Transport Committee on Sept. 13th, 2017

[The Chair, Liberal, Judy Sgro]

We are reconvening our meeting on the study of Bill C-49.

We have with us in our next panel the Mining Association of Canada, Teck Resources Limited, the Forest Products Association of Canada, and the Shipping Federation of Canada.

I welcome all of you and look forward to hearing your remarks.

Would the Mining Association of Canada like to open up this panel and start their 10-minute presentation? Mr. Gratton, would you please start?

[Pierre Gratton, President and Chief Executive Officer, Mining Association of Canada]

Thank you very much, Chair and members of the committee, and clerk and fellow witnesses. It's a pleasure to be here.

My name is Pierre Gratton. I'm president and CEO of the Mining Association of Canada. I'm joined by my colleague, Brad Johnston, whom I think you met yesterday. He is the general manager of logistics and planning for Teck Resources Limited and is someone who works with the railways on a daily basis.

I'll begin by saying just a few words about the mining sector, which, as you know, is an economic stalwart, contributing some $56 billion to national GDP in 2015 in what was a down market. We're major employers, with some 373,000 people working directly and another 190,000 working indirectly for our sector. We pay the highest industrial wage in the country. We're active in both urban and rural settings. Proportionally, we're the largest private sector employer of indigenous peoples and a major supporter of indigenous businesses and are thus a powerful partner in indigenous economic reconciliation.

While increased mineral prices have returned some confidence to the global mining industry, increasing domestic uncertainty and business costs are raising questions over whether Canada is well positioned to take advantage of the next upswing. We are seeing Australia, our major competitor, rebound at a far greater rate than we are currently in Canada, which is concerning.

The effectiveness and reliability of rail freight service are critical to Canada's mineral investment competitiveness throughout the ups and downs of the commodity cycle. There are significant costs associated with transporting goods to and from the mine site, and companies need to get their goods to their international customers on time. I can report that our members' customers are closely monitoring this bill and its potential impacts as a measure of Canada's reliability as a source for raw materials.

If railways are the arteries of our trading nation, then the mining industry is the lifeblood upon which they depend. We account for 20% of Canada's exports and over half of total rail freight revenue generated each year, making us the largest single customer group of Canada's railways. I would just ask you to imagine the state of Canadian rail without mining and the impacts it would have on grain, forest products, and all other rail-reliant industries in Canada.

Despite this, we are continually facing an unlevel playing field in the rail freight market, which manifests itself as significant and perennial service failures. The reason is that the Canada Transportation Act is an imperfect surrogate for competition in a monopoly marketplace. Many shippers are captive to one railway and are beholden to railway market power as a result.

It's crucial to get this bill right on this third legislative attempt in four years. We hope the committee is also encouraged by Minister Garneau's boldness in introducing an ambitious package of reforms. On this note, we are highly supportive of a number of provisions in the bill, including new reporting requirements for railways on rates, service, and performance; the addition of a definition of “adequate and suitable” rail service that confirms railways should provide shippers with the highest level of service that can reasonably be provided in the circumstances; and strengthening the prohibitions against railways shifting liability onto shippers through tariffs.

We want profitable railways, but not at the expense of national economic growth. That is why we support the objectives of Bill C-49, with minor adjustments that will ensure its intended outcomes are achieved. I will now address three areas where we think that's necessary.

The first is data transparency. Enhancing railway data transparency is not only consistent with the government's commitment to data transparency and evidence-based policy, but critical to improving the functionality of rail freight markets. Robust disclosure would inform public policy-making, improve railway-shipper relations, and avoid unnecessary and costly disputes. All parties having a clearer picture of respective capacity and limitations would better compel them to achieve the optimal workable outcome.

While Bill C-49 proposes positive measures to address service-level data deficiencies, we're concerned that, as written, certain transparency provisions will not lead to meaningful data on supply chain performance. Of specific concern is the requirement in subclause 77(2), a measure that would align the Canadian and U.S. systems.

Our concern is that the U.S. model is based on internal railway data that is only partially reported. It doesn't represent shipments accurately or completely. It was created decades ago when large-scale data storage and transmissions were not technologically possible. With the data-storage capabilities that exist today, there is no rationale for such a restriction in either the waybill system for long-haul interswitching outlined in clause 76, or for system performance outlined in clause 77.

