the Grain Act, there are sections, which we just went through, that are about the producer—the farmer—and the grain company. So, actually, it's on both sides of the equation. This is dealing with both sides of that equation.

[The Chair, Conservative, Bev Shipley]

Thank you.

Mr. Dreeshen.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you, Mr. Chair.

I have just a couple of comments.

First of all, there are farmers who can't enter into service-level agreements. I think that's one thing to recognize.

It's difficult sometimes when you listen to people talk about the cost of demurrage and how that's always passed down to the farmer. That's the rhetoric we hear. Then in this case we're suggesting that, no, that isn't the situation. It's just going to be to the shipper. Of course, this is part of the argument. This is, again, why the spread is in the basis, because they know those are potential charges that might come about or actual charges that are coming about.

I think it's important that we kind of recognize the significance of what we have here and how this is going to be able to help throughout the system.

[The Chair, Conservative, Bev Shipley]

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Just for clarification, when you say it doesn't come back to the farmer....You guys came out with the $8-billion number, right? You would have to agree that a good chunk of that $8-billion loss came from the farmer over the last six months. You would have to agree with that. Or, where is this $8-billion loss out there, if it's not mostly with the farmers?

You're telling me that none of this loss goes back to the farmer, that the farmer could sell his stuff later, and that he can get in these contracts. But you guys came out with the $8-billion loss. I'm assuming that at least three-quarters of it is coming out of the farmers' pockets.

That's why I sometimes can't understand when you say the farmer is not losing here, that it's the shipper that's losing or the grain company that's losing. The farmer is going to lose at the end of the day.

Are you saying that all the grain companies are going to lose that $8 billion and the farmers aren't?

[Earl Dreeshen, Conservative, Red Deer, AB]

Just as a very quick response to that, my question was based on demurrage. In terms of the comment you made as to where that was going to be lost, if you look at the length of time it takes for contracts to work their way through the system, when a person is buying and losing, and you're saying, “Hey, I could have sold all of this back in the fall when the prices were high and now world prices have changed, and so on”, that's a regular marketplace.

What you have to realize is that for those people who were forced to sell, those are lost dollars, they're lost opportunities, which is the reason we had advance programs, and so on, that people could take a look at.

But just to get to the actual point of what we're talking about and what had been presented, as far as who's losing, as far as demurrage payments are concerned, and whether this particular amendment is going to deal with this, I believe it will.

[The Chair, Conservative, Bev Shipley]

I'm going to go to Mr. Watson to wrap up.

[Jeff Watson, Conservative, Essex, ON]

Thank you, Mr. Chair.

I think what the member opposite is trying to achieve is somehow a retroactive compensation mechanism for farmers.

What the bill is designed to do—and this amendment, in terms of improving it—is to address the issue of the carry-over and shipping going forward, and who gets compensated.

If I understood witnesses correctly, in terms of moving grain forward, we had two approaches. We could get into regulating far deeper down into every aspect of the logistics chain. I didn't hear a single witness suggest that was the route we should go.

What I heard from witnesses is that in order to move grain, they wanted the ability to move it by commercial terms through service-level agreements. Their hesitancy in approaching Bill C-52 in order to have service-level agreements was that they didn't think there were sufficient teeth. This is to do that in order to move the grain on a go-forward basis.

You have an additional problem you're trying to raise. I think you're hoping to make this mechanism the means of going back and addressing that. The mechanism has to be taken for what it is, which is to strengthen service-level agreements. Every witness I heard wanted that. They didn't want a deeper regulation on how to move the logistics here.

That being said, I think the amendment, G-1, should be supported, as strengthening Bill C-30.

[The Chair, Conservative, Bev Shipley]

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I don't think I have to repeat myself to the parliamentary secretary; it's his amendment. But I asked twice already. When you say, “the company to compensate any person adversely affected for any expenses”, what does that mean? What is the definition of that?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I'll just answer it quickly, Mr. Chair.

A person is a person as defined in law. In terms of expenses, there is a regulatory process as well that's defined here, right? True, you want to consult with and have input from the shippers in terms of what they're specifically thinking of, right? You would want that. That's what this process lays out.

Mr. Chair, I want to make sure this section goes underneath the Canada Transportation Act title, not above it when you're inserting it into the act.

[The Chair, Conservative, Bev Shipley]

Okay.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Yes. It's going to go below the Canada Transportation Act title.

[The Chair, Conservative, Bev Shipley]

He's nodding yes. That's a good sign.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Good.

[The Chair, Conservative, Bev Shipley]

I will ask the clerk now, shall G-1 carry as amended?

(Amendment agreed to: yeas 9; nays 0)

When G-1 is carried, and when we get to G-2 and G-3, it will also apply to them. So when you have your list, we will be able to move beyond G-2 and G-3.

(On clause 6)

We now go to G-2, which we've just talked about.

And now we'll go to LIB-2, 6510405.

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

This amendment was talked about many times. We're talking about corridor capacity. We're talking about supply requirements for short-line rail operators, producer car shippers, and domestic grain farmers.

This amendment makes it pretty clear that they also need to provide some sort of equity in their behaviour. I think we saw all the witnesses who came forward talking about some sort of assurance for the short lines, producer cars. We saw it especially when the case was brought forward from British Columbia where you see the billion-dollar industry in the Fraser Valley that's only got a week or two weeks of grain on hand. I think that's one of the big examples we have out there that when this all comes down and the rail lines are saying, yes, we can move the product that we're told to move, and they're just going to move big volumes.... But is that going to help some of these corridors? Is it going to help some of our domestic users? I think my amendment's pretty self-explanatory. Also, the Federation of Agriculture wanted some more added to that.

That's what it has in there, Mr. Chair. It's pretty self-explanatory. I would hope that the government is going to go with this one, especially because one of their parliamentary secretaries also put it forward. Mr. Anderson, the member from Cypress Hills—Grasslands, wanted this in there. I think he represents a big grain-growing area in southern Saskatchewan. I'm sure he sees lots of short lines and he sees the importance of this.

Mr. Chair, it's very self-explanatory and I think we already have some support from the Conservatives across the way. I think we should go forward with this. I don't think there's much explanation. It was explained very well, especially from the turkey farmer from the Fraser Valley on how we're not moving the grain with short lines and for domestic use. This legislation that's put forward is only dealing with big volumes so the railroads can keep out of trouble. But I think we have to put more into this to make sure the rest are taken care of too.

[The Chair, Conservative, Bev Shipley]

Are there any other comments?

Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Chair, I would just say that, first of all, I don't think Mr. Eyking has actually spoken to Mr. Anderson, whereas I have. Mr. Anderson supports—

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I see him on the bus every day.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

You didn't speak to him. I checked with him today. I did speak with him today about this amendment, and he supports the government legislation the way it is, because he feels that....

I can speak about the way I feel. We support the government legislation, but the problem that we have here is also what we heard from witnesses about getting too specific over volumes related to corridors.

This simply says, “Subject to volume demand and corridor capacity”, which is sufficient. We don't need to get overly prescriptive. So we had, for example, Robert Ballantyne—he's the president of the Freight Management Association of Canada—say, an “intervention such as in Bill C-30 needs to be applied very carefully and only under the most extraordinary circumstances”. In saying that, he is supporting more the clause the way it's worded now, which simply says “Subject to volume demand and corridor capacity”, without drilling down below that.

[The Chair, Conservative, Bev Shipley]

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

I agree with my friend across the way in a sense. Yes, I did talk to the parliamentary secretary last week—

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

You did?