Evidence of meeting #62 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 customers.
A recording is available from Parliament.
4:20 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
Thank you, Mr. Chair. It's always nice to back.
If I may, just to address Mr. Coderre's comment, I think if you consult or ask rural Canadians, they would sooner have—
4:20 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
—fewer grade crossings than more, even though it is a challenge, because that would improve service. It improves the quality of service. It's frustrating at times, but I think in the long term....
I'll use the example of cities on the west coast. They have crossings that delay traffic for hours. When you have it at the grade level, you're subject to this.
In Winnipeg we wait in line sometimes 90 minutes.
4:20 p.m.
Liberal
Denis Coderre Liberal Bourassa, QC
You're a great democrat: if everybody wants it, you're supporting it.
4:20 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
At any rate, what I would like to say in response, and to the railways, is that the agriculture committee has heard from a lot of the grain producers in western Canada. They have stated clearly that they've seen a tremendous improvement in service delivery.
I respect the fact that the last two months have been a challenge, but you don't necessarily base the whole year on a five-game losing streak kind of thing.
Gord, I do want to ask you just a couple of questions, because I'm trying to understand this. You take delivery of the machinery that comes into your working area. You have an agreement with CN and CP and other rails, or that's how I understand it.
What happens to you, or your agreements, when the rail companies strike agreements with the shippers? How are you impacted by that? Are you part of that equation, or are you part of that discussion?
4:20 p.m.
President and Chief Executing Officer, Cando Contracting Limited
Part of it is that we are now. The question is whether we're part of it in the future. We're going to have to be, because we could be liable.
What's our part in this? We take a train, we break it apart, and we give it to five shippers. CN and CP have admitted that on those types of deliveries, they have problems. That's our forte—breaking trains apart and putting them back together again.
So if there's some area that we're concerned about, we wonder what it's impact will be on us because we are dealing with an integrated system here. We can see it being very negative, that it's beyond our control and there's nothing we can do. If CN and CP are negotiating with shippers and coming to different agreements and we're not in the loop, we've got a serious problem.
I think it's a red tape thing. I sit on the red tape commission with the federal government. You know, that was one of the things from your government, to try to get rid of red tape. Especially for small businesses like ours, red tape is a huge burden, and I really don't want any more burden on our company. We've been very successful, being Canadian-owned and surviving in this. We think we're doing a great job at working with shippers.
If you do your surveys and you go and talk to some of the shippers that are on our lines or that we work with industrially, I think you'll find there are some huge improvements.
4:20 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
Perhaps I could just quickly add something, Mr. Tweed.
4:20 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
As we talked about before, there's the issue also of unintended consequences. Under the bill, if an arbitrator were to impose service that wouldn't take into account, as the shippers would like to see, the network operations, you could be in a situation where a service is imposed by an arbitrator for one shipper: it might be possible for CN to meet that service level, but not our partner. All of a sudden, unfortunately, our partner or our supply chain partner will either be an impediment to serving, or, taken in isolation, that agreement and that level of service does not take into account the broader perspective of the network and the other players involved in the movement.
4:20 p.m.
President and Chief Executing Officer, Cando Contracting Limited
One of the clear examples of that could be weights, loaded cars. We have all the light-density lines. Some of our lines don't have heavy rail on them. If somebody imposed on us that we had to take the heavy cars, we'd be out of business—just like that.
4:20 p.m.
Conservative
4:20 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
That's you. So to not be included in those negotiations, or at least a part of the discussion, would be very damaging, I suspect, to all the short lines, or to all the people providing that service.
4:20 p.m.
President and Chief Executing Officer, Cando Contracting Limited
It's more than just the short lines. I mean, we have 14 industrial clients and we work in their plants—potash mines, automotive plants, oil refineries. We have lots of people in a lot of those plants. That's what we're doing today. We're a liaison between the widget builder, the oil refinery or the automotive, and our partners here.
Typically we come up—we know these guys well—and when they move, if something's not right, we can approach them and get some movement on that on behalf of our customers. It's our industrial clients who pay us, not CN and CP. We're not working for.... We are working for the system, but we're working for the transportation system, and the industrial clients are paying us to improve their systems.
