Debates of March 25th, 1996

Canada Transportation Act

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

[Some hon. members]

On division.

[The Deputy Speaker]

I think colleagues there were not sufficient members in the House at the time of the calling of the matter.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, on a point of order. I do believe there may be more than five who have come in now, but at the actual time the fifth member was standing at the back by his desk.

[The Deputy Speaker]

There is no doubt at all. The member is right. There are more than five now, but unfortunately when there was the standing vote, there were not five and accordingly the matter would fail then on division.

Motion No. 19 negatived.

[David Anderson, Liberal, Minister of Transport]

moved:

Motion No. 22

That Bill C-14, in Clause 106, be amended in the English version a ) by replacing line 24, on page 46, with the following:

"ment, bailment, mortgage or hypothec or as a lessor or"; b ) by replacing line 31, on page 46, with the following:

"tions under the security agreement, bailment, mort-"; and c ) by replacing lines 33 to 35, on page 46, with the following: b ) any event that occurred before or after the scheme was filed and that constitutes a default under the security agreement, bailment, mort-''.

Motion No. 26

That Bill C-14, in Clause 133, be amended in the French version, by replacing line 14, on page 61, with the following:

"sur ses lignes-et, le cas échéant, sur des dis-".

Motion No. 71

That Bill C-14, be amended by adding after line 11, on page 94, the following:

"CN Commercialization Act

210.1 Subsections 3(2) and (3) of the CN Commercialization Act are replaced by the following:

(2) Nothing in, or done under the authority of, this Act affects the operation of the Competition Act in respect of the acquisition of any interest in CN."

Motion No. 74

That Bill C-14 be amended by deleting Clause 275.

Motion No. 75

That Bill C-14 be amended by deleting Clause 276.

Motion No. 76

That Bill C-14, in Clause 278, be amended by replacing lines 26 to 37, on page 120, with the following:

"278. If this section comes into force before the day fixed by order under section 24 of the Budget Implementation Act, 1995, then the definition "Agency" in section 2 of the Atlantic Region Freight Assistance Act is replaced by the following:".

Motion No. 77

That Bill C-14, in Clause 279, be amended by replacing lines 40 to 42, on page 120, and lines 1 to 6, on page 121, with the following:

"279. If this section comes into force before the day fixed by order under section 25 of the Budget Implementation Act, 1995, then".

Motion No. 78

That Bill C-14 be amended by deleting Clause 280.

Motion No. 79

That Bill C-14 be amended by deleting Clause 281.

Motion No. 80

That Bill C-14 be amended by deleting Clause 282.

Motion No. 81

That Bill C-14, in Part I of Schedule IV, be amended by replacing, on page 135, the following:

"Central Butte M 44.0 Riverhurst (M 110.5) 66.5".

with the following:

"Central Butte M 44.2 Riverhurst (M 110.5) 66.3".

Motion No. 82

That Bill C-14, in Part II of Schedule IV, be amended by replacing, on page 135, the following:

"Gretna-La Rivière Gretna (M 14.1) Altona (M 21.4) 7.3".

with the following:

"Gretna-La Rivière Gretna (M 14.1) Altona (M 6.8) 7.3".

Mr. Speaker, all these amendments are essentially technical. They are to bring the French text in conformity with the English and vice versa on a number of motions, that is Motions Nos. 22 and 26.

Furthermore, these amendments reflect the fact that other pieces of legislation in draft at the time this bill was first tabled before the House have now been proclaimed, for example the Budget Implementation Act, 1995 or the CN Commercialization Act.

Therefore there is a need to bring it into conformity with what has been passed, Motions Nos. 71, 74, 75, 76, 77, 78, 79 and 80. The final group, Motions Nos. 81 and 82, is to correct geographic references to branch lines identified in schedule IV of the bill.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 22. All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

Agreed to by unanimous consent. I therefore declare Motions Nos. 26, 81 and 82 carried.

(Motions Nos. 22, 26, 81 and 82 agreed to.)

[Paul Zed, Liberal, Fundy Royal, NB]

Mr. Speaker, I wonder if there would be unanimous consent to have that vote applied to Motions Nos. 71, 74, 76 and 78.

[The Deputy Speaker]

Does the whip for the Bloc Quebecois agree?

[Madeleine Dalphond-Guiral, Bloc, Laval Centre, QC]

Agreed.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Agreed.

[Vic Althouse, NDP, Mackenzie, SK]

Agreed.

