Debates of Feb. 2nd, 2015

Rail service

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

moved:

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.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, I listened with great interest to the member.

In the agriculture committee, we have had so many discussions. I thought the member had gotten over his $8-billion loss, recognizing the fact that there was hedging and there were issues that were not real. This was an issue I thought the member had figured out.

The member mentioned the cash advance payments and asked what good they are if the grain is not moving. That is exactly why they are there. It is so that when the grain is not moving, they are able to get some money in to pay bills. It allows them to have that buffer so they can reach into markets when it is better for them.

If the member feels that the cash advance payments program is not worthwhile, does this mean that the Liberals would eliminate such a program if they were ever to come to power?

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

Mr. Speaker, I felt sorry for the member for Red Deer in committee. He is a farmer, and he could feel the pain of all the farmers. He knew what they were going through, but he had to take the lead from the minister.

The $8 billion is a true number. That money was lost. The member talks about the cash advance payments. We had a motion in the last bill to increase the cash advance payments. What do the cash advances pay? It is money they have to pay back. It is only a loan. It is no good if the grain is sitting there and losing value.

We believe in cash advance payments, if the system is working. We have no problem with cash advance payments, but they do not help the grain move. A cash advance payment does not move the grain.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I listened with interest to my friend from Sydney—Victoria. I congratulate him on a motion that we will certainly be supporting as the official opposition.

When the member uses words like “disastrous system”, “absolute chaos”, and “real hardship”, we concur entirely. Again, I would thank the member for this important motion.

He mentioned in his remarks that he wished to put shippers and the railways on an equal footing. I would like to ask whether the member would agree that better enforcement of surface level agreements requires a better explanation of terms in Bill C-30, such as adequate and suitable “service obligations”. The terms are too ambiguous in our view. We need language to clarify rights and obligations. Would the member agree?

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

Mr. Speaker, I would totally agree with the member.

I have to commend the NDP members. They worked hard with us in committee to get this straightened out. We put together amendments, and not one of those amendments from the opposition was accepted. These amendments came from farmers.

I have to commend the NDP for working with us on this. I believe that there has to be more accountability to be on an equal footing. If we look at our supply management system, there is accountability for whoever is buying a product and whoever is selling a product. People are on an equal footing.

That is not the situation with the grain farmers out west.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I want to commend my colleague from Sydney—Victoria for his remarks. This is an extremely important motion. The member has really touched on some fundamental points.

I want to ask him about a few things.

It is important for Canadians to remember, first of all, that the government has had five ministers of transportation in nine years. I think that speaks volumes to the level of commitment and follow-through by a single minister during this time and during this government.

The second thing I would like to say is that there really is a crisis in transportation. We are seeing it in the transportation of grain. We are seeing it in the transportation of passengers. We are seeing it in the transportation of oil. There has not been a serious adult conversation led by the federal government.

As my colleague rightly points out, it has been sort of ice floe to ice floe, crisis by crisis. Can the member help us understand why our counterparts in the United States and Mexico, for example, are not facing the same government-made crisis?

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

Mr. Speaker, the member made another point that is very important.

I am the agriculture critic, so I am pushing for this change for the farmers. However, the western economy depends on the rail system, whether it for potash, coal, or oil. They all rely on the rail system. Really, they should not have to be competing with each other or leaving one behind.

The member is right, the system is working better in the United States. They have regulations in the United States that have to be followed. We do not have those here.

It all boils down to when we lost the Wheat Board, and there was an opportunity at that time for the government to come in with another system that would make everyone accountable and have everything move well. It can happen, but we have to have the cars, and we have to have everyone dealing with it.

Right now what we have is corridors going from east to west with the railroads, and we are leaving a whole big opportunity. The United States and Mexico are selling our products down there with no hopper cars going that way.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Speaker, it is a pleasure to rise today. I would like to wish everyone a happy Groundhog Day. I am kind of disappointed that you do not have your Wiarton Willie tie on today, Mr. Speaker, but I do.

I would like to thank the member for Sydney—Victoria for his motion. I know my colleague across the way as a fellow farmer and someone who cares for agriculture. I am a little surprised that he brought something forward in a motion and not a private member's bill. However, I am happy to be able to speak to it.

I rise today to outline the critical role the rail sector plays in Canada and to highlight the importance of the rail transportation system to Canada's overall economic success. I know that all members of the House support our efforts to ensure that the system is working effectively for Canadians.

Canada's railways, led by Canadian National, Canadian Pacific, and a number of short lines, are vital to our success as a global economic competitor, as a partner in the North American economy, and as a community that stretches from coast to coast to coast.

As we know, the first trans-Canada rail system was completed on November 7, 1885. It was a system that was central to the development of our country then, and its importance has only increased over time. Today we have one of the largest rail networks in the world, with more than 46,000 kilometres of track. Canadians and Canadian businesses depend on rail to transport goods to market efficiently and safely, and move goods they do. In 2012, our railways moved 337 million tonnes of goods.

In particular, railways play a vital role in moving our bulk commodities, such as minerals, oil and gas, agricultural goods, and forest products, to locations across North America and to port positions for export overseas.

The railways play an equally important role in moving imported goods, on which Canadians and Canadian businesses rely, from ports in B.C., Halifax, and Montreal to various locations across Canada. It is because of all of this that we must ensure that the rail system in Canada continues to operate as efficiently, effectively, and reliably as possible.

Allow me to provide members with some specifics. In 2013, Canadian railways moved 16.4% of Canada's exports and 8.5% of its imports, when measured by value. This includes $30 billion in automobiles, $10.6 billion in chemical products, $9.5 billion in forest products, $8.2 billion in metals, and $3.5 billion in agriculture and food products.

While the system works effectively most of the time, situations do arise, as they do in any industry, that require prompt and effective government intervention. In that regard, last winter, the government took decisive action to respond to rail transportation challenges that emerged, particularly on the prairies. We did this in support of farmers and to address the impact these challenges were having on our reputation as a global supplier of grain and on our economy overall. We all know that there were a number of factors that led to that decision last year, including one of the worst winters in memory.

The actions the government took required railways to move minimum amounts of grain, ensured that shippers in Alberta, Saskatchewan, and Manitoba had competitive rail transportation options, better-defined operational terms in service level agreements, allowed shippers to use the level of service provision in the Canada Transportation Act to seek compensation for any expenses they incurred as a result of the railways' failure to meet their service obligations, and required railways to provide additional information to Transport Canada to enhance monitoring of the rail-based supply chain. As a result, I am pleased to report to the House that this winter, the transportation of grain is progressing well.

This government understands that the key to good transportation policy is to understand emerging trends and to respond appropriately. We have taken action in recent years to improve competitiveness and to expand transparency in the rail transportation system. For example, the Fair Rail Freight Service Act, which received Royal Assent on June 26, 2013, creates a strong incentive for shippers and railways to negotiate service agreements commercially.

Likewise, our enhancements to the grain monitoring program and our enhanced support for supply chain stakeholders' collaboration were designed to improve supply chain performance over the longer term.

As the Minister of Transport has said, Canada's transportation system is crucial for our government's goals to create jobs, promote growth, and support families and communities. I would like to take this opportunity to welcome the minister back to the House and wish her all the best of health.

