Transport Committee on April 13th, 2026

[Atul Sharma]

On the size of the ships that can come in and the frequency, one of the physical limitations is around the Welland Canal, because they have to be able to physically fit within the canal. We have spoken with the St. Lawrence Seaway Management Corporation about how we could work together. In fact, we are reaching out to the cruise companies as they design future ships to work with them and the seaway to make sure they are designed to access the Great Lakes. Sometimes we take the Great Lakes for granted, but many of the operators are booked two years in advance, mostly with American and European tourists.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Nguyen, and thank you, Mr. Sharma.

Mr. Barsalou‑Duval, you have the floor for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you very much, Mr. Chair.

I'd like to thank the witnesses for being here with us.

I'll start with Mr. Harvey from the Railway Association of Canada.

Mr. Harvey, earlier you mentioned the importance of rail networks because they are connected to ports and make it possible to move goods in and out. Do you think that the current rail capacity allows for the smooth flow of goods passing through the ports? My question implies that if a port terminal were to be expanded in one location or another, are there places where bottlenecks already exist at this time and where such an expansion might be difficult to carry out?

[Eric Harvey]

If the goal is to double exports to countries other than the United States, it is clear that investments will be needed in several areas, including in our infrastructures and supply chain, including rail.

At a broad level, we can say that rail capacity is available in Canada, both in the eastern and western parts of the country. However, it's also clear that if we want to double the volumes moving from east to west, targeted infrastructure investments will be necessary, based on the specific demand that would result from those changes. In other words, existing infrastructure is suited to current volumes, but if those volumes are expected to double, it's obvious that investments will be needed in specific corridors, at specific ports, and so on.

According to our analysis, market forces would likely be well positioned to determine where those investments should be made.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Specifically, are there any particular locations where we're approaching maximum capacity and that should be monitored? Have any been identified already?

[Eric Harvey]

Obviously, I'm well aware that, for example, representatives from the Port of Montreal told you that they were approaching a certain capacity threshold. I believe they said it was at 85%. Representatives from the Port of Vancouver also mentioned that they needed investment.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

My question is mainly about the rail sector.

[Eric Harvey]

Thank you for the comment.

What's important to understand is that railways don't sell or produce what they transport. This means that we depend entirely on the demand of our customers and the service provided at the destination.

In my opening remarks, I talked about an integrated system. That's really important because, for us in the rail sector, if volumes double, we will inevitably have to invest in our own infrastructure, just as others will have to invest in theirs, particularly ports and so on. As I said, where and to what extent those investments will be needed will depend, in our view, on demand at the time.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

So there aren't really any specific or major bottlenecks at the moment in the rail sector that are hampering traffic.

However, what about the future? The answer wasn't entirely clear to me. Are there any specific locations where investments would be needed if volumes were to increase?

[Eric Harvey]

I'd love to answer your question, but it's difficult to do so because that demand hasn't yet materialized. Once it does, we'll be able to see where the demand is. It isn't something we can predict. We don't determine demand for our services ahead of time. That's part of the challenge.

I'm sorry I'm unable to answer your question.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I think I understand what you mean: You don't control where your customers are located or where the volumes are coming from.

[Eric Harvey]

That's without taking demand into account.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

I assume that when a port terminal is expanded or a new one is built, you anticipate that there could be additional demand.

I know you worked for rail companies. Generally speaking, how does it work internally, or even from the perspective of the Railway Association of Canada? Do you invest ahead of the arrival of volumes, on the assumption that it will be important to have a smooth supply chain, or do you invest once the volumes are already there, because you don't want to spend dollars unnecessarily?

[Eric Harvey]

Generally speaking, decisions are made on the basis of a business case that justifies the investment. In our sector, investment in rail infrastructure is very costly. I mentioned investments of $4.5 billion just for maintenance, in addition to targeted investments at a few locations last year alone. So we're talking about $4.5 billion in a single year.

I would simply say that, before investing, railway companies make sure that the investment will be profitable. That's a given.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

So I understand that you wait until demand is there, or at least until the signals are very clear. You wouldn't necessarily anticipate an investment for something you might need in 10 years' time; you invest in something that is expected to materialize in a foreseeable way.

[Eric Harvey]

You mentioned a 10-year time frame. For me, the question of timing is important. There's a balance to be struck. I would say that if we simply wait before investing in infrastructure, we will inevitably miss opportunities that arise in the coming years.

The idea is that, in many places, our supply chain is already operating very close to full capacity, so if we wait for demand to materialize before justifying those investments, it's possible that we'll miss opportunities.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Harvey.

Thank you, Mr. Barsalou‑Duval.

Next we have Mr. Muys.

Mr. Muys, the floor is yours. You have five minutes, sir.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

Thank you, Mr. Chair, and thank you to the witnesses who are here.

