Debates of June 14th, 2000

Canada Transportation Act

[The Acting Speaker (Ms. Thibeault)]

I declare the motion lost.

(Motion No. 5 negatived)

[The Acting Speaker (Ms. Thibeault)]

The next question is on Motion No. 6. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Ms. Thibeault)]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Ms. Thibeault)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Ms. Thibeault)]

In my opinion the nays have it.

[An hon. member]

On division.

[The Acting Speaker (Ms. Thibeault)]

I declare the motion lost.

(Motion No. 6 negatived)

[David Collenette, Liberal, Minister of Transport]

moved that the bill be concurred in.

[The Acting Speaker (Ms. Thibeault)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Ms. Thibeault)]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Ms. Thibeault)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Ms. Thibeault)]

In my opinion the yeas have it.

[Some hon. members]

On division.

[The Acting Speaker (Ms. Thibeault)]

I declare the motion agreed to.

(Motion agreed to)

[David Collenette, Liberal, Don Valley East, ON]

moved that the bill be read the third time and passed.

Madam Speaker, it is a pleasure to speak today at third reading of Bill C-34 which amends the Canada Transportation Act to implement part of the government's May 10 announcement of its decisions on grain reform.

As the House will know, at second reading I spoke about the overall purpose of the bill and explained many of the measures found in the bill. I want to take this opportunity to acknowledge the extensive work done by the Standing Committee on Transport which took written submissions and heard testimony from about 30 different organizations in the short space of one week. I congratulate the members of the committee, in particular the hon. member for Hamilton West who was the chair, and my parliamentary secretary, the hon. member for Thunder Bay—Atikokan who did an outstanding job at the committee stage.

This committee has worked wonders in this parliament. They had the airline restructuring proposals last fall, the airline bill, this grain bill, plus three other bills. They have certainly worked extremely hard. I want all Canadians to know that members on this side of the House and on the other side of the House have worked with due diligence on behalf of Canadians.

The western grain industry is one of the largest segments of the Canadian agri-food sector. In dollar terms, it ranks close to the forestry industry, the automobile industry, the mining industry and the fishing industries. Total Canadian grain production averages 60 million tonnes a year, with about half of this amount being exported. Production which is not exported is consumed domestically by the livestock industry, flour milling and other value-added processing activities.

The efficiency of the grain handling system has been the subject of much debate over the past few years. Most contend that the current system cannot continue to operate as it is and still allow for the industry to maintain its competitiveness in an international marketplace.

The present system is managed centrally, making it difficult to hold anyone accountable when things go wrong. Freight rates do not vary to encourage more efficient use of the transportation assets over the crop year or during peak periods. The majority of wheat board business is allocated to grain companies and to railways by historic shares rather than by competition.

Three years ago, as I said earlier when I spoke on this at second reading, I went with my colleagues to Winnipeg to meet with all the stakeholders. We agreed that we would try to do something about the breakdown of the system that occurred in the winter of 1996-97. I feel particularly good about the process that has been followed. We appointed an eminent jurist, Mr. Willard Estey, a native of Saskatchewan, who gave us a very comprehensive report advocating reforms toward a more competitive system.

I then asked the former distinguished deputy minister Arthur Kroeger, a native of Alberta, to take the theory of Mr. Estey and put it into practical form, to put some bones to the framework, as it were, and both of those gentlemen worked exceptionally hard and brought forward their recommendations.

We have been criticized for not entirely following the recommendations of those two gentlemen. However, it was always assumed that those gentlemen would give us the overall conceptual framework and some ways that the framework could be implemented. However, ultimately it was government and parliament that had to make the political decisions. We have to make the political trade-offs.

I think we have done that successfully. The fact that even though members on the other side are not entirely happy with every aspect of this bill, the fact that there are really no dissenting voices on the other side, means that we have it right. I like to be accurate, but I cannot believe that there is actually one member of the Canadian Alliance in the House that would say no to a measure that will put money in the pockets of the western farmers. I am sure that I have not heard any dissent on the other side. I am not used to covering up for anyone, and certainly not for the misdemeanours of the opposition, but I take them at face value.