To ensure the appropriate level of data granularity and to ensure the proposed legislation reflects Canada's unique rail freight context, MAC recommends an amendment that would require all waybills to be provided by the railways, rather than the limited reporting that is outlined in subclause 77(2). This modest enhancement is consistent with the direction of this bill, but with the added benefit of modernizing a system that was designed decades ago.

While MAC is supportive of Bill C-49 improvements to costing data collection and processing by the agency, we also raise one minor but important consideration related to final arbitration.

Currently, arbitrators request an agency costing determination only when the two parties agree to make the request. However, railways habitually decline to co-operate with shippers for this request, thus limiting the ability of the parties involved to be equally informed. We know of no legitimate rationale for a railway to decline an agency costing determination, other than to deliberately frustrate the process. To ensure that the right level of transparency and accessibility is struck so that remedies under the act are meaningful and usable, we recommend that shippers be granted the right to an agency costing determination. Often confidentiality considerations are raised, but the committee should note that in agency proceedings redacted decisions protect confidentiality. Further, FOA processes are already confidential. We are not proposing any changes to these practices.

The second issue addresses level-of-service obligations. In proposed subsection 116(1.2), this bill would require the agency to determine whether a railway company is fulfilling its obligations by taking into account the railway company's and the shipper's operational requirements and restrictions. Identical language is also proposed to govern how an arbitrator oversees level-of-service arbitrations.

Our members are concerned that the proposed language for determining whether a railway has fulfilled its service obligations does not reflect the reality of Canada's monopolistic rail freight market. The quality of service that a railway company offers is influenced by how it allocates its resources. These decisions include purchasing assets, staffing, and construction. All those restrictions are determined solely by the rail carrier. Their consideration and fulfillment of service obligations leaves the shipper structurally disadvantaged. The goal of the agency should be facilitating the correct decision based on the facts, not a balanced decision between the parties. To address this, we recommend either striking out this requirement or making the restrictions themselves subject to a separate review.

Third and last, Bill C-49 proposes a long-haul interswitching remedy that demonstrates in principle a creative approach to addressing a long-standing competitive imbalance in our rail freight market. By design, however, when the number of non-entitlement provisions are taken into account, a remedy that could hold significant promise if implemented more liberally, becomes unduly restricted to the exclusion of many. As proposed, it mirrors the current competitive line rate remedy that it proposes to replace.

However, CLR has been largely inoperative for the past three decades because class 1 railways have declined to compete for traffic and are not naturally compelled to do so by market forces. Hypothetically, even if the railways chose to compete using long-haul interswitching, Bill C-49 includes a number of provisions that would make LHI unusable or would create unnecessary barriers for many captive shippers, including a long list of excluded traffic, including by cargo type or geographical restriction. Unless these are revisited, the remedy as proposed will de facto confirm in policy and law the captivity of a host of shippers, the very same shippers it purports to assist.

To conclude, we acknowledge that this bill represents a bold and holistic attempt to addressing the anti-competitive challenges inherent in Canada's monopolistic rail freight market, and the disproportionate burden that shippers endure as a result. For this reason, its direction should be lauded.

The amendments we are seeking are modest and highly consistent with the legislative package. They continue to allow the railways to be profitable and have operational flexibility, but are material enough, and definitely important enough, to make a critical difference if not taken into account. In fact, we fear that without these amendments, this bill may leave us in the same situation that the previous bills have done in the past, not ultimately solving the issues we have been challenged with.

Thank you for your time, and I would be pleased to answer questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will move on to the Forest Products Association.

[Joel Neuheimer, Vice-President, International Trade and Transportation and Corporate Secretary, Forest Products Association of Canada]

Thank you, members of the committee, and thank you very much for having me here today on behalf of the members of the Forest Products Association of Canada.

FPAC is the voice of Canada's wood, pulp, and paper producers, a $67-billion a year industry. Our sector is one of the largest employers of indigenous peoples in Canada, including 1,400 indigenous-owned forest businesses. As the third-largest manufacturing industry, it is a cornerstone of the Canadian economy, representing 12% of Canada's manufacturing GDP. We export 33-billion dollars' worth of goods to 180 countries. We are also the second-largest user of the rail system, transporting over 31 million tonnes by rail in 2016.

