Thank you.
I'm Murad Al-Katib. I'm CEO of AGT Food and Ingredients Inc. I had the honour of serving with Mr. Emerson on the Emerson report as well. I was his lead adviser on the grain sector, on the western Canadian rail chapter, as well as on natural resources, including oil and gas and the mining sector. I'm going to bring to you some perspectives not only in that role, but also as president of one of Canada's largest container intermodal shippers. AGT Food is among, maybe, the top five or seven container shippers in the country. We're also the largest class 3 railway in the country now as well, with the purchase of a short-line railway in Saskatchewan.
Let me pick up on a couple of points that were made by my colleagues. One concerns the work we put forward and the work before you now as Bill C-49. For Canada as a trading nation, transportation infrastructure and the interaction of policy with that infrastructure is one of what I would consider to be Canada's most important generational activities. It means taking a look at how we enable the economy to seize the opportunity, as trade continues to grow, particularly to get our products to market, because of the large geographies we have in our blessed country. With these physical distances, the regulation within the system needed to be addressed in a number of areas. I'm going to break them down into bite-sized pieces.
Transparency of the transportation system was a resonating point of our report and a point that continues to resonate within industry. I think that Bill C-49 addresses greatly one of the major criticisms of the system previously. At least now we have a system such that, if these measures are put forward, the railway systems will be not only encouraged but mandated to provide data input to a system. That data will come into the CTA, will be synthesized, will be published, and will allow policy-makers to make more informed decisions instead of attempting to react on the fly. I think data transparency is a very important part. It is something that was demanded by industry, among the recommendations we made, and certainly it is something we see within Bill C-49.
When we looked at transparency, though, to reiterate both of my colleagues' comments, there was quite a strong desire for ex parte powers of the agency to investigate and be able to look more like a Surface Transportation Board, like a U.S. type of system. We seem to be falling a little bit short on that within this particular round, but we are encouraged as industry, I think, by the type of moves that are being made.
In talking about transparency, I always made the point to industry to be careful what you ask for, because it comes with responsibility. One thing you have to recognize always is that this is a transportation system. Think of it as a supply chain in which each link in the chain is essential for the link directly in front of it and directly behind it. One thing we have in the transportation system is a tendency whereby each link only blames the link ahead of or behind it.
This is a very important element, in that the responsibility of the industry becomes also reliable reporting of our forecasting, reliable reporting of our performance within the system. Efficiency is something that data transparency will drive in the system. I think this is a very important element. This isn't just about railways; it's about each link in the chain.
As that chain continues, fair access to the system is part of what we were looking to see achieved, and I think we made some very good measures in Bill C-49. What we were aiming for in our recommendations was a system whereby the playing field would be levelled to a point that we could encourage commercial agreements.
I think we have to also be very careful. Over-regulation of the transportation industry is a very slippery slope. Over-regulation of our railway system can certainly also have unintended consequences. We have a difficult environment, with long distances, the physical attributes of our terrain, and climate, such that with over-regulation we could actually drive a non-competitive system to become a drag on the economy. But while I say that, I think that fair access to the system and encouraging commercial agreements was really part of the foundation of what we were recommending.
So let's get to some of those.
Shipper remedies were quite strong within Bill C-49. There were a number of moves on the agency's authority to make operational terms within service level agreements more permanent. Reciprocal financial consequences were mandated, which was a major ask of shippers for well over a decade, and which were actually skipped in a number of the previous policy revisions. So it was a very popular move within the shipper community to encourage, then, that when you would sit at the table with your railway on a service level agreement, those operational terms would be defined, reciprocal financial consequences would be mandated by each side, and the agency could then impose those on the parties if they couldn't come to a commercial agreement.
Streamlined dispute resolution mechanisms were key. I think we made some very good progress on those. With regard to the definition of adequate and suitable accommodation, you're probably going to hear a lot about that over the next three or four days, but I do think we've certainly made some very good progress there.
In terms of the overall efficiency piece within the system, long-haul interswitching is also something that there's a lot of angst about in the system, because within the grain industry in particular, with the Fair Rail for Grain Farmers Act, we actually had 160-kilometre interswitching available, hanging there as a shipper remedy that was basically accessible. It was there, and it was extended. That has been sunsetted now, and long-haul interswitching has been introduced as a potential new remedy. I think the angst amongst shippers is from not understanding whether or not it truly can be implemented. Having heard the comments of my colleague Mr. Streiner, I have a level of optimism that in essence shippers will have a chance to apply for 12-month long-haul interswitching, which will involve distances much longer than 160 kilometres, and combining interswitching and the competitive line-haul rates could be an effective mechanism.
It is a new system, and I think that sometimes leads to angst, and as Mr. Streiner has stated, the CTA will be judged by its ability to react and implement. I've also made very strong recommendations to both Transport Canada and the agency to consider expedited renewal processes. So once it is approved for a one-year duration, how do we get the second year and the third year approved on a quicker and quicker basis? Those are service delivery things that I have some optimism about.
In terms of the maximum revenue entitlement, the modernization started within the provisions of Bill C-49 being suggested here, we recommended much broader modernization of the maximum revenue entitlement. There are some first steps that I think are very positive. The container intermodal traffic being excluded and the interswitching revenues being excluded are, I think, common sense provisions, and it made a lot of sense to include those within the modernization. To me, the ability of the railways to reflect individual railway investments was always a ludicrous provision; when one railway invested, that investment was split between the two railways. We've now fixed those. We've fixed out, with the proposals, adjustments to incentivize hopper car investments. These are all positive provisions that still protect the farmer within the MRE and still allow time to see what effect those mechanisms have, but I think they have been very positive.
There are the regulated interswitching rates as well, and then the reduction or the elimination of the minimum grain volumes.
We've made some good progress, I think, and I'm looking forward to being here over the next hour to answer your questions and to give our perspective as you need.
Thank you, Madam Chair.