Evidence of meeting #61 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 shippers.
A recording is available from Parliament.
NDP
Jack Harris NDP St. John's East, NL
Do the shippers agree with that dispute resolution, or do they want to form a new one?
Conservative
The Chair Conservative Larry Miller
Mr. Harris, you're well over the time.
I'll let you answer that, Mr. Tougas.
Representative, Lawyer, McMillan LLP, Mining Association of Canada
Okay.
Surprisingly, no, shippers have not agreed to the railways' proposed mechanism. Frankly, though, here's a place where there is some agreement—namely, that a standard form, as Monsieur Mongeau said, may not be the best thing for every single situation. The devil is in the details. One shipper might like to see this particular kind of dispute resolution mechanism. Another shipper might want something entirely different. Another shipper might just want to go to court and not have one.
So what you hear is an association talking about trying to figure out a way to get to the resolution of disputes within the contract—quickly, cheaply, simply.
Conservative
Mark Adler Conservative York Centre, ON
Thank you, Mr. Chair.
Thank you all for being here this afternoon. I promise I won't ask anybody for any belly-button guesses.
Conservative
Mark Adler Conservative York Centre, ON
Mr. Tougas, you mentioned earlier that this is not a normally functioning market. You're absolutely right about that. There are a lot of variables that sort of skewer the normal operations of the marketplace in this instance.
Mr. Mongeau, I want to start with you. Minister Lebel, when he was here before committee, said:
...I'm confident this bill will pave the way for better commercial relationships between railways and shippers....
Could you just comment on that, first of all ?
President and Chief Executive Officer, Canadian National
I am concerned it will do the reverse. I am concerned it will stifle the innovation and the strong push for supply chain collaboration that we've seen over the last few years.
Any time you create a mechanism that allows a shipper to have a commercial negotiation on the one hand, which they all have the option to do—they have more choice than they say they have—and then have a second kick at the can to go to an arbitrator to decide on it, you will find that many shippers will use it, and it will create a natural requirement for the railroad to play defensive.
So you can open up and be commercial or you can check your back because the other guy has a lever to hit you with. I'm concerned that this law, although you've tried to strike the right balance, is worse than just encouraging people to continue to improve.
President and Chief Executive Officer, Canadian National
I would have told the railroads and the shippers that a good thing has been happening over the last three years and that we are making tremendous progress. We have agreements with ports, terminal operators, and several of our customers. We have service-level agreements. I would have said that we have a good thing going. I would have taken credit for it. I would have said that we will keep a watchful eye to make sure these railroads stay true to their commitment. I would stay away from imposing new regulations and turning back the clock on what is a remarkable success story in Canada.
Conservative
President and Chief Executive Officer, Canadian National
I can't satisfy Mr. Tougas, and it's very difficult to satisfy associations. But I have a great relationship with Mr. Lindsay, a great relationship with Bill Doyle, and a great relationship with the new CEO of Dow. I have a great relationship with our customers.
Conservative
Mark Adler Conservative York Centre, ON
But a relationship is one thing. Business is not personal; it's business, right?
Conservative
Mark Adler Conservative York Centre, ON
How would you have spoken to their bottom line? How would you have made them happy campers here?
President and Chief Executive Officer, Canadian National
As we do every year. I will tell you that last year we grew faster than the economy by about $300 million. That means we gained market share. We gained market share in intermodal. We gained market share in potash. We gained market share in coal. We gained market share in every one of our commodities because we provide good service. That's why CN is very efficient. We are winning the day in satisfying our customers and shareholders by finding new ways to innovate everything. What we're doing is working. You have a market at work.
I would have encouraged my customers and the regulator to have a wise approach to public policy and to stick with a tried and true system of commercial relationships.
Conservative
President and Chief Executive Officer, Canadian National
I feel it was biased. I can understand why there was a rail service review. I've said in other forums that CN has been perhaps the most important reason there was a service review in the first place. It started about eight years ago, in 2003. For three or four years we implemented dramatic change, too fast, not enough consultation. We created so much noise and discontent in our customer base that they convinced the government to do a rail service review.
Today I am the CEO of this company. I am running that railroad. It's the envy of the world. I think it's been a good change, maybe too difficult and too fast, but it doesn't require turning back the clock on a policy of gradual deregulation. What it requires is getting people around the table and coming forward with good sense, tried and true measures that help our customers win in the same fashion.
Conservative
Mark Adler Conservative York Centre, ON
Mr. Paton, was the consultative process sufficient from your perspective?
President and Chief Executive Officer, Chemistry Industry Association of Canada
It was badly needed and it was pretty good.
President and Chief Executive Officer, Chemistry Industry Association of Canada
I would say it was, with some exceptions.
Director, Business and Economics, Chemistry Industry Association of Canada
Are you talking about the review process, Mr. Adler, or about the writing of the legislation?