Debates of May 29th, 2013

Fair Rail Freight Service Act

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, the member opposite just said something that grates on me. In fact, I find it insulting to shippers, who are also business people. The member wants to strengthen economic efficiency, yet in committee, members are not given the opportunity to improve the bill by making amendments. Thus, for the 37th time, a gag order is being imposed. Members do not have the opportunity to discuss issues in a normal, democratic fashion.

The bills being discussed in the House are full of flaws. In fact, one of the many shortcomings that members have been discussing today is the fact that the maximum penalty for rail companies is $100,000. This $100,000 should be given to shippers to compensate them for lost productivity, delays and damage caused to harvests and products. However, in actual fact, this $100,000 goes directly to the federal government. That is not effective. The money is not going to the right place and, what is more, the fine is not even an effective deterrent. For example, in 2012, CN posted a $2.7 billion profit.

How can a bill that is replete with deficiencies benefit the economy and business people?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Mr. Speaker, I want to thank this colleague and others who are part of the NDP caucus for their support of this legislation. Even the NDP recognizes that this legislation is important to Canada's economy and to our resource-based industries across this country.

I am not a member of the transport committee. I cannot speak to exactly the process that occurred at committee. What I can tell members is that the consultation process with stakeholders for this particular piece of legislation was extremely extensive, over a multi-year period. Stakeholders, industry, and the freight industry, are particularly pleased with this piece of legislation.

We look forward to the opportunity of moving it forward. That includes the important component of administrative monetary penalties. With this piece of legislation, like any other mechanism through federal legislation, administrative monetary penalties are paid to the Crown.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, I rise today in support of Bill C-52, the fair rail freight service act. The purpose of this bill would be to amend the Canada Transportation Act in order to improve the reliability and predictability of rail freight service in Canada.

Over the past years, Canada's economy has managed to thrive amid a turbulent global economic downturn. Our success is in great part due to our Conservative government's focus on strengthening our economy. Bill C-52 would greatly improve Canada's rail freight service and consequently contribute to protecting and fostering the growth of our economy.

A great number of Canadian businesses, from grain and forest products to coal and chemical products, use rail services to ship their goods across the country or around the world. The range of sectors that rely on rail is reflected in the range of witnesses who testified on this bill at the Standing Committee on Transportation, Infrastructure and Communities. As my colleague, the hon. Minister of Agriculture and Agri-Food, said, “This bill is good news for Canada's farmers as it will help ensure all shippers are treated fairly by the railroads”.

Now let me explain how we reached the step of introducing this great legislation, and why all members of this Parliament should support it.

The years prior to 2008 were a time of unprecedented growth. Increased trade with Asia contributed to capacity constraints in the transportation system. In 2008, the government launched the rail freight service review to look into issues of rail service reliability that were brought to our attention by stakeholders. As part of the review, the government appointed an independent panel of three eminent persons to develop commercial and, if required, regulatory solutions to improve supply chain reliability. During the review, the panel held broad consultations with 85 shippers, railways and other stakeholders, and received over 141 written submissions. In December 2010, the panel submitted its final report to the government. It recommended several measures to improve rail service.

For example, the panel recommended the use of service agreements to define the commercial relationship between a shipper and a railway. It also recommended having a facilitator work with industry to develop a commercial dispute resolution process.

Our Conservative government agreed with the review's commercial approach and carefully reviewed the panel's recommendations. In March 2011, in a response to the panel, we announced a number of measures that we would undertake to improve the efficiency, effectiveness and reliability of the rail-based supply chain. Our commitment goes beyond the panel's specific recommendations in order to benefit the entire rail-based supply chain. Let me quickly go over the government's response.

The first measure we implemented was a facilitation process to develop a template of what service agreements could look like in a commercial dispute resolution process between shippers and railway companies. On October 31, 2011, the government appointed an independent facilitator, Mr. Jim Dinning, to work with shippers and railways. In his final report to the minister, Mr. Dinning provided clear direction for both shippers and rail companies, moving forward. This included a template service agreement and a streamlined dispute resolution process for parties to use in their commercial negotiations. This government believes this process served its intended scope and purpose. We successfully brought shippers and railway companies to the table to jointly pursue practical solutions that reflect their needs and the reality of their day-to-day business together.