While we know that the actions we have taken in recent years have strengthened our transportation system and our economic future, we have not rested on these past successes. Indeed, last June the Minister of Transport launched a statutory review of the Canada Transportation Act. She appointed six eminent Canadians to lead this arm's-length review, with the hon. David L. Emerson leading the review and with five advisers representing a broad range of transportation perspectives and industry experience in various regions of the country ably supporting him. I understand that their work is well under way.

Let me reaffirm that our government regularly reviews its policies and regulations to ensure they serve Canada's current and future needs.

This review provides us with a unique opportunity to consider how the national transportation system can best be leveraged to support Canada's continuing economic growth. It reaffirms the government's commitment to meeting the transportation challenges and opportunities of the next decade in a sustainable manner.

The chair will be guided by the terms of reference established by the minister, which determine the scope for the review, including provisions of the act that are relevant to the transportation of grain by rail and more broadly to the rail-based supply chain for all commodities. This will take into account the broader goal of a commercially based, market-driven multi-modal transportation system that delivers the best possible service in support of economic growth and prosperity.

The review panel's work, which will involve engagement and advice from all interested parties and produce a report for the Minister of Transport by the end of the year, will play an important role in informing any government action to further strengthen the safety, efficiency, and competitiveness of Canada's transportation system.

This is a valuable process, one that we do not want to pre-empt or prejudge. I think it is important to underscore that the panel's work will benefit from extensive input from all interested stakeholders, and we are confident that it will strike the right balance between the needs of the users of the transportation system and those of the providers, while striving to support the broad goals of a safe, efficient, competitive, and sustainable transportation system in Canada.

Let me repeat that this government has taken decisive action to respond to challenges in the transportation system in the past, including a series of measures just months ago that are proving effective in dealing with recent challenges in the grain transportation system. Let me also assure the House that our government will continue to take whatever action is necessary to respond to challenges and support an effective transportation system in whatever form is most appropriate—legislation, collaboration, or any other means that produces results.

We remain fully committed to ensuring that the transportation system serves the needs of Canadians and fully supports the economy for the benefit of all Canadians.

In closing, I want to thank the member forSydney—Victoria. As I said earlier, I know he sincerely supports anything that benefits agriculture, but at the same time I have to ask him to recognize the good work that has been done in the agriculture industry, which we both have been involved in for years. It changes and evolves all the time. This government has to do the best that we can to change with that evolution. I think our record speaks for itself. I will continue to work with him and other members of the committee in the future, and I can stand here and say that the minister will as well.

[Murray Rankin, NDP, Victoria, BC]

Mr. Speaker, I will say at the outset that the official opposition will be speaking strongly in support of the motion entered today by the member for Sydney—Victoria.

The motion talks about the need to identify increased rail capacity, rebalance the system, and make sure all sections of the industry are convened. We take that to mean that the farmers will be sitting at the table and be strongly involved in enforcing service level agreements and ensuring fair access and adequate compensation for farmers.

It is pretty obvious that it is time to get the railways moving. There is not the level of sophistication and coordination that is needed within our system. It is “absolute chaos”, to use the term used by the hon. member, and we really need to get back to it. It is costing our farmers billions of dollars.

It is no secret. We can ask any farmer what needs to be done, and there are five things. One, we have to increase pressure on rail companies, including through implementing and enforcing rail performance standards, which I will be talking about. Two, we have to ensure that export and vessel information is accessible to producers, and that mandatory price reporting is available throughout the grain supply chain. Three, we have to make sure that grain producers have fair access to rail infrastructure in order to move their products wherever they are. Four, there has to be a full costing review of producer rail service in Canada. Five, we have to develop a strategy for future rail service that accounts for the kind of sustained agricultural growth we have seen in the last few years.

I talked about enforcement. We heard the member for Bruce—Grey—Owen Sound talk about the weather as if the cold weather last year was some sort of excuse. He is quoted as saying:

I noticed the cold weather did not stop them from moving thousands of additional carloads of oil.

Obviously that has been fine. He went on to say he does not blame them, stating:

The first duty of any company president is to maximize profit for his shareholders, and that's what the railways are doing. They can make more money hauling oil than grain, and so that will continue to be their priority. ... If I were a railway president, I would probably do that same.

We had a start with an order in council a couple of years ago that talked about administrative monetary penalties of $100,000 a day. How many of those were issued? Zero. Then, in Bill C-30, the law was changed to contemplate administrative penalties of $100,000 a week, but there was still no action.

In the words of my colleague for Welland, the excellent agriculture critic for the New Democratic Party:

You need a big stick to get their attention. But the fines were supposed to be levied by the day, and the government obviously lost its nerve and made the fines weekly. Their big stick is actually a twig.

That, of course, is the point. The government is not serious about enforcing the rules. The Conservatives huff and puff, go from crisis to crisis, lurch here, lurch there, but when it comes to coordinated action, there is not the kind of single-desk action that we used to have when we had the Canada Wheat Board. It is not longer here. It is every farmer for himself or herself, and that seems to be the way the current government believes our precious grain industry should be treated.

I live on the west coast. Every day in Plumper Sound, I see sometimes 40 ships sitting for months waiting and indirectly costing farmers a lot of money. They are waiting for deliveries that never arrive and end up turning around and going back. This is no way to run a railroad, to use the hackneyed phrase, and it is certainly no way to run a sophisticated modern grain delivery service.

We have had record crops, but here is the irony: people cannot sell it. It sits and rots in grain elevators. Individual farmers have to come up with money to store the grain because they cannot get it to market. They are what are called in economic terms “captive shippers”. They really have nowhere to send it. They often have only one of two monopolies, CP or CN, and they are not able to meet the minimum volume requirements under the Fair Rail for Grain Farmers Act.

Again, there are no penalties if there is any problem in doing what the minister has said they should do, which is to increase volume. Penalties are lowered, and there is no enforcement. That seems to be the way that the government has dealt with this crisis on our prairies.

The NDP fought for certain amendments, but those amendments were ignored. The hon. member for Sydney—Victoria made the same observation. We fought together, and the amendments were ignored. We fought to have real consideration for farmers' interests included in the emergency legislation, the so-called order in council, such as establishing a system of mandatory reporting for the price of grain throughout the transportation system at specified points along the delivery chain. That was not allowed. We fought for the requirement for all corridors to receive equitable service. That was not allowed.

We fought to ensure that all producers in all affected regions were consulted about the regulations, but no. We fought for the requirement that the government work with the provinces to develop and implement a plan for open access running rights to ensure effective competition in the rail service, but no. We fought for the requirement of a moratorium on the closure or delisting of producer car sites and for increasing fines and directing those revenues to compensation programs for producers. That was not allowed.

We also have serious problems with service level agreements. I would like to cite Senator Mercer, from the other place, who talked about the importance of addressing this service level agreement issue head-on in Bill C-30. He said:

Bill C-30 really does not do a lot to establish or enhance existing service-level agreements between shippers and the railways. All it actually does is permit the Canadian Transportation Agency to regulate elements in those negotiated service-level agreements.

