Transport Committee on Nov. 2nd, 2006

[The Chair, Conservative, Merv Tweed]

Good afternoon, everyone.

I call to order meeting 23 of the Standing Committee on Transport, Infrastructure and Communities, pursuant to the order of reference of Thursday, September 21, 2006, Bill C-11, an act to amend the Canada Transportation Act and the Railway Safety Act and to make consequential amendments to other acts.

Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

Before we start the order of the day with the witnesses who have come, I would like to move the notice of motion I supplied for discussion on Tuesday to the end of the meeting. I'm moving it now because Ms. Chow will be debating this motion and I will not be here at the end of the meeting.

So if I have the consent of the committee I'll move it. Then it can be put on the order paper so you can bring it back after the order and the witnesses.

The notice of motion is simply that the Standing Committee on Transport, Infrastructure and Communities study the Roger Tassé review of the Toronto Port Authority following its release at an upcoming meeting of the committee. I so move.

[The Chair, Conservative, Merv Tweed]

The motion has been tabled, and we will debate it at the end of the meeting, after the presentations.

Thank you, Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair.

[The Chair, Conservative, Merv Tweed]

Joining us today are our witnesses. Mr. Jean Gauthier and Ghyslain Chouinard are representing Regroupement des citoyens contre la Pollution. Bernie Churko is representing the Farmer Rail Car Coalition.

We have seven minutes for each presentation. Then we'll have some questions from the committee.

Please begin.

[Jean R. Gauthier, President, Regroupement des citoyens contre la Pollution]

Thank you, Mr. Chairman.

I would first like to thank the members of the Standing Committee on Transport, Infrastructure and Communities for giving us the opportunity to make observations and recommendations. We hope that we can be of use to you and inspire the committee in its work.

The Regroupement des citoyens contre la pollution was founded a few years back. Its mission is to pursue humanitarian objectives, such as defending quality of life and environmental integrity, providing its members and the general public with the information needed to properly understand issues of industrial and agricultural pollution, and taking all the means available to identify, denounce and, if necessary, prosecute individuals or corporations responsible for commercial and industrial activities deemed to contaminate or harm the environment. That is our purpose.

In our introduction, we would like to stress that we fully endorse the brief submitted by the Coalition québécoise contre les bruits ferroviaires (Quebec Coalition Against Railway Noise) and that of the City of Lévis, which were submitted to you and tabled a few days ago in the context of the review of Bill C-11.

The railway industry has flourished in recent years, and we are delighted that it has. However, this has given rise to a number of problems for people living close to railway tracks.

The two major problems linked to this growth are a significant decline in the quality of life caused by noise (whistles, engines running at full power, screeching wheels, cars being coupled in switching yards and inconvenience to road users) and the imminent dangers related to the transportation of dangerous goods (derailments, spills, collisions, explosions, etc.).

This situation has a deplorable impact on the quality of life and on the health of residents along with negative economic impacts. The activities of the major rail carriers, i.e, CN and CP, have a direct impact on the real estate value of adjacent properties.

I will now ask Ghislain to talk to you about noise pollution.

[Ghyslain Chouinard, Vice-President, Regroupement des citoyens contre la Pollution]

First off, we believe that the issue has already been raised in previous briefs.

We are convinced that noise has adverse effects and consequences on health. This has been proven by the World Health Organization. Our brief contains hyperlinks to the WHO website, which includes the recommendation that noise should not exceed 45 decibels at night and 55 decibels in daytime. These statistics have been scientifically proven.

As Mr. Gauthier indicated, there are two problems related to the railway industry. First, there is noise caused by motor cars and cars being coupled in switching yards. Second, we dealt more specifically with train whistle.

The noise generated by train whistles at grade crossings exceeds in intensity and sound pressure all other noise generated in urban areas. For example, in the Charny rail yard alone, where there is a major switching yard, trains whistle more than 20 times between 10 p.m. and 6 a.m. the next morning. A train that whistles at 4:48 a.m. can awaken all the residents of a given town. We are convinced that such micro-awakenings have a detrimental effect not only on the quality of life, but also on the general productivity of all residents who have to put up with such inconvenience.

