Debates of May 23rd, 2013

Speaker's Ruling

[The Deputy Speaker, NDP, Joe Comartin]

There are three motions in amendment standing on the notice paper for the report stage of Bill C-52.

Motions Nos. 1 to 3 will not be selected by the Chair, because they could have been presented in committee.

Therefore, there being no motions at report stage, the House will now proceed without debate to the putting of the question on the motion to concur in the bill at report stage.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved that the bill be concurred in.

[The Deputy Speaker, NDP, Joe Comartin]

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

[Some hon. members]

Agreed.

On division.

[The Deputy Speaker, NDP, Joe Comartin]

(Motion agreed to)

When shall the bill be read the third time? By leave, now?

[Some hon. members]

Agreed.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

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

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Mr. Speaker, I am pleased to speak today in support of Bill C-52, fair rail freight service act.

Before I begin, I would like to thank the hon. Minister of Transport, Infrastructure and Communities for his tremendous leadership on this particular issue. I would also like to thank the members of the Standing Committee on Transport, Infrastructure and Communities, who have recently concluded a comprehensive study of Bill C-52 and referred it back to this House.

The committee held hearings for the past two and a half months, hearing from dozens of witnesses: from the shippers representing the agriculture, mining, forestry and chemical industries, to the railways—CN, CP, the Railway Association of Canada and the short lines—as well as other important supply chain partners such as the Canadian port authorities. I am very pleased that the committee has examined this legislation so thoroughly and carefully considered all of the various issues.

Our government remains focused on creating jobs, economic growth and long-term prosperity, and that is what Bill C-52 is all about.

Transportation plays a major role in supporting our government's economic agenda. It drives and attracts international trade, which makes it essential to ensuring Canada's economic competitiveness in the world. As this House knows, after years of neglect by the previous Liberal government, in 2008 our Conservative government launched the rail freight service review to get an accurate picture of how well the rail freight transportation system was working.

The review panel recommended commercial solutions to address service issues, with legislation to be used as a backstop if necessary. In response, our government committed in March 2011 to table a bill on rail freight service, and Bill C-52 delivers on that promise.

The fair rail freight service act would strongly deliver for shippers by giving them more leverage to negotiate service level agreements with the railways. This would expand the clarity, predictability and reliability they need to succeed in global markets.

This bill would amend the Canada Transportation Act to give shippers the right to request a service level agreement from a rail company. In the event that rail companies and shippers were unable to reach an agreement on their own, the bill would create an arbitration process to establish the terms of service that a shipper is entitled to receive from the railway.

Bill C-52 would grant the arbitrator the power to define, in a forward-looking manner, the railway's service obligations for a specific shipper. The arbitrator's decision would be backed by very strong enforcement tools to ensure compliance by the railways. In addition to the existing enforcement tools that already exist in the Canada Transportation Act, Bill C-52 proposes to give the Canadian Transportation Agency the power to impose administrative monetary penalties on railways to hold them accountable for their service obligations.

During second reading, some of my opposition colleagues across the way raised some concerns about the bill that I would like to address.

First, there were questions regarding the ability of shippers to trigger the arbitration process. Bill C-52 is very clear that the shipper would trigger the arbitration process, not the railway, and the threshold to access arbitration would be quite low. To begin the process, a shipper would only need to demonstrate to the Canadian Transportation Agency that an effort had been made to reach a service level agreement commercially and that a 15-day notice had been served on the railway prior to the arbitration request. Then the shipper would present to the agency the issues he or she would like resolved and ask that these be referred to arbitration. In short, the shipper would get to frame the issues that were submitted for arbitration.

Second, some opposition members raised concerns that the level of the administrative monetary penalty would be too low. The level of the penalty would be significant: up to $100,000 per violation per arbitrated service level agreement. This amount is four times the level of other administrative monetary penalties in the act. If a railway had multiple violations, it could be fined many multiples of $100,000. This would be a very strong enforcement tool.

I would also like to speak on issues raised at committee hearings. As I mentioned earlier, during the hearings on Bill C-52, the Standing Committee on Transport, Infrastructure and Communities heard testimony from everyone wanting to share their views on Bill C-52: shippers, railways, ports and many associations that lobby for rail freight shipping in Canada. Overall, it is clear that shippers support Bill C-52. They overwhelmingly said that this legislation would give them more leverage in their negotiations with the railways.

