Debates of Feb. 5th, 2014

Grain Transport

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I have listened to two government members now in this emergency debate, and their new action plan seems to be hurry up and wait. That is what their new action plan seems to be.

We have heard great theories about new markets and so on and so forth. I know it has to be difficult for the member that they cannot use the Wheat Board any longer as the bogeyman, but the Wheat Board did some things right. One of the things it did right was logistics.

I would suggest to the member, and I hear the member laughing, that one of the reasons that farmers did not pay very much demurrage in previous years was because the Canadian Wheat Board allocated the cars. It targeted the grain in those cars to go into a hull of a ship in Vancouver as it docked at the port. That is a fact.

The member talked about a problem with producer cars, that the railways are not delivering them. I believe that opposition members predicted that with the government's action on transportation and on the Wheat Board that this is exactly what would happen. Producer cars are not available.

I have two points to raise with the member—

[The Acting Speaker, Conservative, Barry Devolin]

The member is well into his time. I would ask that he could quickly put a question to the member.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, could the member tell me, as the parliamentary secretary could not, who is allocating rail cars now where previously they were allocated in an even way? Who is allocating them now?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, I would like to remind the member that what he said about the Canadian wheat board is 100% hogwash. We all know what the wheat board would have done in this scenario with this crop: it would not have accepted it. It would have made a contract for 50% or 30% of the crop, and the farmers would have been stuck with it.

The member asked about the allocation of rail cars. The CGC has always allocated rail cars, even when the CWB was there. If we had a member of the Liberal Party from western Canada who understood agriculture, he would have known the answer to this question.

[LaVar Payne, Conservative, Medicine Hat, AB]

Mr. Speaker, I have been waiting a long time to get up and ask a question on this very important topic.

I had seven farmers in my office who were big wheat board supporters. They were really excited and wanted to make sure that we kept the wheat board. At the end of the discussions, I said that the wheat board would still be there and they would still be able to sell their grain. I asked them if they were going to sell their grain through the wheat board, and the farmers said no, they could get better prices from grain companies.

My contention is, and we have heard over and over, that we in fact have record crops. I would like to ask my colleague from Saskatchewan what the advantage was of getting rid of the Canadian Wheat Board in its former form, and how is it responding in today's market business?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, the member is very accurate in his statements. He is exactly right about what the wheat board did. I have heard that story many times from some of the guys who were very strong board supporters, but when they got $9 off the combine two falls ago, all of a sudden that changed. They realized what they could get by selling through grain companies. They got very excited about the opportunities available to them. Especially now, when they look at the problems with Canadian rail and how they can suddenly deliver straight into the States or other alternatives, they are doing that. They are very creative people.

There is actually a very strong fallacy in terms of wheat board logistics in this area. It would not have done anything better. In fact, it would have made it harder to ship canola and oats. It would have congested the system even more. We know what the wheat board was like when it operated.

Farmers now are well ahead of where they were before and are better off in so many ways because they have a system that gives them some flexibility in how they make their decisions and do what is right for their operations.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, Norm Hall, the president of the Agricultural Producers Association of Saskatchewan, has come out and said that the legislation passed last year by the Conservative government, the Fair Rail Freight Service Act, does not work. Basically, what he is saying is that the incentives for grain companies and railways to voluntarily negotiate shipping service agreements have not worked.

Is the government willing to amend this legislation, as we suggested last year, to improve it so that we can take the first step to eliminate these kinds of bottlenecks in the production chain?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, that is actually a very good question. We have the level of service review coming up in 2015. Maybe that should be stepped up. I'm not sure what the correct answer is there, but maybe it should be considered.

The other thing that is frustrating from the government's standpoint is that we still have not seen one grain company issue a level of service complaint against the railways. How do we know if it works or does not work if the companies do not go through the process of trying? I encourage the grain companies and farm groups to try the system and see how well it could possibly work before saying that it does not.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, there were a number of suggestions that the Conservative government was against at the time. I wonder if the government would reconsider doing a rail costing review. We know that the service is not there—that is very clear—and we know that the grain companies are also causing some of the disruption in service, but are the railways overcharging for the service that they provide?

