Evidence of meeting #43 for Transport, Infrastructure and Communities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
There are some unique challenges within the Canadian context.
I just want to touch a little bit, too, on the regulatory environment. You talked about requiring a regulatory environment that enables testing and use of new technologies to further improve safety, efficiency, etc. Are you able to give us an example of when you've tried to do some testing or wanted to do some testing and had a regulatory issue inhibit the testing work or stop you from doing that testing?
President and Chief Executive Officer, Railway Association of Canada
The specific example here is that during the passing of Bill S-4, the Railway Safety Act, we asked for the exemption to be 12 months instead of six months. That's simply because we operate in four seasons, and in order to introduce a new technology, we need to test it in all of those seasons before we can be certain it's going to be effective. We thought that was a relatively simple request to understand and implement, and it is important to our industry, yet we still are faced with the six-month exemption. That means it adds complexity and difficulty to anything we introduce if there's going to be a significant difference between the way that piece of equipment operates in the heat of the summer versus the cold of the winter.
Conservative
President and Chief Executive Officer, Railway Association of Canada
That's one of the issues, yes.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
Or that's one example only. If there are other regulatory concerns, it would be good for us to hear of those. You could possibly table them through the chair to the committee.
President and Chief Executive Officer, Railway Association of Canada
Sure.
I can mention one now, because it came up earlier, if it's okay with the chair. I did leave the slide, but I thought we could maybe deal with some of these issues in the questions and answers, so I appreciate the question.
Right now we are working with the government on crossings regulations. The regulations were written before input was sought from the rail sector. There are provisions within those regulations that are absolutely unacceptable to the rail industry. I'll give you two examples, and I'd ask the committee to keep in mind that we're working with the government in a collaborative fashion; we're making some headway on these issues. I'm not leading with these kinds of things, and we are working on them, but they're still of concern to us and they are not 100% resolved.
The first issue was snowplowing. In the first draft of the regulations that we saw, which went out for consultation to the broader public, the requirement was for the rail industry to plow the roads on crossings. There are some 30,000 crossings in this country. Many of those are private crossings. Traditionally, the users of those crossings plow them, because they're the ones who use them. Of course, we will plow using the train itself to keep the tracks clear. But in many cases we're not very concerned whether a car can drive over that private crossing in a day. That's one example, and they've since said that was a mistake.
The second example was a rule that required that we not stay in a crossing longer than 10 minutes. As you've heard, we are running longer trains. The reason for running longer trains is that we are moving more goods and it is a more efficient and sustainable way to move cargo. If you pull out of the Vancouver port and you have rules governing the speed that you can come out and you have a long train, if you do the math, length times speed, we're going to be in some crossings longer than 10 minutes. So it's unacceptable to us to have a regulator that will introduce a regulation that we cannot meet. It's not the way to introduce a regulation.
We were quite unhappy with the way those regulations were put forward without our input. We're happy that they are spending some time now getting our input, but we could have resolved a number of those issues before they were written.
I'll leave those.
Conservative
Lawrence Toet Conservative Elmwood—Transcona, MB
That's good. The crossing issue, I know, dwells very strongly, actually, in my riding. I'm in a rail area, and there are some real problems, because we do have trains that are actually halting traffic for upwards of 25 minutes on some of the crossings, and trains are actually stopped on those crossings.
So there are issues on both sides, and I agree we have to do that working through the process.
Conservative
Conservative
Mark Adler Conservative York Centre, ON
Thank you, Chair.
This is an absolutely fascinating discussion. I want to first of all commend our chair for his great wisdom in thinking of inviting the railways to appear before our committee.
Thank you for that, Chair.
To begin, I was very intrigued by your statement at the outset that the railway is experiencing a renaissance. I agree with you on that. There's really nothing more Canadian than the image of the Mountie in red serge on horseback with the train behind them racing through the mountains.
You were dead on when you said this country was not built by revolution but by the railroad. We are the only country in the world that was not created out of revolution or rebellion. The history of the railroad holds a very special place in the hearts of all Canadians.
I want to talk a bit about the railway industry as an economic generator in this country. You mentioned the industry employs 35,000 people directly and that you contribute $12 billion annually in tax dollars to various levels of government in the country.
President and Chief Executive Officer, Railway Association of Canada
That's our revenues; the tax dollars would be a subset of that. I don't have the number in front of me, but I can get it for you.
I may actually have it here. I'll look for it while we're....
Conservative
Mark Adler Conservative York Centre, ON
Okay. That's fine.
In terms of moving freight across the country via the road network as opposed to rail, how has that changed over the last, say, decade or so?
President and Chief Executive Officer, Railway Association of Canada
There have been a number of significant changes. First of all, I would mention that 17 years ago CN was a crown corporation, and it was certainly not enjoying the level of productivity and efficiency it is now.
What's come out of that are a number of investments. If you look at their network, as an example, their reach into the United States, they purchased a railroad that essentially has a ring road around Chicago; 23% of all railroad traffic in the United States touches Chicago. It's a little bit like all roads lead to Rome; almost a quarter of all railroad tracks lead to Chicago. If you look at our map, you can see that both of our major companies travel through there.
CN was able to purchase a railroad that goes around Chicago, which allows them to transport freight to that critical area but also to not get caught in the traffic. Those kinds of investments have been possible because of deregulation, because of private sector investments they've been able to make.
In terms of the impact we have on the economy, I don't even like to use the $12 billion figure. Although it's a matter of public record, and it's an important figure, it belies the importance we play in the economy in terms of moving all of the goods for all of the customers and the different kinds of customers we have in this country.
If you look at the growth in Canada, the mining sector is the number one growing sector in Canada. Most operations would not be able to sell their product without rail, whether it's agriculture, potash, forestry, chemicals, or petroleum products now. Petroleum and chemicals account for more than 20% of rail traffic. It's an incredible story. Five years ago people would not have imagined we'd be moving so much product by rail, something that traditionally moves by pipeline. But we've had the flexibility. Companies like CP have done a great job of identifying opportunities, such as the Bakken, where they're moving shale oil.
Really, the story about freight rail today is about the future growth of this country in terms of our manufactured goods and our natural resources.
If I could take one more moment to tie it to one other thing—
Conservative
Mark Adler Conservative York Centre, ON
I have one other supplementary question.
How much time do I have?
President and Chief Executive Officer, Railway Association of Canada
The only thing I would add is that as we move into the future, we're going to see an even greater need to integrate our supply chain, from our ports to our trucking, rail, shipping, seaways, terminals, intermodal—all of those kinds of investments. We need to keep our eye on that ball, because going into the future, we're going to be moving a lot more goods, and we have a tremendous opportunity in Canada to win new business in that respect. We do need to work together as a society and as a supply chain toward that future.
Conservative
Mark Adler Conservative York Centre, ON
It interesting you say that, because we've heard recently from some quarters about the so-called Dutch disease. Some politicians from the other side—
Conservative
Mark Adler Conservative York Centre, ON
Their preference would be to shut down the natural resources industry, primarily the oil sands. What would that do, in your opinion, if that were to happen to your industry? How many people would be put out of work.
President and Chief Executive Officer, Railway Association of Canada
Mr. Chairman, is there a category of question that I'm not supposed to answer?
Conservative
President and Chief Executive Officer, Railway Association of Canada
As I just mentioned, moving petroleum and chemicals is a growing part of our business. Many of them are originating in oil sands because we're moving bitumen. We're actually providing a solution now where there is under-capacity or there are missing links in the supply chain. It's 21% of our business, and it's growing.
I think that answers the question.