There were some concerns raised by my opposition colleagues at committee, which I would also like to address. Some questioned whether force majeure clauses and performance metrics are captured in the scope of what an arbitrator could impose in a service level agreement. Transport Canada officials testified before the committee and made it very clear that both force majeure and performance metrics are included in the bill.

The shippers suggested some amendments that the committee ultimately judged, after careful consideration, as unacceptable. There were two reasons for this. First, many of the amendments were contrary to the approach to arbitration in Bill C-52, which would give the arbitrator broad discretion to impose the right service contract for a particular situation, in recognition of the fact that each situation is different and there is no one-size-fits-all solution. It is important for the House to understand that legislation is a very blunt instrument and rail freight service issues are often extremely complex. Therefore it is essential to ensure the arbitrator would have enough flexibility to impose a service contract that made sense, given the unique circumstances of each case. For example, shippers asked for changes to the level of service provision that would prescribe detailed service obligations for railways. This would limit the arbitrator's ability to consider the circumstances of each shipper and establish service agreements on a case-by-case basis. Under Bill C-52, the arbitrator would still be able to include every service element a shipper could ask for.

Second, some of the shipper amendments were not possible because of inherent legal risks associated with the proposals, which in some cases would be unprecedented concepts in Canadian law. The committee examined this very carefully. The shippers sought amendments to give the arbitrator the ability to impose pre-established damages or penalties that the railway would pay in the event of a hypothetical service breach in the future. This concept is not consistent with the way damages are handled in contractual law and it is not consistent with the role of regulatory agencies, which is to enforce compliance after an actual breach, not before a potential breach. It is also full of legal risks and would limit the ability of shippers to seek actual damages in court after a service breach.

Also, shippers asked that the arbitrator not take into account the railway's obligation to other shippers and users of the network. It is very clear that the way a railway serves one shipper will affect the service to another. That is the nature of the railway business. It would be completely irresponsible for the arbitrator to be denied the ability to consider the railway's network and its service obligations to other shippers. Such a proposal could have devastating consequences for our entire rail freight system, harming all shippers and threatening our economy. This is why it is important for Bill C-52 to require the arbitrator to consider the rail network and the railway's obligation to other shippers.

The railways strongly maintain that the bill is not required, given recent improvements to rail service. They warned about unintended consequences of regulation and the potential negative effects of government intervention on the efficiency of the supply chain. They are opposed to the entire premise of this legislation.

That said, the railways also requested amendments at committee stage, which were carefully considered. Ultimately, their amendments were also determined to be unnecessary. For example, the railways proposed to limit access to arbitration to only captive shippers, those that have no alternative means of transporting their goods. This amendment would unduly restrict access to service arbitration for shippers, reduce shippers' ability to establish service terms in a timely manner to address their business needs and conflict with existing shipper protection clauses in the act that are available for all shippers.

The railways also proposed an amendment to completely eliminate the administrative monetary penalties provision in Bill C-52. Again, this proposed amendment was rejected by the committee because it is important to ensure that the Canadian Transportation Agency would have a strong enforcement tool to force the railways to comply with the arbitrated service level agreements if necessary.

The testimony heard at committee clearly demonstrated the extent to which shippers and railways have very different perspectives on these issues. This underscores the need for Parliament to assess their proposals with a view to ensuring that the fair rail freight service act would maintain its original focus, which would be to ensure that shippers would have the leverage they need to secure service level agreements from the railways, but do it in a way that would not undermine the efficiency and performance of the rail transportation system as a whole. Bill C-52 would do exactly that. It would support shippers' needs for commercially negotiated service agreements and would provide a legislative backstop if those negotiations were to fail. I believe the bill would strike the right balance for our entire Canadian economy.

I also would like to speak to those benefits to the economy. By working together, Canada's railways, farmers and many others who harvest and ship our natural resources have helped to build our great country. Beyond their own businesses, they drive economic growth and create jobs right across Canada. However, those in agriculture and resource production depend on efficient, effective and reliable rail service to move their products to customers in Canada and around the world. For example, last year Canadian farms shipped more than $3 billion in agricultural products by rail. By ensuring more reliable shipping from gate to plate, as they say, Bill C-52 would help strengthen the livelihood of those who produce food in this country.