Many stakeholders agree that the amendments were needed to clearly define “service”. What do the words “adequate” and “suitable” mean? What does the phrase “service obligation” mean? Obviously, they are too ambiguous to have any meaning. They are too subjective. Therefore, we need language that clearly defines the rights and obligations of all parties. They need to be nailed down. That is something that is clearly needed if we are going to get anywhere in nailing down these service level agreements that are so critical.

As I said in my remarks earlier, in the past the Canadian Wheat Board gave farmers a dependable place, a single desk that was involved in this marketing. Now, it is every farmer for himself or herself. As was pointed out by several of the stakeholders, a lot of farmers just do not have the time or the interest to sit around at night figuring out the market. They used to have someone to do that, but now, of course, the coordination function that was performed by the Canadian Wheat Board has been lost.

This lack of coordination is a problem, as my hon. friend mentioned. It means that we leave ships in dock or sitting out there in Plumper Sound. The port terminals are competing with each other for handling. There is no coordination of the kind that we used to have. That means that they are grabbing rail shipping capacity and having grain delivered without considering the demand.

There have been enormous increases in the amount of oil shipped by train, but the problem is that increased oil shipment creates a lack of capacity for grain producers. It is obvious to everyone, but the lack of coordination is equally obvious, and the need for action is urgent.

When I look at the people who have spoken on this matter, and they are legion all across the prairies. Doug Chorney, the president of Manitoba's Keystone Agricultural Producers, said that the backlogs could be blamed on “abysmal service” by Canada's two major railways. Mr. Paterson points out that those railways are now often controlled by foreign interests. Some 73% of the shares of CP are American-owned. The two men shaping CP's recent history are CEO Hunter Harrison and activist shareholder Bill Ackman. Both are American. CN Rail is roughly half Canadian-owned and half American-owned.

That inadequate service is something we have all seen. It is great to have free trade, but if we cannot get the product to market, it is of no value.

We salute the member for bringing forth this important motion today. We need to get on with it and get our grain moving.

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, this debate is the furthest from hypothetical debates we could find.

I want commend my colleague, the member for Sydney—Victoria, for bringing forward his motion, which is extremely important. He is a very active advocate for agricultural producers and for agribusiness. He viscerally understands the role and the purpose of Canada's agricultural sector in a larger economic context, a theme I will come back to in a few moments.

I want to go back to first principles for listeners, readers or people watching this debate. Let us collectively recall that Canada's railroads were built chiefly with the leadership of government and that they had a unique foundational role to play in helping to kick start our economy and underpin this post-modern economy in which we now live. In fact, rail is indispensable to Canada's economic success. That is woven into the fabric of the specifics that my colleague from Sydney—Victoria wants to see examined in his important motion; what we see with respect to the government and how it interfaces with the transportation sector and its responsibility for transportation.

First, governments have an obligation always to get the big things right, the things on which Canadians count. One of the chief responsibilities of a federal government is transportation, which includes transportation policy, regulation, enforcement and so on.

We have seen an increase in agricultural production, in natural resource exploitation, the transportation of oil by rail and stability, if not a slight increase, in passenger rail transportation across Canada. The government knows this. In fact, for almost a decade now it has watched this growth. However, as my colleague from Sydney—Victoria pointed out, we have seen the government reacting in knee-jerk fashion. It is almost as if it is jumping from one ice floe crisis to another ice floe crisis, depending on the crisis of the week, month or year. It is so much so that now our rail system is in flux.

Our rail system is in crisis. We have ships waiting off the west coast of Canada for our grain, our agricultural products and sometimes for other natural resources. We have seen a massive 1,200% increase in the transportation of oil by rail. The government has known this for almost a decade. We have seen a crisis emerge in passenger rail services in the country. There have been complaints from all over northern Quebec, from Sarnia, Sault Ste. Marie and so many other smaller parts of Canada that are witnessing a decline in service, frequency and availability. On all fronts, we have a problem.

What has the government's reaction been to this problem in almost a decade? Its first reaction was to appoint five transportation ministers in less than nine years. No minister can take on a portfolio like Transport Canada seriously and commit the time and effort that is required to improve the transportation system by flitting in and out, either heading up, down or out of cabinet. This is what we have seen with a succession of cabinet ministers.

One of the things I have noticed in my time as the transportation critic for the Liberal Party of Canada is a proximity relationship between the regulated railways sector and the regulator at Transport Canada. This has deeply concerned me. This relationship, in my view, and I do not say this lightly, between Transport Canada, its minister, its staff, its good officials and the regulated sector of the railway is too close. It is too cosy. It is almost too integrated, and we have seen this as we have studied the safety management systems that apply as much to the transportation of grain as they do to the transportation of oil.

The facts are, as I mentioned, there have been five ministers in nine years. There has been an Auditor General's report, which can only be described as scathing. Over a four-year period, the Auditor General ferreted through what was happening at Transport Canada and came back with some incredibly problematic and troubling findings, thing likes in a four-year period, the government had not had Via Rail, with its millions and millions of rail passengers a year, audited by a qualified inspector for its safety management system.

In the entire rail sector, only 25% of all the audits that were supposed to have been done, planned by the government, were in fact done. It does not increase our confidence in rail safety, particularly in response to and after the terrible tragedy of Lac-Mégantic in Quebec.

As my colleague pointed out on penalty provisions, the minister was buttonholed last week by media. On camera, the minister said that the government would have to see whether it would impose a fine and how much it would be. Agriculture producers and shippers have to know. The government has said that it will be $100,000 a day in fines. Now it has said that it will not be $100,000 a day, but $100,000 a week. It actually is not $100,000 a week either. It is full of discretion. The minister will decide, when she feels like it, or whoever the next minister is, whether the railway company should be fined. I do not know on what grounds or on what basis, because the criteria is not clear.

The fines do not go to the shippers. They do not go to those who have been affected by the choices made by the railways or the constraints imposed on the railways. The fines are paid to the government, not to the shippers who have liquidated damages, with crops and yields and grain sitting in storage waiting to get on to ships that are moored off the coast of B.C. It makes no sense, but these are the kinds of changes and actions the government has brought in, again in a very ad hoc way, dealing with a bottlenecked railway system.

Prairie provinces are the world's top canola producing region. It is incredible what our agricultural producers have done, the efficiency, the environmental sensitivity, the quality of the grain. We are the second largest exporter of wheat, up 14% to record 81 million metric tonne levels in a short number of years.

The Liberal Party of Canada thinks that with the relationship between the regulator and the regulated, the railways companies being regulated, it appears is if the railways are now picking and choosing, based on profit margins, what they will or will not essentially ship. Some volume standards have been brought to bear, but even these do not deal with the crisis that is in play.

To recap, our are shippers captive. They have no competitive commercial alternatives, no legal recourse when the system fails. The threatened fines have no real impact. They are no substitutes for liquidated damages for the affected shippers. The government has brought in an order to move certain minimum volumes of grain, which expired in November 2014, and is making it up again as it goes along.

We need this motion. We need a comprehensive examination of the rail transportation system to get it right and get it better. We owe it to Canadians, to our future, to our economy and we really owe it to the future success of Canada.

[Earl Dreeshen, Conservative, Red Deer, AB]

Mr. Speaker, it is a pleasure to stand here today to speak to the motion.

