That, in the opinion of the House, the government should take steps to provide an increased level of rail service throughout Canada by: (a) recognizing that an increase in rail service and capacity is essential to the livelihood of Canadian agriculture; (b) recognizing that the ongoing review of the Canada Transportation Act provides an opportunity to rebalance the system and improve capacity and service; (c) making sure that all sections of the industry convene, with their own operational ideas, to increase effectiveness and efficiency of our transportation system...; (d) recognizing that changes to legislation are needed to address the imbalance of power along the logistics chain; and (e) making sure that all stakeholders work together to build a world class transportation system, including effective legislation and regulations.
He said, Mr. Speaker, on the domestic front, last winter we were faced with a severe crisis within our agriculture sector to effectively recognize the interests of producers and the struggle to get their record crop to market. Harvests across the prairie provinces, the world's top canola producer and second-largest exporter of wheat, jumped 14%, to a record 90 million metric tonnes, as reported by the government.
To put it simply, the system failed farmers last year, and it failed them badly. There is a responsibility throughout the logistic chain—the railroads, the grain companies—and then we had the cold weather to boot.
However, if the system failed, then we must asked ourselves, “Who designed the system? Who put it in place? Who set it up for failure? Who imposed $8 billion in costs and losses to prairie farmers?” The answer to that question is the current Conservative government. This disastrous system, the one that has failed so badly, is the one that was designed and implemented over the past three years of this current government.
Now, the current Canada Transportation Act review could not be more timely. The winter of 2013-14 saw a transportation crisis that impeded the growth and credibility of our export economy. Real hardship was experienced by farmers due to the failures of the system. For both the producers and the consumers of Canadian grain, our transportation system could not be relied upon. Shippers had to place car orders and had no idea when those orders would be fulfilled.
Of all our Canadian exports, more than 50% are reliant upon rail, and more than 70% of those exports go right to the United States. As Canada grows, the country needs a rail system to evolve, matching these trends.
In 2009, Canadian trade exports were valued at $367 billion. By 2013, they went to $479 billion, 75% of which went to the United States. When we look at 2013-14, it displayed a system that failed to adapt to the growth, especially in western Canada.
The 2012-13 grain harvest, considered a once-in-a-lifetime crop, was topped again in the following year. The farmers are getting better out west; they are getting better varieties and growing more crops, and the world needs those crops. Canadian exports of oil by rail are up over 160,000 barrels per day, from 50,000 barrels in 2012.
As Canada's economy continues to grow, our transportation system needs not only to grow alongside it, but to improve as well. A system as complicated as Canada's transportation system needs to be built upon the spirit of co-operation. The number of stakeholders and the demand on the system is going to continue to grow, which is good. It is good for the people out west; it is good for all of Canada, and it is good for the people who need our products around the world.
The Canadian Wheat Board had a variety of functions in the system. Some of them were set out in legislation, such as the single-desk seller function. Some of its functions simply developed by way of the evolution of the grain system in western Canada. It became a safeguard of the system, helping to direct traffic and providing some overall coordination.
When the Conservatives came in and made the decision to eliminate the single desk, what was going to replace that system? It was their policy decision to make, as a government.
That ship has sailed; it is over, and there was nothing put in its place to help that coordination and to get things going. We saw ships waiting in Vancouver harbour last year that had to turn around and go to other countries to buy grain.
However, Liberals do not believe that they thoroughly considered the collateral damage here, and some of the collateral damage was the total elimination of any coordinating function, oversight function, and an ability to try to use limited assets in the most cost-effective, business-like fashion. That is what is missing in this system now. It is not an issue at the moment of a single-selling desk. That is not what we are here to talk about. It is about an issue of absolute chaos in an uncoordinated system and a lack of synchronization. That is what is happening, with nothing to fill it.
Rail transportation is a very complex system. One has to get the grain from the right delivery point to the right terminal on to the right boat to the right customer in an appropriate amount of time. That did not happen last year. It happened late, and as I stated, there were billions of dollars lost by farmers out west. A very intricate and complex number of parts have to work together to make this happen. What we have seen over the past year is the Conservatives' inability to bring proper coordination to the system. They have not made the best use of our limited assets in the most cost-effective way so that we do not have a colossal mix-up. We need a smoothly functioning system that will get the most money for farmers because their product is delivered at the right place and at the right time.
In November 2013, just when the farmers were finishing their grain harvest—and they were very optimistic, as it was a great harvest and they had customers—I had the opportunity to take an agriculture outreach tour throughout western Canada to meet with farmers and identify areas that are important in my role as agriculture and agri-food critic. After visiting various farmers in Manitoba, Saskatchewan, and Alberta, even early in the fall months it was evident that our grain handling system in Canada was not providing the capability to meet industry demands.
Along with the member from Winnipeg, we witnessed first-hand the mounds of grain that were piled right to the rafters. The bins were full at the McRae's farm, at St. Andrews, in Manitoba. He was optimistic at that time, but throughout the winter things changed for him. The situation became worse.
