Evidence of meeting #24 for Transport, Infrastructure and Communities in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was railways.
A recording is available from Parliament.
9:50 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
Pardon me, but the question is very specific, and I can't offer specific comment on a situation when I'm not familiar with its full scope and details.
Again I would come back to the fact that we've been over these issues for years, decades, and for some associations a century, and we have competing claims. Railways say we don't need interswitching. Some shippers say we do. Why don't we just disclose the information and find out what the truth of the matter is?
9:50 a.m.
Conservative
Dianne Lynn Watts Conservative South Surrey—White Rock, BC
You figure that can be done through the CTA.
9:50 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
MAC is open to different options. We have developed a legal recommendation for the type of data that we would like to see disclosed, the frequency that we would like that data to be disclosed, how that data would be made publicly available, and what portions of that data are confidential and how that would go to shippers. We're happy to share that with the committee if that would be of interest.
9:50 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
Fundamentally, what we perceive is a point of tension, and that point of tension is on a fault line of whether we veer toward network efficiency or whether we veer toward the common carrier obligation and the rights of the shipper.
Our experience—in the last five years, anyway—has been an inability to reconcile those things. The approach we're taking now is that we're not looking necessarily for specific policy measures to reconcile what, in some instances, is a very difficult situation. What we'd like to see is better measures to allow the parties themselves to avoid those situations, avoid the deadlock.
9:50 a.m.
Vice-President, Business and Economics, Chemistry Industry Association of Canada
I'm always stunned when I hear that someone says railcars are sitting somewhere. Our members, as I said at the outset in my opening comments, look after 100% of their own railcars. I can say that we have had to increase the ownership and leasing of cars by a third because the turnaround time to get the cars back has gone up by a third. That means we've had to invest more and more in infrastructure ourselves.
The level of service is not getting better, but the facts are entirely controlled by two railways. How can you be given accurate information when that information is controlled by one of the parties in the dispute? We need to have some independence for the way in which the information is available. We also have to respect some of the products that some of our members move. Even the volume is confidential, because it represents market share in a business where there may only be two players. The way in which we disclose that information may be fine to you, but maybe not to our direct competitor.
Information is power in this game. We are seeing increases in turnaround and reduction in service. We're having cars delivered to the wrong place, and then we're having to pay a penalty because we didn't turn the car around in time to have it picked up because it was delivered to the wrong gate. If cars are delivered back with damage and without reports, we can't reuse them in the system. We have to take them back and have repair work done.
This is about reciprocity and balancing market power. The profit motivation to invest in improvements has proven to be very strong for CN and CP. They have done great things to improve service. I'm simply saying it's not nearly enough. Shareholder value has gone up a lot more than the level of service.
9:55 a.m.
Director, Industry Relations, Pulse Canada
With regard to data, the grain industry has recognized for years that the transparency of data is essential. For years we spoke anecdotally about poor service. Now we've invested in a program that measures railway performance every week, and shippers are seeing the performance they're getting at every location. We measure it by demand. A shipper needs a car for a certain week, and we measure the railways on their performance for that week. It's changed the way we've been able to talk about performance. It's changed the way shippers have been able to deal with railways. It's changed the way railways have talked about their own data and how they publish their own data. It's tremendously powerful.
As for the competition aspect, we welcome competition. Everybody in a business gets better through competition. We think it's an opportunity for the railways to improve the way they service their customers. If they have competition from a third railway, they should embrace it.
9:55 a.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
Thank you, Madam Chair. I have a few questions with respect to some of the comments that were made.
First off, the comment was made earlier about interswitching being made permanent as well as being expanded throughout the entire country. Currently, are any one of your industries using any multimodal methods with rail, but also with shipping by rail and road, and at what capacity?
9:55 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
The mining industry uses all modes of transportation, ranging from millions of tonnes of coal or iron ore—which is a relatively low-value, high-volume product—to gold and diamonds, which people will fly out on a plane in a briefcase. The whole spectrum of transportation usage is in effect for mining.
9:55 a.m.
Liberal
9:55 a.m.
