Transport Committee on Sept. 14th, 2017

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

I understand that.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

That is extremely important to understand. We never intended to include the charter's contents in Bill C-49. The goal was to mandate the Canadian Transportation Agency to make regulations, so that we would have the flexibility to make adjustments much more quickly in the coming years.

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

Thank you. I understand that process.

When I say that this is an omnibus bill, it's because I think that different types of transportation could have been split up, and we could have started working on the charter much sooner, with the process you are proposing. As things stand, it will not be done before 2018, if everything goes well.

However, we are not reinventing the wheel. Similar charters exist elsewhere. The European charter, among others, is a very effective model. It was used as the basis for an NDP bill, which you endorsed.

Does that mean we won't be able to make any amendments to Bill C-49 that would provide specific guidelines and could at least inform the thinking of the consultation that will begin after the royal assent?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

First, how promptly this bill gets passed is in your hands. I encourage you to pass it quickly, as I think that it meets significant needs for Canada. The comments I am hearing support that position.

Second, this committee has the authority to make decisions on the possibility of amendments. I respect that situation, which our government very clearly explained when it took power.

That said, it is important for me to point out that, when we created this bill, we tried to strike a balance on very complex issues. We had to find a balance between passengers and airlines, between producers and railway companies, between railway safety and Canadians' privacy rights. After a tremendous amount of consultation, I believe we have managed to find that balance.

It is certainly possible to bring up a point for any one of these issues and to say that we could have done things differently. You are a member of this committee and, as such, I am asking you to take into consideration the fact that these are complex issues and that we have tried to find a balance.

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

I understand.

I will now move on to something else.

When the Commissioner of Competition blocks a joint venture, as he did a few years ago, I feel protected as a consumer. I tell myself that the Commissioner of Competition had his reasons to say that the agreement was not good for the consumer. However, in Bill C-49, the commissioner's powers are relayed to advisory powers, and the minister can bypass them. That worries me.

Why is it necessary for the minister to be able to ignore the Commissioner of Competition's recommendations?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

It's because we have to take public interest into account. However, I assure you that the consumer will be protected in terms of competition. The intent here is to do what other countries have done, including the United States, and open the door to the concept of joint venture. That is of tremendous interest to airlines, not only here, in Canada, but around the world. It is also good for the consumer, as it can help reduce prices and simplify the entire reservation process.

It is important to take care of competition, and we will continue to do that, as it is clearly indicated in the bill, but we will do two other things. First, we will take public interest into consideration—in other words, the interest of the consumer, as well as the interest of airlines, which have to compete with companies from other countries. Second, as things currently stand, if the Commissioner of Competition decides to investigate a joint venture, he can do so at any time and without notice, and this does not create an atmosphere conducive to trust....

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Garneau. I'm sorry to have to cut you off, but we have a lot of questions from a lot of other members.

Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair.

Minister, thank you for being here this morning.

I am quite pleased and quite excited that the priority that we've established through your leadership is that of balance. We're balancing safety along with value return within the business community, and we're really listening to those thoughts that have come from all sectors.

One of the pillars contained within the government's transportation strategic plan places a strong emphasis on trade corridors, a catalyst to better position Canada to capitalize on global opportunities and to highly perform globally. We get that. However, I want to dig a bit deeper, especially with respect to the question that Mr. Fraser asked. We want to ensure a disciplined asset management plan, both operating capital.... In turn, we want to develop stronger trade-related assets—rail, marine, road, air—that will coordinate and contribute to support Canada's international competitiveness and therefore trade and prosperity. We see Bill C-49 as a component of that; there's no question.

In your own words, how do you see Bill C-49 building itself into the overall strategic plan, transportation 2030, and then ultimately becoming more of a mechanism to be better able to implement that overall strategy?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you, Mr. Badawey, for your question.

As I mentioned and as I think I emphasized in my opening remarks, Bill C-49 is a first step because, as you know, transportation 2030, which I outlined about a year ago, is much broader than simply the measures that are contained in Bill C-49. The Bill C-49 measures are an important first step to address a number of particularly important matters. The charter of rights for passengers is long awaited and has not been done in the past.