Before this legislation was tabled, the shippers asked the government to include three essential elements in the bill for it to be successful. They were, one, a right to a service level agreement with the railways; two, a process to establish a service level agreement when commercial negotiations fail; and three, consequences for non-performance on the part of the railways. I am proud to say that Bill C-52 would deliver all three of these elements.

The range of support for Bill C-52 is broad. Consider these comments:

The Coalition of Rail Shippers said, “Bill C-52 meets the fundamental requests of railway customers for commercial agreements”.

Greg Stewart of Sinclar Group Forest Products Ltd. told the committee on March 7, 2013, that the proposed legislation was “...a significant improvement and will reduce the risk” for shippers.

Jim Facette, CEO of the Canadian Propane Association, told the committee:

We believe this piece of legislation...provides a very good balance between railways and shippers. We're not coming today with any changes at all. Finding a balance is very, very difficult.... For us, it contains all the mechanisms and measures we requested some years ago: a right to a level of service agreement, an arbitration process, and administrative monetary penalties.

Mr. Facette also said that Bill C-52:

is viewed by the propane industry as a balanced approach to managing relations between railways and shippers, and the CPA urges Parliament to pass the legislation in a timely manner.

Also at committee, representatives from the ports expressed strong support for this bill. Mr. Peter Xotta, vice-president of planning and operations at Port Metro Vancouver, said:

...Bill C-52 is extremely important to Port Metro Vancouver.... Clearly, the establishment of service agreements through normal commercial processes should be encouraged, with arbitration as a last resort.

The Prince Rupert Port Authority noted that it:

...supports what we believe is the principal object of this piece of legislation, which is to ensure that there are agreements in place that provide clarity, transparency, and certainty both to shippers and to rail lines regarding the obligations of both parties in their roles in the supply chain.

The fair rail freight service act would help build a more prosperous economy. It would create a strong incentive for both shippers and railways to work together to negotiate service agreements commercially, and it would create a fast and efficient arbitration process if these negotiations were to fail to achieve the clarity and predictability that shippers need.

In conclusion, let me say to my colleagues in this House that we need to pass Bill C-52 as soon as possible to ensure that our rail system and Canada's economy are on the right track.

The proposed legislation would deliver significantly for shippers and would fulfill our government's promise to create a legislative backstop for fair rail freight service issues. However, well beyond the shippers, I would like to stress that the real winner would be the entire Canadian economy. By strengthening our agricultural and resource producers, the bill would build prosperity for many of the people we represent.

I call upon all members of the House to support Bill C-52, expedite its passage through the remaining parliamentary stages and refer it to the other place without delay.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I listened with interest to my colleague's comments. While it is clear that the bill would move the yardsticks somewhat for the rail shippers, it is also clear that the rail shippers themselves are not satisfied with the final result.

In particular, the rail shippers themselves feel that the economic might of the rail companies, one of which made $2.7 billion last year, would not actually be deterred in any way by an administrative monetary penalty of $100,000, which in fact is less than 1/1000th of a per cent of the earnings of one of these companies.

Also, they are concerned that there is no mechanism in the bill for them to be able to avoid suing these rail companies should there be a breach, whereas in labour arbitrations and in labour collective agreements, there is always a way for the smaller player, the individual, to take on the bigger player, the employer. That is absent from the bill, and we believe it to be a very large failing.

I wonder if my colleague would comment on that failing.

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Mr. Speaker, the administrative monetary penalty in this bill is actually quite significant, because it is not a one-time $100,000 penalty. The administrative penalty could be applied many times over the course of a service level agreement if the railway did not fulfill its obligations.

It is also important to note that this particular act, and I spoke of this, would not take away the ability for a shipper to go through the normal court process if it feels that a service level agreement has not been fulfilled and that has incurred financial costs. The shipper would still have the ability to go through the courts to seek a finding to force the railway companies to pay those final bills.

[Isabelle Morin, NDP, Notre-Dame-de-Grâce—Lachine, QC]

Mr. Speaker, I would like to thank the member for his speech. We work together on the Standing Committee on Transport, Infrastructure and Communities, and we had the pleasure of studying this issue at a number of meetings.

The Conservatives have a habit of coming to committee with preconceived notions, and I find that disappointing. They do not really listen to witnesses. They do not ask questions to determine if the witnesses' testimony is relevant or not because they follow their ideology and their minds are made up. Pardon my language, but they just do not seem to give a damn.

The Coalition of Rail Shippers proposed six minor amendments that, in my opinion, would really help them. The coalition believes that even though the bill helps them and is a step in the right direction, it gives far more support to CN and CP.