Since the motion addresses agriculture, I would like to recognize my much older brother Alan on his Groundhog Day birthday as well as his outstanding career as a rancher, grain farmer and businessman. He was my first farming partner from a time long ago when we were both teenagers.

Last year, Canada's 60,000 grain producers exported some 40 million tonnes of world-class grain products worth over $20 billion. That is important for agriculture because it represents about half of all agriculture and food exports, but it is also important for Canadians who live in cities. A strong agriculture and food sector drives one in eight jobs in our country and almost 7% of our gross domestic product.

Canadian grain farmers depend on exports to sell 70% of their wheat, 75% of their pulse crops and 85% of their canola. That is why the rail service is so critical to Canada's hard-working grain farmers.

Regarding today's motion, our government has taken steps to address each of the five points, namely: recognizing that improved rail service is essential to farmers' livelihoods; recognizing that the ongoing review of the Canada Transportation Act will provide an opportunity for improvements; the need for all stakeholders to sit down together; the need to correct the imbalance of power along the chain; and ensuring government and industry work together. We have addressed these points and we continue to do so. Let me elaborate.

We recognize our rail service is essential to the livelihood of Canadian farmers. Likewise, we have moved to address the imbalance of power along the logistics chain.

Canadian farmers pay over $1 billion to move regulated grain by rail. On the prairies, grain travels an average of 1,400 kilometres to reach a port position. Our farmers and our economy depend on efficient, effective and reliable rail service to move those crops off the farm to our valued customers in Canada and around the world. That is why a year ago our government took action when our farmers were facing the prospect of moving a record crop.

First, we introduced an order-in-council mandating the railways to move a minimum volume of one million tonnes of grain a week, backed by penalties. Two weeks later we introduced Bill C-30.

The Fair Rail for Grain Farmers Act has put into law clear and achievable solutions to ensure grain and other commodities get to market in a predictable and timely way. The act amended the Canada Transportation Act to include the authority to set volume requirements in order to mandate that certain grain volumes be moved. The legislation also gives us the ongoing flexibility to monitor and adjust volume requirements as needed. The act also created the regulatory authority to enable the Canadian Transportation Agency to extend inter-switching distances for all commodities on the prairies.

Bill C-30 amended the Canada Grain Act to strengthen contracts between producers and shippers. The amendment will provide the Canadian Grain Commission with the authority to regulate grain contracts between farmers and grain elevators.

Bill C-30 also enacted regulatory power to add greater specificity to service level agreements as requested by all shippers.

In addition, we required additional, timelier and more detailed data from the railways to increase the transparency of railway, port and terminal performance across the supply chain.

In August, the regulations came into force and we renewed the minimum volumes to ensure continued movement through the fall.

In December, we did the same, while committing to increased monitoring throughout the winter months.

These measures are concrete and comprehensive and they have been delivered. The grain is moving faster than last year and faster than the five-year average.

Speaking to the second point of the motion regarding the review of the Canada Transportation Act, this process was up and running in the summer. We accelerated the review by a full year to focus on long-term structural issues affecting all rail transport, including grains.

A discussion paper was released in September for industry comment. Since then, the CTA review panel has been busy throughout the fall and winter, meeting with a number of stakeholders to get a clear picture of the challenges facing the western Canadian grain handling and transportation system.

We will continue to bring the whole value chain together to manage future challenges and create a rail supply chain that has greater capacity, predictability and accountability for the industry and, most important, for our global customers.

As far as urging industry to work together to improve the system is concerned, we have delivered on that as well. We have established a number of opportunities to bring together all the players to develop solutions for the longer term. We have also formed the Crop Logistics Working Group, bringing the entire industry together to focus on the performance of the supply chain for all crops in this new and exciting marketing freedom environment.

We moved forward on recommendations from the working group around performance measurement and government support, with a $3 million industry-government investment in a study on supply chain improvements. We also launched the commodity supply chain table, with stakeholders from the agricultural, forestry, chemical, and petroleum industries, as well as railways, ports, grain elevators, and shipowners. The group is exploring solutions to the challenges facing Canada's rail-based supply chain. Together, these initiatives will ensure that Canada's grain industry can to shape a strong logistics system for the future, one that responds to the needs of the Canadian grain sector.

However, we are not stopping there. This government has an overall plan to create a modern and competitive grain industry that will open up new opportunities for farmers in the 21st century. The cornerstone of our reform is marketing freedom. This landmark legislation restored to farmers a basic business freedom they had been denied for 69 years, the freedom to sell the crop they paid to grow to the buyer of their choice, the same freedom that helped create the canola and pulse industries, which made them juggernauts of Canada's farm economy over the past two decades. The overwhelming majority of western grain farmers have embraced the opportunities opened up by marketing freedom, which allows them to make decisions at the speed of business.

In the post-monopoly era, Canadian wheat is finding new customers in Asia, Africa, and South America, where sales of Canadian wheat in 2013 and 2014 surpassed the previous five-year averages. Meanwhile, instead of one buyer for farmers' wheat, there are now dozens of grain companies competing for their crops, as we saw with the deregulation in Australia. Since marketing freedom came into force, the number of grain dealers licensed by the Canadian Grain Commission has risen significantly.

In December, we took another key step for Canada's grain industry when we introduced BillC-48, the modernization of Canada's grain industry act. This proposed legislation builds on major reforms we made to the Canada Grain Act in 2012. It would modernize the regulatory framework for the grain industry to reflect current practices. It would enhance producer protection and grain quality and safety assurance. Enforcement of the act's provisions would be improved and less burdensome. Efficiencies would be realized in producer protection. This proposed legislation would benefit producers, the grain industry, and all Canadians in a big way.

Trade is also critical to the competitiveness of Canada's grain industry. Internationally, we have continued our aggressive trade agenda by pursuing free trade agreements and ensuring a science-based approach to trade issues, like low-level presence of genetically modified crops. We have concluded major agreements with 38 countries, including the European Union and South Korea, opening up key markets for our producers and processors.

Once the trade agreement with the EU is fully implemented, our grain farmers will have virtually tariff-free access to half a billion consumers from Italy to Scandinavia. To give traction to these trade agreements, the Minister of Agriculture and Agri-Food continues to travel with industry for face-to-face meetings with our customers in key markets. These missions help to promote the qualities of Canadian grains to every corner of the world, while bringing back valuable feedback from our customers to ensure that our grains continue to command a premium in the world.

The other key element in our grain modernization plan is innovation. We are keeping our wheat producers on the leading edge of innovation through investments in the wheat genome and disease-resistant varieties. That includes the national wheat improvement cluster. We have matched funds, bringing in investment up to $25 million. We have dealt with the Western Grain Research Foundation, again bringing all of these things together to help our farmers.

In conclusion, the future is bright for Canada's grain industry. The Food and Agriculture Organization estimates that over the next 35 years, farmers will need to increase their annual production of cereals by a billion tonnes. To meet the world-class demand, they need a world-class transportation system. This government remains committed to ensuring that Canada does, indeed, have a world-class transportation system.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

Opposition Motion—Newfoundland and Labrador Fisheries Investment Fund

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

moved:

That, in the opinion of the House, the federal government must respect its promise to Newfoundland and Labrador of $400 million for development and renewal, based on a 70/30 federal/provincial cost-share model, through the province’s Fisheries Investment Fund, in exchange for lifting minimum processing requirements as part of the Canada-European Union Comprehensive Economic and Trade Agreement.