Motions Nos. 71, 74, 75, 76, 77, 78, 79, 80 agreed to.

[Vic Althouse, NDP, Mackenzie, SK]

moved:

Motion No. 23

That Bill C-14 be amended by deleting Clause 112.

[David Anderson, Liberal, Minister of Transport]

moved:

Motion No. 24

That Bill C-14, in Clause 112, be amended by replacing line 20, on page 49, with the following:

"must be commercially fair and reasonable to all parties."

[Vic Althouse, NDP, Mackenzie, SK]

Mr. Speaker, this clause has been quite contentious among the users in the grain industry. They have some difficulty with the phrase "commercially fair and reasonable" which clause 112 contains.

This is not something that I alone was concerned about in the House. The hon. member for Kindersley-Lloydminster had also attempted to move a similar motion, hence the support by my hon. friend from Lisgar-Marquette.

The problem is that the provisions of this clause are to provide an interpretive direction to the Canadian transport agency when it is setting rates or conditions of service as they apply to carriers.

Since the clause now reads "a rate or condition of service established by the agency under this division must be commercially fair and reasonable", a lot of the witnesses who were before the transport committee, including the prairie pools, the National Farmer's Union, the three prairie provincial governments, indicated they could not support such a provision because there was no clear definition as to what constitutes fair and reasonable.

It was also indicated that clause 113 was to serve as a general guideline for the NTA. If that were the case, this kind of guideline should be conveyed to the agency through means other than legislation.

In their submission to the transport committee the three prairie governments stated clause 113 provides yet another potential avenue for railways to delay the process and to appeal rates established by formulas for interswitching and competitive line rates.

Since a large number of the people who will be affected by this clause think it should be dropped, I am in agreement and propose this amendment to strike this clause from the legislation.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, we support this amendment because of the overwhelming request for that by all the people who intervened at the committee level.

As I said earlier in debate, I do not see why the Liberals would hold committee meetings, paying for interpreters, paying for all the technicians, paying for the research people, the clerk and all the others who come before the committee if they are not prepared to listen to those who come.

One of the people who came before the committee was Mr. Ashley from the National Transportation Agency. I specifically asked him the meaning of "commercially fair and reasonable". His response was there is no specifically defined position since it may mean rather than it would.

This was to cause a lot of uncertainty for shippers who wish to bring their cases before the agency. It also means a great boost for the law profession, as it argues the two opposite extremes of this definition.

It was not there before. The vast majority of people who came before the committee do not want to see it there now. We have not seen any evidence to suggest it serves a useful purpose. We would like to see that taken out and we are very happy to add our support to the hon. member for Mackenzie in his attempts to have this removed.

Motion No. 24 ties into the same thing. It is an amendment to what is now clause 112. It is not necessarily a good amendment. It would be ideal to have the clause removed completely, in which case Motion No. 24 would simply disappear.

If the government intends to use its majority to push through a decision that was unpopular among shippers, among the majority of people who came before the board, and that was not even supported by the National Transportation Agency, with great reluctance we will probably support Motion No. 24 because it is the equivalent of losing only a finger or two when you had been threatened with losing your entire arm. I do not think it is that good. It is probably more like losing it above or below the elbow. That would be a more appropriate analogy.

Motion No. 24 does not make much improvement. If the Liberals are condescending enough to allow us to have that little crumb and will not do what is right, we will have to take whatever is left over.

[David Anderson, Liberal, Minister of Transport]

Mr. Speaker, I appreciate the words of my friends opposite, although I believe we should put this in the context of the examination that has taken place in committee.

It is true that our committee members, including opposition members, are bound to listen to and consider any position brought forward. However, this is the difference between this side of the House and the other. It is not simply the weight of people who arrive as witnesses that determine the outcome.

We do not believe we can have our role as government, as representatives of the people of Canada somehow suspended because a group of people, a large number of people, come on one side or the other. We have to analyse the merits of what is said and not simply count up the number of people who oppose or support a particular measure.

With respect to Motion No. 23, the committee did that. It considered the representations made and it came to the unanimous conclusion that this section of the bill did not require immense substantive amendment. In its view a regulatory decision must be accepted as being in good faith and must be considered fair and

reasonable. We cannot accept the intent of this motion which implies the opposite if we have any confidence whatsoever in the regulatory bodies the House sets up.

We do not support this motion, although I can assure hon. members it was carefully considered. The intent put forward is taken care of by the wording of the current bill.

