Mr. Speaker, it has probably become quite clear from my questions and comments that Canada's railway system is something I care about a great deal.
During my 10-minute speech, I will not necessarily focus on the details of the bill. My NDP colleague just did that, as did many other NDP members, including the hon. member for Trinity—Spadina, our transport critic, who is doing an incredible job in this area.
Bill C-52 affects me personally. We have heard a lot about how this bill will have a national impact and about its many deficiencies, which the NDP has criticized.
I just mentioned the fact that the difference between Canadian Pacific's and Canadian National's rates is quite significant, from one bidder to the next. This aspect bothers the NDP. We would have liked to see the federal government show some leadership on this. Unfortunately, this bill was introduced after five years of dragging their feet, and it was only introduced thanks to the hard work of my colleague from Trinity—Spadina, our transport critic. Fortunately, the NDP is the official opposition and it will hold this government to account.
In my speech I am not going to talk about the national impact or the consequences for big cities. I respect the people of Montreal and Toronto, for whom rail transportation means something different. However, I come from northeastern Quebec and, in the regions, the rail system is mainly used for the transportation of various goods.
Over the past few days, I took the time to find out whether our exporters in Saguenay—Lac-Saint-Jean are satisfied with the rail service they are receiving. Unfortunately, I came to the same conclusion as the other opposition members: there are many shortcomings.
I even managed to get my hands on a study conducted by the City of Saguenay. It is a few years old, but the conclusion was the same. I will share it with the House. This will bring something different to the debate since it pertains more to the regional reality.
This study has to do with issues around rail freight transport in Saguenay—Lac-Saint-Jean.
Editor's note: The findings in this report reflect discussions with most major regional users, including those in the pulp and paper, softwood lumber, fibreboard and aluminum industries, as well as smaller users in other industrial sectors. They basically reflect the comments made.
I just named the economic and industrial sectors that are very important in the region. We export a lot of these products. The people watching at home may be wondering what their rail system looks like. I will explain.
Two companies share the Saguenay—Lac-Saint-Jean railway system: CN and the Compagnie de chemin de fer Roberval-Saguenay or RS, a division of Alcan [or Rio Tinto Alcan]. The CN railway falls under federal jurisdiction and the line ends in Jonquière. The RS railway is a private railway that falls under provincial jurisdiction. The RS railway starts at the Port-Alfred facilities in La Baie and its primary purpose is to provide service to the Alcan plants in the region. As part of a confidential agreement with CN, however, RS provides service to the companies east of Jonquière, including clients from the Chicoutimi and La Baie industrial parks.
The city of Saguenay has two freight transshipment centres: Nolitrex (Jonquière) and Transit PAG (located in La Baie since January 2000), as well as one wood chip transshipment centre (Jonquière). Two other transshipment centres operate in Lac Saint-Jean, in Hébertville (Groupe Goyette) and La Doré.
Northern Quebec Internal Short Line (NQISL)
The NQISL operates the Saguenay-Lac-Saint-Jean, Chibougamau and Abitibi network for CN. Quebec has 11 short lines and private companies, including RS. Unlike the other short lines, which are independent entities that operate secondary lines for CN, CN has maintained control over the NQISL. The NQISL is a semi-autonomous division of CN, wholly owned by CN. The NQISL has a monopoly in the region and operates the largest rail network in Quebec, with 1,756 km of track, including 422 km in Saguenay-Lac-Saint-Jean.
NATIONAL FACTORS
Compared with all the rail companies in North America, the railway has adapted poorly to the new realities of transportation, including the just-in-time factor. Transportation times are long, rail cars get lost and the rates are less competitive, compared to the more efficient trucking industry, which has regained a large share of the market.
Following a string of budget cuts at CN at one point in time, rail car maintenance was neglected as was reinvesting in equipment. Today, the industry is faced with an aging fleet of rail cars. Certain types of rail cars, specifically closed cars that are not watertight, are in poor condition. This situation affects a region like ours in particular since the pulp and paper industry is directly impacted. According to our sources, CN is poised to modernize its fleet of pulp and paper rail cars. [I believe the modernization has already been done, since this study was conducted several years ago.] Other less important industrial sectors have been neglected, however, and will likely have to continue making do with outdated or ill-suited equipment.