Would the member and the government consider a rail costing review? Those costs are going through the roof as well, beyond the service problem.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, in the level of service review that comes forward, I am sure that rail costs will be factored in. If we talk to farmers on the Prairies, there is a lot of debate on the revenue cap and whether or not that is actually working for them now in this new market. There are a lot of questions around that, and more thought and process need to be put into all aspects of the rail situation.

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

Mr. Speaker, I listened carefully to my colleague. He just told us that farmers might be able to get better prices without the Canadian Wheat Board. However, if a tonne of wheat does not get delivered, they will get a big fat zero. That is the Conservatives' promise to farmers. The farmers told the Conservatives to consult with them before they ended the Canadian Wheat Board's monopoly. However, the Conservatives did not listen. They never do. They have given powers to rail companies and big grain companies. They are now realizing that those companies are literally making off with the money instead of helping the farmers.

My colleague himself says that he is aware that those companies have not kept their promises. Is he planning to do something about it in 2015? Why not tomorrow morning? There is a problem now. It would be a good idea for the Conservatives to solve the problem tomorrow morning, not three years from now.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, I appreciate the member's enthusiastic question, but obviously he does not understand what the issues are. The issues here are two things. The rail is not doing its job. It needs to pick up the pace. It needs to get grain from our inland terminals out to the ports so that ships get loaded and farmers get paid.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Mr. Speaker, one thing we actually have in our party is real western Canadian grain farmers. The member for Prince Albert was one, and so was the member for Red Deer. On our side we actually have the experience, and what the member says is specifically from experience.

What does the member see as a plan for the future, for us as a government, looking at the logistical issues? Could he explain what is going on, for the opposition's benefit, to that effect?

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Speaker, finally we have a great question. It is from the member for Prince George—Peace River.

I give the minister a lot of credit in this area, and both ministers, in fact. They are actually looking forward to saying what we need to learn from this scenario, from the past, and how we ensure it does not happen again.

The $3 million, for example, that is being spent, the $1.5 million from the federal government and the $1.5 million from the industry players that are participating, is for looking exactly at those issues to identify what the bottlenecks are and what the solutions are to those bottlenecks.

The other thing that also has to happen is that CN and CP have to recognize the growth that is happening in western Canada, and they have to pick it up. They have to step up and meet the challenge. That is something that these sectors will identify and bring forward to both CN and CP and back to the government.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, I am pleased to speak on the urgent rail delay situation tonight, but I wish we were not here. I wish that we did not find ourselves here tonight with this problem of rail transport and all the delays. It is mind-blowing.

These lengthy delays and backlogs in rail transport have prevented thousands of landlocked western grain producers from getting their product to the market. Western farmers are coming out of a bumper crop without being able to move their product to the market. We need our railroad companies to be able to respond quickly to a bumper crop immediately after harvest. This will avoid the kinds of delays that we are seeing right now.

I have spoken to some farmers about the crisis and I am hearing that there are lot of things that are going wrong.

One, some farmers are telling me that grain shipments are not a high priority to rail companies, as oil, potash, and coal are. This is unacceptable. Rail companies cannot pick and choose their cargo. They are putting thousands of livelihoods at risk.

A farmer told me that his grain is not moving, but his neighbour's is. He explained that his neighbour had contracted a lower price with the rail company than he had, and therefore he was given a priority. If so, this is unacceptable as well.

Another farmer from Saskatchewan, Glenn Tait, talked about how the elevator companies are charging double the demurrage fees, and I quote:

The elevator companies will recoup demurrage charges from farmers by deducting this cost from grain prices.

