Thank you, Madam Chair.
Hello everyone. My name is Sean Finn and I'm the executive vice-president of CN. I'm joined by my colleague, Janet Drysdale. We appreciate the opportunity to meet with the committee to share CN's views on Bill C-30, the Fair Rail For Grain Farmers Act.
I would like to take this opportunity to confirm that CN is ready to transport grain this fall. Our locomotives, train crews and railcars are ready to serve our clients and Canadian farmers.
Regarding Mr. Pellerin's comment on the grain shortage on the south side of Vancouver last week, the explanation is very simple. The grain was not transported because it was not available last week for delivery to a market. So there is no danger with regard to transportation in Vancouver or issue with supplying grain to the network.
We are pleased that the committee has decided to review the provisions of Bill C-30. We recognize that, as a result of the serious backlog of grain in the 2013-14 crop year, the government of the time felt it had to take some action. However, the reality is that the grain would have moved at the same pace without this bill. The situation in 2013-14 was a result of the largest crop on record, combined with one of the longest and most severe winters in recent Canadian history.
To operate safely, railways must reduce train length in severe cold weather, which significantly impacts our capacity. We assured the government of the day that as soon as extreme winter conditions broke, which they did ultimately, we'd quickly ramp up to meet the capacity of the export terminals. The government felt compelled to bring in the quotas, but wisely, they were set at realistic levels based on what we and others recognized was the capacity of the supply chain. While there were a few individual weeks when we missed the quotas, overall we exceeded them.
CN believes the quotas are unnecessary and fail to recognize the importance and interconnectedness of the grain supply chain. If any part of the chain—ports, export terminals, vessels, or country elevators—is not operating at peak efficiency, the whole system suffers. We are only as strong as our weakest link.
Regulation that singles out only one component of the supply chain is, in our view, unnecessary and ineffective. I would also suggest that the quotas send the wrong signal to other Canadian shippers, by definition implying that their traffic does not have the same priority. This is not the message we want to convey to any of our customers, particularly other bulk exporters that are also competing in the global marketplace, as well as those shippers who choose to use Canadian ports and railways when they have other options.