To support these commercial tools, our Conservative government committed to tabling this bill that would also give shippers a right to a service agreement with the railways, and provide a process to establish an agreement should commercial negotiations fail. Bill C-52, the fair rail freight service act, would do just that. It would give shippers a right to service agreements with the railway companies, and would outline a low-cost, timely and efficient arbitration process to establish such agreements, if shippers and railway companies cannot agree commercially of course.

This legislation would align well with what the review panel recommended in its final report. As shippers told the Standing Committee on Transportation, Infrastructure and Communities, this piece of legislation would serve as a strong backstop to commercial negotiations.

First and foremost, the new provisions would create a strong incentive for the parties to negotiate service agreements commercially and to use legislation only as a backstop if commercial discussions fail. This reflects the panel's focus on commercial approaches to addressing service issues. If parties cannot negotiate an agreement commercially, the new provision outlines an arbitration process under the auspices of the Canadian Transportation Agency, which shippers would access to establish one.

The new provision prescribes service elements at a high level. Framing the provision broadly gives shippers the flexibility to ask for what is important to them, such as the number of cars needed for a shipment. This is in line with the approach suggested by the panel. It would also give the arbitrator the flexibility to tailor the service agreements to each case. If appropriate, the arbitrator could impose elements such as performance standards and communication protocols.

The new service arbitration process to establish an agreement would be fast, matching the 45-day process the panel proposed, although it could be extended by 20 days at the discretion of the arbitrator in some of the more complex cases. The arbitrator's decision on service would be final, binding, confidential and non-appealable. All told, this is a strong new provision that would improve rail service and make it more predictable and reliable.

Shippers echoed this sentiment during the hearings held at the Standing Committee on Transportation, Infrastructure and Communities and said that the new provision would enhance their leverage to negotiate commercially with railways.

To quote the testimony of the Canadian Propane Association on the bill at the standing committee, “...it contains all the mechanisms...we requested some years ago: a right to a level of service agreement, an arbitration process, and administrative monetary penalties”.

While introducing this legislation is a key component of our Conservative government's response to the rail freight service review, it is not the final piece. In collaboration with Agriculture and Agri-Food Canada, Transport Canada is currently leading an in-depth analysis of the grain transportation supply chain to focus on issues that affect that sector and help identify potential solutions.

Finally, we are also committed to establishing an industry round table covering commodity sectors in the near future. The commodity supply chain table would provide a forum for commodity exporters, railways and other members of the commodity supply chains to address issues that affect commodity freight systems. This would be an excellent venue for all players in commodity supply chains to work together to improve the reliability and competitiveness of Canada's export market.

As members can see, our Conservative government is well on its way to fulfilling its commitment to help ensure that Canada has the rail system it needs to support a strong economy and our domestic and international trade.

Bill C-52 is a comprehensive package that supports the government's focus on economic growth, job creation and prosperity for Canadians. We are working to benefit the entire rail transportation system. As shippers and railways move forward in defining their bilateral relationships through service agreements, and as stakeholders come together under the commodity supply chain table, it will be important for parties to work collaboratively to improve the efficiency, effectiveness and reliability of the entire rail-based supply chain.

In closing, I strongly encourage all members of the House, from all sides, to vote in favour of this very important legislation.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I live in a region and represent a place that relies heavily on our ability to move product to market. I am talking about a lot of small lumber towns, small cattle operations and farmers of various sorts.

What we have found over the years is that the smaller they are, the more mistreated they are by the large rail companies. I know that the view is shared across both sides of the House that small operators, whatever the industry, have tended to get short shrift as CN, in particular, and CP and others have become more interested in the big fish in the market and less interested in those small operators that actually built up the company from day one.