There are costs to these measures, but we cannot determine the amount.

In the case of train whistles, we are not acoustic, engineering or transport experts. However, we do know that we are no longer living in the 19th century, when trains had to whistle at every grade crossing because communications means at the time were not as developed. The untimely use of train whistles in the 21st century, as we experience it today, harks back to another area. This bygone practice is totally unacceptable.

We are not currently subject to the War Measures Act; as far as I know, we are not at war. So I do not think that a company, a corporate citizen, needs to signal its presence in such an egregious fashion, without any reason. We believe that if there is nothing on the rail track, there is no need to use train whistles. If all car drivers honk their horns each time they cross an intersection, that would cause an appalling din. And yet, that is what trains are currently doing.

In addition to the problem of noise generated by whistles, there is also noise generated by screeching wheels. The general state of disrepair of the rolling fleet , whether it be railway tracks or cars, generates noise that is audible at all hours of the day. You are aware of the problem of CN, for example, which has increased rail traffic exponentially over the past few years, leading to a similar rise in inconvenience and a drop in real estate wealth.

Recently, I had to sell a house that was adjacent to a switching yard. The house has lost almost all of its value. When I bought it in 1993, there were some 10 trains a day. In 2006, a train passes every 15 minutes. It is hard to sell a house when a train passes next to it every 15 minutes and generates noise reaching 90 decibels. That amounts to a loss of real estate wealth.

In addition to noise generated by trains, there are also all kinds of environmental dangers associated with the transportation of hazardous materials.

I would like Mr. Gauthier to speak to the issue.

[Jean R. Gauthier]

In fact, the statistics on derailments, which can be found on the Transport Canada website, are not very informative and cause many people to shudder.

First of all, there are the extreme convoys, that is to say trains with four or five locomotives pulling 200 cars. These convoys often stretch for two or three kilometres. This practice is no doubt profitable to the company, but it poses problems, which I will speak about shortly.

There is the poor rolling stock maintenance, as Ghislain mentioned, as well as poor track maintenance. For example, there can be trains of 200 cars that stretch for more than three kilometres and block traffic on main roads, as is the case in Charny, but I am sure that this occurs in other municipalities as well. Some 75 or 100 years ago, when trains with 10, 15 or 20 cars began to appear, that did not pose a problem, but when there are 200 cars, that becomes a serious issue.

Take the town of Charny, for instance, where the railway runs through the town centre. With 200 cars passing through, Charny is split in two. The Chaudière river is located on one side of the municipality. In the event of an accident, an emergency or whatever, 10,000 to 15,000 people would be surrounded, without any way of leaving the area, because the three grade crossings in the space of one kilometre are closed to let the 200 cars pass through the town. If the train were to derail or stop, people in the southern part of the town would have no way to leave the area, which is surrounded by the Chaudière river. Obviously, it was impossible to foresee such danger when the railway was built.

There are consequences when a company increases its number of cars ten-fold or twenty-fold. We should not wait for a disaster to occur before acting. We want to make it known that at the rate things are going, it is not a matter of whether a disaster will occur, but where and when it will happen.

There is another reason why whistles are not useful. According to Transport Canada Statistics, there are more and more accidents, derailments and deaths at grade crossings. So whistles will not make a difference. Furthermore, trains of 200 cars erode the railway infrastructure, making it less stable. The less stable the infrastructure, the greater the risk of accidents.

In conclusion, I would like to give you a little information on potential solutions to replace whistles. We have thought that instead of whistles, sensors could be installed at grade crossings. Sensors are not very expensive and could easily notify the train conductor that there are no obstacles on the track or at the grade crossing, and that the gates are lowered. That would be achievable. Besides, sensors are already used for cabooses. In fact, an electronic confirmation indicates how they have to be operated.