With regard to the modernization of freight rail, I can't emphasize how important that is. We need to improve safety on our railway systems because there are still too many derailments occurring.

As you know, there are five themes in transportation 2030. One of them is the air passenger experience. It also talks about green transportation and about innovative transportation. It talks about safety in all the forms of transportation, many of which are not addressed in Bill C-49. There is still much more work to do, and that is part of our ongoing work with respect to achieving the aims of transportation 2030, so there will be more projects that will be coming forth.

A simple example is that we have heard from air passengers that it takes too long to go through security at airports. That is still very much something that is on my mind, and it is part of the traveller experience.

We've heard that we need to make transportation greener in this country, and this is a commitment of our country.

There will be more on those as we go along as part of our mandate.

[Vance Badawey, Liberal, Niagara Centre, ON]

I want to touch on something that I think Ms. Raitt was trying to touch on, but she ran out of time: the impact of Bill C-49 on short-line railways. We heard a lot about—and I recognize this from my past experience in my former life—how it can be somewhat challenging, in both the operational side and the capital side of short-line railways, to really augment or be a part of the overall transportation system, especially working in tandem with the main lines. How will Bill C-49 and/or any regulations or recommendations that might come out of this process contribute to the overall health of our short-line railways?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Of the short-line railways in this country, there are about 20 that come under federal control, and there are about 30 that come under provincial control. They carry products in this country. I think the total of rail transportation by short-lines is 12%. We did consult the short-lines in the development of Bill C-49, and their input is reflected. They are not subject to long-haul interswitching orders or to the new data requirements, as they were considered too burdensome for them.

Many of the concerns raised by short-line associations relate to infrastructure investment and are beyond the scope of Bill C-49. What I'm saying is that the short-line railways here don't have the funding, the capital, the deep pockets, that class I railways have. They are mostly concerned about that, and that is not addressed in Bill C-49.

Short-lines are eligible, on the other hand, to apply for funding under the national trade corridors fund which was announced in July 2017. However, it's true to say that projects involving regional short-lines tend to be to rehabilitate them rather than to eliminate bottlenecks. It's a little bit of a challenge with them.

We are looking at short-lines, though. We realize that they're an important element of the railway system. They're just not covered specifically in Bill C-49.

[The Chair, Liberal, Judy Sgro]

We go now to Mr. Hardie.

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

Good morning, Mr. Minister.

First, I hope you and your staff have been able to absorb what we've heard from the various witnesses, because invariably they're saying this is a major step. We're accomplishing things here that some people have been waiting a long, long time to see. Each one has said there are some things they'd like to improve, so I think a sweet spot has somehow been touched here.

In the fullness of time, you will hear a little bit more about the long-haul interswitching and the nearest transfer point versus the most competitive one. We'll hear about the exclusion of soy from the maximum revenue entitlement, the ownership of records for the LVVR systems, and the timeliness of data and how long it's going to take to get everybody up to speed to be able to provide that data and bring in the transparency. You'll hear all of that later on.

With respect to the air passenger bill of rights, I've spent time on airplanes going back and forth to my riding in Fleetwood—Port Kells in B.C., and if I'm sitting on the tarmac or I'm sitting on top of a rocket, I don't care if it takes a little longer, because I want it to be safe. Obviously, there's a balance there that we have to consider, but notwithstanding the fact that a lot of the focus has been on the airlines, they've also been delayed because ground crews aren't available at an airport. That's not a safety issue; it's an operational glitch.

I'm just wondering about something. If we look at the all-of-experience scenario for passengers and whether or not the focus solely on the airlines is fair and balanced, given that some of the other players can also contribute operationally—not necessarily safety or weather or act of God but just simply not working very well—to the delays and problems that air passengers face, is there a sense that we can include that in the mix?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

My aim certainly with the charter of rights for passengers is to address the situations that are within the airline's control. You brought up an example, and I brought up a few more before, in answering Ms. Raitt's question, about weather, air traffic control problems, security alerts and those kinds of things, and go-slows, for example, with respect to baggage handling or getting the stuff on the plane so the plane can leave on time. Those are all factors that will be brought out in the discussions that will occur with the CTA as it consults in determining the charter of rights. But it is, again, a question of balance, if I can use that word. The objective of this is to come up with something that clearly addresses passenger rights but that is also fair to the airlines. We're not here to pick on the airlines. We're here to make sure that passenger rights are respected. When you buy a ticket for a flight, and there is a decision that is within the control of the airline that prevents you from taking that flight, there needs to be compensation.