With respect to Motion No. 24, the words listed are "must be commercially fair and reasonable to all parties". Obviously this is a government motion which we support for the following reasons. The provision gives guidance to the agency when it takes over from commercial negotiations between the parties so as to impose a rate or a level of service on the railway.

It is assumed that at the point when it takes over the commercial deliberations between the two parties have broken down. At that point the agency must have the guidance of this section, and it will. It must look at balance to ensure that when it examines the rate it will be fair and reasonable to all the parties.

Some stakeholders have said this phrase is unclear and will create excessive litigation. I do not believe so at all. In my view the average person in the public, the average person watching the televised proceedings of the House today will have pretty good idea in their own mind of what is fair and reasonable.

I think excessive use of the courts to get the lawyers to argue something which is not fair and reasonable, not the common sense meaning, would not succeed when we have a good regulatory agency such as the NTA.

Some litigation is inevitable with any new piece of legislation. It happened with the major transportation bills in 1967 and again 20 years later in 1987 and it will happen with this one. There will be challenges, of course. It happens every time there is a legislative change.

As to the claim that there are going to be hundreds of cases, let me just observe that the costs of litigation make that prohibitive, costs not only in terms of dollars but also in terms of time. These costs fall on all parties. Railways and shippers know that after one, two or three key cases they will have all the clarity they need from the NTA and the courts. What we will get as a result of the change are more successful commercial agreements for the rail service, which is the objective, where both parties and the entire Canadian economy wind up as the winners.

Clause 112 in the Canada Transportation Act, that the rate imposed by the agency be commercially fair and reasonable to all parties, is important and indeed vital for rail renewal in Canada which is obviously in the interests of producers and shippers as well. This will help put the required new balance into the formula for the benefit of all Canadians. Therefore, we definitely support Motion No. 24, just as we must oppose Motion No. 23.

[Bob Nault, Liberal, Parliamentary Secretary to Minister of Human Resources Development]

Mr. Speaker, I would like to speak to the amendment by my colleague from the NDP and to the support he has received from the Reform Party.

This is an important discussion. I sat on the committee and from my railway experience I can say that this is obviously something that has stacked up against the railways for a number of years. If we are going to have a successful railway industry and a transportation sector which will deliver the services required, there must be a significant balance.

In 1987 when the Tory government brought in the NTA, it brought in some regulatory changes but stacked them on top of each other. Because of that stacking there were some problems with the act which these amendments are trying to change. The rationale is that if we are going to go to a more commercially driven transportation sector, the process must be in place for it to be successful.

Most intriguing is that on the one hand the Reform Party has continually said that governments should not get in the way of free market enterprise and allow companies to make decisions on their own. We all know that commercially fair and reasonable means that agencies are given the objective of making decisions on behalf of two complainants. For instance when a shipper disputes what the railway would like to charge there must be some form of criteria laid out in order for them to make decisions and arrive at a result. The process in the amendment the minister has added which affects all parties is intended to make sure that the parties are relatively successful in Canada.

One thing the opposition has failed to bring forward so far in the discussion but which came forward in committee is that since 1987 the line rates and the cost to the railways have increased 30 per cent. In fact railway companies in this country have had significant problems in making a profit. I know the NDP are suggesting this but I am quite surprised that the Reform Party is in agreement. If they are suggesting that the government bail out the railways every time they do not make a profit, we can then go back to the regulatory system which is in place now.

People would go to the agency only for one reason. The agency would make a decision on whether it is fair and commercially viable for the railway to up its cost per commodity. Under the present system, that has not taken place and therefore, there have been problems with it all along. The intent of these new regulations and changes is to put the balance back where it belongs. It is the same argument with labour-management relations. If there is not a good balance then it does not work. The same thing occurred with the 1987 amendments. Of course, the grain farmers and shippers in

western Canada are opposed to this. There will be stronger, businesslike discussions and debate which will go on before they go to the agency.

I reiterate that when I was in committee not everybody agreed that this was a bad thing as the member who spoke previous to me suggested. There were different groups of thought. If we go to a commercially based industry and system and if the government stops subsidizing the railway industry, it would have to have the means and the capability to be successful. That is what this rebalancing does.

The amendment the government has proposed will prove over the years that this is good for Canada in the long run. It is not going to be successful if we use the short term arguments of the opposition. We will be revisiting this as we did in the 1920s, in the 1940s and in the 1970s and bailing out railway industries because we have not allowed them the tools to be successful. That is why this amendment is so important to the overall viability of the industry itself and of course to all of us who need to get our products to market.