Vice-President, Business and Economics, Chemistry Industry Association of Canada
I would add that intermodal shipping is important to us because of our international shipments. We have to get containers to ports and then load them on, so port service is just as important and can become a constraint from time to time. Then we move them by marine to get to international markets around the world.
9:55 a.m.
Executive Director, Barley Council of Canada
I'll give you an example. As far as the malting industry goes, the largest maltster in Canada couldn't get railcars to ship malt and barley to Montreal, but could get containers on time and all the time. Mind you, you have to ship it in 20-tonne containers because they need to get the containers back to port for the haul back overseas. They can't get the cars, but they can get the containers, so that's what they're doing.
9:55 a.m.
Director, Industry Relations, Pulse Canada
Sixteen per cent of all our movement is through container. Virtually all the movement of what we send east is through container. Twenty-five per cent of special crops move in container. We've developed specialized supply chains whereby we'll move product in bulk to Port Metro Vancouver and transload it into an ocean container.
10 a.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
Of course that capacity with respect to each method of transportation would change based on an overall national strategy, and, quite frankly, that can be international with respect to working with other countries that may be integrated within our transportation network.
All of that being said, with respect to how you're operating, as you may know, the Canada Transportation Act review has been tabled by the minister, and this committee is moving toward establishing a transportation and logistics strategy for all modes of transport as well as all of the commodities that are utilizing those modes of transport.
Do you think, given a lot of the comments and opinions that have been expressed today and a lot of the recommendations that may come out of this exercise with Bill C-30, that this strategy should take the recommendations out of a process of strategizing? Having a recommendation come forward may in fact suffice for the interim, but ultimately the overall recommendations that would come forward would come out of that strategy. What are your thoughts on that?
10 a.m.
Vice-President, Business and Economics, Chemistry Industry Association of Canada
I'd be very concerned that we not wait for the perfect.
At this point, there is a service issue. There is a service imbalance. There's an information issue. I believe that intermodal is very important and getting to international markets is very important. Most of our product is still moving north-south or east-west within North America, so the harmonization with the U.S. systems and rail system is, in my opinion, job one.
The intermodal aspect is very important. I would be concerned that we not delay. We've already been in discussions around service imbalances for over a decade, and the problems aren't getting better. I appreciate that we do need a national strategy that covers intermodal movement, but in the meantime we also need improved rail service.
10 a.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
When you're looking at improved rail service, are you looking at something that's more interim in nature or more permanent in nature, taking into consideration that in fact we are moving forward with establishing a strategy?
10 a.m.
Vice-President, Business and Economics, Chemistry Industry Association of Canada
I think it's an all-of-the-above approach, because an investor looking at whether to come here versus whether to go somewhere else is going to want to have a robust system in place to move the finished products. As I said at the outset, 80% of our production has to move by rail. If the system isn't continuously improving, then the investor is going to say, “You can barely move what you're already producing; why add new capacity? We'll invest down in Texas and Louisiana. Thank you very much.”
10 a.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
My last question is with respect to the barley industry. It was mentioned earlier that the CTA should be given more power. Do the chemical and mining associations agree? If so, will this help move your commodity?
10 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
We're still reviewing some of the recommendations in the Canada Transportation Act, but with respect to creating a super-agency, there is some uncertainty over how effective that would be in addressing some of the challenges that shippers face.
I've been working on this file through the last four pieces of legislation that have affected the rail freight market in one respect or another. I can't reiterate strongly enough that the need to clearly right-size any policy changes or regulatory changes to the market is crucial to actually having the desired effect. If we look back on those pieces of legislation, specifically from a rail freight service standpoint, we can see that the outcome has not matched the desired effect. We're urging, respectfully, a database-informed approach, regardless of whether that is with respect to empowering the agency or otherwise. For us, the most important first step needs to be to clearly identify the problems so that a refined—
10:05 a.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
This is part of the strategy, with respect to a transportation and logistics strategy. It is also a management—
10:05 a.m.
Vice President, Economic and Northern Affairs, Mining Association of Canada
Yes.