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

Got it.

We've heard various testimony. It's amazing how quickly this week has gone. We've had 10 hours a day of witnesses, and it's flown by because we've heard a lot of really interesting stuff.

We understand that being able to ship something is critical to the economy, so our shippers are really a huge catalyst for the wealth and well-being of Canada. At the same time, the transportation system is the enabler. It makes a lot of these things happen. Everybody seems to acknowledge that each side—the shippers and the transport system—needs to be healthy. They acknowledge that, but you see the tension when everybody seems to be operating under enlightened self-interest, and it falls continuously to government to be the referee to try to achieve that balance. Is there any thought in the grand scheme of things, as we look forward to 2030 and all the rest of it, to somehow try to create a new sense of collaboration between the parties, rather than just having everybody pulling for their own side?

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

It's a very interesting point.

I should point out that some shippers and railways work under contractual arrangements that they're both very happy with. We're trying to make the system as efficient as possible. Some people will say historically we haven't gotten this right for 150 years. There is a huge amount of history here. This is the attempt by this government, after a great deal of consultation, to get it right.

You may hear from the shippers that they're happy with this but that it would be even better if we did that. You'll hear from the railways likewise. This is a bill that I think achieves a balance, which is going to be to the advantage of both shippers and the railways overall. I can't emphasize how much thought we gave to it before coming out with the specific recommendations.

It would be great if we didn't have to invoke measures such as final offer arbitration, if service level agreements were not needed, if reciprocal penalties were not needed. These are measures that are in place, which hopefully will not be used, but they're there to ensure we have a fair system for both sides.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Minister Garneau.

Sorry, Mr. Hardie, your time is up.

Mr. Chong.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Madam Chair.

Thank you, Minister, for appearing in front of committee.

Minister, I think we would all agree that the privatization of Air Canada in the 1980s and the subsequent privatization of Canadian National Railway in the 1990s, along with the deregulation of parts of the transport system in allowing commercial forces to play a greater role in that system, have been successful. It's better for consumers and customers and better for companies.

What I don't understand is why the government didn't move in Bill C-49 in that direction for the movement of grain. We've had an ongoing crisis in the grain handling industry. This is not new. We had one in 2013-14 under the previous Conservative government. There was one in 2001 under a previous Liberal government. The crisis is only going to get worse. In fact, projections are that the amount of grains and oilseeds produced in Canada is going to continue to increase as a result of advances in crop science and techniques.

Both the June 2001 report, which was commissioned by a Liberal government, and the February 2016 report, commissioned by a Conservative government, recommended that we move toward a commercial grain handling system, and that we lift, over a period of time, the maximum revenue entitlements.

Maybe you could tell this committee why the government didn't move on those recommendations in this bill, particularly in light of the fact that two reports have now recommended that the government move on it, that we've had a number of crises in the grain handling industry over the last two decades, and that it's only going to get worse going forward as production continues to increase.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

I certainly hope that production does increase in the years to come. The simple answer to your question is that it's because it's a very complex matter. I would remind you that we have among the lowest rates in the world with respect to the movement of grain. That's a tribute to the efficiency with which our railways are moving.

I can cite to you many sources that will say we shouldn't have touched the MRE at all in this bill. We have done so because we were conscious that we needed to provide investment incentives for the railways. The railways need to upgrade and replace their rolling stock on a continuous basis to be able to continue to deliver goods to ports across this country, so we did make changes to the MRE. Some shippers said they would like to leave the MRE exactly the way it is, and, as you point out, others would like to do away with it completely. It is a complex matter, and we have tried to achieve the proper balance.