I know that everyone in the House agrees that we have it right, that we are putting money in the hands of the producers and that there has been significant changes made throughout the system. The bill will not be proclaimed unless the MOU is satisfactory. We are still holding consultations on the MOU. I have talked with the presidents of the railways. We have talked with the grain companies. My colleague, the minister responsible for the wheat board, who was here a few minutes ago, has worked very hard at trying to calibrate that MOU so that it deals with the concerns of the various stakeholders.

I think this shows that we are sensitive. We are trying to get this particular measure right.

There are four main measures within the bill which have a large impact on the problems that were uncovered over three years of discussion. First, there is the annual limit on railway grain revenue, what we now call the revenue cap. Second, there have been enhancements to the final offer arbitration. Third, enhancements have been made to the branch line process. Finally, we have added measures to help obtain and share information required for the monitoring of the grain system in a secure manner.

I do not want to unduly hold up the passage of this bill at third reading, but I would be remiss if I did not emphasize once again that the bill does contain a limit on rail revenues of $27 a tonne for the crop year commencing August 1, which is 18% lower than the effective revenue per tonne in 2000-01 under current law, announced recently by the Canadian Transportation Agency after its deliberations.

Railways will have the flexibility to vary individual grain rates at any time to reflect efficiency and to offer more innovative services to shippers.

The bill also designates the agency as having the responsibility to monitor compliance based on actual grain movements and distance hauled. If the agency at the end of the year determines there are any railway earnings in excess of the cap, the excess amounts will be repaid with a penalty.

The revenue cap will be adjusted annually to reflect railway inflation, starting in 2001-02. Shippers whose traffic starts from branch lines will have an assurance that the tariff rates for single car movements originating on branch lines will not be allowed under this bill to exceed main line tariff rates for similar movements by more than 3%. I think that is an effective guarantee.

Amendments to the CTA in Bill C-34 will also make significant improvements to the final offer arbitration process. It will require shippers to submit their whole proposal as part of the application, excluding dollar amounts. After 10 days the shipper and the railway will exchange their complete final offers simultaneously, including dollar amounts.

A simplified arbitration mechanism is proposed for arbitration involving freight charges that total no more than $750,000. In this faster process the time between the shipper filing the initial submission and the final decision will not exceed 30 days. At the request of the shipper or for arbitration of disputes above $750,000 a 60 day process will be followed.

The bill allows the establishment of a three person panel on agreement by both parties to hear more complex disputes. Of the three arbitrators, one would be chosen by the shipper, one by the railway and one by the two arbitrators. Failing that, the agency could select the third arbitrator.

There were many members of the House on both sides who were concerned with the provisions of the CTA in 1996 which allowed the railways a certain procedure for the abandonment of branch lines without recourse to the governor in council. I know this is going to be an ongoing discussion as we start the review of the act on July 1. I will be announcing the appointment of prominent people to conduct that review very shortly.

We have included in this bill, because of the urgency and the need for balance in the system, specific provisions that would not only allow the two railways to reduce their costs, but facilitate the transfer of branch lines for continued operation.

The main goal of these provisions was to ensure that a community could maintain the rail line, which is so often the lifeblood of the town. I am proud to say that since the act came into effect in July 1996 about 80% or 9,200 kilometres of track are operated by short line railways and only 1,800 kilometres of track have been discontinued. This process has resulted in the creation of 36 new short line operators.

Despite this success, Justice Estey identified some issues related to branch lines. Some of the problems included the ability of railways to transfer grain dependent lines in small segments, making a viable short line operation very difficult, and the fact that when a community does lose a grain dependent branch line it is not directly compensated. I believe the bill addresses these particular issues.

We are extending the notice period before a railway can take steps to discontinue a rail line from two months to twelve months. This would give more time for potential short line purchasers to come along. It would also allow a community based group which is ready to proceed with an offer to trigger an early curtailment of the twelve month notice period and extend the negotiation period from four months to six months. Also, either party may request the Canadian Transportation Agency during this stage to provide its estimate of the net salvage value of the line.

