Evidence of meeting #30 for International Trade in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was containers.
A recording is available from Parliament.
Conservative
Colin Carrie Conservative Oshawa, ON
I have no numbers, but I've heard that if we could take off even a percentage of the amount of oil and gas going by rail, it would increase capacity.
You mentioned that you've asked repeatedly for this task force and this review. It just makes a lot of sense, especially now when we in Canada are being such aggressive traders around the world. What's the government saying and why is there the delay for the review of this request?
Senior Director, Policy and Regulatory Affairs, Association of Canadian Port Authorities
They are saying that they're conducting the assessment.
Conservative
Colin Carrie Conservative Oshawa, ON
Yes, and that's not good, especially right now.
Mr. Masse and I both come from automotive areas. You mentioned the just-in-time delivery. I think it was Mr. Gooch who was mentioning harmonization with the United States. In 2011, we signed the Beyond the Border agreement, and I think we did talk about enhanced security and about mechanisms for enhanced trade.
You mentioned that the Americans have en route preclearance. Are we using things like radio frequency identification—RFID cards, for example—to the capacity that they should be used?
I see Mr. MacDonald shaking his head.
This is something that was kind of my file; I was working on it years ago. Have we progressed with that? Why are we so far behind? This is outrageous, because competitiveness is going to be such a huge issue moving forward.
President and Chief Executive Officer, Association of Canadian Port Authorities
There are a couple of questions in there.
Just to add to my colleague's comment, I think that seeing the report of the supply chain task force and where they're sending us next in terms of that development of the national strategy is right where we should be, and we're very interested, at the Association of Canadian Port Authorities, to work on the development of that strategy and in the implementation of the recommendations in there.
You did speak to CBSA, and my colleague spoke to the regulatory and policy side, which I'm not as familiar with as she is. I will say that I joined ACPA in February, but I worked with CBSA for about 10 years before that. I've generally found them to be a very innovative agency that wants to do things such as more border modernization but often finds that resources are a constraint there.
We have examples of ports around the country that have opportunities to develop their trade and their business, but there are certain impediments. One of the impediments that's sometimes in place is the ability to have CBSA services at the port. The Port of Hamilton is a great example. The St. Lawrence Seaway and the Great Lakes, which make up a system here, are one of the greatest assets we have as a continent in terms of being able to use that to bring containers and shipments right into the Great Lakes and into our ports there.
We have ports at Windsor, HOPA, Toronto and Thunder Bay, but there are impediments in the way, and CBSA resources are one of them. They're aware of it and they're working to correct it, but I think those are the types of issues that we'd like to see a national strategy take a look at. That's going to require.... Not to dismiss the work of the supply chain task force, but it's probably going to take more than 100 days and a lot more work. It's why we're pleased to see that we're going in that direction.
Liberal
Liberal
Chandra Arya Liberal Nepean, ON
Thank you, Madam Chair.
Mr. MacDonald, recently I was reading about the autonomous truck testing that was being done in the U.S. between Dallas and Atlanta—day and night for five days, 6,300 miles in autonomous truck driving. I was wondering what impact it will have, first on the existing truck industry and then secondly on the rail companies, but we will come to that later.
I want to thank CN Rail for taking steps. I understand from what you said that all the backlog has been cleared now.
You did mention the seven- or eight-year regulatory process. Was it all a federally regulated process that took seven or eight years for the approval?
Chief Marketing Officer, Canadian National Railway Company
It became an entire full five-year federal environmental review.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. Is it something new that happened in the last five or 10 years?
Chief Marketing Officer, Canadian National Railway Company
It's the only time in our history, I think, to my knowledge, that we've done that. It was a farmer's land that our company had actually owned for 10 to 15 years, and we were forced to go through that full process and then go through the courts for it as well.
Liberal
Chandra Arya Liberal Nepean, ON
In your opening remarks you mentioned about the weakest link. Obviously, anything is as strong as the weakest link. Did you say that the weakest link was CBSA with this legacy system? Can you expand on that “weakest link” remark?
Chief Marketing Officer, Canadian National Railway Company
From a data standpoint, the CBSA is the one that has all the data, but they have—and I'm taking them at their word—antiquated IT systems. They are not able to pull the data out. They also have legislation, so they are not allowed to provide the data anyway.
We spend a lot of time trying to get information as to where all these containers are going so that maybe we can open up a new terminal somewhere to help alleviate the pressure, but to this day, three months later, I still cannot get that information from anybody in the supply chain on where it would be best to help alleviate future issues in the entire market.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. You mentioned that 30% of your shipments are for international trade. Is that correct?
October 18th, 2022 / 12:30 p.m.
Chief Marketing Officer, Canadian National Railway Company
It all depends. It's by commodity, so if you look at the rail market share, you'll see that we're probably almost 60-40 with Canadian Pacific Railway, as an example. A lot of this moves by pipeline, so basically our percentage of the crude oil for export out of Canada is zero. You have to really look at it from a commodity-by-commodity standpoint.
Liberal
Chandra Arya Liberal Nepean, ON
You obviously know the rail companies outside Canada too. Is it something they too would experience, or is this unique to Canada?
Chief Marketing Officer, Canadian National Railway Company
It is primarily in North America, because we're such a large consumer area. Europe actually did have some issues as well. They are a big consumption society, but they are also a lot closer, and they can also truck. They have a lot more rail, but a lot of it's served by water. They were able to perform a lot better than we were.
Liberal
Chandra Arya Liberal Nepean, ON
Is what we experienced in Canada similar to what happened in the U.S. too?
Chief Marketing Officer, Canadian National Railway Company
We mimic the U.S. very well.
Liberal
Chandra Arya Liberal Nepean, ON
Do you think this sort of situation is going to come again? If yes, what is a specific thing the federal government can do?
Chief Marketing Officer, Canadian National Railway Company
Will this happen again? The answer is probably yes.
Unless we're ready to put in the surge capacity and fix lots of the issues around the supply chain, with data as a priority, we're just setting ourselves up to see history repeat itself.
Liberal
Chandra Arya Liberal Nepean, ON
Since I have some time, can you comment on the impact that autonomous trucks or trailers can make in five or 10 years down the road on the trucking industry and on the rail companies?
Chief Marketing Officer, Canadian National Railway Company
We're a small investor in one of them just so we can follow what they're doing. The answer is that today in the U.S., about 500 miles is the number. You can say 1,000 is a better number to use. One thousand miles says it should move by rail; anything under that should move by truck.
That's probably going to get extended by at least another 500 to 1,000 miles. What that's going to do is move a lot more intermodal freight back onto the road, which will be a taxing on the infrastructure, both in Canada and the U.S. I don't think any of us are set up for that.
Liberal
Chandra Arya Liberal Nepean, ON
Okay. You said you are also an investor in one of those companies. I guess that is in the U.S. Is that correct?
