Thank you very much. I'm happy to be here.
I very much appreciate the committee's efforts to review this bill. As Bob Ballantyne has already stated, we, as shippers, remain united in the need for this legislation. I'm here today representing forest product shippers from coast to coast. My remarks will not be association-speak, but will actually be direct feedback from the shippers we represent.
I would like to point out that with me today is a shipper, Mr. Brian Mcgurk. He is with Resolute Forest Products. He leads their shipping from coast to coast and also happens to be the chair of the Forest Products Association's transportation committee.
We also have with us, Allan Foran, from Aikins, MacAulay & Thorvaldson. He is our legal counsel, and I offer his assistance to you if there are any legal points of clarification that you might benefit from.
On behalf of the members of the Forest Products Association of Canada, our 230,000 employees, and the 200 rural communities we represent, I would like to thank the government for the work it has done to date to prepare Bill C-52. This bill does move us forward and will give us more leverage on the day it is passed than what we currently have. We do have a few simple suggestions that are of critical importance for improving the practicality of the bill and to assure that the regulatory burden is minimized.
Before I get into those specifics, I will share with you some insights on how forest product shippers experience the world to help you appreciate why this is such a critical area to get right. FPAC member companies represent a significant slice of the rural economy. We also represent a significant slice of the railways business. We estimate that to be about 20%. While we are rurally based in our manufacturing, we serve a very wide global marketplace. Over 85% of our products from these small northern towns are shipped all over the world and into a demanding global marketplace. Whether we're shipping to China, Europe, or the U.S., we require timely, predictable, and cost-effective transportation systems to meet the needs of these discerning global customers.
I would also say that we believe in a free market economy. However, it is unfortunate that we routinely experience the challenge of living with a key component of our business, the railway transportation system, that is not free market-based. Indeed, addressing the imbalance of market power that the railways currently enjoy remains the final frontier—if you're a Trekkie—of opening up Canada to the world economy.
It is with this backdrop that FPAC applauds the intent of Bill C-52. You have taken action to enhance the effectiveness, efficiency, and reliability of rail freight supply to address the current imbalance we face in the rail system.
Minister Lebel's testimony on February 12th went further in outlining the critical intent, when he urged this committee to understand why this legislation is vital. My colleague Bob Ballantyne has already read the quote, and I'll just borrow from the very beginning of it, where Minister Lebel said, “We are not dealing with the normal free market”.
FPAC member companies fully agree with the intent of creating the conditions to allow for successful commercial relations. Obviously, that's what we agree with, and this would normally be possible in a free market condition. Ideally, we'll never have to use this legislation.
I want to point out that our bona fides on this point is very strong. In fact, we had tried to broker our own commercial deal with one of the railways on this very topic prior to this regulatory endeavour, and we failed miserably. Having led the exercise on behalf of FPAC member companies, I can say from personal experience that the shipper community does not have any other option than a strong piece of legislation being available to us to bring the discussions with the railways into better commercial balance.
Again, we fully support the intent of the bill, and in the spirit of ensuring the objectives of this bill are indeed fulfilled, forest product shippers make three important recommendations for your consideration.
Recommendation number one is that you delete all references to the word “operational”. Simply remove this one word. This will ensure that we do not undermine the objective of rebalancing commercial relations. By referencing operational data, you create the unintended consequences of adding costs, creating an information imbalance, and diminishing the intent and power of the legislation.
Recommendation number two that you delete all references to statutory obligations to other shippers and third parties. Removing this reference will ensure that we don't dilute the arbitration away from the true objective, which is addressing the inadequate service experienced by the shipper.
Recommendation number three is that you insert a new stand-alone section that would define adequate, suitable accommodation and service obligations. This one should be easy. All parties in previous processes, such as the rail freight service review and the Dinning process, were in full agreement as to the elements that defined service obligations. We argue that if this is not clearly spelled out in the legislation, we run the risk of cumbersome legal proceedings defining and eroding the intent and nature of this bill. I happen to put my faith in this committee over the lawyers in this regard.
A detailed description of these three changes has been circulated for all of you. I'm just glossing over them, but hopefully I've given you enough of a description so you can appreciate what they intend.
In conclusion, as Canadian companies aim to secure their place as the preferred supplier to the world, we must have an efficient, reliable, and effective rail system. The committee's undertaking on this legislation is therefore critical.
FPAC members appreciate your attention to these matters. We request your support for these adjustments to ensure that the bill is a workable success. Thank you for your attention.