As Minister Garneau said in his May 18, 2017, speech in Edmonton, “The challenge of our time is to further enhance the utility, the efficiency and the fluidity of our rail system.”

FPAC believes that the primary goal for transportation policy is a freight system that is even more competitive, efficient, and transparent, to reliably move Canada's goods to global markets. This is most likely to emerge if guided by commercial decisions and competitive markets. At the same time, there are some markets where competitive forces are limited or non-existent, and where there is a legitimate and necessary role for regulation and other government action, including a number of the types of concepts being considered in Bill C-49.

Forest industry mills are normally located in rural, remote communities, and served by one single rail carrier hundreds of kilometres away from the next competing railway. That causes an imbalance of power between these mills and the railways. Poor service costs our members in the hundreds of millions of dollars every year, including the cost of things like lost production, alternative transportation costs, additional storage, additional management and overhead costs, and long-term business impacts.

While the railways are one of our most important partners on Canada's supply chain infrastructure needs, as well as reducing GHGs, FPAC members need Bill C-49 to help balance the playing field when it comes to their business dealings with railways.

Bill C-49 needs more robust and workable measures than what are currently included. Without these changes, Canada's economy and the jobs that our member companies and other industries provide across the country will continue to be threatened. Urgent action is needed. The economies of over 600 communities across Canada depend on their local forest products mills. Making Bill C-49 work the way it is intended to will enable our members and other industries to create more middle-class jobs and help prevent economic failures in communities, such as but not limited to things like mill shutdowns resulting from poor rail service. In the case of a large pulp mill, for example, this would mean losses in the range of $1.5 million a day.

FPAC supports Bill C-49's wording on reciprocal penalties. However, to be truly effective, there are some critically important amendments that should be made, which are consistent with the minister's intent for this bill.

FPAC urges the government to make changes in five key areas. The specific wording changes and rationale behind each of these is outlined in the detailed annex that is included with my remarks this morning. I would like to focus today on a few of these important changes.

First is the improved access and timelines to agency decisions. As is, the bill will weaken the agency's ability to respond quickly to urgent rail service issues, unless it is amended so that the agency controls its own procedure. The U.S. equivalent to the Canadian Transportation Agency, the Surface Transportation Board, or STB, recently began a service-related investigation on one of the class 1 railways in the United States. The STB did not have to wait for the U.S. Secretary of Transportation to instruct them to do this. They recognized that there might be a problem and they began to investigate.

Why can't we have the same set-up here in Canada? Who wants to wait for the Minister of Justice to ask the police to investigate every time someone may not be following the law? Bill C-49 needs to be amended to make this so, to help ensure that Canada's supply chain is working well in delivering for the 600 forest communities, hundreds of other communities, and millions of workers it supports across Canada.

The second one relates to the definition of “adequate and suitable”. As currently written, the bill tells the railways that if they provide the highest level of service they can reasonably provide in the circumstances, they cannot lose a service complaint. The objective of our proposed wording change is to make the intent absolutely clear, without the need for protracted litigation about what this clause really means. The final outcome on this component of the bill must prevent current failures, such as the following that our members must live with. At a minimum, give the Canadian Transportation Agency the mandate to investigate, on its own, these types of matters.

When members ask why their traffic has been left behind or why they have not received empty cars that have been sitting at the railway's serving yard, they hear it is because priority is being given to another commodity sector.

We have members who have product to ship to current and potential customers, whose facilities are accessible by rail, but they cannot get enough railcars or are not served frequently enough and are being discouraged by the rates that are quoted. These types of service issues are not isolated, and they cost our members in the hundreds of millions of dollars annually.

Third is long-haul interswitching. The bill needs to be amended to eliminate the unnecessary prerequisites for using this remedy as well as the many exclusions. Without important amendments, long-haul interswitching will not be a usable remedy for the majority of captive forest products traffic.