CN’s operating system appears to be poorly adapted to the size of Canada and the unique characteristics of sub-regions like those in Quebec. CN’s national service centre is located in Winnipeg. Some customers can go to Vancouver for a price and to Winnipeg to request a rail car that will be sent from Edmonton to a transshipment centre in Montreal. From Montreal, the freight can then be shipped to the Saguenay. The transaction can then be billed in Toronto. Each time, a different person is involved in the process. The system is highly complex and rather daunting for the user. Customers can easily encounter many pitfalls. Another issue is the lack of knowledge of the Quebec market, especially a region like the Saguenay, as well as a strong tendency to apply national standards and rates, allowing little room for regional differences and for contact between a customer and a supplier.
Most of the customers who were consulted said that CN was not highly service oriented and took advantage of its monopoly, especially since the large-scale cuts in recent years. Mention was made of unilateral decisions where CN notifies rather than consults with its customers. [This happens regularly.] Another told us: “You want two rail cars and you get 20. When you want 20 rail cars, you get two.” Others spoke of lengthy delays for one thing or another.
REGIONAL FACTORS
In early 2002, the industry was hit with a major rail car shortage that affected all Canadian railway companies. The softwood lumber industry was primarily affected. Manufacturers picked up the pace of shipments to the United States before the American tax was scheduled to take effect. The softwood lumber industry was hopeful that the situation would sort itself out after May 23. Whether or not that happens remains to be seen. [Many years later, we can see that the situation has not improved.] However, even though this situation was exceptional, there had been a long-standing shortage of CN rail cars, except for major clients. In an October 8, 1999, report, Quebec's transport ministry stated the following about the Saguenay-Lac-Saint-Jean: “...because of the shortage of rail cars, regional transshipment centres may lose customers—indeed, some already have—to transshipment centres in Quebec City where rail cars are easier to obtain.” This situation does not adequately support regional development, nor does it encourage the NQISL to develop regional markets and seek new clients.
The NQISL seems uninterested in small customers, occasional customers and potential customers. Except for major users, most shippers get the sense that CN wants to focus on choice customers—aluminum and pulp and paper—while ignoring smaller customers and sectors. For example, occasional customers can wait weeks to get shipping rates for their goods.
The general consensus is that CN is using its regional monopoly to charge excessively high prices. This could make rail transportation unaffordable for small businesses and could cause larger companies to opt for other means of transportation, such as trucks, which put additional pressure on our roads.
For example, recently, a client got an initial quote of $9,280 to send 10 cars to Calgary. That was lowered to $4,390 following a single phone call to a CN higher-up.
For example, a major regional company got rates from Canadian Pacific out of Quebec City that were so much lower than CN's rates, they almost covered the cost of shipping goods by truck on Route 175 even though CP has a longer route through the Eastern Townships compared to CN's direct line between Quebec City and Montreal.
For an 11-kilometre segment, a major part of Saguenay's industrial base—Chicoutimi and La Baie—is served by a third company, RS, for which this is not a priority. Although RS provides very good service, this results in a prohibitive surcharge for shippers just for those few kilometres. This situation could cause problems in the future for the La Baie sector, which has 75% of the new City of Saguenay's industrial development space as well as major regional marine and air transportation infrastructure.
I would like to provide some other information about my region that may be relevant:
Transportation is a determining factor in the location and development of industry. Transportation is more important in regions such as ours than it is in larger centres. More than anywhere else, we need proper, modern, competitive transportation systems if we want economic growth, particularly given recent unemployment statistics...
The railway is an essential mode of transportation in the region. Trains carry approximately one-third of all goods shipped regionally or inter-regionally, 40% of goods shipped inter-regionally via ground transportation and two-thirds of goods shipped across the continent via ground transportation.
The NQISL is the only rail company that gives the region access to provincial, national and continental markets.
In 1996, the break-even point for an internal short line was 37 cars shipped per kilometre of track per year. In the region, the NQISL is definitely profitable, moving more than 61 cars per kilometre, which translates to more than three million tonnes of goods annually (57% of that being forest products).
I painted a regional picture of the rail transportation system and I would like to quote some local stakeholders, particularly the mayors of Saguenay-Lac-St-Jean municipalities. I will not limit myself to my own riding, Chicoutimi—Le Fjord, and I will even venture into the riding of the Minister of Transport, Infrastructure and Communities, who may not show the other side of the coin, since he will want to protect his government's bill.
I would like to read part of a fairly recent Radio-Canada article from November 16, 2010. In the article, people were complaining about rail service.