I am wondering if my colleague is able to list three of those amendments. I sometimes get the impression that the Conservatives did not even necessarily listen to them, let alone really study them. Could he list three of the amendments and tell me why he voted against them?

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Mr. Speaker, the hon. member's comments about our having preconceived notions is completely false. As a member of the committee, she would know that we ask many tough questions of both the shippers and the railways in asking them to back up their requests for amendments.

We talked very closely about many of the considerations they brought forward, and we addressed them specifically in committee with the witnesses who came before us.

One of the specific examples was the desire of the shippers to have the network not be looked at as part of the arbitration process. They did not want the arbitrator to look at the whole network as part of the process. If we do not look at the whole network and we tell the shippers that the rail freight company only has to look at their particular issue and does not have to worry about the big picture of shifting freight across Canada for multiple shippers but just their particular issue, we would have a situation in which a shipper would be tying up the resources of the railway for an undetermined and unlimited amount of time and affecting other shippers because they would not be able to get their goods to market.

Would it be fair that one shipper could basically hold many other shippers across Canada hostage? It is wrong, and it could be a complete collapse of the network if we allowed that to happen. That is one example in which we listened very closely and closely questioned the witnesses who appeared. We closely questioned the shippers.

We did go through a deliberate process. We looked very closely at the request for amendments, and we determined that those amendment requests were actually contrary to what they were trying to accomplish, and were actually even dangerous for themselves in many items. That was also pointed out very clearly by Transport Canada officials. It was one of those situations in which they needed to be aware of what they were asking for, because they might not be getting what they thought they were getting.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, the Conservatives obviously have a hard time understanding that rail transportation is a public service and one that is essential to the Canadian economy.

How can this government hope to ensure—with this incomplete bill that provides only some solutions—that our natural resources will be developed and exported in a timely manner and at prices that will help the economy grow?

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Mr. Speaker, it is refreshing to hear somebody from the NDP talking about resource development being necessary in this country, because so often NDP members stand in the House and say that we should not develop anything and should shut down all resource development. It is refreshing at least to hear that they have a desire to have resource development in our country. We hope they will get on board with some of our resource development initiatives.

It is also important to remember that the railways are an essential service. That is why the government did a review. We looked at the report and the review very closely and came up with a solution that serves the railways so that they can continue to serve all shippers across the country.

This legislation always has been considered as a backstop. We would love to see no arbitration cases ever come out of the legislation. We have now given an incentive and a little more strength to the shippers to be able to go to the railways and negotiate commercial solutions and commercial service level agreements. That is ultimately the goal of the legislation.

I believe very strongly it will deliver on that goal and I look forward to seeing the bill passed by this House and moved to the other House very quickly.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, on this side we want to see resource development that takes our environment into account and creates jobs here in Canada for Canadians instead of flushing them down a pipeline to the United States to the tune of 40,000 lost jobs.

On this issue, 80% of the service commitments for agricultural rail customers are currently not being met. As well, 80% of the shippers are not satisfied with the services they are receiving. The shippers are so desperate for anything at this point that they welcome even the watered down and weak protections offered by the bill, which would be stronger if the government had listened to our recommendations in committee.

A few minutes ago the member mentioned that they had recourse to the courts. Of course this is important and valuable, but is that the government's solution—that companies should have to go to the courts? Why not write a bill that would not force shippers to have to go to the courts, spend money and waste the time of the court in trying to deal with legitimate issues?

[Lawrence Toet, Conservative, Elmwood—Transcona, MB]

Mr. Speaker, they do have recourse to the courts, and that is something that is a final backstop. The administrative monetary penalties in the act are very strong, and the railways will be looking at them very closely. No railway that has to report to its shareholders wants to be paying fines in the millions of dollars over the course of the year for a failure to deliver on an agreement that it made. There is great protection in here for the shippers, and it allows the railways to continue to operate so that we can deliver the goods around the world for Canadians.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, for many years now, whether it be grain farmers, forestry companies or mining companies, what they have wanted to do is to ship their products from coast to coast to coast so that they could get loaded into a container and be exported. Eighty per cent of the shippers have been saying that the service that they are getting from rail companies is not satisfactory.

Why is that? It is because in Canada there is really a monopoly of service. CN and CP control all the tracks. They do not compete with each other, and there are no other choices. Yes, perhaps shippers could use trucks, but imagine large amounts of coal or large numbers of logs being shipped by truck. It is just not feasible.

