Evidence of meeting #69 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 c-49.
A video is available from Parliament.
Conservative
Martin Shields Conservative Bow River, AB
I'll go back to the chemistry industry. If you're competing with the U.S. and you have exclusion zones, how much of a disadvantage does that put to you in, when you compare with somebody going to Canada or the U.S. through our market?
President and Chief Executive Officer, Chemistry Industry Association of Canada
It's hard to quantify a specific disadvantage from a specific measure. What do we know? I mentioned earlier that our industry has seen over $250 billion of new investment in the United States in the last five years. Historical patterns say Canada should have seen 10% of that. We should have seen $25 billion to $30 billion of new investment in our sector in Canada in the last five years. We've not seen that. We've seen about $2 billion. We know we have a lot of work to do to make business conditions attractive so that people want to invest here.
Going back to your earlier question, maybe C was good enough in the 1970s, but in today's world, for individuals who are moving product from their family farms or for the economy as a whole, when we want to attract a greater share of the global market and attract investment, I can guarantee you that a C is not enough.
I would add one more thing that I think is really important on the data question asked earlier. We have to distinguish between individual claims. There will always be reasons that things don't happen when they should, but the most important information that will come out of this will be those broader trends. Is the system performing the way it's supposed to?
If you look at the United States, one major class 1 railway within the last year had a change of ownership, and within six months, the Surface Transportation Board was able to issue letters and call people in to Washington to say their service wasn't good enough and had to change. I don't think we have the ability today, and that's where we need to get to.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Thank you, Madam Chair.
This will only be received and understood by a few, but the answer to “adequate and suitable” service is 42.
President and Chief Executive Officer, Chemistry Industry Association of Canada
And a half.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Is there rationing of rail capacity in Canada? Is there enough to go around?
President, Cereals Canada
That's a complicated question. It depends when you ask.
From a grain perspective, if you ask that question in the middle of July, the answer is no. If you ask that question in the middle of November, the answer is yes, because there are peak demands in international markets, as well as domestically. It depends on the time of year and it depends on the conditions.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Do you think there's dysfunctional competition between various sectors or shippers?
President, Cereals Canada
I don't see that, but what I do see in particular with the grain industry is a sector that's absolutely captive to rail. There's no way we're going to move 20 million tonnes of wheat by truck to Vancouver. If there is a crisis and you're a rail company and you have a choice between moving something that you might lose otherwise or something that you can move two or three months from now, what choice would you make?
President, Grain Growers of Canada
We had a famous past chairman of one of the railroads who made a public statement that grain is in the bin. They'll move it when they get to it, and they have the whole 12-month period to move it.
We cannot let our grain go in 12-month increments.
Fiona Cook Executive Director, Grain Growers of Canada
That's an excellent question, though, because it speaks to the need for data. Can we really, at any given time, know what the capacity of the system is? I would say we can't right now, so we need the data and a system-wide dataset to be able to assess where we're at, at any given point in time.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Part of the reason for my question is that there is a very robust debate out in British Columbia right now about pipelines. Pipelines, of course, would offer an alternate form of transport that currently might be taking up capacity of railways.
I want to talk about the exclusion zones. There are the two that I understand: Kamloops to Vancouver; and between Quebec City and, I think, Montreal.
Liberal
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
Okay, Quebec City and Windsor. Thank you for that.
Are we not dealing with a couple of corridors, though, where there's pretty adequate competition because of the fact that you have that concentration of service along those two corridors? Do we in fact need extended interswitching along those corridors? You do have the competition.
President and Chief Executive Officer, Chemistry Industry Association of Canada
Windsor-Quebec, for instance, is a very long distance, and while you might have two class 1s reasonably close together, I would have to even calculate the distance in the centre like Toronto. Elsewhere in that corridor those distances are easily beyond that.
The short answer is no. Again, if the goal is to increase competition, we know those companies that have been given, under the earlier provisions, the opportunity to force competition for moving their product did very well, and had improved rates and were more competitive because the opportunity was there. We don't understand why it would be artificially restricted because of a geography.
I'll leave it at that.
President, Cereals Canada
I would just concur. This is, of course, not one of the primary issues for the grain shippers, but I don't see the reasoning for the exclusions also.
President, Grain Growers of Canada
Going back to your previous question on capacity, when you look at the U.S. marketplace, both CN and CP do have rail lines into the U.S., but with this loss, as Ms. Block mentioned about the 160-kilometre interswitching, we're missing opportunities right now to get grain in there because we were relying on those two railroads instead of doing the interswitch at BNSF.
If we're looking at having to ship hopper cars onto CN and CP lines in the U.S., the cycle time there is a lot longer, up to 30 days, to get those cars back into Canada whereas say Saskatchewan to Vancouver is 10 days. That's out there and back. There could be capacity restraints there as well.
Liberal
Ken Hardie Liberal Fleetwood—Port Kells, BC
In the time I have left I wouldn't mind hearing from Mr. Dahl and Mr. Nielsen on the whole issue of producer cars because we've received signals in some of the testimony so far that they are almost a thing of the past. I don't know if that's correct or not, but the other issue is whether they are available, and how they are handled by the railways. In the Fair Rail for Grain Farmers Act study we did earlier we heard very strong signals that in situations like that the producers should be considered as shippers as well with the rights that go along with that.
Your thoughts, please.
President, Cereals Canada
I'm a former commissioner of the Canadian Grain Commission so I'm somewhat familiar with producer cars. Producer cars are actually a right that is enshrined in the Canada Grain Act and have existed since 1918, I think. Don't quote me on that date. The right for producers to load their own hopper cars and ship their own hopper cars has existed in Canada for a long time and still continues to exist.
The use of producer cars goes up and down over time. It depends on market conditions, and it depends on the year, but they are still utilized, and they are still an emergency valve, as it were, for producers and are not impacted by Bill C-49 at all.
Conservative
Kelly Block Conservative Carlton Trail—Eagle Creek, SK
Thank you very much, Madam Chair.
An observation I would make is that, to a witness, the optimism that has been expressed in the intent of this legislation can't go without being noticed. I appreciate that you have highlighted some of the good provisions in this bill that you strongly support.
If the technical amendments you're suggesting aren't made to this bill, how will your industry be affected? I put that question to each one of you.
President, Cereals Canada
The reason that the technical amendments have been brought forward is to help ensure we meet the intent of the bill in terms of improved service, accountability, and transparency. If we don't see some of those improvements, the ability to meet that intent won't be as high. This would make the bill better and improve the chances of our getting to those intents.
President, Grain Growers of Canada
I agree with those comments. We're very happy with a lot of the intent of the bill. We're just asking for some minor amendments to it. As mentioned, we need to see this go through now. We're into week six or seven as far as the crop year goes and as far as the shipping calendar goes. As you mentioned, without the 160-kilometre interswitching in place right now, there could be some blips. I think there are already some blips in the market as far as getting our product into the U.S. is concerned.