I'm going to direct my questions to Mr. Hynes and Mr. Harvey.

I'm going to pick up on a question asked by my colleague Ms. Nguyen about work stoppages. Both of you raised that issue. That's not something we've heard thus far from witnesses for this study. That's an important area to delve into as we think ahead to the report and the recommendations that the report will make.

First off, why is it so important that we address that now?

[Eric Harvey]

It is so important because it really affects the throughput of our economy. It's the fundamental thing here.

What we're talking about is that whenever you have a work stoppage in the rail world or the ports world, our trading partners need to redirect their traffic somewhere else. If Canada won't take it, somebody else will.

Recent years in particular have been basically and unfortunately a perfect illustration of that. We lost opportunities for our country because of the work stoppages in ports and railways in 2024, or you had this thing looming that affected the way the traffic was directed. It's clear. On my association's website, we're publishing data that shows that whenever there's a work stoppage, the drop in traffic is immediate. It's a direct consequence.

The short answer is that it's a question of our own economy. On the other side, I would say we believe it's about the ability to provide our employees with good working conditions and salaries without affecting their rights, while maintaining and sustaining the economy.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

I'll switch over for a moment.

I know you've made a recommendation, Mr. Hynes, about the singular act of implementing the report, and you've made some other recommendations. Say a bit on the “how.” What do we do to address this?

[Derrick Hynes]

To bring greater stability in the short term, particularly in the west coast port space, it is about the implementation of the Industrial Inquiry Commission report. Currently, under the Canada Labour Code, if a collection of unions wants to work together to bargain as one, they have the authority under the Canada Labour Code to apply under section 34 for the right to do that. The employer has no capacity to do that.

Our request, as recommended by this objective, third party report, is to allow the employer to apply under section 34 to have one union and one employer bargaining. That, in the near term, for us, is a pretty simple solution that would bring greater stability, rather than the potentially chaotic outcome starting later this fall of 39 bargaining tables along the west coast. I don't think that's what we want.

Building on my colleague's comments from earlier, we've gone through a period over the last couple of years post-COVID where we've had a great deal of instability at the bargaining table in aviation, in maritime and in rail. We've seen a tremendous number of work stoppages. Nobody here is arguing against the right to strike, but we think there need to be some limits. We need some balance in this system such that we can keep parties at the bargaining table to avoid some of the highly consequential work stoppages we've experienced.

[Dan Muys, Conservative, Flamborough—Glanbrook—Brant North, ON]

Thank you for that.

Mr. Chair, given world events and the increasing cost of fuel, which is having an impact on the transport sector, like in trucking and in other parts of the sector, and certainly on the economy overall, I'd like to give verbal notice of a motion as follows:

That, given that:

surging oil prices are increasing costs for Canadian families and businesses;

higher oil prices are generating an estimated $9 billion to $10 billion in additional annual federal revenue;

this additional revenue exceeds the cost of suspending federal fuel taxes; and

high fuel and diesel costs are driving up the price of essential goods across the economy,

the committee report to the House that it calls on the Government of Canada to:

immediately suspend the federal fuel excise tax;

suspend the GST on gasoline and diesel; and

permanently eliminate the clean fuel standard tax and the industrial carbon tax,

in order to provide immediate, meaningful relief to Canadians at the pumps while reducing cost pressures across the economy.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much for tabling that motion, Mr. Muys. Your time is up.

I will now turn the floor over to Mr. Lauzon.

Mr. Lauzon, the floor is yours.

[Stéphane Lauzon, Liberal, Argenteuil—La Petite-Nation, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

You talked a lot about maintenance plans and upgrades. The numbers are impressive.

Mr. Harvey, you mentioned that more than $4.5 billion has been invested in maintenance, as well as infrastructure deficits. Would it be better to maintain the existing rail network before thinking about adding services? What is your strategy for meeting demand while, at the same time, maintaining the rail network? Can you tell us a bit about that?

[Eric Harvey]

Thank you for your question.

I would say that the Canadian rail network is currently very well maintained. Generally speaking, the existing network is one that is actively used. There was a rationalization process in the late 1990s, which means that today, most of the rail network in Canada is in use, maintained and compliant with standards set by Transport Canada.

Where we see a need is in investing to make marginal increases to rail capacity when demand justifies it in very specific locations. I always speak in terms of demand, with the understanding that it is expected to grow. That's what everyone is hoping for.

That's why we're specifically calling for the cost-of-capital allowance to be made applicable to more industries, not just manufacturing. This would be very helpful in increasing demand and production across all sectors.

In Canada, we have two major railways, but we also have short-line railways. These are smaller, highly localized railways, and I would say that they may require support more tailored to their reality. I'm referring here to a tax credit similar to the one introduced by the Province of Ontario last year. That measure should be commended, and the federal government should be encouraged to adopt it and extend it to all short-line railways across Canada.