Next is data disclosure. As currently worded, the interim provisions in the bill dealing with rail performance data will provide supply chain participants with data that is too aggregated and too out of date to be of any real use in their planning. The time frames for reporting and publication need to be shortened. For example, the bill says requirements will be set out in a regulation in a year. Can we not do better than that with so much at stake? Also, more granular detail needs to be published, such as, but not limited to, commodity-specific information regarding such things as grain, coal, lumber, pulp and paper; results by railcar type, on a weekly basis; and by region, for example, east and west.

Oversight of railway discontinuance processes needs to be strengthened. As currently worded, the bill will prevent the creation of viable short-lines by allowing railways to suspend service before the process is completed, thereby making it more difficult for an alternative railway to take over. Making these changes will mean Canadians in communities across the country will be served by a more reliable and competitive freight transportation system.

FPAC members take great interest in transportation issues because they account for up to one-third of their input costs. The availability of an efficient, reliable, and cost-competitive transportation system is essential for the future investment in our sector and to support the families across Canada that rely on our industry for their livelihoods.

Members of the committee, for the 230,000 Canadians across Canada directly employed by the forest sector, a more competitive freight transportation system, as outlined here, will ensure increased access to the rail system, more reliable service throughout the supply chain, more competitive rates, and a more competitive supply chain.

I will now be happy to answer any questions you have.

Thank you very much.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Now we move on to the Shipping Federation of Canada.

[Karen Kancens, Director, Policy and Trade Affairs, Shipping Federation of Canada]

Thank you. Good morning, Madam Chair, and thanks for the opportunity to appear before the standing committee on Bill C-49, the transportation modernization act.

My name is Karen Kancens. I'm here with my colleague Sonia Simard on behalf of the Shipping Federation of Canada, which is the voice of the owners, operators, and agents of foreign-flag ships that carry Canada's imports and exports to and from world markets.

Our members represent more than 200 shipping companies whose vessels make thousands of voyages between Canadian ports and ports overseas every year, carrying hundreds of millions of tonnes of commodities, ranging from dry bulk commodities such as grain and coal, to liquid bulk such as crude oil and oil products, to containerized consumer and manufactured goods.

These ships play an essential role in the Canadian economy by facilitating the movement of Canada's international trade, and they do so safely, securely, and efficiently day in and day out. Indeed, ocean shipping is one of the world's most highly regulated industries, and foreign-flag ships are subject to a stringent regime of safety, environmental, and crewing regulations when sailing in Canadian waters, which are enforced by Canadian authorities as part of Canada's port state obligations.

Like many of our colleagues who have spoken before us, we also have a strong interest in Bill C-49's rail provisions, as we believe that the development of a more efficient rail freight system will have a positive impact on all of the elements of the logistics chain, from carriers in the rail, marine, and trucking sectors, to ports and marine terminals, to inland distribution centres and warehouses, and beyond.

That being said, we'd like to focus our comments today not on Bill C-49's rail provisions but on its maritime provisions, which we believe will also have a beneficial impact on the fluidity of the trade chain overall.

We're especially interested in clause 70 of Bill C-49, which proposes to allow all foreign-flag ships to reposition their empty containers between Canadian ports on a non-revenue basis, which is an activity that has been closed to them up until now due to the prohibitions of the Coasting Trade Act.

It's worth just backtracking a bit and noting that this isn't a new or a revolutionary concept. It's actually something that our container carrier members have been asking for and that our association has been advocating for over the last decade.

Indeed, discussions on this subject between the government and our industry had advanced to such a degree that, in 2011, Transport Canada was on the verge of introducing an amendment to the Coasting Trade Act to allow for the repositioning of empty containers by foreign-flag ships. However, those discussions were subsequently placed on hold when empty container repositioning became a negotiating item in the CETA between Canada and the European Union.

Now that those negotiations are over, Bill C-49 essentially seeks to complete the discussions that were placed on hold in 2011, when we had reached general agreement, including from some domestic ship owners, that empty container repositioning should be open to all ships regardless of flag or ownership.

Why is this issue important? It's important because a significant aspect of the container shipping industry involves moving empty containers from locations where they are not needed, or where there is a surplus, to locations where they are needed or where there is an exporter who needs empties so that he can load them with cargo for an overseas customer.

