Transport Committee on Feb. 26th, 2013

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank all of our guests for being here today and providing their testimony and suggestions. I think it's fair to say that, as we look at the suggested amendments, it strikes me that you probably all could have come together and just done one laundry list. That might actually have been a little simpler and have provided better clarity. But we have your written submissions, so we'll certainly consider your amendments as you presented them to us.

I was struck when Minister Lebel came before us and introduced Bill C-52 and gave us some descriptive references and answered questions. And here I want to acknowledge your support, in broad terms, for our effort to put this in place. It has been a long time coming; I think you'd all acknowledge that. But if I get the best sense of what you're trying to do, it is that you're trying to take what is now going in the right direction and make it a bit tighter. That's certainly how I feel you have presented yourselves today.

I want to make reference briefly to a couple of things, and then I have a couple of questions.

What the minister said was that he felt strongly that the bill will pave the way for better commercial relationships between railways and shippers, which is ultimately the best outcome for everyone. I'm going to stop there, though, because that prompted me to ask a question recently in a previous committee meeting about how things were going as a result of this proposed bill, that is to say, in the relationship between shippers and railways.

Mr. May, you were fairly emphatic in response to Mr. Toet when you said that service has not improved. That is certainly not the impression I have received. One might collectively sense that as a result of this kind of pending legislation, stronger efforts might come forward.

Can you and maybe those who have been impacted briefly elaborate on whether you think those relationships have improved?

Mr. May, since you were so strong one way, can you briefly comment on that? Bring some clarity to my mind, please.

[Ian May]

It's a cynical point of view, and I can't speak to the railways' motivation. Only they can do that, but the timing is curious. I know that CN in particular was opposed to the bill, stridently opposed to the bill all the way along, and once the bill appeared we haven't heard from CN, certainly publicly. I can tell you for a fact that things have reverted to the way they were. There was definitely a change in attitude, there was a change in the way railways treated their customers, particularly CN. It was much more collegial, much more willing to talk. That has seemed to have gone away. A couple of months doesn't make a trend, but I can tell you that my members are telling me, with some indignation, that things look like they're going back to the way they were.

[Ed Holder, Conservative, London West, ON]

That's interesting.

Mr. Sobkowich, in a letter that we have here from the Western Grain Elevator Association, dated December 11, 2012, it was quoted that:

[Mr.] Sobkowich added that rail service for grain shipments has generally improved in the recent past, and this legislation will hopefully be effective in backstopping and enhancing the gains that have been made.

What are your views on this Mr. May.

[Wade Sobkowich]

If I may, since January—and I just talked to my members yesterday about this, because I wanted the most current information on service levels—service has been very poor on both roads since January. We haven't seen service this poor, particularly from CN, in three years. Overall, the railways are delivering less than 50% of the rail cars specified by their service plan.

[Ed Holder, Conservative, London West, ON]

So on December 11, it was good, but in January not so good?

[Wade Sobkowich]

It just changed, and they say it's the cold weather.

[Ed Holder, Conservative, London West, ON]

And you say?

[Wade Sobkowich]

We say cold weather happens every winter.

[Ed Holder, Conservative, London West, ON]

Mr. Cherewyk, you wanted to answer.

[Greg Cherewyk]

I would just say, to echo what we're hearing here, anecdotally we are getting calls to our office from some of our members who are irate and pointing out that, in the midst of this process that we're in right now, they're 60 cars behind. If a small shipper is 60 hopper cars behind, they're ready to fold up shop.

The comment from them is that if they don't get service, they're losing on both ends. We have farmers who were to deliver in December, who have been told they cannot deliver and won't deliver until March, and they're prepared to walk on their contract. On the buyers' side, they're also prepared. So they're getting hit from both sides. That's anecdotal.

We do measure performance in our industry as well, and I'll read for you from our performance measurement note on this, which says that “railway planning for fulfillment of customer orders has fallen off significantly since week 22, with an average of only 54% of weekly orders planned in the last six weeks”.

So anecdotally, we have these the calls coming from furious exporters not being able to get access to equipment, and that is also reflected in the data.

[The Chair, Conservative, Larry Miller]

Does somebody else want to comment?

Ms. Cobden.

[Catherine Cobden]

Representing a group of shippers that are very captive to the railways, we have actually been experiencing service challenges all the way through the piece. So I've already reported on that. It's interesting, but I didn't realize that we were all experiencing about half of what we're asking for.