Mr. Speaker, it is no small feat for Newfoundland and Labrador to seize the country's attention, the national spotlight. It is no small feat to turn the eyes of all of Canada to the eastern-most province, even though we are the youngest province, the coolest province, and the most beautiful province. It is no small feat for our issues, our agenda, to capture the national or international stage. It is no small feat because we are a small province, with just over half a million people, about the size of Hamilton or Quebec City. We only have 7 members of Parliament out of what will soon be 338 members of Parliament across the country.

How do we do it? We do it with flair, Newfoundland and Labrador flair. We do it with confidence, a confidence that comes from incredible pride of place. We do it with drive. We do it with determination. We do it with fight. It is always a fight for Newfoundland and Labrador. We are always having to punch above our weight.

Former federal Liberal cabinet minister Brian Tobin seized the country's attention, the world's attention, by firing a shot across the bow of a Spanish trawler during the turbot wars of the 1990s. Tobin took the 16-storey long illegal net that the Spanish trawler had been dragging on the floor of the Grand Banks, with mesh so undersized it could catch fish the size of someone's palm, and hung it from a crane on the New York city waterfront near the United Nations. Point taken.

This is the 20th anniversary of the turbot war and our fisheries are still in shambles, in a state of perpetual crisis. Not much came from Tobin's theatrics, besides the theatrics themselves and his becoming premier.

Another former premier, Danny Williams, made another point, another national statement, when he removed Canadian flags from the front of all provincial government buildings back in 2004. The move turned heads across the country. There were gasps of outrage from one coast to the next coast to the next. Danny removed the maple leaf in retaliation for the actions of the Conservative Prime Minister. The Prime Minister had reneged on a promise to honour a deal excluding offshore resource revenues, oil revenues, from the equalization formula. Danny Williams went to war. He accused the Prime Minister of betraying Newfoundland and Labrador. He called the Prime Minister a fraud. He questioned the Prime Minister's character, and said that the Prime Minister could not be trusted. Danny Williams launched the ABC campaign, anybody but Conservative, during the 2008 federal election. Not a single Conservative MP, not one, was elected from Newfoundland and Labrador.

There are times that we in Newfoundland and Labrador do not feel like we belong or are welcome in this Confederation. There are times when we feel that we are not important, that we are expendable even, and not high on the national agenda.

That brings us to today. The Prime Minister is accused yet again of betraying Newfoundland and Labrador, betraying the Progressive Conservative Government of Newfoundland and Labrador, reneging on a deal or engaging in a doublecross, breaking a promise and failing to honour an agreement.

It certainly looks that way. The facts point in the direction of a betrayal. That seems to be a trend with the Prime Minister, the same Prime Minister who once said that Atlantic Canada had a culture of defeat. The actions of this Prime Minister towards Newfoundland and Labrador, to put it mildly, do not foster warmth and trust.

The federal Conservative brand back home is dirt. The Prime Minister's surname is almost a swear word. It is a bad word; it is not repeated in public. However, there is still time for the current Prime Minister and his government to do the right thing by Newfoundland and Labrador for a change. There is still time for the current Prime Minister to keep his word to the Province of Newfoundland and Labrador. More than that, there is time for the Prime Minister to help position Newfoundland and Labrador for that elusive success with our fisheries. There is still time for the current Prime Minister to abandon his defeatist attitude toward Atlantic Canada.

The motion centres on the Canada-European Union free trade deal, CETA, the comprehensive economic and trade agreement. Unlike any other province, Newfoundland and Labrador was asked to give something up. To make the trade deal happen, the current Conservative government asked my province to surrender its most fundamental fisheries policy, called “minimum processing requirements”. Those requirements protect fish plant jobs on land by ensuring that fish caught off our shores is processed in fish plants on our shores.

The Newfoundland and Labrador government thought long and hard about what it wanted in exchange for surrendering those minimum processing requirements, and the current Conservative government asked the province to think outside the box. In the end, the two levels of government decided to create a $400 million fisheries investment fund: $280 million was to come from the current Conservative government, and the remaining $120 million was to come from the provincial government, the Government of Newfoundland and Labrador.

Correspondence from the current government clearly outlines that the fisheries fund was for a transitional program to address development and renewal in the seafood industry.

The opposition motion before the House today calls upon the Conservative government to respect and honour its commitment to Newfoundland and Labrador, a deal that was first struck in June 2013. There was no grey area. It was clearly a deal between two levels of government.

Former Progressive Conservative Premier Kathy Dunderdale held a news conference in October 2013 to announce details of the agreement it had struck with the federal Conservative government. The current government did not say a peep about the agreement, about the $400 million fisheries fund. It did not raise a single objection, not one. Not one word was said in objection to anything announced by the Newfoundland and Labrador government for 17 months. There were 17 months for the current Conservative government to raise a single objection to any of the points announced by the Progressive Conservative government of Newfoundland and Labrador. Not a word was said, not a whisper.

I even posed a question on the order paper last April that asked the President of the Treasury Board for details of the fisheries fund, including the purpose and any stipulations on the funding. In response, the treasury board president refused to answer, applying the Privacy Act on the grounds that the information was a “confidence of cabinet”.

I clearly asked if there were stipulations on the funding, and the Conservatives refused to answer. Why? Why did they do that? Why did they wait almost a year and a half to raise a single objection to the details announced by the Newfoundland and Labrador government? Why did they wait almost a year and a half to change the terms of the deal? Was it to keep Newfoundland and Labrador quiet? Was it to shut up the province until the CETA deal was done? It certainly appears that way.

The Conservatives now say that the fisheries fund was only created to compensate for losses from the removal of minimum processing requirements. In other words, the province must now show direct losses before it is compensated from the fisheries fund. However, that was not the deal. That is an excuse. I see that as the Prime Minister essentially giving Newfoundland and Labrador the finger.

The Conservatives now say that their $280 contribution is not a blank cheque. The Minister of Justice even had the gall a few weeks ago to visit St. John's and criticize Newfoundland and Labrador for wanting a “slush fund”. That is the same minister who used a military search and rescue helicopter for a taxi from a fishing lodge on the Gander River. That minister has no credibility.

Another Conservative told me that the province was after yet another handout, a welfare cheque. He said that to my face. He only said it once, and he was dead wrong. We want the ability to stand on our own. We want the ability to do for ourselves.

If the $400-million fisheries fund is for compensation for losses as a result of CETA, why is the Province of Newfoundland and Labrador kicking in $120 million of its own money? Is it to compensate itself? That makes no sense. Why was ACOA tasked with administering the fund? If the $400 million was straight-up compensation, why go through the Atlantic Canada Opportunities Agency? Pay the province. Pay the companies directly.

Another point is that it could be another five years before minimum processing requirements are officially eliminated as part of CETA. According to Conservative rationale, that means five years before Newfoundland and Labrador would receive any funds to help it with the marketing and development needed to capitalize on the 500-million people in the EU market. Again, that makes no sense. It is not smart. It does not add up. The transition fund was for us to capitalize on the EU trade deal. It was to position ourselves, to position the fishery for renewal for maximum benefit. We cannot do that with the Conservative double-cross.

