Evidence of meeting #68 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 video is available from Parliament.
3:05 p.m.
Conservative
3:05 p.m.
NDP
Robert Aubin NDP Trois-Rivières, QC
Thank you.
I am going to continue along the lines of the person who said that we have to continue the discussion.
My question is very clear. What we have here is an omnibus bill that goes off in all directions. I imagine the passengers' bill of rights does not interest you a great deal, except on a personal level, as a consumer. We could also talk about coasting trade, but we fully understand that it is not your favourite subject either.
In terms of the provisions that are of particular concern to you, I would like to know if, in your opinion, Bill C-49 is too fast, or too vague, to provide a viable solution for your problems. Let me put the question another way. Could you accept Bill C-49 if a few amendments were made, or do you feel that there is many a slip twixt cup and lip?
3:05 p.m.
President and Chief Executive Officer, Western Canadian Shippers' Coalition
I'll just speak for WCSC.
We have made some suggested amendments to tweak language in the proposed bill. Based on what is in the bill right now, if some of the suggested tweaks, plus some of the other areas that we had expressed to the government to look into, are adopted we think we can enhance the bill to make it a better bill than what was presented to us.
3:05 p.m.
President, Western Canadian Short Line Railway Association
We walk a bit of a fine line because there are some positive things in it for our customers away from the short-line.
It was mentioned earlier that there's some concern even this year because the bill is not passed, and we're kind of sitting out there in the open. We want to be careful not to bog this down either. What we're saying is that this is strictly from a short-line perspective. There's nothing here that helps us survive, and we need to change that. Can we do that, and does that have to be part of this bill? I don't even think so.
I think we need to recognize the fact that I don't want anybody in government to think that this is helping short-lines. That's for sure. If we can do it outside of this bill or we can do it within it, we're willing to do either way, but we have to do something to help us out here.
3:05 p.m.
Chair, Alberta Wheat Commission
Alberta Wheat is a member of the crop logistics working group. We had some recommendations that we had made to improve the bill. I think if we had those, it would work very well. There are some good provisions in this bill, as I said before, and with a few little tweaks like that, I think it could be very workable and would bring some balance back into the system.
We have two monopolies that operate in rail transport. I understand why you can't have multiple railways. There is a large infrastructure investment. What we're looking for is some way to approximate a competitive system. I think this bill does go towards doing that.
3:05 p.m.
Liberal
The Chair Liberal Judy Sgro
We do have a couple of minutes left on the clock. Do any members have additional questions or do you want to do another round? We don't have enough time for another round.
Ms. Block, are there any questions on your side?
Mr. Blaney?
Mr. Badawey is interested. He has a question.
3:05 p.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
Thank you, Madam Chair.
I would comment first off that the session that we've been having this past week has been very non-political and today that changed, which is giving me the opportunity to respond. I want to make three points based on Mr. Blaney's comments.
If in fact Bill C-30 was good legislation, why did the previous government also introduce the sunset clause? The second point is why did we hear loud and clear from the witnesses criticizing long-haul interswitching during the fair rail for grain farmers study? Lastly, why did the previous government also take it upon itself to commission David Emerson to review the system, as well as propose long-term solutions as seen in Bill C-30?
My apologies, but I had to correct the record.
3:10 p.m.
Liberal
3:10 p.m.
Conservative
3:10 p.m.
Liberal
Vance Badawey Liberal Niagara Centre, ON
To get back to the productive dialogue that we have been having, I'm really interested, Mr. Pellerin, in hearing your comments. Again, the reason why we're here is that, quite frankly, we do want to strike that balance. We want to ensure that balance—albeit we heard a lot of the challenges from the main lines, from the class 1s earlier, some of which I would agree with, but most of which I wouldn't.
Your situation is something that fills that void. It fills the void for those who are most important, those who are our priority, the customers, and, of course, adds value for Canadians.
I'm going to ask the same question that Mr. Blaney asked and that is, what can we do to this bill? What can we do Bill C-49 to make it a better and more conducive for you to be a part of the ultimate performance that we have globally with respect for our economy, which is to make our transportation system more robust, which you're a part of?
3:10 p.m.
President, Western Canadian Short Line Railway Association
A point that we didn't make today was the fact that the short-lines don't have some of the opportunities available to shippers through the CTA. I've got to convince one of our shippers to take on that issue, and they're not always very happy to do that on our behalf. So that might be a good start, to allow short-line railways some of the same opportunities and avenues through the CTA. I think the CTA has a very good handle on the system and would be able to help us out in really short order on certain terms, especially issues like the service issues we have.
We give our customers traffic to the class 1 carrier and they sit there for 10 days. That's not right and we have to get that fixed. We need that opportunity ourselves. It would be a good start.
3:10 p.m.
Liberal
The Chair Liberal Judy Sgro
Thank you very much to our witnesses again. Each one of these panels has so much valuable information. It's amazing. We'll know Bill C-49 in and out by the time it gets back into the House.
Thank you very much.
We will suspend until the next group comes to the table.