Bill C-34 requires that both parties negotiate in good faith. The Canadian Transportation Agency may order the railway to enter into a commercially fair and reasonable agreement, or it may allow a railway to end negotiations and continue to abandon the line if parties are not negotiating in good faith.

Not all grain lines will be retained or transferred. Therefore, the bill requires a railway that abandons a line to make three annual payments of up to $10,000 per mile to each of the municipal governments located along the line, related to the length of the line that falls within each municipality. This will ensure that the municipalities which are feeling the impact of the changes will see the benefits from these railway payments.

With respect to the monitoring provisions, I believe that these measures will ensure that we obtain information that is critical to a full and fair assessment of the results from the changes to the grain transportation and handling system. The bill ensures that the information can be forwarded to a third party monitor. The confidentiality of the information obtained for monitoring purposes is ensured.

The standing committee adopted an amendment that calls on the minister to table an annual report on the monitoring of the system to parliament no later than January 31, which is six months after the end of each crop year. The Minister responsible for the Canadian Wheat Board, the Minister of Agriculture and Agri-Food and I support this amendment. We are very confident that there will be much progress to report.

Under the decision we announced on May 10, the issue of more open access to rail lines will be referred to the upcoming review of the Canada Transportation Act for priority consideration on effective ways to enhance competition in the railway sector, including enhanced running rights, regional railways and other access concepts. This review will be launched within the next few days and will be ready by July 1. In the mandate letter for the review I will request that an interim report be provided on the open access issue no later than six months after the start of the review.

Three of the government's measures on grain are realized through non-statutory means. First, a memorandum of understanding will be put in place to guide changes to the wheat board's transportation role. Second, a mechanism will be put in place to ensure the continuous monitoring, measurement and reporting of the changes by a professional private sector third party. Third, the Minister of Agriculture and Agri-Food will provide for a five year, $175 million grain roads program at the rate of $35 million per year from 2001 to 2005-06. This grain road program is to be modelled on the Canada agri-infrastructure program, as implemented in Saskatchewan.

On the whole, the statutory and non-statutory measures are designed to turn a new page in Canada's grain transportation and handling system. I think they create a significant opportunity for the parties to commence a different set of relationships and to work together to build a more commercial, more accountable and more effective system.

Before I sit down I would like to thank all members on both sides of the House who have worked really hard on this measure. I know that it came late, but as I said at second reading, this was a very tough measure to adjudicate and to do things properly. The fact that there is no significant technical opposition to the bill underscores the fact that we have gotten it right, that the producers will benefit and that productivity gains will be shared.

I realize that while producers may be happy, the railways and the grain companies may not be as happy. We are trying to work out modalities in the MOU with the wheat board to address some of their concerns.

I think we have done justice to the railways by moving the open access provisions and the regional railway provisions to the CTA review to allow for a broader debate which will allow all shippers, not just shippers of grain, to have an influence on the decisions and an impact on policy changes which are coming forward.

I think the coming year will be an interesting one because the review will deal with some of the unfinished business. I am firm in my view that we have started on the road to true commercialization and reform of the system. I applaud members of both sides of the House who have agreed that this objective will be met.

[The Acting Speaker (Ms. Thibeault)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Acadie—Bathurst, Employment Insurance; the hon. member for Prince Albert, Indian Affairs and Northern Development; the hon. member for Lotbinière, Transfer Payments; the hon. member for Lambton—Kent—Middlesex, Agriculture; and the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, Human Resources Development.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Madam Speaker, it is with some sadness that I stand at this time. I want to join with the minister, however, in congratulating the men and women who served on the transport committee. I think it was a very good committee. The hearings were good, we heard good witnesses and we had good discussion and good debate.

Mr. Speaker, I would ask for the unanimous consent of the House to share my time with the hon. member for Lethbridge.