The former Progressive Conservative government, under Kathy Dunderdale, held a news conference in 2013, which I mentioned earlier, to announce the deal with the federal Conservatives: the elimination of minimum processing requirements for a $400-million fisheries fund. The PCs were criticized because there were no federal Conservatives in the room. At the same time, the federal Conservatives held a Canada–EU summit reception in September. They spent more than $160,000 on that reception, when the final trade deal has yet to be ratified by the European Union nations.

The deal to surrender minimum processing requirements for a $400-million fisheries fund has been lauded by all quarters in the Newfoundland and Labrador fishing industry. The union likes it, and industry is on side, and the Province of Newfoundland and Labrador is behind it. The most obvious benefit of the trade deal is duty-free access to the world's most lucrative fish and seafood market, which imports more than $25 billion in products annually. That is more than $25 billion a year, and make no mistake, we want a piece of that market.

CETA would eliminate 95% of all fish and seafood tariffs when the deal comes into force, with all remaining tariffs going to zero within three, five, or seven years. Again, the elimination of tariffs is seen as a great thing for our fishing industry. Everybody is in favour, on all sides, but there are still voices of concern.

There are voices of concern from the offshore oil industry that oil companies would no longer have to charter Canadian-flagged vessels with Canadian crews. Instead, the concern is that CETA would open up the shipping industry so foreign-flagged vessels could operate in Canadian waters. These are foreign vessels with much lower working standards and salaries than Canadian ships.

Likewise, there is concern in some quarters of Newfoundland and Labrador that CETA would allow foreign ownership of Canadian fish quotas. Of course, that can happen right now. There is also concern that foreign trawlers with lower-paid foreign fishing crews would be chartered to catch Canadian fish and sail them to the European Union for processing.

Could there come a day when the fish off of our shores is not caught or processed by Canadians? That is a question that I have been asked. It is a concern that has been raised. What is the answer?

I will now say a few words about the Liberals. The CETA deal was barely out of the mouth of the Prime Minister when the leader of the Liberal Party of Canada jumped to his feet in the House to endorse it. The Liberal leader had not read the deal; the wording was not out then. He did not know the terms for Newfoundland and Labrador either. Would anyone buy a car or house without reading the contract or the fine print? The answer is no. A person who did that would be irresponsible. However, the Liberals supported the deal without even reading it. That is shameful.

Now the Liberal leader has written a letter to the Premier of Newfoundland and Labrador in support of the $400-million fisheries fund. That is all well and good. Newfoundland and Labrador is being nailed to the wall, and the Liberal leader blindly trusted the Prime Minister. Here was this monster trade deal, and, at the most, the Liberal leader gave it all of 10 seconds of consideration.

As it stands, the collapse in world oil prices is slamming Newfoundland and Labrador from both ends. To the east, revenues from the province's oil play on the Grand Banks are down substantially, to the point that this year's provincial deficit is pegged at $916 million. That is a deficit of almost $1 billion for a small province with just over a half million people. To the west, thousands of layoffs in the Alberta oil sands will have a devastating impact on our migratory workforce. Thousands of Newfoundlanders and Labradorians travel west, every day, month, year, for work in the oil sands. Alberta oil money has been propping up our fishing outports for years. The fishery has not returned since the early 1990s when the northern cod moratorium was introduced. It has not returned even close to its historic days, and that is because of federal mismanagement.

The problem with the Progressive Conservative government is the same as with the federal Conservative government. To our peril, it has been focused solely on the oil industry. I have called it economic tunnel vision. Diversification to renewable resources is critical. For example, fish is key. Oil and gas will run out. That is an absolute given; it is a certainty. If not managed under the current Conservative government but managed properly for a change, and if given a chance to reproduce, fish will be around forever.

Of all the things I can say with absolute certainty about the Prime Minister, I will say this: He is not stupid. He is the first person to praise the benefits and opportunities of this latest free trade deal, and so he should. It is his government that is bringing it in. Surely the Prime Minister can see the direct benefit of Newfoundland and Labrador using the $400-million fisheries fund to poise itself for tariff-free access to the European Union market, to prepare in terms of marketing and industry renewal.

Unlike any other province, Newfoundland and Labrador is giving up minimum processing requirements. We are surrendering a constitutional right over our greatest industry and resource. We are the only province that has been asked to surrender anything. My province made a deal in good faith with a Conservative government, and a Conservative Prime Minister, who has been accused of betrayal before. As the saying goes, “Fool me once, shame on you. Fool me twice, shame on me”. Newfoundland and Labrador should perhaps be ashamed of itself for putting faith in the Conservative government.

I am again appealing to the Prime Minister to surrender his defeatist attitude toward Atlantic Canada, surrender his war on Newfoundland and Labrador, to stand by his word, do the honourable and right thing for Canada and Newfoundland and Labrador. I ask that he honour his promise and stand by his word.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the member's comments; I do not necessarily agree with everything he said.

I would like to express to residents of Newfoundland and Labrador that the leader of the Liberal Party's passion for the province is very strong, second to no others. He is a strong national figure who recognizes the importance of agreements. That is why we are supporting what the NDP is putting forward today. We recognize that when a national government enters into an agreement that there is an obligation for the government to fulfill that agreement, so there is a sense of betrayal here.

I am a bit concerned about the manner in which the member started his speech. Canadians care for and have a strong passion for Newfoundland and Labrador's place in Canada. It is a political party with a particular leader that is perhaps offending Newfoundlanders and Labradorians today. However, the overwhelming feeling across the country is that we are a strong united country and that Newfoundland and Labrador is second to no other province in Canada.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I do not think that Newfoundlanders and Labradorians always feel welcome in this Confederation. We often feel like the screws are being put to our province.

However, I will give a little lesson on how to pronounce Newfoundland: “Newfoundland understand; understand Newfoundland”. If the member practises that a few times, he will have the pronunciation down pat.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with great interest to my hon. colleague's passion. I remember when the cod fishery collapsed because of years of federal mismanagement. The cod fishery was one of the reasons that Canada as a nation was founded. It was this incredible resource that brought so many Europeans over here, who created settlements on Newfoundland and Labrador.

One of the agreements when Newfoundland and Labrador signed on with the federal government was that it would be better within Confederation, that there would be a quid pro quo with the province.

The loss of the cod fisheries was a symbol of federal mismanagement. Therefore, I understand the deep suspicion that the people of Newfoundland and Labrador have when an international trade agreement is being brought forward and it is being asked to give up some of the sovereignty it has wanted to maintain over its fisheries in order to be part of an international agreement. It has to be able to trust that the federal government is going to make sure that the agreement works on its behalf, not just on behalf of anybody in the Conservative Party, but on behalf of the people of Newfoundland and Labrador.

I am very concerned by this backtracking. We saw how Danny Williams stood up. We saw the movement of “anything but Conservative”. We know that Conservatives cannot be trusted in the Maritimes, just like they cannot be trusted anywhere else.