4:25 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
Would all or most of the companies that you represent, as far as the small rail association is concerned, agree with that?
4:25 p.m.
President and Chief Executing Officer, Cando Contracting Limited
I think they would.
4:25 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
With the bill the way it is, I guess I would ask, does that suggest that you have to be a part of the discussion? Or is that just going to be an automatic?
4:25 p.m.
President and Chief Executing Officer, Cando Contracting Limited
There are two problems. One, we're provincially regulated—Cando is. So ours wouldn't be affected. So, on the one hand, we could say we're not part of it. You guys promised something to your customer. Well, that's still not going to do anything for anybody if we're in the middle of this and we say, nobody talked to us. Nobody had to talk to us. We're out of it. I still don't see where that's going to improve the rail system. It's going to be one piece in the middle of that thing. It's like taking a mile of track out and saying okay, now figure it out. So I don't see it.
Now a bunch of our short lines are federally regulated and will fall under this. But it's a multiple move. There are lots of moves on which CN, CP, and we get together. This hits all three of us. So who imposed what, how, when? You're complicated. I just don't see....
If you look back at the improvements.... Like I said, we've been at this since 1978 and we're excited about it. We think we've done a lot of great work and I think we're getting recognition from both industry and our class 1 partners that the short-line industry is here to stay. It's had some ups and downs. We're really the first mile, last mile. Whether you call us a short-line operator or you call us an industrial switcher, I don't see a whole lot of differences. It's working on that first mile and last mile.
4:25 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
Do the provincial regulations prohibit you from entering into agreements as part of the bigger negotiation? What's their role then?
4:25 p.m.
President and Chief Executing Officer, Cando Contracting Limited
Their number one role is probably safety more than anything else. So their role in the commercialization of this is with the commercial agreements that Mike talks about and stuff like that, where we try to get into the loop with our shippers and that—what's signed, what's not—and to get in while we're helping them to set priorities on who is going to do what. And if there are changes, what will we do? With some of the trains that we've set up, we air them up and get them ready to go, so that our partners CN and CP can come back on, hook on, and they're gone. It speeds up the whole system.
4:25 p.m.
Conservative
Merv Tweed Conservative Brandon—Souris, MB
For all the witnesses, on the question of the ports and access to them, do they now have to be a part of that information chain? I assume that over the years they haven't been—or haven't been as active or as involved in it?
4:25 p.m.
Executive Vice-President, Corporate Services and Chief Legal Officer, Canadian National
One of the catalysts of the rail service review was, in our case, about the ability to enter into every port in Canada with a level of service agreement where we exchange information and try to get the details about line of sight, about how many boxes have been landed for more than 48 hours. All of us together realized that the supply chain through Vancouver, Rupert, or Halifax was only as strong as the players who were playing there. That's really been an impediment...for the rail service review to look at and say, historically they're not customers, they're not shippers, but they're an integral part of the supply chain.
So in the case of CN we have agreements with every port in Canada, wherein we regularly exchange information on what's going well, what the issues are, what terminals are loading and unloading, and try to adjust the supply chain to make sure that we meet the needs of the ultimate customer who is using these ports as gateways to Canada.
4:25 p.m.
Conservative
March 5th, 2013 / 4:25 p.m.
NDP
Philip Toone NDP Gaspésie—Îles-de-la-Madeleine, QC
Thank you, Mr. Chair.
I've been listening to the testimony. It's been very enlightening and I thank you for it.
It is stunning to see how the shippers seem to have a completely opposite position to what you're proposing today. But, hopefully, a compromise is going to be found somewhere.
First, I just have a technical question. Ms. Paul, you were talking about logging, the forestry industry, and their percentage use of the rail lines. Certainly where I live there's a lot of intermodal transportation. Did I miss that? Did you mention anything about intermodal?
4:25 p.m.
General Manager, Service Delivery, Canadian National Railway Company
Intermodal is actually a great alternative that we've introduced in the last couple of years for a lot of our pulp and our paper customers. So that's another mode whereby many of our customers will ship into some of our intermodal terminals like Saskatoon and Prince George and we will rail from there. We call it our intermodal flex program. It's just another way of including the alternative modes of transport that are available in containers.
