Mr. Speaker, it is an honour to rise in the House today to speak to this important bill, Bill C-49, the transportation modernization act, on behalf of my constituents in Saint Boniface—Saint Vital.
In his mandate letter to the Minister of Transport, the Prime Minister stated that his overarching goal is to ensure that Canada's transportation system supports the government's agenda for economic growth and job creation. To carry out that mandate, it is essential to look ahead, and today, I would like to reflect on that by focusing on some of the key amendments in Bill C-49, the transportation modernization act, that would help ensure that our transportation system can continue to help build this country for future generations.
In particular, it is essential that our transportation system be fluid in its operation and responsive in meeting the needs of our society and economy. To meet these goals, we need to lay the groundwork for a transportation system that will be safe and secure, innovative and green, adaptable to changing trade flows, and sensitive to the needs of travellers. Following a comprehensive consultation process with Canadians, industry stakeholders, provinces, territories, and indigenous groups, we have established a foundation to realize these goals through transportation 2030, the government's strategic plan for the future of transportation in Canada.
For this government, the transport portfolio is critical to economic growth. Transportation in Canada must continue to be a single interconnected system that drives the Canadian economy. In February of last year, the Minister of Transport tabled the report of the review of the Canada Transportation Act, also known as the CTA review, which was led by the hon. David Emerson. It had been 15 years since the last such review. The review report looked ahead to position our transportation system to continue to support Canada's international competitiveness, trade, and prosperity. As Mr. Emerson noted, our transportation system is the connective tissue that binds us together as a nation, that enables us to participate in the global economy, and that helps us ensure our economic and social well-being.
The review pointed toward many of the goals to which we need to aspire in building the transportation system of the future. We, as a country, must take the long view. We must develop a long-term vision of Canada's transportation system that is focused on the future, on the outcomes of what we want to achieve: better growth, more competition, and better service. When we mention economic potential, we must remember that we can have the best-quality products in the world, but it will not matter if we lack in efficient ways to get those goods to international markets.
Improving our trade corridors is a key requirement in building our future transportation system. That is why Bill C-49 focuses on promoting transparency, system efficiency, and fairness. The bill proposes legislative amendments that would better meet the needs and service expectations of Canadian travellers and shippers, while creating a safer and more innovative transportation system that would position Canada to capitalize on global opportunities and thrive on a higher-performing economy.
In particular, Bill C-49 recognizes that a reliable freight rail network is critical to Canada's success as a trading nation. Many of our commodities, from minerals to forest products to grain, depend on rail to move to markets, both in Canada and abroad. Canada already enjoys a very efficient rail system with the world's lowest rates. Bill C-49 would sustain this by addressing pressures in the system so that it can continue to meet the needs of users and the economy over the long term.
There is no clearer example of the importance of our freight and rail network than the prairie provinces. Each year, over $280 billion worth of goods move through our freight rail system throughout Canada. It is the backbone of our export trade, allowing goods to move efficiently throughout the country and to our export markets.
Bill C-49 builds on our already strong freight rail system by safeguarding its continued reliability and efficiency. Bill C-49 seeks to create a more competitive environment for shippers and producers by introducing long-haul interswitching, a new mechanism that would be available to all captive shippers in Canada across all sectors. Long-haul interswitching would allow shippers access to competing railways at rates and at service terms set by the Canadian Transportation Agency. This measure would allow better service options while improving system efficiency. It would ensure that shippers across industries would be able to bring their products to market.
There has been much discussion of the plan's sunsetting of an extension of the interswitching mechanism created in 2014 with the passing of the Fair Rail For Grain Farmers Act. This system only applied to captive grain shippers within the prairie provinces. In the year prior to the act's implementation, there was a record prairie grain crop, which was immediately followed by a devastating winter. This act was introduced to address this unique situation and the conditions in the grain handling and transportation system at the time. These no longer exist. It is important to emphasize the temporary nature of the previous legislation. Bill C-49 would replace this temporary legislation with a stronger and permanent mechanism that would apply across various sectors, including the grain sector in various regions in Canada. It would apply to a much longer distance of 1,200 kilometres or more, far greater than the 160 kilometres in the previous act. It is critical that this new mechanism apply to all commodities over a much longer distance throughout this great country. At committee, changes were adopted to the exclusion zones, opening the interswitching mechanism to captive shippers in northern Quebec, British Columbia, and Alberta, which will have a favourable impact on the mining and forestry industries in those regions. By extending the interswitching system, we would strengthen multiple industries while still supporting the grain industry.
It is also important to note the stronger benefits and protections that Bill C-49 would provide to prairie grain shippers and farmers. These include the ability of shippers to seek reciprocal financial penalties in their service agreements with railways. These include a better definition of what adequate and suitable rail service means, and improved access to final-offer arbitration. Bill C-49 better defines adequate and suitable rail service. Previously within the Canada Transportation Act, the terms “adequate and suitable” were not defined and had been the subject of various definitions over time. By better defining the term and providing better clarity to both shippers and rail companies, we reduce the potential for service disputes that can be both costly and disruptive to both parties.