Initially the minister suggested cash advance payments—I wonder what good that is if their crop is not moving—and a working group to look into the disaster. As the months were going by and they were losing more money, it was too little and too late. Ships remained idle in Vancouver, resulting in millions of dollars in demurrage charges and on-farm operating debts being unpaid. Grain prices were dropping, and farmers were losing that window to sell their crop.
That all came as a direct result of the Conservatives' Fair Rail Freight Service Act, Bill C-52, introduced in the House before 2012. They had the opportunity. It was supposed to rectify the imbalance in market power between the farmers and railroads. The Conservatives took the Wheat Board out and had an opportunity to put something else in its place, and they did not. Bill C-52, an act to amend the Canada Transportation Act, was a great opportunity. We could have had a real rail act then. There were recommendations made, and we would not have had the $8 billion loss that we had to deal with.
In the continued spirit of an open and fair market, a need exists for an oversight to ensure that complaints against parties can be addressed in an appropriate manner. There is a strong need for the ability for shippers to seek solutions to problems arising during their interactions with the railroads. In order to effectively address issues that occur in the fulfilment of service level agreements, the complaint mechanism must allow not only for shippers to seek arbitration efficiently and fairly, but also for each party to be on equal footing. That is very important. Everybody has to be on equal footing to make this system work because everybody is accountable.
During the passage of Bill C-52, the Coalition of Rail Shippers made several recommendations, which we in the Liberal Party supported. However, none of those resolutions were passed back in 2012.
Many prairie groups agreed that the legislation needed to be amended to make it easier to hit the railroad companies with fines over transportation bottlenecks. If it had stuck then, the railroads might have complied with it last year.
This eventually brought forward Bill C-30, which was the bill we dealt with just last year, an act to amend the Canada Grain Act and the Canada Transportation Act and to provide for other measures. That was introduced by the government in March of 2013. The measures being imposed will expire in another year's time.
As I said, there is no long-term solution for the farmers. The government is putting band-aids on as we go along. There is no long-term solution that will keep the same situation from happening again and again. The crops are going to continue to do well, they are going to get bigger, and there is no solution.
Many agronomists and public servants at the agriculture department have said that these harvests are only going to get bigger and better, which is great, but we have to get those crops to the Asian markets especially and to the United States. The bill does not attempt to find a long-term solution for farmers.
The fact that the measures will expire demonstrates yet again that the Conservatives see this as a political short-term issue, while in reality, this is a structural issue farmers are faced with. The problem could very well resurface at the next harvest.
This year, as bad as it was, there are still bottlenecks, and it is not working well. Farmers are still shipping grain that was produced the year before, and last year was just an average year.
The minister has brought forward pieces of legislation that seem to be reacting to the issue rather than leading the way, on the agriculture front, on a long-term solution. It seems that members only have a chance to debate agriculture-related bills in the House when something is going wrong. There is no long-term vision. When something happens, then it is brought to the House. It seems that this is what happens every time.
The most recent grain transportation crisis is a prime example. The government waited months and months before acting. Then it scrambled together a bill that could help farmers get their grain moving. The government only acts when it needs to, and it delays action as much as possible, because it is all politically driven.
Farm lobby groups in Saskatchewan and Manitoba say that fines levied against Canada's two largest railroads stemming from the provisions in Bill C-30 do not reflect the damage caused when the companies failed to transport the minimum required grain volumes last year. The railroads are going to be fined, but even if they get the money from the railroads, it will go to the government. It will not pay the farmers who are losing money while the crops are stored in their buildings or bins.
Norm Hall is president of the Agricultural Producers Association of Saskatchewan. He represents a lot of farmers in Saskatchewan. He says that farmers are frustrated about the fallout from months of railway backlogs following last year's bumper grain crop. He stated:
“There's also some relief that the federal government did step forward, but there's still frustration. The one thing that bothers us most about this is that fine, that money, goes to government [instead of the farmers who are losing the money]. It in no way goes to those that were hurt...be it the producers or the grain companies.”
He also said that the fines are a drop in the bucket for the railways. He is a representative of the farmers in Saskatchewan.
Also, Doug Chorney, who represents many producers in Manitoba and is head of Keystone Agricultural Producers in Manitoba, said there needs to be a way to compensate shipping companies and farmers who are adversely affected by rail delays. He stated:
A fine of such [a] small amount really doesn't reflect the kind of damage poor service is impacting on shippers and farmers. We've always had challenges with reliable and adequate service from railways because of different planning issues, not always because of capacity. We do have fundamental challenges in terms of making sure we have a system that's well-co-ordinated. ....we can't be left to wait months and months for rail service.
In March 2014, the Minister of Transport said fines against rail companies could total up to $100,000 a day. What happened? She came out with $100,000 a week. That is a big change, from $100,000 to $100,000 a week.
To wrap up, what the government has done is not working for farmers. It is not working for customers around the world who need our grain so badly. We should have a long-term plan, and that is why I am bringing this motion forward.