Mr. Speaker, I am pleased to rise to speak in support of Bill C-52, the fair rail freight service act. My comments today will describe our extensive consultations with stakeholders from across the rail-based supply chain. These consultations helped shape Bill C-52 and helped to ensure that it would take a fair and balanced approach to enhance the effectiveness, efficiency and reliability of rail-based supply.
In 2008, the government initiated the rail freight service review to address ongoing concerns regarding rail service. As part of the review, the government appointed an independent panel of three eminent persons. The panel's mandate was to provide recommendations on how to address rail service issues, including both commercial and, if necessary, regulatory solutions.
In issuing its recommendations, the panel consulted extensively and broadly with stakeholders in the rail-based supply chain. Indeed, the panel held broad consultations with 85 shippers, railways and other stakeholders and received over 140 written submissions.
Taking full account of input provided by stakeholders, the panel submitted its final report to the government. The government carefully considered the panel's recommendations as well as stakeholder views presented during the review and announced a number of key commitments to enhance the efficiency, effectiveness and reliability of the rail-based supply chain.
A key commitment of our Conservative government was to develop legislation that would provide shippers the right to a service agreement and a process to establish one should commercial negotiations fail.
As part of our commitment for legislation, we launched a consultation process, inviting input from stakeholders. During the summer of 2012, we asked stakeholders for their views on the development of a new legislative provision to give shippers a right to a service agreement and on what process should be followed to establish one should commercial negotiations fail.
The response from stakeholders was robust and fulsome. Extensive consultations spanned a number of months, including meetings with shippers, shipper associations and railways that provided the opportunity to listen to a diverse range of views regarding rail service issues and a legislative provision to address those issues.
In addition, a variety of stakeholders provided extensive written input, including shippers, shipper associations, railways, provinces, municipal associations, ports and terminals. These stakeholders came from across the rail-based supply chain and had operations throughout various regions of the country.
I have described the formal processes of the review and our invitation to stakeholder input over the summer months of last year. I would also like to note that we have continued to hear the views of stakeholders on an ongoing and informal basis.
Throughout these consultations, we heard from a diverse range of stakeholders, including large, medium and small shippers, shippers of various products, including agriculture products, coal, potash and forest products, ports and terminals from east and west coasts of Canada, class 1 and short line railways and other levels of government. We listened carefully to stakeholder views and considered their input to develop a legislative provision that would ensure the best possible outcomes for the supply chain as a whole, as well as for the Canadian economy.
The fair rail freight service act responds to key points raised by stakeholders throughout the consultations, which I just described. For example, shippers reiterated that the legislation had to provide leverage in their negotiations with the railways to ensure they could get the rail service that met their needs. Shippers have also expressed that a process to establish agreements must be timely and efficient. Additionally, shippers have asked for a mechanism that would hold railways accountable for service failures.
We have heard these concerns. The bill provides every shipper with the right to a service agreement and a process to establish one where commercial negotiations fail. Service agreements would help give shippers more clarity on the rail service they can expect to receive. While we expect that most would be able to negotiate agreements commercially, the arbitration process ensures that shippers identify the elements to be addressed to ensure they can get the rail service that truly meets their needs. Furthermore, the arbitration process is 45 days and can be extended for up to another 20 days at the arbitrator's discretion. This timely process would allow shippers to focus their resources on growing their businesses.
In response to the request of the shippers for greater railway accountability, the bill provides for the Canada Transportation Agency to apply an administrative monetary penalty of up to $100,000 for each railway service failure. This is a strong mechanism to hold railways accountable.
The bill is a balanced approach, which is reflective of stakeholder views in several other respects as well. For example, both the shipper and the railway must first try to resolve the matter commercially. Should commercial negotiations fail, there is a process for an arbitrator to establish an agreement. The arbitrator would have sufficient flexibility to impose an agreement that is tailored to the given situation. In this flexibility, the bill recognizes that there is no one-size-fits-all solution and that railways have an obligation to provide service to all users on their network.
It is clear that the fair rail freight service act is the product of listening to input provided by stakeholders. The bill's approach is firmly grounded in the views and concerns expressed by stakeholders from across the rail-based supply chain. This bill provides shippers with leverage to ensure they can negotiate with the railways to get the rail service that truly meets their needs.
Shippers have expressed their support for the bill, indicating that it meets their fundamental request for more leverage in their negotiations with railways. Bill C-52 balances the requirements of the railways to provide adequate and suitable service to all other customers. The balanced approach responds to concerns raised by shippers and railways, but more importantly ensures that the Canadian economy is the ultimate winner. Efficient and reliable rail service is key to the long-term prosperity and growth of the Canadian economy.
To remain competitive in global markets, shippers have to get their products to market. Canadian shippers work hard to maintain their global reputation as reliable suppliers. To enhance Canada's international competitiveness, shippers need a fluid rail-based supply chain to move product from farms, mills and mines to market, in a predictable, reliable and efficient manner. The fair rail freight service act ensures shippers would get the rail service that meets their needs, allowing them to grow their businesses and take advantage of global market opportunities. Railways would be able to manage their networks in a manner that benefits all users, and the Canadian economy would be better positioned to take advantage of new opportunities, thereby supporting long-term economic growth and prosperity for all Canadians.