3:30 p.m.
Liberal
The Chair Liberal Judy Sgro
Okay, we're reconvening our meeting.
We have several representatives with us. I am going to ask them all to introduce themselves and the organization they represent.
Mr. Audet, would you like to start, please? Introduce yourself.
3:30 p.m.
Béland Audet President, Institut en Culture Sécurité Industrielle Mégantic
My name is Béland Audet and I am the President of the Institut en Culture Sécurité Industrielle Mégantic, or ICSIM. This is an organization that we set up following the tragedy in 2013. We want the organization to be dedicated to the training of first responders in railway safety, and to instilling a culture of safety in rail companies, particularly shortlines, which actually have no training on the culture of safety. We also want to have a section on the culture of safety for the general public in Lac Mégantic.
3:30 p.m.
Liberal
The Chair Liberal Judy Sgro
Would you like to go on? You have 10 minutes, Mr. Audet. We're very interested in Lac-Mégantic, given that the only travel that the committee has done since we convened has been a trip to Lac-Mégantic. We're familiar with your organization and your desires as well. We're happy to have you here with us today.
If you would like to, go ahead and speak to the initiative.
3:30 p.m.
President, Institut en Culture Sécurité Industrielle Mégantic
As I was saying earlier, we created the organization in the aftermath of the tragedy of 2013. Local business people decided to take charge of the situation and try to make something positive out of this tragedy. We therefore have partnered with institutions such as Université de Sherbrooke, CEGEP Beauce-Appalaches, which is in our region, and the Commission scolaire des Hauts-Cantons. This partnership will enable us to work with people who are at three different levels of education. We are also partners with CN rail and Desjardins.
As you know, there's only one training centre for first responders in Canada: the Justice Institute of British Columbia (JIBC). This institute is in Vancouver, more specifically in Maple Ridge, and provides services in English only. We want to create a similar training centre in Lac-Mégantic, in eastern Canada, and provide those services to francophones and anglophones on our territory. Since Canada is so vast, it is very expensive for people from Quebec, Ontario and the eastern provinces to attend training in the west, for instance in Vancouver. After the tragedy, we felt the desire to create a centre like that in Lac-Mégantic.
As you said earlier, Madam Chair, some members of the Standing Committee on Transport, Infrastructure and Communities came to Lac-Mégantic in June 2016. One of the committee's recommendations was for Transport Canada to work with the City of Lac-Mégantic to create a training centre. We are here today to talk about it again and to draw attention to the project.
We are asking that Transport Canada standardize and enforce the training for conductors and that the training be provided by accredited organizations. We are also asking that Transport Canada standardize and enforce specific training on risks associated with railway operations for first responders in railway communities. As we know, 1,200 cities in Canada have a railway. However, people there do not receive the necessary railway training. So that's what we are working on.
We have shared a brief with you. I'm not sure whether everyone has seen it, but we can answer any questions you may have about that document.
3:35 p.m.
Liberal
The Chair Liberal Judy Sgro
Unfortunately, the clerk did not receive the brief. If you would, please resend it so that the committee has the information.
3:35 p.m.
President, Institut en Culture Sécurité Industrielle Mégantic
Okay, I'll resend the document.
September 12th, 2017 / 3:35 p.m.
Brad Johnston General Manager, Logistics and Planning, Teck Resources Limited
Thank you very much.
Chair, members of the standing committee, clerk and witnesses, good afternoon everyone.
My name is Brad Johnston. I'm the general manager of logistics and planning for Teck Resources. Today I'm joined by my colleague, Alexa Young, head of federal government affairs.
Thank you very much for the opportunity to discuss Teck's view on Bill C-49. Teck is a proudly Canadian diversified resource company. We employ over 7,000 people across the nation. As the country's single largest rail user, and with exports to Asia and other markets totalling close to $5 billion annually, ensuring that this bill enables a transparent, fair and safe rail regime, and one that meets the needs of users and Canadians is of critical importance to Teck.
Throughout the consultation process leading up to this bill's development, Teck has sought to advance balanced solutions to address the significant rail service issues that all sectors have regularly experienced. Perennial rail service challenges have impacted our competitiveness, our national supply chains' long-term economic sustainability, and Canada's global reputation as a trading nation. To put this into perspective, the direct costs attributable to rail service failures incurred by Teck alone have amounted to as much as $50 million to $200 million over 18-month periods in the past decade. These are added costs, of course, that our global competitors do not incur. Foundationally, we believe the solution is a legislative regime that inspires commercial relations in our non-competitive market, while maintaining the railways' abilities to be profitable and operationally flexible. This solution would benefit railways, shippers, and all Canadians.
At the heart of our recommended solution has been the need for a meaningful, granular, and accessible rail freight data regime. We've also advanced a definition of adequate and suitable service that acknowledges the unique monopoly context in which we operate. Teck has offered what we believe to be the only long-term and sustainable solution to addressing the acute imbalance in the railway-shipper relationship, and that is for allowing for real competition in Canada's rail freight market by extending running rights to all persons, including shippers.
