Mr. Speaker, I rise today in support of Bill C-52, the fair rail freight service act. The purpose of this bill would be to amend the Canada Transportation Act in order to improve the reliability and predictability of rail freight service in Canada.
Over the past years, Canada's economy has managed to thrive amid a turbulent global economic downturn. Our success is in great part due to our Conservative government's focus on strengthening our economy. Bill C-52 would greatly improve Canada's rail freight service and consequently contribute to protecting and fostering the growth of our economy.
A great number of Canadian businesses, from grain and forest products to coal and chemical products, use rail services to ship their goods across the country or around the world. The range of sectors that rely on rail is reflected in the range of witnesses who testified on this bill at the Standing Committee on Transportation, Infrastructure and Communities. As my colleague, the hon. Minister of Agriculture and Agri-Food, said, “This bill is good news for Canada's farmers as it will help ensure all shippers are treated fairly by the railroads”.
Now let me explain how we reached the step of introducing this great legislation, and why all members of this Parliament should support it.
The years prior to 2008 were a time of unprecedented growth. Increased trade with Asia contributed to capacity constraints in the transportation system. In 2008, the government launched the rail freight service review to look into issues of rail service reliability that were brought to our attention by stakeholders. As part of the review, the government appointed an independent panel of three eminent persons to develop commercial and, if required, regulatory solutions to improve supply chain reliability. During the review, the panel held broad consultations with 85 shippers, railways and other stakeholders, and received over 141 written submissions. In December 2010, the panel submitted its final report to the government. It recommended several measures to improve rail service.
For example, the panel recommended the use of service agreements to define the commercial relationship between a shipper and a railway. It also recommended having a facilitator work with industry to develop a commercial dispute resolution process.
Our Conservative government agreed with the review's commercial approach and carefully reviewed the panel's recommendations. In March 2011, in a response to the panel, we announced a number of measures that we would undertake to improve the efficiency, effectiveness and reliability of the rail-based supply chain. Our commitment goes beyond the panel's specific recommendations in order to benefit the entire rail-based supply chain. Let me quickly go over the government's response.
The first measure we implemented was a facilitation process to develop a template of what service agreements could look like in a commercial dispute resolution process between shippers and railway companies. On October 31, 2011, the government appointed an independent facilitator, Mr. Jim Dinning, to work with shippers and railways. In his final report to the minister, Mr. Dinning provided clear direction for both shippers and rail companies, moving forward. This included a template service agreement and a streamlined dispute resolution process for parties to use in their commercial negotiations. This government believes this process served its intended scope and purpose. We successfully brought shippers and railway companies to the table to jointly pursue practical solutions that reflect their needs and the reality of their day-to-day business together.
To support these commercial tools, our Conservative government committed to tabling this bill that would also give shippers a right to a service agreement with the railways, and provide a process to establish an agreement should commercial negotiations fail. Bill C-52, the fair rail freight service act, would do just that. It would give shippers a right to service agreements with the railway companies, and would outline a low-cost, timely and efficient arbitration process to establish such agreements, if shippers and railway companies cannot agree commercially of course.
This legislation would align well with what the review panel recommended in its final report. As shippers told the Standing Committee on Transportation, Infrastructure and Communities, this piece of legislation would serve as a strong backstop to commercial negotiations.
First and foremost, the new provisions would create a strong incentive for the parties to negotiate service agreements commercially and to use legislation only as a backstop if commercial discussions fail. This reflects the panel's focus on commercial approaches to addressing service issues. If parties cannot negotiate an agreement commercially, the new provision outlines an arbitration process under the auspices of the Canadian Transportation Agency, which shippers would access to establish one.
The new provision prescribes service elements at a high level. Framing the provision broadly gives shippers the flexibility to ask for what is important to them, such as the number of cars needed for a shipment. This is in line with the approach suggested by the panel. It would also give the arbitrator the flexibility to tailor the service agreements to each case. If appropriate, the arbitrator could impose elements such as performance standards and communication protocols.
The new service arbitration process to establish an agreement would be fast, matching the 45-day process the panel proposed, although it could be extended by 20 days at the discretion of the arbitrator in some of the more complex cases. The arbitrator's decision on service would be final, binding, confidential and non-appealable. All told, this is a strong new provision that would improve rail service and make it more predictable and reliable.
Shippers echoed this sentiment during the hearings held at the Standing Committee on Transportation, Infrastructure and Communities and said that the new provision would enhance their leverage to negotiate commercially with railways.
To quote the testimony of the Canadian Propane Association on the bill at the standing committee, “...it contains all the mechanisms...we requested some years ago: a right to a level of service agreement, an arbitration process, and administrative monetary penalties”.
While introducing this legislation is a key component of our Conservative government's response to the rail freight service review, it is not the final piece. In collaboration with Agriculture and Agri-Food Canada, Transport Canada is currently leading an in-depth analysis of the grain transportation supply chain to focus on issues that affect that sector and help identify potential solutions.
Finally, we are also committed to establishing an industry round table covering commodity sectors in the near future. The commodity supply chain table would provide a forum for commodity exporters, railways and other members of the commodity supply chains to address issues that affect commodity freight systems. This would be an excellent venue for all players in commodity supply chains to work together to improve the reliability and competitiveness of Canada's export market.
As members can see, our Conservative government is well on its way to fulfilling its commitment to help ensure that Canada has the rail system it needs to support a strong economy and our domestic and international trade.
Bill C-52 is a comprehensive package that supports the government's focus on economic growth, job creation and prosperity for Canadians. We are working to benefit the entire rail transportation system. As shippers and railways move forward in defining their bilateral relationships through service agreements, and as stakeholders come together under the commodity supply chain table, it will be important for parties to work collaboratively to improve the efficiency, effectiveness and reliability of the entire rail-based supply chain.
In closing, I strongly encourage all members of the House, from all sides, to vote in favour of this very important legislation.
