Transport Committee on Nov. 27th, 2007

[The Chair, Conservative, Merv Tweed]

Thank you, Mr. Shipley.

We'll go to Mr. Maloney, who has agreed to share his time with Mr. Volpe.

[John Maloney, Liberal, Welland, ON]

Thank you, Mr. Chair.

I just wanted to address the discontinuance of service on a line that could otherwise be called a short line. On grain-dependent lines there's a three-year compensation to the municipality. How is that compensation calculated? How does compensation to the municipality assist the shippers?

With those short lines that service sectors other than the grain industry, perhaps other resources, what happens in that situation? Could or should there be a right of first refusal to other short-line operators, and would other short-line operators welcome such a possibility?

[Jean Patenaude]

The process for line discontinuance and transfer was established in 1996, and it basically is a time-geared process where if a railway has identified lines that it thinks it wants to get rid of, it identifies those lines in a plan, it publishes the plan, and that line has to be in the plan for 12 months before it can start any process.

Then the process is you advertise that it's available for sale or transfer to whomever wants to buy it, to continue to operate it, and then if someone says they're interested, that negotiation takes place and the law says it takes place during six months' time. They negotiate the sale, and if the sale goes through, that's fine, then there's a sale. That's how Mr. Allen's railway was established, presumably.

If no one comes forward to purchase that line, because they are marginal lines for the most part, then it has to be offered to the government in a series, depending on whether the line crosses a border or a provincial border. It goes to the federal, the provincial, and the municipal governments, and now it also has to be offered to urban transit authorities, where there is an urban transit authority, because they might need it for urban transit purposes.

If there is no one who comes forward and wants to buy the line, then the line can be discontinued. If it's a line that is identified as a grain-dependent branch line, then there is $10,000 per kilometre that is being paid to the municipalities through which that line runs. I presume the intent at the outset was that whatever traffic was operating on that line—in most cases it was very little—would now be shifting to trucks, to roads, and it was to help the municipalities cope with that process.

[John Maloney, Liberal, Welland, ON]

What if it's a sector other than grain?

[Jean Patenaude]

No, that's specific for grain-dependent branch lines. There's no provision.

[John Maloney, Liberal, Welland, ON]

There's no provision.

[Marc Shannon]

To be clear, though, the discontinuance process is the same; it's just the $10,000 a month for three years that is different.

[John Maloney, Liberal, Welland, ON]

Go ahead, Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you.

Gentlemen, as I understand from your responses, you really only have two serious objections to this bill. Just so I can clarify things in my own mind, I take it that you really don't have any problems with the issue of publishing rates--that is, getting into a closer understanding of what the expected profits should be over provision of a particular service. Is that a fairly accurate understanding?

[Cliff Mackay]

That's correct, but let me be clear. Publishing rates that are general rates are absolutely no problem. However, we do a lot of confidential commercial contracts with large shippers, and the publishing of those details would be, of course, of great concern not only to us but to our customers.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Am I correct in understanding that you have no objection to a review of service so that the general public, and of course your customers, can have a better understanding and a better level of expectation of the kinds of service standards that you're going to set for everybody?

[Cliff Mackay]

That's correct. We've said we will participate in that process.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

I know I'm not going to have enough time, so I'm going to do this in two stages.

I think everybody around the table wants to be fair to every person who appears before the committee. I've looked at your section 3 and section 7 proposals. I'm wondering, and I might go through one and then the other, if you could be a little bit more specific about exactly what you are proposing, because what you've suggested is.... It's a principle on a position.

I asked the minister last week on section 7 about an authentification and certification process. I'm wondering whether you can be more specific, because otherwise I'm not going to pay any attention to this at all. What is it you want when you say you want a certification process that the shippers have to go through? The minister says they're going to do something sectoral. What do you want?

[Jean Patenaude]

On the group FOA, the minister referred to it as a class action. When you go into every province, a class action has a two-step process. First of all, you have a certification of a class; you say they are a group that has the same issue and they can go as a group to the court. We're saying we should have a classification process for this group of shippers in the same manner. It works; it works in the class action recourses in the province, and we see no reason it should not work here.

As Mr. Shannon was saying, however, if for some reason someone thinks it's too cumbersome, the original bill had another clause that said the offer shall apply equally to all members of the group. That was a form of certification, if you will, and it was a very easy, very slow, and very non-invasive form that would ensure that at least you would have a homogeneous group. You would end up with one FOA for this group of shippers; you wouldn't have single issues with the 20 or 30 members of that group. That's what we're trying to clarify.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Maybe I'm not making myself sufficiently clear. Do you want to put down a model that we can digest?

[Cliff Mackay]

We can do that if that's the committee's will. There's no problem with doing that.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

I don't think the committee is in the position to consider the general idea. You either accept what the minister has proposed through the bill--and the committee will dispose and through its disposition hand it off to the House--or you provide an alternative. I don't think committee members are in a position to examine every alternative out there for you just so you can say yes, well, they heard us. We heard you, and we're asking you what you specifically want.

[Cliff Mackay]

If the chairman is so disposed, we can easily provide that to his office.

[The Chair, Conservative, Merv Tweed]

We'd appreciate it if you would, and I'll see that the committee members get it today.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

I suppose you want me to wait for another round.

[The Chair, Conservative, Merv Tweed]

That's right, if you wouldn't mind.

Go ahead, Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair.

We have the study of rail service and capacity issues in the lower mainland, a final draft for circulation, and there is an executive summary here. Can I get unanimous consent of the committee to get it translated into French, because it's only in English, and once it is translated, to have at least the executive summary tabled with the committee?

[The Chair, Conservative, Merv Tweed]

I see no problem with that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Excellent.

My first question deals with the ancillary charges referred to in this discussion so far. You mentioned that shippers have a choice whether or not to have those charges. I'm wondering if you would share with us what percentage of gross or general income those ancillary charges make up overall, so that we can see over the last 10 years whether or not they've grown substantially as a percentage of overall gross income.

Would you be prepared to table that?

[Cliff Mackay]

I don't have that with me, but I would certainly be happy to go to my colleagues and try to get that data for you.