Mr. Speaker, it is an honour for me to rise and contribute to the debate on Bill C-39, the restoring rail service act.
Let me come right to the point. Our government has decided that it is necessary to bring in legislation to end the work stoppage at CP Rail. I am speaking of the work stoppage resulting from the outside disputes between the Canadian Pacific Railway, CP Rail, and the Teamsters Canada Rail Conference, the TCRC.
The TCRC represents 4,200 running trades employees at CP. The running trades include locomotive engineers, conductors, baggagemen, brakemen, car retarder operators, yardmen, switch tenders and locomotive firemen. It also represents 220 rail traffic controllers.
I would like to talk a little about the history of the dispute at CP Rail. As members know, the collective agreements for these two groups expired on December 31 of last year. Negotiations for a new collective agreement for both units began in October 2011. In March of this year, the labour program appointed conciliation officers to help the parties conclude an agreement. However, sadly in my view, these efforts were unsuccessful.
On May 1 of this year, the parties were released from conciliation. On May 16, the Minister of Labour offered the parties extended mediation to help them reach agreements, or at least move forward on some of the remaining issues from the bargaining table that included pensions, wages, benefits and working conditions. However, sadly, this offer was declined.
On May 22, the Minister of Labour again met with the parties. While she was able to get the parties to agree to maintain commuter rail services, the parties were unable to reach an overall collective agreement. On May 23 of this year, the strike began. That brings us to the unfortunate situation we are faced with here tonight in this House. The strike has caused a complete shutdown of CP Rail due to the lack of personnel trained and certified to work as conductors, engineers and rail traffic controllers. The legislation we are proposing would resume services at CP Rail.
What are reasons for this legislation? We understand that labour dispute legislation is rarely popular. Canadians are rightfully concerned about preserving the right to strike or lockout. Of course we have heard a great deal about that from our friends on the other side of the House. We do not come to this legislation easily. We regard it as a last resort, but certainly a necessary last resort for reasons that I am going to briefly outline.
Our government has compelling reasons for intervening in this particular case. Most important of these reasons is that a continued work stoppage at CP Rail will seriously and possibly irreparably damage the Canadian economy.
We have used this argument before to justify pre-emptive, back-to-work legislation, but the danger was real then and the danger is real today. Our recovering economy is still fragile and it cannot afford a sustained work stoppage in a major transportation mode.
I am not exaggerating when I say that CP Rail is a major transportation mode. Let me give this House an idea of some of its operations. We can think of CP Rail as a ribbon of steel that extends from the Port of Metro Vancouver to the Port of Montreal, with connections to the U.S. industrial centres of Chicago, Newark, Philadelphia, Washington, New York City and Buffalo. We are talking about a 22,000 kilometre railway network.
CP Rail operates in British Columbia, my home province of Alberta, Saskatchewan, Manitoba, Ontario and Quebec, as well as in 13 American states. Through agreements with other carriers, CP Rail extends its market reach east of Montreal into the Maritimes, and south throughout the U.S. and all the way into Mexico.
According to Transport Canada, in 2010, CP Rail handled the shipment of 74% of Canada's potash, 57% of Canada's wheat and 53% of Canada's coal. Let me put this in dollar figures. Every year CP Rail moves $5 billion worth of potash, $11.1 billion worth of grain and $5.25 billion worth of coal. The total value of freight moved in Canada by CP Rail every year is $50 billion.
These numbers are so large that they are difficult to comprehend, but I think Canadians can understand that when the movement of commodities like wheat, coal and potash is interrupted, reverberations are felt throughout the entire economy.
The Minister of Labour has met with some key stakeholders, including CN Rail, VIA Rail, Port of Metro Vancouver, TSI Terminal Systems Inc., Potash Corporation Inc. and Teck Resources, which is a coal company. When she asked them how they would be affected by a CP Rail work stoppage, they confirmed it would be devastating to their businesses.
The different transportation modes in this country are all linked to each other and function best as part of an integrated whole. The rail-based logistics system is complex and involves a range of associated operations, including terminal operators, transloaders, ports, shipping lines and trucking firms. When even one of these operations shuts down, the problem can cause congestion and delays that affect all of the other modes of transportation. That is what we are currently faced with.
Many Canadian enterprises depend on efficient and reliable rail services. The sectors that use rail transport contribute significantly to the Canadian economy. The four key industries that use bulk shipping are oilseed and grain farming, coal mining, wood products manufacturing, and pulp and paper. These industries add more than $81 billion to Canada's GDP annually and account for close to one million jobs.
It is not an over-exaggeration that a work stoppage at CP Rail is particularly bad news for the forest industry, which is still struggling to recover from the economic downturn. It is a hard blow to the automotive industry because imported auto parts travel by rail. It is also a serious hardship for Canadian wheat producers. Work stoppages in the rail industry are very disruptive to the flow of products like these. It often takes several weeks for operations to recover after disruptions.
CP Rail is also a vital link in moving freight to and from Canada's west coast ports, which are an integral part of the Asia Pacific gateway. The work stoppage is preventing our ability to keep products moving between Canada and Asia and threatens Canada's reputation as a reliable place to do business. There are no good alternatives to rail.
Now that CP Rail is sidelined, are there other rail companies that are able to take over? The answer is no. The ability of CN Rail to handle additional freight is quite limited. For example, for a commodity like grain, CN estimates it can pick up less 10% of CP Rail's capacity. VIA Rail could not mitigate the damage caused by this work stoppage because it is a passenger rail service that is not equipped for freight. Rail is a relatively cheap and efficient way to move bulky products. In fact, most commodities that are currently moved by rail cannot be transported by alternative means, such as truck or barge. Even when there are alternative carriers, the cost and requirements of switching may be restrictive.
This work stoppage could not only lead to shutdowns and layoffs in many industries, but the added costs of transportation would be passed on through the supply chain to the Canadian consumer, leading to higher retail costs for many of the goods that I have just outlined. Just to give one rather obvious example, a prolonged work stoppage at CP Rail could affect every Canadian simply by raising the price of bread.
The government does not use this type of legislation without careful deliberation. Our government's use of legislation to end labour disputes in the rail industry is not unprecedented. In fact, the Government of Canada has taken this step eight times since 1950, which would show the importance of rail movement to Canadians.
The last time there was back-to-work legislation involving CP Rail was in 1995 when minister of labour Lucienne Robillard introduced Bill C-77, the Maintenance of Railway Operations Act. The act ordered a resumption of operations at CN, CP and VIA Rail and the establishment of mediation-arbitration commissions for each of the bargaining units.
The Canada Labour Code specifically recognizes that free collective bargaining is the basis for sound industrial relations. When collective bargaining fails, the code gives the parties the right to strike and lockout. Government intervention is used only in situations where the public interest or the national economy is threatened. That is the case here.
As we know, in March 2012, the government brought in an act to provide for the continuation and resumption of air service operations to prevent work stoppages at Air Canada by the Air Canada Pilots Association and the International Association of Machinists and Aerospace Workers. We did that to protect the public interest. The government will continue to use its legislative powers to protect Canadians from strikes and lockouts that could paralyze Canadian infrastructure.
Labour stability in the railway transportation sector is critical to the functioning of the Canadian economy and to our continued recovery. Therefore, in a country as large as Canada with such vast distances over which products must be moved, it is imperative that the rail lines continue to operate. For those reasons, I urge all hon. members to support the quick passage of Bill C-39.