Many grain, lentil or soybean farmers and many in the forestry industry are saying they need to get their products to the coast on time. They need to have advance warning if a train will not be coming on time. They also need to be assured that if the service is not satisfactory, there would be some kind of refund or compensation. If not, there would be a complete imbalance of power in that the rail companies could say whatever they want, charge whatever they want, deliver whatever kind of service they want and not worry about losing customers. The market is completely skewed. We all firmly believe that competition matters and that shippers should get the right price, but in this case there is no competition at all. There is a complete imbalance.

What is happening is that sometimes with no or very short advance warning, the train does not show up on time, or if it does show up, it does not deliver the products on time. As a result, the grain rots. Sometimes the company hires a large group of people to get the grain, or whatever product they are trying to ship, ready to be shipped, and the trains do not arrive. What do they do? Some of the companies, rather than booking one container, will book several, one before and one after, because if the products do not show up on time, they do not get their product exported properly. As a result, millions of dollars are lost because of poor rail freight service.

Successive governments have said they understood the problem and would do something about it. They talked a lot about it, yet nothing has been done.

The Conservatives promised that action would be taken. They first had a stakeholder panel and did a study. That study consulted everyone, and it took many years. As the report came forward, the rail companies said they did not need legislation; they would provide good service, and we should not worry about it. The Conservative government at the time agreed, but suggested a mediation process, the idea being to see how it went and then, if that did not work out, it would introduce legislation. Most of the shippers agreed to give it a try, although they did not think it would work because of the complete imbalance of power.

The Conservatives then made a promise in the last election that action would be taken. Now, two and a half years later, we finally see a bill in front of us.

Last year I got very impatient, so I established a private member's bill. I took the stakeholders' report and all of the recommendations in it and put them into a private member's bill. The shippers looked at the private member's bill and thought it was a model for what should be done and said that if the government were to take action, that should be the kind of legislation that should be made into law.

Unfortunately, we have this bill in front of us. This bill is a start. However, it does not include a model of what a service agreement should be, which means that companies that have no service agreements have to start with a blank slate. Instead of having a framework, with a model, they have no guidelines and have to start from square one with no template to back up their right to service agreements. That is very unfortunate. Negotiations need flexibility, but they should not have to start with a blank piece of paper. Optional elements should include performance measures, communication protocols and consequences for non-performance. None of that is in this bill, which is unfortunate.

This bill would only cover those that have no service agreements. Any companies that have service agreements with CN and CP would not be covered, unfortunately. In terms of conflict resolution, the shippers want a process like arbitration that covers not only negotiations for new contracts but also violations of existing contracts. Companies could have existing contracts, but if punishments are not spelled out, how would those contracts be honoured? Conflict resolution has to be accessible and affordable for all shippers. Unfortunately, this bill made it very complex. For some of the smaller companies in the forest industry and farmers, it is going to be very difficult to access because of the process and the red tape involved in this bill.

One of the critical points shippers have been talking about is that there has to be compensation for non-performance. If their products are not delivered on time, there have to be consequences. Unfortunately, there are none. Shippers need to be compensated for contract violations, not just when an arbitration agreement is reached. Any penalties have to go straight to the shippers, not to the federal government.

What does this bill do? This bill says that if CN or CP violate a contract, and compensation is awarded to the shipper and not to CN or CP, then they should pay a fine. I think the fine is something like $100,000. The amount of $100,000 is too small, and the penalty does not go to the customers. It goes to the government. That does not make sense. If I am a customer, go into an arbitration process and prove to Transport Canada that the company was not providing good service to me, the customer, one would think that the reward would go to the customer. In this case, no, it goes to the government. In some ways, that is a bit of a tax grab.

Bill C-52 covers only new agreements and not existing ones, as I said earlier. This bill would unfairly exclude shippers from any protection and conflict resolution measures. Instead, they would be stuck with continued contract violations, with retribution.

I heard my Conservative colleague say that they could always go to court. Of course they could always go to court. Why do we need a government, then? They could go to court now, of course. The problem is that the court process is long, involved, and expensive. Companies would end up spending most of the money on lawyers rather than on producing better products for their customers.