What does my hon. colleague think about a government that is reneging on a deal that sends symbolic concerns to the people of Newfoundland and Labrador?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I remember, in 1992, when the then Conservative government of Brian Mulroney shut down the northern cod fishery. I was the fisheries reporter with the daily newspaper in St. John's, Newfoundland and Labrador, and I was there on the day, in that hotel room in downtown St. John's, when Crosbie shut down the fishery. I was there when the fishermen from Petty Harbour, Newfoundland tried to break into the room. They were pissed off because Crosbie did not make the announcement to their faces. He did it in another room, and it was televised to the room where the fishermen were.

The hon. member brings up the word “trust”. There is no trust. When Danny Williams was premier, the Prime Minister made a promise to Newfoundland and Labrador about equalization, about resource revenues, but he did not follow through. This is the second example of a promise made and a promise not kept. How can we in Newfoundland and Labrador trust a prime minister and a government who do not live up to a promise? My sons watched CBC. They watched his speech and asked me why the government does not live up to its promises, which they have to live up to when they make promises. I do not know the answer to that question.

[The Acting Speaker, Conservative, Barry Devolin]

Just before we go to more questions, I would ask all hon. members to be careful of their language and to use parliamentary language in the House.

Questions and comments, the hon. member for Saint-Lambert.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I would like to begin by thanking my colleague for his speech and congratulating him. He is an honourable representative and a credit to his province.

The Conservatives made a promise to Newfoundland and Labrador, and they have to keep that promise. As my colleague said, even a child knows what a promise is and how important it is to keep promises. My colleague talked about how important the fishery is and the impact of breaking that promise on a province's economy.

Can my colleague go into a little more detail about the economic consequences of breaking that promise? I figure it must be disastrous.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I mentioned in my speech that Newfoundland and Labrador is being hit from two ends when it comes to the downturn in the price of oil. We are being hit from the western end in that literally thousands of workers from Newfoundland and Labrador travel back and forth to Alberta for work. The average salary of each of those workers is $100,000 a year, and it comes back to Newfoundland and Labrador. Then from the eastern end, off the east coast of Newfoundland, from the offshore on the Grand Banks of Newfoundland, our revenues from our oil industry are down severely. The Newfoundland and Labrador government faces a deficit this year alone of $916 million, almost $1 billion, in a small province of just over a half million people. We need to diversify. The country needs to diversify.

In answer to the hon. member's question, that $400 million fund would be used by the Newfoundland and Labrador government to position itself to capitalize on and to seize the business opportunity of the opening of the 500-million-person European Union market. If we do not have that, it means we do not capitalize. If we do not have that, it means we do not diversify. If we do not have it, it means the Conservative government has failed Newfoundland and Labrador—again.

[Rob Moore, Conservative, Minister of State (Atlantic Canada Opportunities Agency)]

Mr. Speaker, the member spoke about all the benefits the Canada-European Union trade agreement would bring to his home province. I agree.

I need to quote from the chair of the St. John's Board of Trade, who said:

The CETA agreement provides significant opportunity for our members to do business with the affluent 500 million customers in Europe.

The problem is that the hon. member and his party did not support the agreement, an agreement that would bring untold benefits to the industry and people of his home province. Now he has brought forward this opposition day motion that will further create problems when it comes to the agreement

Why does the hon. member not get on board and support this agreement that, in his own words, benefits his home province?

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, I do not know what to say. I shake my head. The hon. member knows that is not true. He knows it beyond the shadow of a doubt. The New Democratic Party of Canada has yet to take a stand on the CETA agreement. He knows that. We did not say yes immediately, like the Liberals; we wanted to read the text. We are still speaking with groups right across the country about how they feel about the wording of an agreement that would be in place for perpetuity. We are taking our time with that.

The minister knows that statement is not true. He knows it is not true.

[Rob Moore, Conservative, Minister of State (Atlantic Canada Opportunities Agency)]

Mr. Speaker, I guess I hit a nerve with that last question, but I think that it is time to take a stand. It is time to take a stand in favour of the people of Newfoundland and Labrador. It is time to take a stand in favour of industry, exporters, and the people who rely on the fisheries in Newfoundland and Labrador.

The Canada-European Union trade agreement will have untold benefits for the people of Newfoundland and Labrador, and indeed all Canadians. Anything that is done to undermine this agreement will be to the detriment of those people who stand to benefit.

I am very pleased to rise today to speak to our Conservative government's historic trade agreement with the European Union and the benefits that the agreement will bring for hard-working Canadians, particularly the people of Newfoundland and Labrador.

First of all, the Canada-EU trade agreement will greatly benefit Newfoundland and Labrador's fish and seafood sector. Secondly, CETA has tremendous support from Newfoundland and Labrador's business leaders, and the NDP knows this. Finally, our government remains committed to investing up to $280 million in a cost-shared fund shared 70:30 for up to $400 million to compensate Newfoundland and Labrador for any loss incurred due to the removal of minimum processing requirements.

CETA is a historic accomplishment. It will benefit hard-working Newfoundlanders and Labradorians, and indeed all Canadians across all trade-related sectors of our economy. In particular, in the case of Newfoundland and Labrador, the fish and seafood sector will benefit.

Newfoundland and Labrador was founded on the fishery. For over 500 years, the province worked to perfect the art of doing business with European fish traders. I am certain that my Newfoundland and Labrador colleagues across the floor are very well versed on the economic importance of the province's historic and current relationship with the European Union. I am also certain that they are very aware that Newfoundland and Labrador's fishery continues to face challenges distinct from minimum processing requirements and the conversation that we are focused on here today. These include declines in shellfish stocks and other challenges related to competing in the global marketplace.

I am sure that my Newfoundland and Labrador colleagues will agree that the focus must now be on the future of those relationships and on addressing those challenges. The focus must be on building those historic connections and that industrial intelligence to take full advantage of all that the Canada-European Union trade agreement has to offer Newfoundland and Labrador.

Newfoundlanders and Labradorians stand to benefit significantly from this preferred access to the European Union. The EU is already the province's second-largest export destination and second-largest trading partner. In 2013, Newfoundland and Labrador's fish and seafood industry was valued at $1.1 billion. In 2013, its fish exports to the EU were valued at $116.5 million. Given that the EU is the world's largest fish and seafood market, with over 500 million customers and $18 trillion in economic activity, CETA represents a lucrative opportunity for the people of Newfoundland and Labrador.

That said, fish and seafood products destined for the EU, such as shrimp, snow crab, cod, and scallops face stubbornly high tariffs at an average of 11%, with some as high as 25%. On the first day that CETA comes into force, almost 96% of those tariffs will be eliminated, and seven years later, 100% of these tariffs will be eliminated. In fact, CETA will eliminate tariffs on almost all of Newfoundland and Labrador's key exports to the EU, and it will permanently lock in the duty-free access currently received by goods in the mineral and petroleum sectors.

Exporters will also benefit from other CETA provisions that will improve conditions for exports. There are provisions, for example, that will ease regulatory barriers and ensure more transparent rules for market access. The elimination of tariffs and the creation of new value-added and branded products, combined with new marketing development opportunities, could result in an estimated additional $100 million in revenue annually to the fish and seafood industry, according to the Newfoundland and Labrador Department of Fisheries and Aquaculture.