Because up until now the Coasting Trade Act has prohibited foreign-flag carriers from using their own ships to carry out this activity, they have had no choice but to employ alternative solutions such as moving the empty containers by truck or rail, or more commonly, importing them from overseas. However, none of those solutions represents the most productive use of the carrier's transportation assets, and all of them come at a price not only for the carrier but also for the exporter in the form of a less cost-efficient transportation option, as well as for the logistics chain in the form of reduced fluidity and overall efficiency.

The maritime provisions of Bill C-49 would address these issues by giving carriers the flexibility to use their transportation assets, their ships, and their empty containers in the most productive and cost-effective manner possible for the ultimate benefit of everyone in the supply chain.

Although we very strongly support Bill C-49's provisions on the repositioning of empty containers, we have a concern that the actual wording the bill uses to define the party that is eligible to reposition empty containers may be too narrowly focused and that this may make it difficult to achieve the full benefits of liberalizing this activity.

More specifically, subclause 70(1) of Bill C-49 provides that the party that may reposition its empty containers is the owner of the ship, which is defined in subsection 2(1) of the Coasting Trade Act as the party that has the “rights of the owner” with respect to both the ship's possession and its use. We see a potential problem in how this definition will be applied in cases involving vessel-sharing agreements, in which a number of container carriers enter into an agreement to share space on one another's ships and which are used extensively in the container shipping industry.

It's not clear to us at this point how the partners in such an agreement would have the rights of the owner with respect to the ship's possession other than in cases where it's their ship that's being used to reposition the empty containers. Indeed, depending on how the ships in a given vessel-sharing arrangement are allocated, a ship owner may only have the ability to reposition its empty containers on every fourth or fifth voyage, which would reduce the significant potential benefits of liberalizing this activity.

We believe that if Bill C-49's provisions on the repositioning of empty containers are to be fully and effectively implemented for the benefit of all parties, then it must be made clear that any partner in a vessel-sharing agreement may reposition its own empty containers, as well as those of the other partners in the agreement, using any of the vessels named in that agreement. Although there may be various ways of achieving this, including through additional guidance and clarification from Transport Canada, it's our view that the optimal solution is to amend subclause 70(1) of Bill C-49 to clearly indicate that the party that is eligible to reposition empty containers encompasses not only the ship owner, as defined in subsection 2(1) of the Coasting Trade Act, but all the partners who share operational control and use of that vessel as part of a larger vessel-sharing agreement.

We believe that the introduction of such an amendment represents the best means of ensuring that Bill C-49's maritime provisions are implemented in a way that reflects the realities of how the container shipping industry operates, and this for the benefit of all stakeholders, from shipping lines to Canadian importers and exporters to the supply chain overall.

We thank you for your attention and look forward to any questions you might have.

[The Chair, Liberal, Judy Sgro]

Thank you all very much.

We'll go to Ms. Block for questioning.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you, Madam Chair, and thank you all for being here today. It's good to hear from another group of stakeholders. I look forward to the questions and answers that we're going to hear over the next hour.

I noted earlier today that this is very important work and mentioned how important your remarks are today in providing this committee with the information we need to ensure that the right balance is struck in addressing the issues that exist in our transportation system.

We know that this is not the first time your input has been sought to aid us as parliamentarians in these deliberations. In fact, we know that the Minister of Transport has had the CTA review for almost two years and that broad consultations have been done by Transport Canada and many others, seeking input into how to structure the Canada Transportation Act going forward. It's important that we get it right. It's important that we structure legislation that ensures market access for our producers and an efficient means of transportation.

I will note that every witness to testify so far has recommended changes to this bill, and all have identified issues with the long-haul interswitching provisions, with the exception perhaps of the last witnesses to testify here this morning.

I would pose a question to all of you, and you can each take your turn in answering it. What will be the long-term implications for your industry if the technical amendments that you are proposing are not made to this bill?

[Pierre Gratton]

As you rightly noted, this is the third time in four years that I'm appearing before a transport committee on a proposed bill to address these types of issues.

I would make the following observation. My sense is that through this bill, which is the most comprehensive attempt to get at these issues, the witnesses and the shippers are becoming more focused in their recommendations, because this bill is actually making a serious attempt to address the issues. Our recommendations are getting really into the details. That's a good thing.

However, to answer your question, our view is that we're just falling short, particularly in the area of data. If we don't make these amendments—especially the one related to data—we will not be further ahead and will be back in another four years looking at another bill.