What does all of this mean? It means that a lot of Canadian customers, whether they are logging companies or grain farmers, are saying that it is hurting their exports. It is hurting Canada's productivity. It is costing our economy millions of dollars. Because they have no say over how the pricing works, they were hoping that this bill would not just talk about the service but would talk about the pricing.

We could have the best service, but if the price is too high and farmers cannot afford to ship their grain, what good is it? Unfortunately, that key component is missing from the bill in front of us. It deals only with service, service contracts and service agreements but not with pricing. That big chunk still has to be tackled through the Canada Transportation Act.

We need to know what fair pricing is. Right now, we do not know, and the government has not tracked it. We also need to know what kind of performance standards should be acceptable. There needs to be a model so that people could learn from best practices. That, too, is missing.

Yes, the shippers were happy that there was finally some kind of legislation, weak though it is. They want it passed. However, the coalition of all rail shippers came together and said that they wanted a series of amendments. They did a lot of good work. They came to the transport committee and they proposed six areas to work on.

They want to tackle the problem of what should be in the service level agreements. They want to make sure that they are legally protected. They want to allow shippers to include arbitration conflict resolution in service level agreements for non-performance. They want protection from additional service charges. That is important, because we can have an agreement, but if service charges are laid on all of a sudden, it is very difficult for shippers to plan ahead.

They want to narrow the arbitration to what the shippers' complaints are about and not allow the rail companies to broaden the scope of the arbitration. It is hard to believe that this bill, which is supposed to support the shippers, would allow shippers to put in their complaint after which CN and CP could say that they too have things to put on the table, which they could do. The shippers are slightly worried about that. I do not blame them. It is almost like protection against retaliation. If they dare challenge the CN and CP monopoly and dare to say that the service is not up to par and they take it to arbitration, CN and CP could retaliate and cost them a lot of money.

Remember, CN had a $3-billion profit last year, so it is not doing too badly. CP will also begin to have a profit margin.

The shippers' last recommendation was to lighten the burden of proof on shippers to demonstrate that they are captive during the arbitration.

Those are the six recommendations they had. They provided detailed support and documentation. They looked at the bill very carefully. They hired lawyers and different companies, whether they were logging and forestry industries, Canada Post, or the coalition itself, which all came in and said that this would make the bill much stronger.

Unfortunately, without much debate, without much deliberation, the Conservative majority on the transport committee said no and voted down all of the recommendations. That is really unfortunate. In some ways it is a betrayal of the good faith of these companies. They have been waiting for years for action. They have been waiting for legislation. They have been very patient. They waited for over a year for the negotiator, Mr. Dinning, to be appointed. They waited a year, because the Conservatives were not doing anything. Right after the election, the Conservatives had a blueprint showing how to go forward, but they did nothing. A year later, they appointed Mr. Dinning. The report took a long time, and this legislation has taken a long time.

Flawed as the legislation is, we as New Democrats support the bill, because it is better than nothing, but there is a lot of room for improvement.

Ultimately, Canada needs two pieces of legislation. The first piece of legislation would regulate and would clearly indicate to CN and CP what the performance standards should be, what the arbitration process should be, what kind of service contract should be given to the shippers, and what the results, the consequences, the penalty would be if the company failed to satisfy customers.

We also need a second piece of legislation that would provide a level playing field and deal with pricing. How much should it really be? How much should it cost? What would be the upper and the lower range? We need to let the market dictate pricing, but because the market is completely skewed right now, there is no competition. The government needs to step in and provide the support Canadian companies are desperately looking for.

All of the products Canada exports require a good transportation system, whether one is a small soybean farmer or one is shipping lentils or logs outside Canada. More and more oil is being shipped by rail. Rail service is good for the environment. It is an efficient way of moving things. We would prefer to see more train service rather than more trucks. As a result, the NDP believes that the Canada Transportation Act must be amended so that there is a level playing field for all shippers.

We support the bill, but we wish the Conservatives would listen to their constituents and these companies a lot more.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I wonder if the member could provide comment on the shippers' expectations since 2008, when they expected the government to take some action on the issue. It was a couple of years later that the panel ultimately pointed out the degree to which some legislation needed to be brought in. Initially it was expected that something was going to be put in place that would allow shippers to be on a more level playing field. Today shippers are disappointed that the government has not gone far enough.