Therefore, sensors allow you to see what is happening one or two kilometres down the track, without needing to blow a whistle. Whistles might also attract people who are looking to commit suicide. That is one of the reasons why we recommend eliminating the use of whistles.

We recommend that there be sound barriers set up around marshalling yards. This is nothing new, because Europeans have been using sound barriers for at least 20 years. In fact, railways pose a real problem over there, maybe even more so than here. People have dealt with the problem, especially in Switzerland, where authorities installed sound barriers in marshalling yards. In our opinion, that would make things a lot easier.

Solutions exist, and we have indicated some in our brief, which you have no doubt read.

If you have any questions, we would be pleased to provide you with additional information on this issue.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Gauthier.

Mr. Churko, please.

[Bernie Churko, Chief Executive Officer, Farmer Rail Car Coalition]

Mr. Chairman, members of the Standing Committee on Transport, good afternoon. On behalf of the Farmer Rail Car Coalition, I want to thank you for this opportunity to comment on Bill C-11.

The Farmer Rail Car Coalition, an organization comprising 17 farm organizations from the three prairie provinces, was established to realize a fairly simple goal: to provide an adequate supply of reliable, well-maintained, modern cars for the movement of western Canadian grain at the lowest possible cost to farmers.

Considering that the previous government had committed to selling its hopper car fleet, the FRCC is convinced that it had developed a business plan that would have delivered on that goal. It is that plan that formed the basis of the agreement reached by the FRCC and the Government of Canada in November of 2005.

During the development of its business plan, the FRCC examined the costs associated with the maintenance of hopper cars in North America. After extensive study, it determined that the North American industry average cost related to the maintenance of a grain service hopper car of similar vintage to those of the government fleet is approximately $1,500 per car, per year. The Canadian Transportation Agency had estimated that for the 2002-2003 crop year, $4,329 per car, per year is embedded in the revenue cap. Not only were the costs excessive, the cars were not being maintained to acceptable standards. For the federal government fleet, this difference in cost approaches $40 million annually.

On May 4, 2006, the new federal government announced its decision to retain ownership of the federal hopper car fleet, thus ending the proposed purchase of the fleet by the FRCC. To address the excess hopper car maintenance costs being paid by producers, as identified by the FRCC, the federal government announced that legislation would be introduced that would result in a net reduction of freight rates by an estimated $2.00 to $2.50 per tonne.

Considering that approximately 25,000 cars are used in grain service in an average year, the difference between FRCC's maintenance plan and the costs embedded in the revenue cap could amount to over $70 million per year when all cars--other government cars, the Canadian Wheat Board cars, and the railway cars--are included.

The FRCC advised the government that it was prepared to support the government's decision to retain ownership providing six recommendations were adopted. Two of these require legislative amendments. These recommendations were forwarded to the members of the Standing Committee on Agriculture and Agri-Food and, I understand, to this committee. The Standing Committee on Agriculture and Agri-Food adopted a variation of the FRCC's recommendations on May 30, 2006.

The first of these six recommendations was to introduce legislation to remove from the revenue cap the excess maintenance costs for all cars moving statutory grain. Mr. Chairman, we are very pleased to see that the government has taken action on this recommendation.

After examining the amendments to the Canada Transportation Act proposed in Bill C-11, the FRCC has concluded that the addition of clause 57 of the transitional provisions does provide the agency with the legislative authority needed to undertake the recosting of hopper car maintenance for all hopper cars.

The FRCC and all its member organizations wish to thank the government for recognizing and expeditiously addressing this problem. We do have two concerns, however. In many cases, when the agency undertakes a railway costing exercise, the primary source of their information is the railways themselves. This happens because in most instances no other source of data exists. In the area of hopper car maintenance, however, there are numerous sources of information that can be drawn on by the agency. In fact, parties other than the class 1 railways own nearly 65% of hopper cars in service in North America. It is our view that this information provides an invaluable benchmark against which the railway maintenance costs should be compared.

