Transport Committee on Feb. 12th, 2013

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Yes. We'll fix all of that. The arbitration system will be short and not really expensive. A period of 45 days for some people can be long, but for us in the system that's not long. We think that will fix mostly everything that the shippers wanted.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Do you agree that commercial solutions are the best approach to resolve shipper-railway disputes?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

It was former Minister of Transport Cannon who launched that. I'm actually the fourth Minister of Transport to work on it.

I'm very proud to arrive with this tool to support the Canadian economy, and I'm sure that's the right way to do it.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Many shippers say they do not have balanced commercial negotiations with railways.

Would this remedy of arbitration on service agreements help to give shippers the leverage they need?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Absolutely.

As we have said, many agreements have been signed in the last years. We think that is because we have started this process.

In the future we think there will be more and more agreements. We hope this bill will never be used, but we'll see. Railways are there. Shippers are there. Business is there. Companies want to make money, and shippers do too. That's why we think they will use this tool.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Some shippers believe the arbitration process will be too expensive, largely because of the cost of legal representation.

Isn't this up to the shipper to manage?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

The cost will be split 50-50 between the shippers and the railways, and the arbitration will take 45 days. We think that's the right time and that's the best process to do it. There will be some cost, but that's the price to pay to have this kind of agreement. I hope it will not be used again.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Minister.

Mr. Poilievre, your time is up.

Mr. Toet, for seven minutes.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

My understanding is that this bill is essentially a backstop. What we want to see, Mr. Minister, and maybe you can confirm this, is that commercial contracts are the desired methodology going forward. This is meant to be a backstop to bring that forward in a more expeditious fashion, for both sides of the equation.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Absolutely. That's the way we have managed this since the beginning of the process. When we set up the committee, we gave the mandate to a facilitator, Mr. Dinning. All the way through this process that was our goal, and now we think we have reached it.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you.

I want to talk a little bit also on the question of the confidential contracts that have been signed in good faith. As a businessman myself, I believe very much in the free enterprise system, our open market, in which we negotiate contracts. As a businessman, I'd be very upset no matter who the third party was who would step in and say that a contract I've signed, whichever side of the party I'm on, would be basically null and void and I'd have to start all over again because somebody has come in with a new process.

Would you agree that, again, it just comes back to the fact that for commercial contracts, being the desired methodology, we already have those in place? Why would we start to renew commercial contracts that we have today in order to facilitate somebody getting into an arbitration procedure? They've obviously negotiated a contract they were happy with at a point in time.

I would never sign a contract that I wasn't happy with. It might not be the contract I'd love to have, but it would be a contract I'm happy with and could live with, not a contract that necessarily ultimately meets all my goals. Any business negotiation is basically two parties going back and forth and coming to somewhat of a compromise at all points.

Would you agree that the free market approach we're bringing forward here is really in the best interests of Canadian business, both shippers and rail, and both are being brought into a position where they can use their strengths to the best of their ability to help drive economic growth in the country?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Absolutely. The goal we have with this bill is to have an agreement for both parties. Doing that and not respecting the agreements we have already signed is counterproductive for sure. These agreements will come to an end in one or two years, by the information we have, and at that time they will be able to sign another agreement. If they had one in the past, probably they will have another one. Fortunately, the free market is there, and, as I've said, we have only goal at the end. The Canadian economy will win, create more jobs, keep our kids and grandkids in our regions and have more jobs for them. That's why we think we have to respect the contracts that are already signed.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Good. My kids and my, I hope, soon-to-be grandchildren would be happy to hear that.

I want to talk a little on the fine process. The $100,000 fine has been brought up a few times. There has been some indication from some of the other questions that this is seen more as a source of revenue for the government.

I would see it, and I wonder if you would agree or disagree, as really a desire to make sure that the railway is basically doubly motivated to make sure that they're meeting their obligations. They have one motivation. I think the commercial motivation is probably their number one motivation anyhow. Anybody who wants to run a business, I would assume, wants to run an appropriate business. They want to run a business that is well respected by all parties they deal with, and if you're going from that way of thinking, you also want to be well respected by your clients, or your shippers in this case.

Would you say this is basically meant more as a bit of doubling up of that motivation, not looking for a source of revenue? In fact, hopefully from the government's perspective, this is a fine we very rarely or never would collect.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Yes. We think with the bill we have now for railways, they will not want to pay this fine, and shippers, because the fine will go to the government, will not do things for nothing either. We're forcing an agreement. That's what they wanted. That's why we're working on that. I repeat, the Canadian economy will win in the end. That's what we want.

We want good agreements for both parties, and we think that the tolls we have now will be very helpful in that regard. That's what we think.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I have one last item I want to touch on, the timeframe for the arbitration. I find it very interesting. To me, it is a very short timeframe of 30 days. When you've gone through the process.... It sounds to me like it's not a really onerous obligation on the part of the shipper to show they have done some really intense negotiation, that they have got into the process, and if they seem to be making no headway, then within 30 days they can go for arbitration, and then it's in 45 days that the arbitration is actually resolved by the arbitrator.

From your perspective and the dialogues you've had—and from what I understand there have been many dialogues with all parties and all stakeholders on this over the course of the years—would this short timeframe be something that should be very acceptable to all the parties?

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

Yes, from the information we have, for sure everybody wants to have a shorter one, but is that the right amount of time to give the arbitrator to do the job? The agreements must be arbitrated. The arbitrator will have to consider a lot of things and ensure those agreements are commercially fair and are reasonable for both shippers and railways. We think that 45 days is the right length of time to do that.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

How much time do I have left, Mr. Chair?

[The Chair, Conservative, Larry Miller]

You still have a little over a minute, Mr. Toet.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

I'm too efficient here, I guess.

The last thing I want to touch on I briefly touched on in my last question. I sense from reading some of the documentation that's gone on over the years, there's been a lot of consultation with all stakeholders going through this process and coming up with Bill C-52. Minister, could you touch on how much consultation was held and how deep that consultation has been? It might be interesting for the committee to hear that.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

As I've said, I'm the fourth Minister of Transport to work on this bill. We've been working with stakeholders for years to build the best possible bill. The committee has done a very good job, composed a very good report. I don't know the numbers. Do you have the number?

[Annette Gibbons]

There were 140 submissions to the rail freight service review panel.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

That's a lot. The facilitator, Mr. Dinning, did another incredible job consulting most of the stakeholders involved in this process. Since we announced this bill, we have seen how these stakeholders reacted, and we're very proud of what we have now. I'm a former ball player, like many of you, and for sure we will not hit 4,000, but at least we have a very balanced approach. It will fix a lot of things in the Canadian economy.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Thank you.

[The Chair, Conservative, Larry Miller]

I hear you were a very good ball player, Mr. Minister.

[Denis Lebel, Conservative, Roberval—Lac-Saint-Jean, QC]

I don't know.