The town of Chibougamau and its municipal development agency are calling on the federal government to intervene to improve rail service to Lac-St-Jean.
The preliminary report just released by Transport Canada on railroads in Canada's small communities worries Développement Chibougamau, because the document talks about long-term solutions to improve service across the country, but it says nothing about the infrastructure on the Triquet-Faribault line, which links Chibougamau to Saint-Félicien.
Saint-Félicien is in the municipality of the Minister of Transport, Infrastructure and Communities.
The town of Chibougamau, Développement Chibougamau and Génivar submitted a position paper to the federal government last March denouncing the sorry state of the track, railway cars and service on the Triquet-Faribault line.
The general manager of Développement Chibougamau, Pierre D'Amour, also pointed out that mining exploration is booming in the region. “Our fear is that there will be downsizing and that less profitable rail lines will be shut down,” he said. “For us, that would be a catastrophe.”
Too slow
Chantier Chibougamau ships one-quarter of its production by train, but would like to ship more to improve its environmental record.
The company's communications officer, Frédéric Verreault, explained that, for the time being, it is impossible for them to increase rail shipments because the train travels at 40 km an hour owing to the condition of the tracks.
“A moose racing a train carrying our products would get to Lac-Saint-Jean faster.”
A rail shipment to Toronto takes more than a week; it can get there in 24 hours by truck. According to Frédéric Verreault, the decision about the shipping method is an easy one. “The just-in-time concept is central to our relations with our clients,” Mr. Verreault pointed out.
The Chantier Chibougamau representative would like the federal government to invest just as much in rail service as it does in seaports.
I will quote another newspaper article from one of our regional weeklies:
Last week, we published an item about the Forest Products Association of Canada (FPAC), which was urging the federal government to “act decisively” on the various problems associated with the rail transportation of goods. We have further information this week.
You will remember that, in 2008, the government committed to reviewing poor rail service provided to rural industries by establishing a review panel, which made recommendations.
However, today, the FPAC considers it inappropriate that all measures will be delayed for another three years.
The association pointed out that the government is counting on CN and CP to implement the changes on a voluntary basis and that regulatory measures will not be enacted until after 2013.
Last Friday, La Sentinelle contacted Susan Murray, executive director of public relations for the Forest Products Association of Canada, to find out if the government had responded to FPAC's press release entitled “Forest Industry to Government: Fix Rail Service Now”. She said that the government had not responded.
When contacted by La Sentinelle for comment on the FPAC's press release, the mayor of Chibougamau said she agreed with the association.
She also said that the railway is of the utmost importance for the region's mining and forestry companies, as well as those in James Bay and Matagami.
In her opinion, these companies are stuck because CN has not made any investments in its infrastructure for years.
She also wondered about future projects, namely those that will be implemented in the James Bay sector. “Will CN have the reactive capability to support these projects?” she wondered.
I would now like to mention what the Mayor of Saint-Félicien had to say.
...the Mayor of Saint-Félicien, Gilles Potvin, is also concerned about CN's lack of investment. Mr. Potvin is of the opinion that the Saint-Félicien-Chibougamau line is essential for the Saguenay-Lac-Saint-Jean region because it provides access to the port of Grande Anse. He said, “It is a key area for the future of the region. We have to be concerned about it.”
For the past few minutes, I have been talking about the state of the railway in Chambord, which is in the Minister of Transport's riding. Here is a newspaper article that was published a year after the two articles I just quoted. It reads:
Train Derails in Saguenay-Lac-Saint-Jean
CHAMBORD—Three cars derailed on part of the Saint-André line in the Chambord area of Saguenay-Lac-Saint-Jean late Sunday night/early Monday morning. According to Sûreté du Québec spokesperson Hélène Nepton, Sûreté du Québec was informed of the incident, which was allegedly related to a defective rail, at approximately 2 a.m.
It is disappointing.
In closing, I will let people draw their own conclusions about the fact that another train derailed in Chambord one year later, in 2011, because the track was not being properly maintained even though local stakeholders had asked the federal government to take action, to take responsibility and to invest in the railway.
I am proud to be from the Saguenay-Lac-Saint-Jean area and, as the member for Chicoutimi—Le Fjord, which is home to part of the CN and RS railway, I am calling for the federal government to take responsibility and finally invest in rail transportation. It is important for the Canadian economy.
