Agriculture Committee on Dec. 5th, 2024

[Tamara Rudge]

Since September, at an aggregate level, the number of cars that have been interswitched is less than 1% of the total car rail movements in Canada.

[The Chair, Liberal, Kody Blois]

I assume this assessment is still being done by Transport Canada, as the information is coming in, but does the department have a view thus far about the pilot and its success, or the data that has come back thus far?

[Tamara Rudge]

Mr. Chair, as you said, we're still assessing the pilot. It's not done. The data is coming in.

We saw previously under the other three-year extended interswitching period that the uptake increased over time. I think, based on how contracts and negotiations work, the start of the pilot might have had lower usage, and things increase over time, so we're still assessing it. We are getting information from the railways on usage and we've gone out to the shipper side, which was not done under the previous pilot, to do a survey and get input from them.

We continue to assess the pilot.

[The Chair, Liberal, Kody Blois]

I asked questions of the railroads in the first panel.

Again, I'm supportive of carbon pricing, but I've fought to make some adjustments at the national level. One thing I was concerned to hear is that the railroads are able to pass on the entirety of that cost, which I think goes against the principle of the market mechanism serving as a way to incentivize the reduction of emissions. Is it your understanding as well that the entirety of the cost that is incurred can be passed off, and that there is no ability under the maximum revenue entitlement to adjust what proportion of carbon pricing can be passed off to shippers?

I take note that there is still a question of whether that benefit flows directly to the farms, because these are major shippers, but it is something we hear a lot. Am I reading that situation correctly?

[Tamara Rudge]

I think it would be for Environment Canada, which is the expert on carbon pricing, to explain exactly what's allowed under the policies. Even with the maximum revenue entitlement and how the costing works within that, it is quite complex.

I think the CTA is the expert on that. Transport Canada is not well positioned to opine on it.

[The Chair, Liberal, Kody Blois]

I have one last quick one before I go over to Mr. Louis.

We heard from the railroads in the first panel about BNSF having access to Canadian rail networks and that there's no symmetry there with Canadian railroads having the same types of principles. At Transport Canada, are you of the view that that is a valid argument? Can something be done to try to create a network?

Have there ever been conversations with U.S. states about allowing for similar types of principles to be extended, taking into account that this pilot is Canadian? Is there anything you can provide the committee on that?

[Tamara Rudge]

Yes. In fact, the U.S. has recently introduced reciprocal switching. It's not the same as extended interswitching. It's a different approach in the U.S. A shipper would have to show a service concern before having access to that remedy.

It's a different approach in the U.S. It's not the same, so the railways are correct in saying it's not exactly the same system.

[The Chair, Liberal, Kody Blois]

Do Canadian railroads have access to those tools when they have those tracks?

[Tamara Rudge]

The shippers would have access to that tool to get a different railway, yes.

I just want to clarify that what's happening in Canada through the extended interswitching pilot is they are able to market a different path through the U.S. The railway doesn't really have that opportunity through the way reciprocal switching works in the U.S., so it's different.

[The Chair, Liberal, Kody Blois]

Okay.

Mr. Louis, you have just over two minutes. I'm sorry. I didn't quite get you half.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you, Chair.

Thank you to the officials from Transport Canada.

I would ask this question of either of you.

In the previous panel, CPKC and CN said that of the private farm crossings, there are only about eight left in the country that haven't been addressed. There are 27 in my region and many haven't been notified.

Whose responsibility is it to notify these farmers about any kind of modifications or closures? Now that the deadline has passed, they're concerned. Whose responsibility is it to notify them?

[Stephen Scott]

Under the regulations, there are information-sharing requirements, so the railways are obligated to share certain information with the landowners. I know it's not always possible to get in touch with specific landowners for logistical reasons or what have you, but if a landowner wants to contact a railway to initiate that dialogue, they can do that.

As I said in my opening remarks, if landowners or other stakeholders need assistance in navigating that dialogue, the Canadian Transportation Agency provides dispute-resolution, mediation and adjudication services.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

It's more that the information seems to be lacking right now.

I have two quick questions. First, have you been in touch with organizations like the Ontario Federation of Agriculture or the Canadian Federation of Agriculture?

[Stephen Scott]

Yes, over the last 10 years, we've had quite a comprehensive engagement strategy. There have been working group meetings and town halls, and bulletins were sent to over 1,600 municipalities. The departmental website has been updated. There have been bilateral meetings, including a few weeks ago, with the agriculture associations.