The benefits of CETA are crystal clear even to the NDP, apparently: increased sales, more jobs, higher wages, and greater long-term prosperity. Why would any provincial government want to delay or threaten that access for their local companies? Why, indeed, would any federal party want to delay that access to their constituents?

Let us make no mistake: those companies, those people, those workers stand to benefit greatly from the CETA deal. This is why many have come forward to state their support for this historic agreement.

Some stakeholders have referred to CETA as a game changer. Others have spoken of CETA's potential to facilitate market diversification and allow our seafood products to compete on a level playing field in the world's single largest integrated market. The business leaders in Newfoundland and Labrador understand the transformative power of the Canada-European Union trade agreement, and they understand that this government is committed to ensuring that Canadians from coast to coast to coast benefit from the deal. Indeed, all Canadians will benefit from this deal.

This is the best access the EU has ever granted a trading partner, and Newfoundland and Labrador companies are eager to take full and fair advantage of this new access. The leaders of Newfoundland and Labrador's business community, both within and outside the fish and seafood sector, have spoken publicly of their support for CETA. I will recap some of their words for members as well as for all those who are listening in on this debate.

The Association of Seafood Producers from Newfoundland and Labrador has stated on the record that:

For too many of our products, we are kept from being competitive because of the high tariffs the EU placed on our seafood products. It’s a remarkable achievement, the elimination of all EU tariffs on fish and seafood in a single leap. The EU is our backyard. ... We’re closer to many parts of Europe, geographically and historically, than many markets in the U.S.

It is a historic deal.

The Newfoundland and Labrador Employers' Council agrees, saying:

The agreement reached between Canada and the European Union demonstrates great growth in the province. Businesses that are having difficulty surviving in the current marketplace will see increased opportunities as the province begins to compete on a global scale.

The vice-president of the Canadian Manufacturers and Exporters, Newfoundland and Labrador, adds his voice:

A trade agreement with the EU would give manufacturers and exporters...the ability to diversify their sales...increase their presence in Europe at a time when they are looking for new market opportunities....

The St. John's Board of Trade, an organization that is the voice of business and an advocate for sustained economic prosperity in Newfoundland and Labrador, stated in a news release that:

CETA is one of the most significant trade deals ever negotiated for Canadian business, including businesses right here in St. John’s.

The chairman and CEO of a private sector fish enterprise sums it up perfectly. Bill Barry of Barry Group said:

I think it’s a tremendous initiative. I think the free trade deal with the EU is something almost everybody in the fishing industry had hoped for years.

As members can see, CETA is very important to the future and prosperity of this country and of Newfoundland and Labrador's fish and seafood industry. It is critical for the Government of Newfoundland and Labrador to come back to the negotiating table to work this out for the benefit of hard-working men and women who stand to benefit greatly from this trade agreement.

The Government of Canada has committed to invest up to $280 million in a cost-shared initiative in Newfoundland and Labrador to compensate for negative impacts caused by the removal of minimum processing requirements on fish and seafood destined for the EU market. As we have stated time and time again, we remain committed to working out the details of the minimum processing requirements fund with the Government of Newfoundland and Labrador, but I will step back a bit to clarify MPRs for the benefit of my colleagues on both sides of the House.

Newfoundland and Labrador legislation states that minimum processing requirements, or MPRs, apply to all fish intended for sale outside of the province. Fish exported from the province must be processed to a minimum requirement as outlined by the provincial government.

During CETA negotiations, the European Union requested unrestricted access to Canadian fishery sources, requiring Newfoundland and Labrador to give up their minimum processing requirements. At that time, Newfoundland and Labrador raised significant concerns that the removal of MPRs would impact their fisheries sector. In line with dairy and in line with pharmaceuticals, we were prepared to offer a compensation package of up to $280 million for losses in a 70-30 federal-provincial cost-shared fund totalling up to $400 million.

Our government remains fully committed to investing up to $280 million to compensate Newfoundland and Labrador for losses caused by the removal of MPRs, and we are committed to working with the government of Newfoundland and Labrador to work out a transition initiative that would address priorities such as compensation for displaced workers, research and development, and innovation.

However, this fund was always intended to compensate Newfoundland and Labrador for losses as a result of the removal of MPRs. It was never intended to be a blank cheque. In fact, a review of the documents disclosed publicly by the Province of Newfoundland and Labrador clearly demonstrate the position of the Government of Canada as it relates to this fund. I repeat: this initiative is intended to help Newfoundland and Labrador transition from the removal of MPRs. Our investment of up to $280 million is intended to compensate that province for the negative impact of that removal and to ensure that the benefits of CETA accrue to all Canadians.

Let me revisit the state of Newfoundland and Labrador's fish and seafood sector for a moment. The fish processing sector, which has particular importance to rural economies, has been dramatically reduced in size and character since the early nineties. Rationalization has been extensive, from a high of nearly 214 processing plans in 1989 to 86 in 2013. The number of seafood sector employees now stands at approximately 18,000. That industry continues to face challenges, with declining shellfish stocks and changing consumer expectations, and these challenges are real.

CETA represents a tremendous potential to mitigate those challenges. Industries facing such intense pressure to transform and modernize have never in history had the opportunity and benefit afforded by CETA to help them do exactly that.

Our government understands that the Newfoundland and Labrador fish and seafood sector will be impacted by the removal of MPRs, and that is why we have committed to this fund. We also understand that the Newfoundland and Labrador fish and seafood sector is on the brink of realizing something the industry has wanted for many years. Because of CETA, the Newfoundland and Labrador fish and seafood sector will have unprecedented tariff-free access to lucrative new markets and countless opportunities to grow, to modernize, and to compete. CETA, for the Newfoundland and Labrador fish and seafood sector, means opportunity. We know it, my esteem colleagues across the floor know it, and the leaders in Newfoundland and Labrador's business community know it.

As I have said in the past and here again today, our government remains steadfast in our commitment to getting back to the table and working out the details of the MPR fund with the government of Newfoundland and Labrador. We are ready when it is ready.

[Ryan Cleary, NDP, St. John's South—Mount Pearl, NL]

Mr. Speaker, we agree on most of the points the minister just outlined. The benefits, for example, are absolutely undeniable. The seafood market in the European Union is worth $25 billion a year, and we want a piece of that. It is also undeniable that the fishing industry, the Fish, Food and Allied Workers Union, and the Progressive Conservative government of Newfoundland and Labrador all want in to CETA. That is not the question. That is not why this debate is happening right now. The minister did not address why the motion is before the House.

I have two questions.

The former Progressive Conservative government of Kathy Dunderdale in Newfoundland and Labrador announced details of what this fisheries fund of $400 million, with $280 million from the federal government and $180 million from the provincial government, would be used for. Her government announced details more than a year ago, but this Conservative government did not raise a word of objection about what the Progressive Conservative government of Newfoundland and Labrador said the fund would be used for. It was not to be used for losses. The government did not have to demonstrate losses. This was about transition, renewal, and industry development.

Why did the Conservative government wait more than a year to raise an objection to the way the PC government of Newfoundland and Labrador framed this? If this fund is all about losses, why is the Newfoundland and Labrador--

[The Acting Speaker, Conservative, Barry Devolin]

Order. The hon. Minister of State for Atlantic Canada Opportunities Agency.