We had some improvements and amendments to make to the dispute resolution mechanism, based not on our own particular views but on the testimony we heard from those very same shippers. There are concerns that the arbitration method and the fines that are to be levied are not of enough consequence for the company to actually change its behaviour and its ways, particularly because these companies are so massive. I am talking about the rail companies that turn such extraordinary profits. There is not the motivation to actually correct the behaviour and change basic business practices.

We only get to do this once every so often. It is not very frequent that the House is seized with changing and improving our rail system. While the NDP members are supporting this bill, our lament is that the government did not listen to any of the amendments that came forward. It did not listen to any of the advice that came forward from some of those very shippers it now claims to defend.

It is a curiosity to me that the government was so intransigent over evidence brought before the committee. Why go through the exercise if it is not willing to listen to the facts?

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, as we have heard over the many hours we have discussed this piece of legislation, both in committee, from a wide variety of witnesses from different industries across the country who appeared before us, and in the last five hours or so of debate in the House, this is a bill that was widely consulted on.

Views were heard from the people who are actually affected on a daily basis. Yes, we heard from the railway system. Yes, we heard from shippers from across this country. We put together a piece of legislation that we believe encompasses the key points that will help get product to market, including product in the hon. member's riding, in a much faster, more efficient, more accountable way.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Mr. Speaker, the Conservatives often say that they are there to help the country prosper and stand up for businesses.

However, can the hon. Conservative member tell me why they are standing up for businesses that abuse their market power? Why are they not standing up for farmers and forestry and mining communities in Canada?

It seems to me that the Conservatives should be on the other side. It is obvious that the NDP supports the people in the second group.

[Costas Menegakis, Conservative, Richmond Hill, ON]

Mr. Speaker, it is perplexing to hear a question like that from the hon. member, but I will endeavour to respond to it by simply saying this. We have put through a number of measures and a large number of pieces of legislation that address the needs and requirements of small, medium and large businesses in this country. We know, at the end of the day, that it creates jobs, growth and prosperity. It puts money in the pockets of everyday Canadians.

I would, for once, love to see the hon. member opposite support and vote in favour of some of this very important legislation rather than give me his party's talking points. Of course, part of the democratic process of the House is to oppose. However, to oppose for the simple reason of opposition is certainly not helpful. We will all be here at the stroke of midnight a few minutes from now, because we care about Canadians, and we care about putting in important pieces of legislation like this one that will benefit families from coast to coast to coast in this nation.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, it is a privilege for me to stand tonight and speak to this bill. It was my privilege about seven years ago to go to my first meeting as a yet to be elected member of Parliament. There were a number of folks who were gathering in a community just outside of Peace River to discuss the issues of rail service in the local community. They had called me in because I was a nominated candidate and they believed it was important that I heard the concerns of the local community as we prepared to go into an election campaign.

Over the last eight years, I have been dedicated, in many ways, to ensuring that I bring the voice of Peace Country businesses and shippers to this House, our government, and to the shipping and rail companies, to address the concerns of my local constituents.

Today we stand on the precipice of having one of the largest and most comprehensive pieces of legislation to address many of the concerns we have heard about for the last number of years. However, it did not just arrive here.

My colleague just spoke about the extensive consultations that were undertaken across this country. I can assure members that is in fact the truth. I have the privilege of personally knowing the man our government named as the chair of the rail freight service review. The committee that he chaired was responsible for looking for solutions to the reality that our government recognized, and that this review committee also recognized very quickly, that being that small business owners, those people who are seeking to ship, really do have a disadvantage when it comes to negotiating with large rail companies.

Mr. Walter Paszkowski, the chair of the committee, served an invaluable role. He comes from Sexsmith, Alberta. It is a community that I have had the opportunity to call home. It is a farming community. It is an agricultural community. It also neighbours the city of Grande Prairie and is surrounded by the County of Grande Prairie. There are also a number of lumber producers in that community, as well as a growing oil and gas industry. That industry continues to depend on rail, and is growing in the necessity of being serviced by the rail industry as well. Therefore, we have three sectors that have become entirely dependent on rail service.

