Mr. Speaker, it is an honour and a privilege to be able to enter the debate on Bill C-101, a rather large omnibus bill.
I was interested to hear the hon. parliamentary secretary suggest that it was a straightforward, simple and small bill. This is not a small bill. It has at least 120 pages and it is a rather far reaching and overarching bill that covers the three modes of transportation in Canada.
The bill makes some progress toward levelling the playing field, especially in the railway sector with the United States. It makes it easier to abandon some short rail lines, which is an important issue. It also makes it easier to establish short lines under provincial control.
There are some positive developments taking place in the legislation that we need to recognize. However it seems the chief purpose of the bill is not so much to enhance the investor interest in the particular railways but rather to facilitate the selling of CN Rail or the privatization of the Canadian National Railway.
The bill continues to treat railways as a service rather than as a business. The bill is clearly not about rail renewal. Canada remains 15 years behind the American system. Instead of levelling the playing field for the U.S., the federal government has chosen to deregulate in a piecemeal fashion rather than in a consistent, logical pattern.
Bill C-101 fails to ensure true competition between the railways. The competitive line rates and final offer arbitration provisions only highlight an artificial competition that benefits neither shippers nor the railways in the long run. Under both these options the ultimate arbiter of freight prices is the National Transportation Agency rather than the marketplace.
In other words, competitive line rates and final offer arbitration are actually a hidden form of price regulation or managed competition. The bill has no guaranteed access provision or even study regarding the rail infrastructure in terms of further development and competitiveness in the industry.
In spite of these sorts of statements the whole business of transportation and shippers needs to recognize they need each other to sustain the economy that is there. The railway business exists to support shippers and shippers need the railway to send their materials and products to market. Each needs the other to be successful.
Let me list a couple of the major shippers that use the railway system rather extensively. I refer in particular to the Western Canadian Shippers' Coalition, which includes companies like Agrium Inc., Alberta Forest Products Association, the Canadian Oilseed Processsors Association, Canpotex Limited, the Council of Forest Industries, Luscar Ltd., Manalta Coal Ltd., Novacor Chemicals Ltd., Potash Corporation of Saskatchewan, Sherrit Inc. and Sultran Limited. These companies are significant customers of the Canadian railroad system. The products shipped tend to be bulk in nature and must travel substantial distances to distant markets.
For many products highway transport does not present an effective, competitive alternative to rail transportation and water transport is not a practical alternative. Hence for the majority of the transportation requirements of industries like the ones named the only economical way of accessing the markets is through the railway.
There is a need for the railroad system to be reformed. There is excess track. There are impediments to the productivity improvements and there are too many threats to the profitability and long term viability of the railroads.
We must admit there have been improvements in the last couple of years in the productivity of railways and the net revenues of both CN Rail and CP have increased. These rationalizations, however, should not jeopardize the benefits of competition in the railway industry. I will refer to that in just a moment.
In the meantime we need to indicate as well that the Canadian railway system is not like the American system. The American system has many more railroads, to begin with. The distances to market are shorter. They have an extensively developed highway system and inland water routes. Therefore it is not valid to argue that Canada should have a regulatory system directly comparable to that of the United States.
We should recognize that rails are not like the trucking industry. Trucking regulations restrict vehicles by the availability of trucking services and limit shippers' freedom of choice. Accordingly the deregulation of major carriers has a pro-competitive result. We should also recognize that the capitalization required in that area is not nearly as great as it is in the railway business.
Railway regulation protects captive shippers against the excessive monopoly power of the railway. Herein lies the crux of the issue. The imposition of statutory provisions which limit or deter
accessibility to the competitive access provision will be anti-competitive by permitting the railroads to more rapidly and more extensively exploit their monopoly power.
We come back to the business of competitiveness. Are the railroads competitive? The conclusion of the group of industries we referred to before is:
It has become apparent to railway customers during the past eight years that Canada's railways have refused to compete for rail traffic which would become available by virtue of a customer's utilization of the competitive line rate provisions.
Page 131 of the National Transportation Act Review Commission report states:
CN and CP Rail have effectively declined to compete with each other through CLRs and as a result the provision is largely inoperative in Canada.
It is suggested that the failure of railways to compete through CLRs should now be shifted and, rather than be treated under the Transport Act, should now become subject to the provisions of the Competition Act.
There is a provision in Bill C-101 that there be an appeal to the National Transportation Agency. However shippers will have to prove that they suffer from significant prejudice. It is interesting that significant prejudice is not defined. Neither is suffering.
If this phrase is not defined in the bill it lends itself to all kinds of problems. First, it is difficult for shippers to be able to prove what is happening. Second, because that is difficult there will be a defence and the result will be extensive litigation proceedings that mitigate against the expeditious and objective determination of relief. That is precisely what is needed to get this business going and to get the economy rolling along smoothly.
Those terms are not defined in the bill. They have never been used in transportation legislation before. Consequently there would be very little, if anything, to go on in the way of precedent. The agency serves as a price regulator.
Another part the agency deals with is that the rates shall be commercially fair and reasonable. These words are used in the bill but are not defined. Hence they are likely to result in uncertainty, delay and contention which reduce the effectiveness of the level of service and competitive access provisions.
A further provision in the bill states that the clarification of these kinds of terms would come from the governor in council and does not help at all. It will introduce into the decision facing the council the politics of the day in preference to the economic considerations existing in the marketplace.
A further development is that a complaint, if one is issued by a shipper against the transportation agency, should not be vexatious or frivolous. These terms are not defined.
It is a very difficult situation. It is all very well to talk about the agency as being able to act as the final arbiter and to get agreements in place, but the result will be that litigation of one kind or another will come into play and the courts will become the arbiter.
There are two other parts of the bill that also need to be looked at: the idea of the interchange and the interswitch. These words have to be defined as well as the words limited running rights.
While the provisions of the bill go far they do not go far enough. Neither do they create a regulatory system which will provide an economic system that will look after the interests of transportation and shippers, so that together they can both meet their needs and we as Canadians will benefit from sound transportation and manufacturing systems that can deliver their products easily to the marketplace.