There are also two ways to look at service and I just want to make sure we thought of them. One is on supply, and in that regard it sounds like we have an interesting trend happening right now with half of the needed cars arriving, which is really insufficient. The other element of service is the quality of those cars, and our members are adamant about the poor quality of the cars arriving. There's been garbage, and we've had a few incidents where employees' health and safety was at high risk with doors falling off boxcars. So there is a lot of anecdotal evidence we're in trouble as well on quality.

[The Chair, Conservative, Larry Miller]

Your time has expired. We have just a couple of minutes left before the bells start to ring.

Ms. Morin.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Thank you very much, Mr. Chair.

My question is for Ms. Cobden.

You proposed three amendments. You said earlier you had listed them in order of your priorities, but the one I am interested in is the third one. It calls for a new stand-alone section that would define adequate and suitable accommodation, and service obligations.

You said that if those terms are not clearly spelled out in the legislation, the use of market power by the railways, or the legal process through arbitration, could erode these already agreed to definitions.

I think that's a very wise idea and would make a worthwhile addition to the bill.

Could you enlighten us all and tell us in real terms what could happen if those definitions are not included in the bill?

[Catherine Cobden]

I guess the first point I'd like to re-emphasize is that these outlined obligations—and we outline a number of them and they have been referred to already by my colleagues—have already been agreed to by everybody, so we shouldn't be running for the hills on this one. I think this is actually an easy slam dunk for a change to the process.

The idea is that if we do not get the service definitions nailed down.... By the way, this is the service we're already paying for, so let's get some clarity to that; let's put that on the record and get that clear. If we don't, then we're going to get into legal proceeding after legal proceeding, and then the outcome of those legal proceedings will start to recast and reshape this. In the worst case, it will move us away from what we're intending this bill to achieve. It's for that reason that we would like to see that nailed down and give some really strong clarity to what we mean by service.

I think it was you, Greg, who had a great description when you were talking about what the definition of adequate actually is. For a long time we've been working in a grey zone, and so adding some of these things in will be really helpful.

Allan, do you want to add anything, or is that sufficient?

[Allan Foran]

We already have level of service protections right now, and all this does is that is just reaffirms them. You look at the needs of the shipper, and those are paramount. It's a shipper remedy. This just makes it absolutely clear and certain that's the case.

The concern with the bill is to make sure that this new remedy doesn't impact what currently exists.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

I gathered from your earlier comment that you have a long list of proposed amendments, as well as a short list, the one we have here.

Are there amendments that aren't listed in this document but that you feel are important for the bill? Actually, could you send us the full list of your suggestions?

[Catherine Cobden]

I feel I should probably clarify that we are supportive of all six of the recommendations that the Coalition of Rail Shippers has put forward. We are an active member of the Coalition of Rail Shippers, so we support all of its amendments.

What I'm referring to is that we felt it was really important to get very specific and very focused on what we're asking for. We really appreciate what has happened with the bill in terms of its intent, and rather than going through 10, 12, or 15 asks, we thought we would put forward on the table just the ones that we thought were really aligned with the intent of the government in this bill. That's how we've prioritized this.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

No more questions. Thank you.

[The Chair, Conservative, Larry Miller]

I thought the bells would have been off by now. Is there any question from this side?

Mr. Watson, do you have a quick question?

[Jeff Watson, Conservative, Essex, ON]

I have a couple of observations. I've listened intently to the presentations today and I certainly understand the frustrations. During the rail safety discussions in this committee over the years, I've had my own reservations about the performance of rail companies and their responsibilities.

I want to cut to the chase, and I hope this doesn't come across the wrong way. Is it possible, after years of feeling mistreated by rail companies, that you're not really seeking a balanced resolution model but a punitive model that tips in your favour now? That's my first question.

Second, is it possible that, with the same sentiment, you feel justified in asking the government rather than the courts to act as the hammer? That's the question.

[The Chair, Conservative, Larry Miller]

The bells are going so I'll allow you to....

Mr. Sobkowich, you had your hand up first.

[Jeff Watson, Conservative, Essex, ON]

I thought we had time, Mr. Chair.

[Wade Sobkowich]

I'll give a brief response because I know Ian wants to add to this.

[The Chair, Conservative, Larry Miller]

I have to ask you to be very brief.