There is even a concern within the mining sector that without at least the amendments dealing with data, some of our members if not all of them could find themselves slightly worse off than they were under the current regime. That is the concern. There would still be more to come through regulations, so I say that with some caution.

Nevertheless, we feel that it's so close to making a very meaningful difference to the regime we've been struggling with for 20 years. It's just falling short, and if we don't go the extra mile, we will have really missed a tremendous opportunity.

[Joel Neuheimer]

I'll just start by saying, as Pierre said in his remarks, that what we're looking at in the context of the long-haul interswitching looks a lot like the competitive line rates that we already have. While in theory this is a very powerful concept, in reality, with the exemptions that have been built into it, it is not going to have the desired impact that the minister wants it to have. It's not going to help us as captive shippers.

I'll give you three quick examples showing why that's the case. Example one is that all the traffic that moves between Quebec City and Windsor will be excluded. Two is that all the traffic that moves between Kamloops and Vancouver will be excluded, and three is that we won't be able to move any toxic inhalation hazardous products. Just finishing on TIH, as you just heard from the chemistry session in the last session, TDG is already regulated under the TDG regs. I think we're good there, so why would you make it harder for us to move the things we need to make the stuff that helps pay the bills here in Canada?

As to the two geographic exemptions, it just so happens that's where you have the lion's share of our forest product traffic moving in the system. To be quite frank, what I would suggest, if these exemptions cannot be made, is that you just strike this part of the bill and go back to what we have. We'd probably be better off with what we already have.

Thank you very much for your question.

[Karen Kancens]

To switch tracks just a bit, from our perspective, we've been working on empty container repositioning for the last 10 years. We've made slow and steady progress. We're now on the verge, where we have an amendment that would allow foreign-flag ships to reposition their empty containers between Canadian ports.

It's a big deal because it gives a carrier the flexibility to use its assets in the most efficient way possible, and those effects trickle down through the chain. But because of the way the bill is written, and because of the lack of clarity in terms of which party is actually eligible to reposition its empties, we almost have a missed opportunity. We'll have this amendment come into effect and it could be that when you have a vessel-sharing agreement, which, by the way, is the way the container shipping industry operates, we're going to be in a situation where your carrier can reposition its empties in one-fifth of the cases only when they're acting as the master carrier. It would be a missed opportunity.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

I do want to note my appreciation to all of you for coming out today. There's no question that we all have a role in contributing to the overall economic growth of the nation, and you guys are contributing to that today.

We want to get this right. We want to ensure that what we hear, we're going to discuss. I was told by our team today that this has been a continuation of dialogue over the course of the years, and the expectation is to in fact get this right from their end, your end, and our end as a committee. I appreciate your participation.

I want to ask one thing of you before I ask my question. For any information and any recommendations—you mentioned the details, Mr. Gratton and Mr. Neuheimer, that you've passed on—could you pass that on to us as well? Albeit it may be for a second or third time, I'd appreciate that. That way, when we go into the room, we can really ensure that those details are being discussed.

I want to ask a question with respect to the indigenous communities. For the northern communities, Mr. Neuheimer, you touched on this a bit, and I believe you did as well, Mr. Gratton, especially in line with your business interests. It's in terms of mining in northern communities and remote communities that are sometimes so remote that service costs and the balancing of the playing field become next to impossible.

My question is very simple. How do we become an enabler—I use this word a lot—for you and what you're doing in these communities to really level that playing field, to contribute to lesser service costs and ultimately to allow those communities, some of which are indigenous, to have available to them a strengthening in the development of their economy, thus creating more jobs for them and ultimately ensuring that access to growth and to goods—affordable goods—is available to them?

[Joel Neuheimer]

Thanks very much for your question. We will make sure that you have the detailed annex that we submitted as part of our remarks this morning, with pleasure.

I have just a couple of quick thoughts. If you go ahead and make the changes we've outlined in relation to “suitable and adequate”, I think it would go a long way to speaking to what you're talking about. It's the same thing with our suggested changes on the long-haul interswitching that we were just talking about.

