The House resumed consideration of the motion that Bill C-52, An Act to amend the Canada Transportation Act (administration, air and railway transportation and arbitration), be read the second time and referred to a committee.
Mr. Denis Blanchette (Louis-Hébert, NDP):
Mr. Speaker, when I had to interrupt my speech, I was talking about the report on the mediation that was unfortunately not successful. We tried to open a dialogue between the clients and the service provider. We were unable to resolve the problem and that is why we have this bill before us today.
CN and CP wanted nothing to do with this bill. But it might be a kind of wake-up call for these two companies. It is a little bill that does not do too much or ask for much and that we would like to see improved. For the rail companies it is a sign that everything is not just fine.
There are things to improve, and these companies will be tasked with improving them. If they do not, other more restrictive bills will be introduced. Even though, depending on the region, they have either a monopoly or a duopoly, they will have to develop a corporate culture based on customer service. They will have to find a balance between profit and customer service, so that customer service is not sacrificed for the sake of profit. That is the message we must get across.
I would now like to talk about the vision of transportation as such. In some respects, this bill manages a crisis. We have let the rot set in and we have waited until the very last moment. Minimal action has been taken. However, it is not our job here in the House of Commons to engage in short-term crisis management. Our job is to stamp out a vision for our country for tomorrow, for the day after tomorrow and for decades to come. Right now, we lack this vision.
I would therefore like to share with you some elements of a vision which has been dubbed, among other things, a national transportation policy. It would be entirely appropriate to address issue. It is my hope that once the bill passes second reading stage and has been referred to a committee, committee members will expand the debate to consider the overall evolution of the rail transportation system.
We live in a global world. We have a phenomenon called the Internet. It allows a supplier to advertise a product on the web and a customer anywhere in the world to buy that product. The logistics of delivering that product is the ensuing challenge. For Canada, a country of wide open spaces, the rail transportation system is absolutely critical to the process of delivering goods.
So then, it is important for us to continue focusing on this issue. However, I want to stress the importance of striking a balance. Much has been said about striking a balance between an industry’s ability to make a fair and reasonable profit and the possibility for captive customers to have a service that meets their needs and allows their business to grow. Such a service would help people stay in their regions and prevent a population exodus. It would be one way to develop resource regions. This matter is extremely important to us.
On the question of balance, we can take it further. We can talk about striking a balance between the transportation of people and freight. Even though there are problems with respect to freight transportation, passenger rail service often takes a back seat to freight transportation. How many times must passenger trains pull over onto a siding to allow a freight train to pass?
It all comes down to a matter of balance. Therefore, we need to examine all of these aspects and put an end to any short-term vision. We need to come up with a plan for a rail infrastructure worthy of the 21st century. This is important.
We are still living with an infrastructure that is a holdover from the 19th century, albeit an infrastructure that helped cement our national unity. Why not take another stab at improving it so that the companies that provide the service as well as the users and citizens can all benefit.
Finally, I want to stress that the main reason we want a national passenger and freight transportation policy in place is to be able to plan and make the right moves at the right time, rather than merely react to situations.
A business owner always looks to get a positive reaction from customers. Right now, there is no positive response and that is why this legislation is before the House.
In conclusion, I will say that this is a step in the right direction, a very small step. Everyone has agreed to support it. In fact, everyone is operating on the principle that a bird in the hand is worth two in the bush. So we are taking this small step today. We hope to improve service to suppliers. We hope the government will accept some of the amendments that will be proposed. Ultimately, we are probably addressing the most glaring part of the problem, but, since there have already been some reports and mediation attempts, and because we at least want to solve certain problems, I believe this requires cooperation by everyone, and especially by the various stakeholders, so that the House has to intervene as little as possible in the development of the railway system. It will be important for citizens, suppliers, customers, the economy and especially for Canada that we resolve that.
Mrs. Djaouida Sellah (Saint-Bruno—Saint-Hubert, NDP):
Mr. Speaker, Bill C-52 amends the Canada Transportation Act to require a railway company, on a shipper’s request, to make the shipper an offer to enter into a contract respecting the manner in which the railway company must fulfill its service obligations to the shipper.
In point of fact, clients of the rail transportation system, like farmers and mining companies, are victims of the near-monopoly held by railway companies: service interruptions, delays and other disruptive situations at Canadian National and Canadian Pacific are harmful to industries such as agriculture, forestry, mining and manufacturing, which do not receive compensation. A large proportion of the goods are intended for export. Poor rail transportation services damage the ability of Canadian exporters to compete on the international marketplace, particularly in terms of agricultural products.