We've had joint seminars with the Canadian Transportation Agency, because we recognize that the roles and responsibilities are not always clear to stakeholders. We try to do those jointly. There have been mass email communications and social media notifications, recognizing that there are 23,000 crossings across the country and we need to do everything we can to reach people.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Finally, can the rail safety improvement program be part of the solution? Is that something that can be applied here?

[Stephen Scott]

The rail safety improvement program is a grant and contribution program administered by Transport Canada. It funds all types of projects—infrastructure, research, technology and educational awareness projects—to improve safety. Since its inception in 2016, it's funded more than 1,000 projects, for a total of $230 million.

The timing and theme of the next call is expected in 2025-26 at the earliest for projects starting in 2026-27. It will be a pathway available for applicants going forward.

[The Chair, Liberal, Kody Blois]

We're out of time, Mr. Louis.

I will echo what Mr. Lawrence said. Thank you to our officials. You're very well prepared today with lots of good information.

Mr. Perron, you have the floor for six minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being here this morning.

I'll start with the grade crossings regulations.

Mr. Scott, you said there are 23,000 crossings in Canada, 9,000 are regulated, and of those, 3,000 have been exempted.

If I understand correctly, the 9,000 level crossings you mentioned are private.

Is that correct?

[Stephen Scott]

The 9,000 crossings I referred to are indeed private crossings.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Agricultural producer groups appeared before the committee at a previous meeting. We also met with representatives of the rail sector earlier.

These witnesses told us that, for level crossings that are subject to the regulations and that have not been exempted from them, in some cases, development measures could be used that are less costly than those that are being considered and that range from $600,000 to $2 million. It makes no sense that it would cost so much to build a private crossing.

It is conceivable that, when a railway separates a piece of land in two, the railway company is responsible for the level crossing. However, even when a railway does not split agricultural land in half, a level crossing may be required to access that land.

In such circumstances, is your department open to the idea of analyzing what the railway companies are doing?

Are discussions still possible about the few cases that have not yet been resolved, particularly with respect to CN's rail network?

[Stephen Scott]

Thank you for those questions.

Under the regulations, there's what I like to call a menu approach. Once the assessed level of risk of a crossing is determined, there are multiple different options for a railway or landowner to achieve compliance and reduce risk to the tolerable level we want to see it at.

In many cases, it can be achieved by vegetation clearing and adjusting the road approach so it's a little less acute to the railway to improve blind spots. In some cases, the crossing can be moved, let's say, further down the field or to some other spot where sightlines are improved. There are also the warning systems, which tend to be the most costly options.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

In cases where such accommodations aren't possible, because we can't improve visibility, speed and everything else, we have the rail safety improvement program. However, according to representatives of agricultural organizations, there is no money in this program. It happens a little too often that the government announces programs that appear to exist, but they don't have the necessary funds. When the time comes to apply, people realize that there's no money.

Are you aware of this situation?

Is there any money for the few remaining cases? We all know that a cost ranging from $600,000 to $2 million for an agricultural producer makes no sense. There have to be alternatives.

Will there be money in this program or will there be another program?

[Stephen Scott]

Mr. Chair, I thank the member for the question.

In fact, Transport Canada has a program.

It's the rail safety improvement program. It provides funding for all sorts of projects, as I referred to earlier. It's currently fully subscribed. The next call-out is anticipated some time in fiscal year 2025-26 for projects starting in fiscal year 2026-27. It's not an immediately available solution because it's a popular program and is fully subscribed at the moment, but applicants can subscribe to get on the program's distribution list to be notified of future call-outs.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you for your precise and honest answers.

The government says it wants to introduce regulations that had to be complied with from November 28, 2024. However, the money won't be available until 2025-26. Don't you think this contradiction is a bit ridiculous?

Should the committee make a recommendation so that the funds are available now for the people who need them? There doesn't seem to be a huge number of crossings that need to be improved.

[Stephen Scott]

I would like to make a few comments, Mr. Chair.

First, there's been a 10-year implementation period, which we feel as the regulator is reasonable and balanced. The funding has been made available to applicants in the past, and there have indeed been successful applicants for crossing upgrades.

My understanding, based on the testimony from the railways and information they've provided to us, is that over 99% of the crossings are already in compliance. We're really just talking about the eight that CN spoke about in the previous hour. They were clear in explaining their interim approach and how they intend to move forward there.