Mr. Speaker, Bill C-8 is the third and final bill amending the Canada Transportation Act. Two previous bills, one on international bridges and tunnels and other provisions of the act, were passed in the previous session.
The Canada Transportation Act is the legislative framework that, among other things, regulates the economic activities of the railways, in particular services and rates. While the act generally relies on market forces, there are a number of shipper protection provisions to address the potential abuse of market power by the railways.
I remind all members that Bill C-8 is extremely important to shippers. I am sure that many of us in the House today have heard how important the bill is.
Many members have undoubtedly heard many complaints from coast to coast about railway service and rates over the last few years. Bill C-8 strengthens the shippers' provisions in the act. By doing so, it improves shippers' leverage when they negotiate with railways, which contribute to better service and lower rates.
Bill C-8 is great news for Canada. Over time it is hoped that this will also improve the relationships between shippers and railways.
I also wish to remind members that Bill C-8 is the result of extensive consultations, dating back to the statutory review of the Canada Transportation Act that took place in 2000-01. This provided an opportunity for shippers to develop a very strong consensus in support of the bill. In fact, a couple of the members of the Standing Committee on Transport, Infrastructure and Communities, on which I sit, commented on how unique it was to see such a strong, solid consensus from an industry sector such as the shippers in this case.
I ask members to keep this in mind during third reading debate. Shippers like the bill. They want it to be passed as soon as possible. Let us not disappoint them.
The bill is also important to railways and their investors because it gives them certainty. It gives them regulatory stability and they know this. Providing regulatory stability will improve the investment climate and facilitate investments by the railways and their networks, equipment and crews so they can maintain and even expand their operations.
Canada is a trading nation and railways are important to our future growth in our economy. This in turn will help shippers compete in domestic, continental and international markets. It will also facilitate the achievement of government objectives to improve the transportation gateways in corridors in western, central and eastern Canada.
What the government is doing is making this an even stronger trading nation, ensuring we have all the inventory and assets necessary to become that strong nation.
When asked at committee stage whether Bill C-8 would cause the railways to cancel any investment plans, Mr. Cliff Mackay, president of the Railway Association of Canada, replied:
The short answer is no, we will invest. We need to invest. It's part of our business. It's very important.
I believe Bill C-8 re-balances the regulatory framework in an appropriate manner. Shippers are clearly looking forward to the new provisions. At the same time, however, there should not be a significant impact on railway investments. The bill is necessary for our future, and the government is going to pass it.
During the consultative process in the summer of 2006, the minister encouraged the railways to look at potential commercial solutions to address the concerns of shippers. The intention was that improved commercial mechanisms would complement amendments to the shipper provisions.
The railways discussed a commercial dispute resolution proposal with shippers. For some period of time, we heard at committee that they discussed this. Good progress was made, but discussions eventually broke down as both sides could not find a solution that was satisfactory to both sides.
The government is hopeful that the discussions will resume once the bill is passed and sets a framework for those. An effective commercial dispute resolution process is preferable to regulated remedies. A commercial approach would be more expeditious, less costly and less confrontational and better for long term relations.
I will briefly discuss the main provisions in the bill that have been endorsed by the committee.
Under the existing section 27 of the act, the agency must be satisfied that a shipper would suffer “substantial commercial harm” before granting a remedy.
Shippers have long objected to this test. As members can imagine, it can be quite onerous. The railways argue that this test is consistent with the commercial approach reflected throughout the act and have pointed out that based on agency decisions to date, the provision has not prevented shippers from accessing remedies. The government concurs with shippers that the substantial harm test is not required.
It is a serious matter for a shipper to seek a remedy under the Canada Transportation Act.
First, it can have an adverse impact on a shipper's relationship with a carrier. Many shippers across the country only have one carrier, one railroad to deal with, and this relationship is very important to them.
Second, pursuing a regulatory remedy can often be extremely expensive. For small farmers, independent operators, it is almost impossible in some instances to afford or even to launch such a discussion.