Really, for me, I think the easiest change at this point with this bill is to really give the agency the power to investigate on its own if something doesn't pass the sniff test, let's call it. You know how it works. Our unique geography is what makes us such an incredible nation, but the realities of what you've just touched on.... I mean, think about it. Any time you make a large purchase.... Imagine you're trying to buy a pickup truck. You're living in one of those communities you're talking about and there's only one dealer in town. You're not looking forward to what you're going to have to pay, and you're probably not looking forward to what your after-service might be, so if by chance something does go wrong, it would be great to have our watchdog able to look at those things to make sure these communities are getting the service they deserve.

[Pierre Gratton]

First, I should just make the observation that we have members with mines that have no railways at all, so investing in infrastructure, which we're seeing particularly in northern Canada by this government, is very much supported by our sector. I should acknowledge that. Otherwise, I would make most of the points that Joel just made. On the issue of data, which we feel is the simplest and easiest change to make, it would provide....

Why is data so important? If we have access to data that actually identifies how many railcars get to a particular location, at what time, and so on, throughout the system, that would show whether the railways are meeting their obligations. It could also help reveal whether there are other reasons beyond the railways' control. That would allow all of us to have a better understanding of how well our system is going, whether we might need to invest resources in infrastructure to improve the functionality of our rail system, or if in fact the railways are doing what we certainly believe they are doing from time to time, which is sweating their assets and not providing good service. Having such data, we believe, would, on its own, have the ability to influence railway behaviour.

If you do nothing else—and it's the simplest thing to do—just extend the breadth of data that is disclosed, recognizing that there are certain things for which confidentiality is required, but those are pretty minimal. I think with the technology we have today it's fully possible to go further.

I thought we had circulated this, but perhaps we haven't. These are the detailed amendments we are proposing to the bill.

[Vance Badawey, Liberal, Niagara Centre, ON]

Do you find, gentlemen and ladies, as well that with this data collection we can actually also highlight and recognize the integrated network of transportation, and with that the need for the infrastructure dollars to follow that strategy ultimately, which Minister Garneau is proposing and attempting to put in place?

[Pierre Gratton]

Absolutely. I think that's absolutely critical; otherwise, we really are operating in a bit of a vacuum. We don't know where the pressure points are.

[Vance Badawey, Liberal, Niagara Centre, ON]

Exactly. Thank you.

[The Chair, Liberal, Judy Sgro]

You can have just a quick comment.

[Joel Neuheimer]

If you don't know the data and if you don't know how well or how poorly the system is working, how do you know how to make a well-informed decision about where to invest in infrastructure? I think that's the point that Pierre is making.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Aubin.

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

Thank you, Madam Chair.

Ladies and gentlemen, I want to welcome you and thank you for sharing your expertise with us.

I want to continue discussing the issue of adequate and suitable service. Sometimes, “adequate and valid” is used. However, regardless of the interpretations, the concept is still somewhat vague. That fact has been pointed out by many witnesses, including you, this morning.

The issue of data is also brought up again and again. Is that not a solution? Shouldn't the new definition you want for adequate service contracts be evidence-based? It is possible to connect what is handled differently. Data is considered to be too general, confusing and lacking, and the definition is dealt with afterwards. Can you propose a better definition of what adequate service is? It seems a bit vague to me.

I feel that the best way to be clear may be to establish a link with data.

What do you think about that?

[Joel Neuheimer]

We've provided a very specific amendment in relation to the “suitable and adequate” issue that you've just asked about. That's in our submission, and I hope that will be helpful to you. What it boils down to is that we need to be as explicit as possible that they must meet the highest level of service possible in the situation in question. We have to make sure that in the definition that's included with this bill, there is as much precision as possible about what is acceptable and what is not.

If there is a flood and their tracks get washed out, it's pretty hard to expect that the bus service is going to run on time as usual. However, if there isn't some kind of natural catastrophe and things are as they normally operate here, given the weather we have during the 12 months we have here in Canada, they should be able to deliver a bus service on a regular schedule, and when it arrives, it should have working equipment and be safe for the shippers who are using it. That's how I would try to answer your question.

Merci.

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

I am not involved in the industry, but with all due respect for your proposal, I feel that “highest level possible” is still a vague concept. It cannot be quantified.

Are you and your industry satisfied with your proposed definition that I read?

Does it enable you to establish concrete business relationships?