Our second concern is that in some cases the agency conducts its work in railway costing without the benefit of input from affected stakeholders. We believe it is imperative that in this case stakeholders be invited to participate in the process. This has proven to be a very successful process when the agency indexes costs, as required under the act.

With respect to clause 151, the FRCC has examined the proposed legislative amendment and has determined that it is inhibiting the ability of shippers to economically acquire their own car supply; and secondly, it is impeding private sector shops from successfully carrying out the maintenance of the government fleet where it is the lowest-cost option. Both of these are important if the transportation system is to effectively serve the grain industry.

In a circumstance where government-supplied cars are to be provided to the railways on a full-service basis--that is, the railways are not responsible for maintenance costs, or are removed from railway service and leased directly to shippers of statutory grains on a full-service leased basis--no clear provisions exist in the act to remove the maintenance cost embedded in the revenue cap for these cars. As a result, a situation could exist where the railways are being paid for maintaining cars that they are no longer maintaining.

The FRCC recommends that paragraph 151.(4)(c) be amended to state:

The Agency shall make adjustments to the index to reflect the changes in costs incurred by the prescribed railway companies as a result of the sale, lease, change in lease terms or other disposal or withdrawal from service of government hopper cars.

Finally, it is common practice for shippers in the business of moving bulk commodities to acquire rail cars to ensure they have the capacity to meet market demands. The act supports this practice. Subsection 113.(3) of the act states:

Where a shipper provides rolling stock for the carriage by the railway company of the shipper's traffic, the company shall, at the request of the shipper, establish specific reasonable compensation to the shipper in a tariff for the provision of rolling stock.

However, in the case of statutory grain movements, the legislation does not easily accommodate this practice. In some circumstances, the affected railway may not be able to recoup the compensation it provided to the shipper; in other cases, the railway may be compensated again for revenues that it's already entitled to under the revenue cap.

The agency requires the clear authority to assess the circumstances and permit an adjustment to the revenue cap that deals fairly with both the railway and the shipper. The FRCC recommends that paragraph 150.(3)(a) of the act be amended to state:

For the purpose of this section, a prescribed railway company's revenue for the movement of grain in a crop year shall not include

(a) incentives, rebates or any similar reductions paid or allowed by the company,

—and this is the addition—

including reasonable compensation paid by the company to a shipper for the provision of rolling stock for the carriage by the railway company of the shipper's grain;

I look forward to discussing these issues as well as any other issues of interest to the committee during the question period. I also hope we have an opportunity to explore the FRCC's other recommendations.

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Churko.

Questions? Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you, gentlemen.

My questions are mainly to Mr. Churko.

While the Canadian Wheat Board is extremely important to western farmers as a marketing institution, transportation, especially in your area, is really functional to marketing. I don't think a lot of people understand that in the country. You're 900 miles from tidewater, on average, and it's extremely crucial that the railways do work in your interest.

There's no question that, from my experience, Transport Canada was always opposed to the FRCC's proposal, which would have given producers a little more marketing clout in terms of dealing with the railways. In any event, the new government took Transport Canada's recommendations, which is as much as not the railway's recommendation, and broke that agreement.

The fact of the matter is, I think you said the figures were somewhere close to $40 million per year, in terms of overcharged maintenance. They've been doing that for a number of years. Do you think it's right that they basically get to keep those moneys that they've gouged from farmers over all those years?

[Bernie Churko]

Well, Mr. Easter, there are a couple of issues there, I suppose.

First of all, what it actually costs for the railway to maintain the cars is really unknown. Whether the railway has truly gouged the farmer or not, I'm not prepared to say. However, we do know that private shops throughout North America could have maintained those cars for a much lower price. As a result, farmers have overpaid and they have paid substantially. For the federal government fleet, we estimate $40 million per year, if you look at adding the Wheat Board and the other provincial governments' fleet. That's a substantial amount that has come out of, essentially, the producers' pockets for a long time. I think the FRCC has gone on record as asking the Auditor General to look into that to see, in fact, if the farmers had paid excessively over all that time period.