The test itself is unwarranted and is being dropped under Bill C-8, great news for shippers.
The bill also contains a new provision that would allow shippers to complain to the agency if they were not satisfied with railway charges or the conditions associated with such charges, other than freight rates. The principal remedy for freight rates will continue to be final offer arbitration. The charges I refer to include what are often referred to as ancillary charges such as fees levied for cleaning or storing cars.
The new provision would also deal with such charges as well as some other charges related to the movement of traffic, such as demurrage. Demurrage is a payment incurred when a shipper takes too long to unload or load a car. Sometimes these circumstances happen as a result of something beyond their control.
The agency will have the authority to review complaints about such charges and to order a railway to revise the charge or so stated conditions if the agency finds them to be unreasonable. These charges have become an issue with shippers over the past few years and shippers are very pleased that the Conservative government has introduced an effective measure to address them.
The last major element of Bill C-8 is the introduction of group final offer arbitration, commonly referred to as group FOA. The existing final offer arbitration provision is one of the more popular remedies with shippers. A shipper can apply for final offer arbitration if the shipper is not satisfied with the railway's freight rates or associated conditions.
Under the process, the shipper and railway each submit their final offer to the arbitrator. The arbitrator must select either one or the other and is not allowed to change or modify either of the final offers. Imagine what that would lead to. It encourages the two parties to be fair and reasonable, which is most important, or else they lose the arbitration itself. The process often leads to a negotiated settlement and that would be good news as well.
Bill C-8 would allow a group of shippers to apply for final offer arbitration subject to three main conditions.
First, the agency must be satisfied that the group attempted to mediate the matter with the railway first. This is to encourage a commercial solution if at all possible, and would be in the best interests of the Canadian shipping industry.
Second, in addition, the matter must be common to all the shippers.
Third, they must make a joint offer, the terms of which apply to all of them.
The concept of commonality in terms of both the matter and the offer is essential to group final offer arbitration. Otherwise it simply would not work and we would all be wasting our time. In this case it will be and it is again great news for shippers around the country.
The former Bill C-58, which was reinstated as Bill C-8, was tabled on May 30 of this year. At that time, the minister announced there would be a review of railway service. This would commence within 30 days after the bill itself has passed.
It is important to note that shippers strongly endorse the proposed review and look forward to it. The review will focus on solutions to railway service issues, including commercial solutions. Transport Canada officials have had some preliminary discussions with shippers on the terms of reference for this study. More consultations will take place before recommendations are submitted to the minister and before any final decision is made, again, great news for Canadians.
There is a widespread support for Bill CC-8 among all political parties. As I mentioned, the former Bill C-58 was tabled in the House on May 30 of this year. Second reading debate was concluded in one day, on June 14. It moved very quickly, with all party support for the most part of all clauses of the bill, before the session was prorogued.
The Standing Committee on Transport, Infrastructure and Communities heard witnesses at three meetings last month. The witnesses included the minister, the railways and the shippers. We have heard from stakeholders.
The committee heard a clear desire for the bill to be passed expeditiously without amendments. I have seen many emails and have had many phone calls from shippers across the country. They want the bill passed as quickly as possible.
The standing committee was able to conclude clause-by-clause review in less than 30 minutes. The committee approved one technical amendment to clarify that the new power being given to the agency to address complaints about railway charges would not apply to freight rates. In essence, it was simply an amendment to ensure and to clarify that we would have less litigation.
The bill is extremely important to shippers from coast to coast to coast from all types of industry. They have been waiting for results since 2001. The statutory review of the act was completed in 2001.
The bill would also provide regulatory stability sought by the railways. This is good news for Canadians because we are a trading nation. The economy of Canadians is tightly woven with the success of our shipping from coast to coast.
The standing committee dealt with the bill very quickly. I want to personally thank all members of the standing committee for their efficient review of the bill.
I now urge the House and all members to get behind the bill and to pass it as quickly as possible so Canadian shippers and manufacturers can rely on the great work of the House.