What do we mean by “running rights”? Similar to when competition was enabled in the telecommunications sector in Canada, we mean opening the door to competition in the rail sector—in other words, allowing new entrants who meet specific criteria to run a railway. While disappointed that the introduction of real competition isn't addressed in the bill, more so than in any past legislative review, we're strongly encouraged by the bold vision Bill C-49 represents in many of its provisions. These include new reporting requirements for railways on rate, service and performance; a new definition of adequate and suitable rail service; enhanced accessibility to remedies by shippers on both rates and service; and a prohibition on railways from unilaterally shifting liability onto shippers through tariffs.
We also believe that Bill C-49 achieves the right balance in reflecting the needs of various stakeholders, including both shippers and railways. However, it's our view that to meaningfully realize the bill's intent and to strike the balance we believe it seeks to achieve, some minor adjustments will be required. The amendments we propose are meant to address design challenges that will have unintended consequences or that will simply not fulfill the bill's objectives. Our proposed amendments also address the reality that, due to having to rely on one rail carrier for all of the movement of our steelmaking coal and/or because of geographical limitations, some of the major provisions in Bill C-49 aimed at rebalancing the shipper-railway relationship won't apply to certain shippers, including Teck. For instance, the long-haul interswitching provisions aren't an option for our five southeast B.C. steelmaking coal mines, because this region is amongst the vast geographical areas that the provisions simply do not cover. Further, our recommended adjustments reflect Teck's actual experience with existing processes within the act.
On transparency, Bill C-49 goes a long way to addressing service level data deficiencies in our national rail transportation system, deficiencies that have led to business and policy decisions being made in an evidence vacuum. However, we're concerned that, as written, certain transparency provisions will not achieve the objective of enabling meaningful data on supply chain performance to be made available. Of specific concern is the design of the data-reporting vehicle outlined in clause 77(2).
The U.S. model that is being relied on is flawed and doesn't provide the level of reliability, granularity, or transparency required for the Canadian context. First, as the U.S. model is based on internal railway data that is only partially reported, it doesn't represent shipments accurately or completely.
Further, the U.S. model was created when the storage and transmittal of large amounts of data wasn't technologically possible. With the data storage capabilities that exist in 2017, there's no need for such a restriction in either the waybill system for long-haul interswitching outlined in clause 76 or the system for service performance outlined in clause 77. Note that railways are already collecting the required data.
To ensure the right level of service level data granularity is struck to make it meaningful, and to ensure it reflects the unique Canadian rail freight context we operate in, we recommend an amendment that ensures all waybills are provided by the railways rather than limiting reporting to what is outlined in 77(2).
For the ability of the agency to collect and process railway costing data, we believe the bill will significantly improve the Canadian Transportation Agency's ability to collect and process this costing data, enabling it to arrive at costing determinations to ensure the rates shippers pay are fair and justifiable. This is critical to maintaining the integrity of the final offer arbitration process as a shipper remedy to deal with the railways' market power. However, we're concerned that as written, a shipper won't have access to that costing determination, which defeats one of its purposes.
Under the current FOA model, it's the practice of an arbitrator to request an agency costing determination only when the railway and the shipper agree to do so. However, we witness the railways routinely declining to cooperate with shippers in agreeing to make such a request. Bill C-49must limit a railway's ability to decline this request. To ensure the right level of transparency and accessibility is struck so that remedies are meaningful and usable, we recommend that shippers also be given access to the agency costing determination that comes out of this process.
On level of service, we're concerned that the language offered in Bill C-49 for determining whether a railway has fulfilled its service obligations doesn't reflect the reality of the railway-shipper imbalance, given the monopoly context in which we operate in Canada. In proposed subsection 116(1)(1.2), Bill C-49 would require the agency to determine whether a railway company is fulfilling its service obligations by taking into account the railway company's and the shipper's operational requirements and restrictions. The same language is also proposed for how an arbitrator would oversee the level of service arbitrations. This language doesn't reflect the reality that in connection with the service a railway may offer its customers, it's the railway that decides the resources it'll provide. Those decisions include the purchasing of assets, hiring of labour, and building of infrastructure. Any of these decisions could result in one or more restrictions.
As those restrictions are determined unilaterally by the rail carrier, it's not appropriate for those restrictions to then become a goal post in an agency determination. As such, we recommend either striking out the provision or making the restrictions themselves subject to review.
In conclusion, as the failures of past rail freight legislative reviews have demonstrated, despite good intentions, legislative design is critical to enabling those intentions to come to fruition. Getting this bill's design right with a few minor amendments will help Canada shift away from a status quo that has resulted in continued rail freight service failures and led to a proliferation of quick-fix solutions that have picked winners and losers across industries over the past years.
Again, as the biggest rail user in Canada, we believe this is the opportunity to be bold and to set a new course in building a truly world-class rail freight regime in Canada to the benefit of shippers, railways, and all Canadians. Thank you very much, and I look forward to your questions.