Having been a farmer and a former provincial agriculture minister, Walter knows the necessity of rail in the region of northern Alberta that I represent. He also has had the privilege over the last number of years to serve as the economic development officer for the County of Grande Prairie. It is a growing community. It is the community that I now call home. I can say that he has served our community well. We have been proud to lend him to the federal government, to all Canadians, to serve in this capacity. As Canadians, we can all be proud of the work that Walter has undertaken, both in this review and our local municipality, as well as his service in the provincial government before that.

With great disappointment, I would note that he announced just weeks ago that he is intending to move into what he is calling full-time retirement. I know that will mean he will do more work than ever because that is the kind of guy he is. I hope that Walter will take some time with his beautiful wife Marlyss to do some of the things they have never had the opportunity to enjoy because of Walter's dedication to public service. Marlyss has remained by his side throughout that process. Not only on behalf of Peace Country residents, but Canadians from coast to coast, I want to thank him and Marlyss for their service to Canada, to Peace Country, and to the province of Alberta. I know from the applause that my colleagues recognize that as well.

As Walter and the commission undertook their work, they recognized that there needed to be a new process put in place to ensure that shippers in our local communities, from coast to coast, had better and stronger clout in the process.

Now we have before us legislation that articulates a process, by which, if commercial negotiations fail, there is an arbitration process to ensure that shippers' interests are defended. This is the first time we have seen legislation like this. This is legislation that we promised.

We know what happened. As the service review was being undertaken, all of a sudden we saw CP and CN begin to improve their rail service. It was kind of interesting. It was almost comical in some cases where, all of a sudden, the rail service was beginning to improve. We recognized at that point in time, as well as communities across the country, that service could improve and that there were mechanisms in place that the rail companies had at their disposal to ensure this happened.

We have seen that it has not been applied consistently. Some communities are still falling behind in terms of service and some communities are moving ahead. Some industries are moving ahead in being served and some are falling behind.

In my local community there has been an improvement in grain shipping over the last number of years. There has been some movement and infrastructure improvements on the lines. I note, though, that at times we still a struggle with cars being delivered on time, but I have also heard major concerns from the lumber mills in the communities of Grand Prairie and further north where there are still some major challenges in getting cars allocated in the time frame to which these companies have committed. These new mechanisms will go a long distance to ensure there is a balancing of the rights and responsibilities of both players.

My bigger concern, as a representative of Peace country and the industries of agriculture, forestry and oil and gas, is about those people trying to get products to market. Our government has been dedicated over the last seven years that we have served in government of expanding trade with places around the world. One thing we know is that while we produce the best-quality agricultural, forestry and oil and gas products in the world, we continue to struggle to get these products to market.

We can sign all kinds of trade deals all over the world, but unless we can get our products to market, we will not to get the prices we deserve or continue to grow trade relationships. This is vitally important. Our government has been committed to growing our economy across the country, but what that means in reality is that every community across the country has to see efficiencies when it comes to exporting the things we are seeking to export. We are an exporting nation. Significant portions of the things we produce in communities like mine go to markets outside of our country. We look to rail service to provide mechanisms to get our products from the communities that I represent in Grand Prairie and further north to markets. If they go to Vancouver, the port of Prince Rupert or Chicago, they need to move and they need to move on time.

Our government is focused on continuing to develop trade relationships to ensure that our products can get to market. We are also ensuring that there are mechanisms to ensure that rail companies will undertake their responsibilities and move products.

I congratulate the Minister of Transport, Infrastructure and Communities, who has undertaken the heavy lifting with regard to this bill. This is important legislation. There are a number of people who I should thank. I should note the fact that the chamber of commerce in Grand Prairie and the surrounding area was dedicated to seeing this legislation move forward. It has been a strong lobbyist, not only at the local level but strong and vocal when it comes to the advocacy for a bill like this at the provincial and national levels. I want to thank the chamber of commerce as well as all the folks who undertook—

[Scott Andrews, Liberal, Avalon, NL]

Mr. Speaker, I rise on a point of order. As important as the rail service is to the rest of Canada, Newfoundland and Labrador has been exempt from a rail service for many years. As important as this debate is—

[An hon. member]

I want to call quorum.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

How many Liberals? You are the first one forever.

