Thank you, Mr. Chair.
First, let me express, on behalf of my members, our appreciation for this motion that you just dealt with. It has been a matter of quite some concern with our members that more time was needed, but let me now turn to my remarks.
The Railway Association of Canada represents virtually all railways operating in Canada, most of which are federally regulated, including the large class 1 CN and CPR railways, short-line and regional railways, intercity passenger and commuter rail services, and tourist railways. As its CEO, I am pleased to have the opportunity to speak to Bill C-257. My remarks will focus on the overall implications of the proposed legislation for the rail industry, and more generally, for the Canadian economy. I am not a labour expert, so I will leave those considerations to others.
In a nutshell, the RAC is strongly opposed to the adoption of this legislation.
Since Confederation, Canadian legislators have identified some economic sectors as being so strategic to the future of the country that they had to be federally regulated. Canada's railways were a part of this group from the very beginning. The railway industry was not only an integral part of the creation of the country, but it was also recognized as a critical infrastructure that would bind the country together and make a major contribution to growth and our well-being. This link between the railways and Canada's prosperity is even more important today. The rail sector, which physically links most of the regions of the country, moves goods and people throughout the country, but it also connects us to our major ports and to our major trading partner south of the border.
Canada's railways move almost 65% of all of the goods shipped by surface in Canada. They are by far the largest transportation service provider for our exports and imports. As you all know, Canada is a trading nation. Our prosperity depends on our ability to compete internationally and to thrive in an increasingly global market.
The legislation you have before you, we believe, would have a major negative impact on Canada's competitiveness through worsening the ability of our railways to provide stable, safe, secure, and highly competitive transportation services.
Our major concerns are as follows. In the competitive area, Canada is vigorously competing for a greater share of world trade. This is critical to our future prosperity. The railway industry is a major part of that competition. One example I would point out to you is our efforts through the Pacific gateway program. We are competing with the U.S. and Mexico for a greater share of Asia-Pacific trade. Labour stability is a critical part of that equation. In fact, this matter is raised on many occasions by Asian shippers as a concern in evaluating the Canadian option. This legislation will clearly shift the labour-management balance and increase uncertainty and the probability of labour disruptions, in our view. This will hurt our ability to compete in this growing market. I could list other examples such as the critical importance of stable rail services to small centres in central Canada that rely on railways to ship such products as forest products to Europe and the U.S. The consequences of destabilizing these efforts are profound and they need careful study.
One point with regard to the difference.... I made a number of mentions about other jurisdictions regulating provincially regulated industries in this way. I would make the following point. Federally regulated industries are enablers to the Canadian economy and they need to be looked at in that context. A disruption in a major part of those industries has profound and very far-reaching and immediate effects on the Canadian economy.
Let me now speak to local or regional impacts. It's not widely known, but Canada's railway industry is made up of a large number, over 40, of short-line and regional railways that serve local markets and connect these communities to the broader national and international network.
Again, disruptions in rail service could have a profound local effect. For example, we move almost all of the dangerous goods in the country because we are by far the safest surface mode of transportation. It doesn't take much to think of the consequences of a disruption of chlorine supplies, for example, for local water supplies or a disruption of the movement of manufactured autos out of the many plants in southern Ontario to the U.S. market.
When we consulted our members on this, there were a number of concerns, but one is particularly noteworthy. Tshiuetin Rail Transportation Inc. is a small, native-owned short-line railway that operates, in Labrador and northern Quebec, both a passenger and freight rail service to the remote community of Schefferville. Obviously, a disruption in their service would isolate this community from surface transportation, but also this railway provides transportation services to well over 200 native trappers and hunters who use the railway to get to and from their traplines and hunting grounds for their livelihood.
Bill C-257 will create the situation where, if there is a labour conflict, it will go beyond freight transportation. In our view, it will impact commuter trains in Toronto, Vancouver, and Montreal, and it could easily have a domino effect on a number of other employees.
The point I'm trying to make, Mr. Chair, is that clearly this legislation raises the risk of many unintended consequences that deserve more study.
With regard to Canada's reputation, Canada is struggling with a major productivity problem at the moment. Many experts have commented on this. Our question is whether we can afford to increase the probability of further disruptions in our exports, which amount to 40% of our GNP. I would kindly take the point of view that we cannot.
In fact, in the last major rail labour conflict that took place in this country that resulted in a strike or lockout, legislators at the time recognized the strategic importance of rail. An act to provide for the maintenance of railway operations and subsidiary services passed the following requirements for arbitrators, that they be
guided by the need for terms and conditions of employment that are consistent with the economic viability and competitiveness of a coast-to-coast rail system in both the short and the long term, taking into account the importance of good labour-management relations.
In our view, that clearly indicates that legislators saw the strategic need for careful consideration. As well, some studies that have been made available to the committee, dated October 2006, clearly indicate that the effectiveness of this proposed legislation is in question.
Let me just finish, Mr. Chair, by pointing out that we believe the committee would benefit from the appearance of a number of experts. Again, I'm not an expert, but I have been advised that there are a number of issues in this legislation that really do require expert advice. We would strongly recommend that the committee avail themselves of that advice. I can tell you that both CN and CPR have indicated to me that they would be more than willing to provide technical expert advice on some of the labour relations issues here from their perspective.
Let me just close, Mr. Chair, by saying that the Canadian rail industry believes in sound, stable, and respectful labour management relations. We believe a stable and productive labour environment is critical to the interests of all Canadians, and we're committed to that goal. In our view, this legislation will not further that objective but will destabilize the labour management environment and lead to further disruptions.
Thank you.