[Wayne Easter, Liberal, Malpeque, PE]

Certainly one of our problems there is on getting the documentation from the Canadian Transportation Commission to really compare the numbers.

I appreciate the fact that you put two or three recommended amendments for the committee's consideration, and we'll see them in hard copy later. On the last one you mentioned under section 150(3)(a), I believe it was to try to achieve reasonable compensation.

Is there any kind of an appeal? When you get into those kinds of matters, there's always an argument over who's right and who's wrong. If you don't get it, are you suggesting any kind of an appeal process to that effect?

[Bernie Churko]

Mr. Easter, if it isn't statutory grain, the provisions in the legislation seem to work very well for most commodities.

There is an appeal mechanism through the agency if there is some disagreement relative to compensation on the cars. The complexity comes around the fact that there's a revenue cap, an averaging process, and all kinds of complexities such that it is very difficult for shippers moving commodity grain to acquire a car supply, as others do, to ensure they can meet market needs.

The interpretation from our legal counsel is that it's unclear. As a result, there's a tendency for shippers to not move in that area because it becomes very costly to go through a process of level-of-service complaints with the agency.

We think clarification would clearly benefit shippers, especially secondary processors that have contacted us for car supply. It would then be clear that they could get the cars and adequate compensation and at the same time the railway would be treated fairly. I think it's a combination to ensure that if the railway pays for compensation, they are not penalized under the revenue cap.

[Wayne Easter, Liberal, Malpeque, PE]

There's no question that the railways need to be treated fairly as well, and I wouldn't suggest otherwise, but all the power often seems to be on their side.

One of the difficulties in dealing with any of these issues, Mr. Chair, is on how to get real figures when the primary source, as Bernie said, for costing figures is the railways themselves.

Do you have any suggestions on ways for perhaps an independent body that's not so closely tied to the railways to do a better analysis on those figures so that farmers and primary producers can have some confidence that they're getting a fair deal when it comes to dealing with the costs the railways say are in the system?

[Bernie Churko]

I can only speak to the maintenance issue because that's where we went through a fairly extensive study. It was not difficult to get figures from those that carry out maintenance on similar kinds of equipment throughout North America. In that case, I think we were able to come up with a number that, quite frankly, is significantly lower than the costs being charged in the revenue gap.

I think the point we were trying to make in this submission as well is in our recommendation number six. What it costs the railway is one issue; the second issue is that we should have a mechanism whereby if the private sector shops can do it for a lower cost, it should be relatively easy for that to happen.

I don't think the legislation as it currently exists and the practices by Transport Canada historically have allowed those private shops to actually compete for the work.

[The Chair, Conservative, Merv Tweed]

Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you, Mr. Chairman.

First of all, Mr. Churko, you can rest assured that the Bloc Québécois will support you with regard to farmers' requests. My first questions are not for you; they are for Mr. Chouinard and Mr. Gauthier and deal with noise.

It is time we settle the noise problem. We have been talking about it here for too long. We need a bill to deal with this matter.

In the past, when I worked at the Union des municipalités du Québec, I had the opportunity to visit the Joffre marshalling yard along with the mayor at the time, Mr. Lemaire. As well, as Bloc Québécois transport critic, I have witnessed the problems you speak of.

We are about to do a clause by clause consideration of the bill. As the saying goes, the devil is in the details. We will be dealing with the details next week. Rest assured that we will settle a number of them.

Regarding the definition of “unreasonable noise” contained in the bill, I have been convinced that it is not the best term to use. There are, however, two versions. The City of Levis has defended its position of “limiting the damages to a minimum”. The City of Quebec would have preferred “the least noise possible”.