[An hon. member]

Quorum call.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Wake up over there. Let the debate continue, for Heaven's sake.

[The Deputy Speaker]

Order, please. There is a quorum.

[Some hon. members]

Oh, oh!

[The Deputy Speaker]

Order, please. The member for Peace River is out of time.

[Scott Andrews, Liberal, Avalon, NL]

Where are they all coming from?

[Some hon. members]

Oh, oh!

[The Deputy Speaker]

Order, please. Questions and comments, the hon. member for Drummond.

[Some hon. members]

Oh, oh!

[The Deputy Speaker]

Order, please. That is enough. We will not let this last hour degenerate. The hon. member for Drummond.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, despite the recent interruption, we have to deal with the serious issue of Bill C-52, all the same.

The bill does in fact respond to some of the concerns of shippers, as has already been mentioned. The members of the NDP are still standing, they are still awake, and they are still ready to debate all the bills that have an impact on Canadians and the people in my riding.

The thing that is important to remember in this bill is that, in committee, shippers and businesses made six fair and reasonable proposals that would lead to something that was equitable. Unfortunately, the Conservatives flatly rejected those proposals, despite the fact that these were recommendations made by experts, by people who know the field and its problems.

I do not understand why the Conservatives stubbornly insist on going in one single direction and on taking a purely ideological view of everything they do.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, the NDP members have a funny way of demonstrating their support. On one hand, they are supportive; on the other hand, they are not supportive. One of these days they will get it together. I am less interested in whether the NDP members are supporting it and more interested in whether the shippers are supportive of the bill.

We have support for the bill, not only from folks who live in my constituency, but from 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 Association, and Western Canadian Wheat Growers. I could go on and on. I could go all night. Folks across this country are supportive of this legislation.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, part of the reason my friend is going all night is that, once again, we have a government that has difficulty approaching the opposition to work collectively and co-operatively on legislation.

We heard testimony, and my friend knows this, that led to amendments on this piece of legislation. As for cases, we asked the Library of Parliament to look at how the Conservatives approach amendments from the opposition, and 99.3% of all amendments moved by the opposition on a variety of bills have been rejected by the government out of hand. The basis of the amendments in this particular case came from those very shippers.

New Democrats will not sacrifice the mediocre seeking out the perfect, and in this case, we have a bill that moves us further down the road. The challenge is that governments only look at something like our rail system every so often, sometimes only once in a generation. To do only half measures and not listen to the testimony of those people my friend quoted seems a disappointment, because the rest of the quotes say there were improvements that they sought but were unable to achieve in this round of negotiations. They were about the arbitration and about the fines that will be levied on these major rail shippers who will not really feel the pinch.

The reason there is time allocation on the bill is not because we did not support it. It is because the government decided to shut down debate for no purpose at all. That kind of obstinance does not lead to good legislation. It does not lead to good governance.

[Chris Warkentin, Conservative, Peace River, AB]

Mr. Speaker, the hon. member may not take my word for it, but why do we not take the word of folks who know what they are talking about? I will quote some of them.

These measures will create the conditions for improved railway performance and accountability. It will help ensure all shippers can gain access to an adequate level of service.

That was the president of the Western Canadian Wheat Growers Association.

We especially thank [the] Agriculture Minister...[the] Transportation Minister...and the federal government for listening to farmers and moving this legislation ahead.

That was from the president of the Grain Growers of Canada.

[T]his legislation is critical—not only for our industry's competitiveness, but for Canada's overall productivity and prosperity.

That was from the CEO of the Chemistry Industry Association of Canada.

We will support opposition amendments when they make sense, and that is exactly what we have done 0.7% of the time.