When the Canadian Wheat Board looked after logistical matters, freight costs from the prairies to the western ports were in the range of $50 per tonne. Today, we are seeing costs of $100 per tonne or more deducted.

The total losses from demurrage alone so far are in the millions of dollars, money that will never be spent by prairie farmers or anywhere within the Canadian economy.

Western grain farmers are incredibly frustrated. They have done their part and have worked very hard to produce a bumper crop. Now they need the government to hold up its end of the bargain and get the railways moving.

We are in an emergency debate here tonight. All of this is because the government did not do its homework two years ago after it abolished the wheat board. It did not take the time to consider or develop a plan for transportation.

Back in 2011, the NDP warned the Conservatives that getting rid of the wheat board would mean putting an end to stability. For generations, farmers relied on the wheat board—

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

Dig that hole.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

I am not digging a hole. I am proud of it.

For generations, farmers relied on the Wheat Board to get the best possible price for their grain to support their families, but the government ignored the warnings from the NDP, other groups, and farmers themselves when they all went through this. The government refused to listen to the democratic wishes of prairie farmers, who voted in September 2011 to keep a single desk for their wheat and barley.

In the past, wheat farmers could depend on the Canadian Wheat Board to fight and to put pressure on the rail companies to get the grain to market. When the board had a monopoly on selling grain overseas, it also held considerable market influence. However, it is clear that smaller producers are being penalized under this new system as they carry less volume.

In a system that has to move around 400,000 grain cars in a year, there is absolutely no room for error or a shortfall when grain shipments are waiting at a cost of the thousands and thousands of dollars a day, a cost that is ultimately paid by farmers through a lower price for their product. We should be building up our agricultural sector, not penalizing it.

The Minister of Agriculture and Agri-Food suggested that farmers should be getting loans to tide them over. That is not very sound advice and threatens long-term financial health. This will only create another financial crisis in the future. Also, a five-year study on the source of the bottleneck is far too slow for producers, who need help right now.

I will mention that I will be splitting my time with the member for Edmonton—Strathcona.

Kyle Friesen, from the Manitoba Pulse Growers Association, put it perfectly, and I quote:

We need to get the grain moving because many farmers may not be paid for last year's harvest until after spring planting.... This is already causing lost sales, things need to improve otherwise this will translate into a serious cash flow issue for farmers when they need to buy seed and inputs this spring.

Like every Canadian, grain producers have bills and loans due.

We need to do better to get the railways moving. Producers deserve better. This is obviously not an easy question to answer. There is no easy answer.

I urge the government to take action in a way that will help farmers' burdens now. The minister has pledged $1.5 million for a five-year transportation study. He has also committed to increasing the monitoring of rail companies. It is a good step. However, the minister needs to look at the issue closely. Both CP and CN have seen their grain revenues go up, even as the number of rail cars available to producers has decreased.

We are urging the government to increase pressure on rail companies, including with the implementation and enforcement of rail performance standards. It is clear that we need new communication protocols and consequences for non-performers when shipping deals are broken. We are also urging the government to ensure that export and vessel information is accessible to producers and that grain producers have fair access to rail infrastructure to move their product. The government also needs to develop a strategy for future rail service that accounts for sustained agricultural growth.

Grain producers across the country are frustrated by the difficulties they are having when it comes to transporting their crops. The problems they are experiencing are driving down the price of grain, and they are afraid they will not be able to transport their crops in the future.

Lynn Jacobson, president of the Alberta Federation of Agriculture, is asking shippers to increase their capacity in order to meet the demand. Farmers are afraid of being passed over in favour of other clients because of the price cap that the railway can impose on grain transportation. The problem is that the Conservative government got rid of the Canadian Wheat Board without coming up with a plan for shipping grain, even though that is something it could have avoided.

Now the Minister of Agriculture is suggesting that farmers use cash advances and is proposing a five-year study on the source of the problem. What are farmers supposed to do in the meantime? Life goes on.