It is also important to balance the shipper's service entitlements while taking into consideration the railway's broader obligations across the network. The act strongly affirms that railways must provide shippers with the highest level of service they reasonably can provide within the circumstances. Factors for the Canadian Transportation Agency to use in assessing what is reasonable will also be identified. These would include the service that the shipper requires, the railway's obligations under the Canada Transportation Act, and the operational requirements of both the railway and the shipper, among others.
The act also addresses penalties for delays, which currently are one-sided. While railways currently can impose penalties on shippers for delays, shippers are not able to impose penalties on the railways unless the railway agrees to these as part of a confidential contract. This causes an inequity between the rail lines and the shippers. Reciprocal penalties would ensure that the responsibility for efficient and timely movement of goods would be shared between the shippers and the rail companies.
With Bill C-49, shippers will be able to pursue reciprocal financial penalties through the service level agreement process under the CTA. The process will allow a shipper to obtain an agreement on service through CTA arbitration when negotiations with the rail company fail. The CTA arbitrator will ensure that the penalties both balance the interests of the shipper and the railway and encourage efficient movement of goods. This is of vital importance to grain farmers on the Prairies and was one of the big asks of stakeholders in the period leading to the tabling of the bill.
The bill would also increase transparency by increasing the amount of publicly available information on the performance of the rail transportation supply chain. Of note is that Bill C-49 requires railways to provide a report assessing their ability to meet their grain movement obligations prior to the start of a crop year. The state of the year's crop and forecast for the upcoming winter will be reviewed annually. This will ensure that should a similar scenario occur like the one seen in 2013-14, a contingency plan can be put in place by the railways to ensure the movement of grains.
In addition, railways will need to report service, performance, and rate metrics publicly. The bill will require railways to provide service and performance information on a weekly basis to the Canadian Transportation Agency, which in turn will make this information public by publishing it on its website.
Rate data will be required from the railways as well for Transport Canada. The rate data will be used by the agency to help calculate long-haul interswitching rates. It is important that this information be available in a timely manner to ensure the efficiency of the supply chain.
Bill C-49 would encourage the long-term growth of the freight rail system by encouraging investments. It would change the provisions of the maximum revenue entitlement regime by making adjustments to intensify hopper car investments and reform the MRE methodology. These reforms will better reflect individual railway investments and encourage investments by all supply chain partners.
One only has to think of Lac-Mégantic, where people are still recovering from the tragedy that took the lives of 47 residents in 2013. This and other events like the derailment at Gogama remind me that the most crucial thing the Minister of Transport can do is to keep the people who use our transportation system safe. Nothing else is as important.
Bill C-49, the transportation modernization act, would further this goal. It would do this by implementing in-cab video and voice recorders, commonly referred to as LVVR, as recommended by the CTA review panel and the Transportation Safety Board. These recorders would further strengthen rail safety by providing objective data about the true actions taken leading up to and during a rail accident. This technology would also provide companies with an additional safety tool for analyzing trends identified through their safety management system.
Finally, the transportation system of the future needs to better meet the needs of travellers who seek greater choice and convenience at a reasonable cost. For example, passenger traffic at Toronto Pearson airport has almost doubled in the past three decades and the airport marked its 40 millionth passenger in 2015. Just cast our minds ahead to 2030 when Toronto Pearson forecasts that it will serve some 66 million passengers per year. That is a lot of people to manage, and our airports need to be up to the task.
Along with connections, we must also consider the air traveller experience and the need for new tools to assist consumers. The traveller needs to know how decisions are made when flights do not go as planned and what recourse they have. That is the very reason that Bill C-49 proposes the creation of new regulations to enhance Canada's air passenger rights, ensuring that they are clear, consistent, and fair to both travellers and air carriers.
The Canadian Transportation Agency would be mandated to develop, in consultation with Transport Canada, these new regulations, and would consult Canadians and stakeholders should royal assent be given. The overriding objective of this new approach is to ensure that Canadians and anyone travelling to, from, or within Canada understands their rights as air travellers without having a negative impact on access to air services and the cost of air travel for Canadians.
The simple fact we must address for all travellers is this: Canadians are spending more on transportation in all forms. In the past 30 years, household spending on transportation has more than tripled, up to 16% of expenditures, second only to shelter. Our government's vision for the Canadian traveller experience is one in which we have more integrated and seamless connections between air, rail, and transit to reduce the overwhelming reliance on the automobile.
These are some big issues, and sorting through the implications of what I have just talked about is a tall order that requires many conversations with Canadians.
The CTA review started this engagement. The report is a comprehensive source of independent advice to government. As I said earlier, I see transportation as essential to driving this country's economic growth and future prosperity for all Canadians. We must also design and manage the transportation system so that we continue to protect passengers, communities, and our environment.
I challenge all of us to think about how we can achieve all of these goals so that we can develop a transportation system that is even more safe, efficient, and green, and which supports both our economy and our country.