Transport Committee on Sept. 11th, 2017

[David Emerson]

For sure.

The truth of the matter, honourable members, is that we threw the cat amongst the pigeons with the airport authorities. They're very comfortable organizations these days, I have to say. They've mounted a very strenuous lobby campaign to basically argue that everything is good and nothing needs to be fixed. Frankly, I think it's up to people who dig into this to look at the underlying weaknesses, because it was 25 years ago that the airport authorities were basically created. At the time, there was a thought that maybe they should be for-profit authorities because they're essentially amenable to private sector finance. There is a relatively easy way to contain the for-profit influence that a shareholder would bring. To me, it's just so important over time that you have a shareholder looking at and applying discipline to the way capital is being spent and operations are being run at some of these authorities. Today, they are really nice facilities, but going forward it's not clear that we're going to be quite as happy, because the cost base is building up.

[Martin Shields, Conservative, Bow River, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Aubin.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you, Madam Chair.

My next questions are for you, Mr. Streiner. I really need you to shed some light on the reality of western agriculture, which I'm not familiar with.

My first question is about the maximum revenue entitlement. I'm not able to find why soy derivatives or products are excluded from this measure, especially since the market seems increasingly integrated. Grains from the United States are part of the equation but the soybeans from Canada are not.

Could you enlighten me?

[Scott Streiner]

Once again, it is a matter of politics, objectives and the logic of the bill. With all due respect, this question should be addressed to the minister and the folks from Transport Canada. It is not a question for the agency that administers the act, but is not its author.

[Robert Aubin, NDP, Trois-Rivières, QC]

To date, has this caused you a number of issues in your relations with the producers or carriers?

[Scott Streiner]

Once again, I don't think this is a question for the agency responsible for administering the act.

[Robert Aubin, NDP, Trois-Rivières, QC]

I understand.

Let me try with a second topic, hoping—

I see that you want to add something, Mr. Al-Katib.

[Murad Al-Katib]

I could make a quick comment.

Soybeans were actually not very prevalent in western Canada up until recent years. They are spreading eastward. Manitoba has just in the last handful of years become a very major soybean producer. There is a movement by farmers that they do want the number of crops to be expanded in the MRE. Soybeans were raised, chickpeas were raised. They're excluded as well. There were recommendations on our side. We did recommend a few crops to be reviewed and added.

[Robert Aubin, NDP, Trois-Rivières, QC]

I fully understand that the perspective is historic. At the time when production was minimal, that was understandable, but today, it would be unacceptable. Thank you.

My second question is about interswitching and, specifically, the possibility for a railway company to request an interchange to be removed from its list. Subclauses 136.9(1) and (2) of the bill describe the obligations of railway companies to keep up to date a list of the locations of interchanges and a process including a 60-day notice to remove an interchange from that list.

From reading that, my understanding was that, after a 60-day notice, the obligations no longer applied since the time expired. However, in its FAQ last week, Transport Canada notes that the railway companies have other general obligations that they must continue to fulfill beyond the 60 days.

There is an issue with the consistency between Bill C-49 and Transport Canada's FAQ. At the very least, there is a lack of clarity in terms of the general obligations that carriers must fulfill.

[Scott Streiner]

I was not here for the presentations of the people from Transport Canada. So I'm not sure which provisions they discussed.

If the reference was to the discontinuance provisions in the legislation, those provisions require the railway company to go through a fairly lengthy process to end the operation of or to transfer a railway line.

My understanding with respect to the provision you've spoken about is that removing an interchange from a line is covered by a separate process, the provision to which you referred, but that's different from ending service on a line.

[Robert Aubin, NDP, Trois-Rivières, QC]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Brassard.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Thank you, Madam Chair.

I have one question. Mr. Emerson, you spoke about short-lines and not enough attention being paid to their role. I know that in my municipality, in Barrie, for example, the municipality owns a short-line. In many cases, it's a much cheaper alternative for local businesses to get their goods to a class 1 line so they can be moved down the line. There are some significant capital costs required to maintain the line crossings, rail maintenance, etc.

I'm just wondering if you can expand on that. What attention needs to be paid to ensure that the short-lines many municipalities rely on are made viable or remain viable?

[David Emerson]

A lot of the short-lines were kind of abandoned lines from the class 1 railways. When you look at the financial health of the short-line railways, they're pretty fragile, and they do not get the same kinds of tax benefits and advantages American short-lines get, for example.

In our report we recommended that there be a much greater harmonization of the treatment of investments in Canadian short-lines, more like those that exist in the U.S. The U.S. also has various capital pools available from government for investments in short-lines.

I don't know, Murad, if you want to add to that. I think it's a very serious problem, and if we don't deal with it, it's either going to force everybody onto the roads in trucks, or we're going to have to fix the problem probably when it's very late in the day and maybe ineffective.

[Murad Al-Katib]

We did recommend first-mile, last-mile short-line-related incentives, in particular the extension of the accelerated capital cost allowance for short-line railways, the establishment of a short-line railway infrastructure, and allowing short-lines to apply for the building Canada fund. These were all things that were there.

This is an essential element of interconnectivity. The rail lines, with consolidation, will go to main lines. The densification of short-lines is essential for rural economic development in this country.

[John Brassard, Conservative, Barrie—Innisfil, ON]

From your standpoint, then, are you disappointed that you didn't see this addressed in this piece of legislation? Should this be something that is looked into?

[Murad Al-Katib]

We recommended it as a key recommendation. It was not contained in this round. It's a disappointing aspect, for sure.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Mr. Hardie.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you, Madam Chair.

Mr. Al-Katib, you brought it up, so I'm going to ask you a question about what constitutes adequate and suitable service. If you have some opinions on what that should look like, I'd love to hear them. If you don't want to go that far out on a limb, you could just tell us or even suggest what we should be thinking about when we come to define that.

[Murad Al-Katib]

This was a point of significant consultation. One of the things is that shippers are of the view that adequate and suitable accommodation is satisfying all the needs of the shipper, full stop. We came to the conclusion that the rights of the shipper need to be satisfied but within an efficient transportation system, so we went one step further. Some of the shipping community really felt that it was quite egregious that we went further than the rights of the shipper, full stop.

For instance, if you have to invest $10 to achieve $1 of efficiency to achieve the rights of the shipper, full stop, is that efficient? My answer would be no. Adequate and suitable accommodation has a number of factors to be considered. The rights of the shipper are paramount, but an efficiently functioning system that addresses the needs of all the players in the system is a key element.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Streiner, you mentioned that you'll be looking at the airlines' tariffs to determine their performance standards. Did I hear that correctly?

[Scott Streiner]

No, we currently have the ability to look at tariffs. If we get a complaint, for example, about an incident, we can look at whether the airline applied its tariff, but we can also look at whether or not the terms of the tariff are reasonable. Under Bill C-49, we'll be making regulations that establish minimum standards for things like flight delays and lost baggage, and those minimum standards will be deemed to be part of the tariff unless the tariff provides for better compensation than is in the regulations.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

So you would essentially audit the tariffs then to make sure that the right ingredients were in there.