Like everyone else, Canada's grain producers have bills to pay and loan payments to make, and the banks will not wait for them. The government needs to take concrete action immediately to get meaningful results for farmers. The fact that hard-working farmers cannot ship their grain is completely unacceptable. It makes no sense.

We are urging the government to increase pressure on rail companies, including the implementation and enforcement of rail performance standards. We need a viable strategy for transporting grain by rail.

Farmers should not have to struggle with increasing prices. We need to take immediate action to find a solution and determine the root of the problem. Are oil shipments a factor? Why is there such a bottleneck? We need to find answers. Are the ports also playing a role in this issue?

The government has asked the railway companies to come up with solutions to deal with the backlog, but it does not plan on imposing penalties. Is the government going to just stand by and watch?

The Alberta Federation of Agriculture believes that railway companies prefer to do business with oil companies, not producers and farmers. CN responds that no oil is transported in the 5,500 cars reserved for grain each week. Everyone is passing the buck.

The NDP is urging the government to increase pressure on rail companies, including the implementation and enforcement of rail performance standards; ensure that vessel and export information is accessible to producers; ensure that grain producers have fair access to rail infrastructure in order to move their product; and develop a strategy for future rail service.

It is time to do something about this. The government could have prevented this from happening. Everyone has a role to play. It is not black and white. Tonight's debate is interesting and gives us an opportunity to learn things. We are sharing good ideas. I hope that we can soon resolve this situation, which is frustrating and painful for the farmers. They have worked so hard this year.

[Pierre Lemieux, Conservative, Parliamentary Secretary to the Minister of Agriculture]

Mr. Speaker, I would like to put a question to my colleague on a very near and present danger.

I spoke in my speech about the Teamsters union perhaps going on strike. So far it has struck what is known as a tentative deal with CN. The grain is moving now, but nowhere near enough is moving. A strike by the Teamsters would certainly not benefit the farmers. It would benefit no one.

Would my colleague encourage the Teamsters to finalize the deal with CN, or is she in favour, perhaps, of the union not following through on the tentative deal, which would have an adverse impact on farmers? Where does she stand on this?

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, it is a tentative deal. I support the rights of workers to collective bargaining. The government freaks out when it hears the word “strike” and has teams working on back-to-work legislation non-stop. I think it already has some on the back burner for this.

This is not an easy issue. However, the government has a big role to play. The Minister of Agriculture and Agri-Food has had so many issues in the last two years. We had contaminated meat and listeriosis. What is next?

There needs to be more communication between the agriculture minister, the transport minister, and stakeholders. We have to find solutions and get this resolved as soon as possible.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Speaker, the hon. member has brought out the Conservatives' view of anything that is organized in this country. Whether it be organized labour or organized marketing, it is all a disaster. However, at the end of the day, that is what built this country. We as Canadians work together. We see what has failed with the government getting rid of all of this. Now it has tried to put it back onto the unions or the Wheat Board.

My question goes more to the act the minister put forward last year that failed. The NDP alluded to it. I would ask the member what kind of teeth she would want in that act to make sure that the railroads do the job they have to do.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, it is a pleasure to work with the hon. member on the agriculture committee. I think he is talking about the Fair Rail Freight Service Act. We had amendments to that act. I wish there had been more collaboration. That is something we do not see with the government. Good ideas and amendments are always proposed from this side, but it seems that they always fall on deaf ears.

I am hoping that the government is listening and taking note. If it wants more information about amendments, we will be ready to help it with that.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, perhaps I can help my friends across the way understand collective bargaining, since I did it for 20 years. A tentative agreement means that there is an agreement in principle and there will probably be ratification. Perhaps one ought to stay out of the way and let the parties make the final decision, since none of us get to vote on it. The folks who are the workers get to vote on it.