As a final comment, I would agree with you that privatizing Air Canada and CN as we did was a very good idea and a very positive step. We're almost 100% there. There are still a few vestiges of government control left, but we've generally gone in a very positive direction with those decisions.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Minister, for that answer, but with respect, I think the best investment incentive you could provide to the industry to ensure that the capacity is there particularly during peak times to move grain to tidewater is to move to a system where commercial forces can play a much greater role. I think that's the one big flaw in this bill that has not been addressed. I think we will be revisiting, in a crisis situation, the fact that western Canadian grain farmers cannot get their grain to tidewater when they need to. I think that's the major flaw in this bill.

I applaud you for the other initiatives that you've taken in this bill, but this is clearly an issue. It's not an issue that's new. It's an issue that's been around for the better part of two decades. We have two reports now, one commissioned by a Conservative government and one commissioned by a Liberal government, that have both concluded that the government should lift the maximum revenue entitlements and move the system slowly and gradually to a commercial basis to address this fundamental problem.

You know, in the 2001 report, it says, and I quote, the “failure to move quickly enough to a system where commercial forces are allowed to work” resulted in a crisis in the grain industry in terms of moving grain. The same conclusions were made in the report that David Emerson was involved with in February of last year. We know what the root problem is, and Bill C-49 does not address it.

Thank you, Madam Chair.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you for your question.

I should remind everybody here, for those who don't know, that not all grain movement is subject to the MRE.

I do thank the previous government, and particularly the previous minister of transport, who is here, for commissioning the Emerson report. We think it provided an enormous amount of very useful input for the government's consideration.

Once again, on the issue of the MRE, the MRE was put in place specifically for grain. If you look at how grain has moved in the past three years since the very disastrous situation that existed in 2013 and 2014, I think you'll find that it has moved efficiently. I was very proud of the way in which CN and CP moved grain last year, which was not a record year but very close to a record year. We think the provisions that have been put in place, taken as a whole, will continue to allow grain to move efficiently to our ports for export. We're satisfied that we've achieved the right balance, including with the MRE.

[The Chair, Liberal, Judy Sgro]

That's time.

Just for the information of the committee, we've just been notified—thank you, Ms. Raitt—that Arnold Chan, our member of Parliament from Scarborough, has died. He was a member whom we all very much respected and appreciated. It is with great sadness that I have to make that announcement.

Take a deep breath, and I'm sure all of us will send our sympathies out to his wife and family.

All right, as parliamentarians, we're back to work.

Mr. Sikand.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

Thank you, Madam Chair.

Thank you, Minister, for being here and taking our questions.

You've repeatedly mentioned how rail safety is your number one concern and priority. I'd like to express a concern of mine to you before starting my line of questioning. In 1979 Mississauga saw one of North America's worst rail disasters. In fact, I believe it was the largest peacetime evacuation up until 2005 in New Orleans. Now, Mississauga's a very different place. We have freight going through there every single day. In fact, it carries on into my colleague Lisa Raitt's riding. I'm concerned that if there's a disaster now, with the number of people who are in Mississauga, it would be quite a devastating disaster.

I'd like to know what Transport Canada has done to address fatigue in regard to rail.

[Marc Garneau, Liberal, Notre-Dame-de-Grâce—Westmount, QC]

Thank you, Mr. Sikand.

The issue of fatigue is one that applies not only to railways but also to airlines and the marine industry. We are currently studying the issue of fatigue as it applies to railway engineers and conductors. We are seized with this issue because we think it is a contributing factor that we need to take into account to improve safety in general. We are currently in the midst of evaluating that.

We recently came out with crew duty days and fatigue regulations in Canada Gazette part I for pilots. We will be doing the same thing for the rail industry.

That being said, we are taking other measures and we are reviewing the Railway Safety Act. We have brought in a number of measures since Lac-Mégantic, which of course was an absolutely catastrophic accident that needed a lot of remedies to address it. Fatigue is being studied at the moment with respect to the railway industry.

[Gagan Sikand, Liberal, Mississauga—Streetsville, ON]

We've heard a lot of testimony with regard to LVVRs. How do you think that will help move, as I refer to it, the safety yardstick a bit further?