I wonder if my colleague could provide some specific comment with regard to those expectations.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, the shippers have been voicing their discontent since 2007. A talk-it-out-and-wait tactic was employed, starting with the promise of an expert panel review. The freight rail service review started in 2008 and the independent expert panel's final report was tabled in early 2011. There were a lot of pent-up expectations. In the fall of 2011, the Conservatives started a mediation process. It did not yield any results. CN and CP were unwilling to make any meaningful concessions. The mediation process was led by retired Conservative politician, University of Calgary Chancellor Jim Dinning. It failed. Mr. Dinning released a report in June 2012. Then the Minister of Transport promised legislation in the fall.

We gave the government a model piece of legislation using the expert panel's recommendations. Perhaps the CN and CP lobbying effort was too powerful and as a result they were successful. There were dozens of documented visits to government offices. A media campaign undertaken by CN showed its determination to keep the status quo.

It is quite unfortunate that we have such a watered-down bill as a result. There is massive disappointment in the industry. However, they see it as a first step. Hopefully, there will be better legislation in the future when the NDP form the government in 2015.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Speaker, I thank the opposition critic for her support of the bill. As she mentioned it is an important bill and we have had a lot of consultation with respect to it.

I would also note that it is supported by Pulse Canada, the Grain Growers of Canada, the Forest Products Association of Canada, the Western Barley Growers Association, the Chemistry Industry Association of Canada, the Western Grain Elevator Association, the Fertilizer Institute, the canola growers, the western Canadian grain growers. There is a very broad level of support for this bill.

I am happy that the NDP members are supporting it. I wonder if the critic will work with her colleagues to help them understand just how important the bill is and if we can expect them to work with us to get the bill passed as soon as possible.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, after we have been pushing the minister for five years, since I became the transport critic, I have personally been writing letters, bills and working with the Coalition of Rail Shippers. I have met with all of them and they do support it. On February 20 they provided a comprehensive list of recommendations, not just for the NDP but for every member of Parliament in every party. It lists the problem, why it is a problem and then a fix. It was very clear. They took the bill, dissected it and made very clear recommendations. None of what they wanted went into it. They do want some action. However, they certainly want to be listened to.

One aspect of the consultation process is to hear and listen. It makes no sense to consult and then not listen to any of the recommendations. These shippers came to the transport committee and we consulted with them, but none of their recommendations were accepted, which is unfortunate.

[Mike Sullivan, NDP, York South—Weston, ON]

Mr. Speaker, I want to thank my colleague from Trinity—Spadina for her excellent work on this bill and on all of the shippers' concerns.

I would note that very recently, in fact, there have been difficulties with shipments out of this country to other countries, which is indicative, I think, of the problems that we have with the bill. Bill C-52 corrects some of the problems, but it does not correct all of the problems. The shippers are not universally happy with the results.

The NDP agrees that we are a trading nation. However, if, as a trading nation, Canada has an inefficient and outdated service model for delivering goods to its ports, we cannot compete and we will lose in the overall trading field in the rest of the world.

I wonder if the member would like to comment further on our position in the world with regard to trade when it comes to things like Bill C-52 and our attempts to make it better.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, to have a successful export policy, and for Canada to have a good reputation around the world as being a country that knows how to export, we have to deliver products on time. We cannot say that we will send a number of containers of logs or tonnes of grain, but then have the containers not show up on time. Therefore, it is critically important for our export market to have a good transportation system.

Unfortunately, a fundamental weakness with Bill C-52 is with the outline of the arbitration process, which could not only be too expensive for some shippers, but the option of arbitration is only available when contract negotiations fail and not in the case of violations to existing service level agreements.

For example, if CN promised a certain performance standard through the service agreement and violated that service agreement, that should automatically trigger arbitration. However, in this case, the bill does not say that. The bill says that one can only go into the arbitration process when the contract negotiation fails, which could take a long time, could be very costly and it is not exactly what the shippers want.

[Alain Giguère, NDP, Marc-Aurèle-Fortin, QC]

Mr. Speaker, CN was privatized in 1995. Would it not have made more sense, at that time, to establish a policy to protect Canada's economic interests instead of just sacrificing a public asset to neo-liberalism?

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, that is a perfect question.

Yes, that would have been the time to set all the legislation in place. It would also have been the time to make sure that there was VIA Rail legislation, which we still do not have. As a result, passenger rail service is declining at a time when other countries around the world are increasing their passenger rail services.

Remember, more than 70% of all goods in Canada are shipped by rail. If we do not have good rail service, we do not have good export capabilities.