Does my colleague not believe that the government needs to act? It is wonderful to have a study. I am sure there will be wonderful data that comes from that study. Eventually we will finally get something down the road that we might use and go forward with it. Does she agree with me that what needs to happen now is that the government needs to take action on what is now a crisis on the Prairies when it comes to grain?

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

Mr. Speaker, like all those wonderful advertisements we see on TV for the economic action plan, the government needs to take action on this and work together. There is no action on this. It is frustrating to see. We do not need another report. We need action. There are some steps we can take right now to help get this moving. We need action now, not later.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, it is a pleasure to follow the deputy critic for the New Democrats. She does a fantastic job on behalf of our producers in Canada, and I wish to thank her for her remarks today.

It is my pleasure in the House as well to share my space with the NDP critic for agriculture. It is hard to follow in his stead, because he knows this subject very well.

I am a third generation prairie product, having been born in Edmonton, as were my parents, but back before that, all of our family were farm stock. We were proud farm producers, and I grew up visiting family farms with my father.

In my earlier career, when I ran the Environmental Law Centre, I was made an honorary member of the Preservation of Agricultural Land Association. I have felt absolutely obliged since to stand up, at any opportunity I have, on behalf of our producers. I am very proud of them. Despite how the government often speaks of how our gross domestic product was based on fossil fuels, our farm products, in fact, are a major part of the revenue of both this country and my province of Alberta.

At the outset, it is important to keep in mind that railroads are under federal jurisdiction. The government has a popular refrain. Any time we raise any issue in this House, whether it is education, health care, or the environment, the Conservatives say it is a provincial jurisdiction. This is one area where they absolutely cannot raise that defence. This is absolutely under federal jurisdiction, and the Conservatives have the power to act. It is up to the government to choose to intervene and to act, or not. To this point in time, a study has been proposed, but no specific action.

If I could remind the members of the House and those who are following the debate, to the credit of the Speaker, he agreed to the need for this emergency debate this evening, and that is because three million tonnes of wheat and canola are sitting stranded in the Prairies. We are told that railway congestion has resulted in millions of dollars in demurrage penalties for grain companies unable to load ships in a timely fashion. Many farmers have willing buyers and no way to deliver the product, so understandably, many grain producers are speaking out and are calling for action by the Government of Canada. That is why, as members of Parliament, we are standing up and echoing that sentiment and are asking the government to respond to those requests.

As my colleagues have mentioned, the government has taken a number of measures. It killed the Wheat Board, contrary to calls by many producers that they depended on the Wheat Board in exact situations like this to look after their interests. When those grains were pooled and could be delivered to any elevator, we could have avoided, at least partially, this problem.

The government also, of course, shut the gates on the prairie pastures. Why is that significant? It is because many of the prairies' small and medium farmers are having to sell off their herds, and they will be relying 100% on the grain crops. They are needing to get this grain to market all the more so they can afford to buy seed and plant the crops this spring, which is not that far off.

This is an emergency. The government has spoken loudly for other sectors. It has spent hundreds of millions of Canadian tax dollars trying to get export markets for our fossil fuels. Where is equal enthusiasm for this sector of our economy? They say that they will do a study, and maybe five years from now, they might have some ideas, and maybe they can take some action.

I do not really see equivalent action from the government in standing up for the agriculture sector. I hope from the debate today, we will see a little bit more action on exactly the kind of proposals the farmers have brought forward and that many reviews proposed, as I understand it, as far back as 2002.

The delay is not because of a failing of the producers. They have forwarded the contracts. The delay is because they simply cannot get the rail companies to deliver their product to the port. The reality is that producers are now receiving less than half the value under the agreed upon contracts.

This is really serious, because I have heard member after member from the other side stand up tonight and brag about the bumper crop this year. The bumper crop this year did not arise because we killed the Wheat Board. The bumper crop arose because of good growing conditions. I am told by the producers that Statistics Canada initially forecast a much lower crop.

However, they were able to—

[Some hon. members]

Oh, oh!