Once again, words are important. One thing is certain: if it is a question of “limiting the damages to a minimum”, that extends beyond the issue of noise. But if it is only a matter of “the least noise possible”, then we only deal with noise.

Would you like us to be beyond the simple issue of “noise” to the issue of “damage”? I know full well that where you come from, there was a lot of analyses of what happened at Oakville and the decision that was handed down, because Transport Canada became interested in the matter. I know that you have followed the matter very closely. What do you suggest we do in this regard?

[Ghyslain Chouinard]

Our position is quite clear. The concept of “reasonable noise” is rather vague. That is why I prefer using the term “nuisance”. We have to go beyond noise. Noise can be measured with a decibel meter, and standards can be established, as has done the WHO, which is an international organization. I do not think we can find faults with those standards, because they are not quantified in an empiric manner. In fact, the measurement of noise is not totally speculative; noise is measurable.

Furthermore, on a more general level, we hope that the Department of Transport give back more powers to the Canadian Transportation Agency, or CTA, by establishing clear rules, standards and procedures. In fact, we would ask you to avoid using the term “reasonable”. We know very well that, over the past few years, all initiatives dealing with train whistles and marshalling yard noise have been stifled by the word “reasonable”. Mediation never got beyond “reasonable noise”.

Do you think it is reasonable, Mr. Laframboise, and you, sirs, to be awoken at 3 o'clock in the morning by a “slam” in a marshalling yard, because you are convinced that a 747 aircraft crashed on your street? You have already visited the Joffre marshalling yard, so you know it is a chronic situation. We are not talking about sporadic noise, but about a chronic situation. Each and every night, there are two or three such “slam”. The train whistle is heard regularly, 20 times.

I prefer using the word “nuisance”, because noise has already been measured. The Supreme Court of Canada has ruled, for example, that the City of Montreal had jurisdiction over nuisances caused by noise in a bar, among other places. I am convinced that the bar in question generated a lot less noise then a two-stroke diesel engine locomotive running full blast in a marshalling yard.

We believe that the municipal and provincial regulations are there to prevent nuisances, and not only noise. There is no reason why the railway industry should not be subject to them.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Here is our problem: the Constitution does not subject the federal government to provincial or municipal legislation. You are preaching to the choir. It would have been preferable to have the railway companies governed by, at the very least, municipal bylaws. We know that the municipalities now have all of the equipment they need to respect the standards. There is no constitutional requirement for the federal government to abide by provincial and municipal legislation. This could lead the railways to challenge the constitutionality of anything that we might table.

That is why we should consider giving more power to the agency.

[Ghyslain Chouinard]

In fact, Mr. Laframboise, that is exactly what we are suggesting. That is why we are here. There are many types of nuisance that contravene municipal and provincial laws. However, we want the CTA to have more power to act in the specific area of the widespread nuisance caused by the railway companies.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

When you say “nuisance”—and I like that term—, it means more than just noise.

Apart from the noise, can you put up with the vibrations and the emissions alone?

[Ghyslain Chouinard]

Monsieur Laframboise, gentlemen, if I may take a moment of your time, I would like to explain something to you. I am a long time resident of the area next to the Joffre shunting yard.

When you live next door to a shunting yard, you have to take a white cloth and wipe down your resin patio table every day, and at the end of that same day—not three weeks later—, the cloth is black. I moved just recently and I can assure you that where I live now, when we wipe down the patio table at the end of the week, the cloth is nowhere near as black as it used to be.

We are very concerned about the emissions caused by the two-stroke diesel locomotive engines. At a time when the Minister of the Environment and the Prime Minister are talking about a Canadian act to regulate air quality or “something else”, we are quite worried that the railway companies, which come under federal jurisdiction, might totally escape the grasp of any future legislation.

I am talking about a nuisance: it can even stop traffic within an entire city. It is a nuisance when industries and companies are wasting time because there is a train sitting at the level crossing for half an hour, as is regularly the case in Charny.

[A voice]

It is an emergency.