Moreover, a number of shippers have difficulty, not just in getting good service, but in getting any service at all. Shippers complain that they are not able to sign freight contracts with the big railway companies. This situation is detrimental to Canadian exporters. Steps must be taken, especially because right now the trade deficit is very high. I would like to point out that the trade deficit reached $2 billion last November.
Statistics show that 80% of railway clients are dissatisfied with the service they receive. As the situation is one of a quasi-monopoly, it is important that the government take action to ensure that clients are better protected. It is the shippers who have to pick up the pieces if their goods do not arrive on time. This causes huge inconveniences.
When perishables are being shipped, the situation is disastrous, because by the time the goods arrive at their destination, they may be rotten or just not usable. This hinders Canada’s competitive position. For example, Canadian soybean growers are placed at a competitive disadvantage vis-à-vis their Argentinian competitors, not because of the quality of their product, but because of unreliable shipments. The growers should not have to bear the cost of this situation.
Rail transportation of goods is vital in many respects. First of all, since 70% of goods are transported by rail at some point, we need to have an efficient system. Secondly, rail transportation makes it possible to keep trucks off the roads, thereby limiting greenhouse gas emissions that result from the transportation of our goods. By ensuring that a certain number of trucks are not on the roads, we avoid putting additional pressure on our road infrastructures, that do not really need it.
I come from the Montreal area. Like my constituents in my riding of Saint-Bruno—Saint-Hubert, when I use the highways, I can see many trucks, and I can also see the state of the infrastructure, which is underfunded. Therefore, we need a rail transportation system that is efficient and accessible, so that we do not make the situation worse. Moreover, we need investments to restore our existing infrastructure.
Inaction on this issue will be costly for the Canadian economy. The situation cannot continue. Inadequate rail service is costly for Canadian businesses, and it is detrimental to the economy and to the labour market. In 2008, the government set up a panel of experts that studied the issue for three years. Their report was submitted in early 2011.
The government also initiated a mediation process that served only to show that Canadian National and Canadian Pacific lack the will to solve the problem and to provide adequate service to shippers. Although this bill could be improved, it is part of the solution.
Bill C-52 will cover only new service level agreements, not those that already exist. Many shippers will therefore continue to live with unreliable and unfair service, without having any recourse to dispute resolution if violations of existing service agreements occur.
Furthermore, arbitration is only available for shippers who are negotiating new contracts. Instead of providing fast, reliable dispute resolution for all shippers, Bill C-52 is offering a limited arbitration process for a small group of shippers. The proposed arbitration process may be too costly for shippers and require an unfair burden of proof by asking shippers to prove that they need the services of the rail company.
To find a comprehensive solution, we also have to consider the question of rates. While some members of the shipping community wanted to address problems with rates in this legislative process as well, the Conservatives made it clearly known that they will not be examining that aspect before the next legislative review of the Canada Transportation Act, in 2014 and 2015.
Of course we have to tackle the problems associated with service level agreements, but we also have to consider how we can make rail transportation more affordable. We have to tackle the problem in its entirety to ensure that our businesses, some of which are in rural communities, are an important element of the local economy.
The situation affects numerous sectors, such as natural resources, manufacturing, agriculture, forestry products, mining, chemicals and the auto industry. No one is really spared.
It is also important to note that the mining sector is the second largest employer in first nations communities, after the public sector, of course.
Improving rail services for shipping goods from mining companies could have a positive impact on the economic situation of the aboriginal peoples in some regions of the country. The government should be working with first nations leaders to improve their living conditions and the economic circumstances of the aboriginal people. There needs to be a sense of urgency to move quickly on this issue.
I will conclude by saying that it is most important that we not solve problems by halves. We have to tackle the problem in its entirety. I know that Bill C-52 is a small step forward, because this is a crisis.
Mr. Dany Morin (Chicoutimi—Le Fjord, NDP):
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.
|| 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.
|| 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.”
|| 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.
Mr. Matthew Dubé (Chambly—Borduas, NDP):
Mr. Speaker, I am very pleased to speak to Bill C-52 today. The railway, or shipping by rail, is very important in my riding. As I often say in my speeches in this House, the river divides my riding in two, but the railway also does the same thing. This is not just a legacy; it is also a very important economic asset for us.
To begin, I would like to say a little about my experience since 2011 when I was elected, and even before that time, from what I hear from my constituents and other elected representatives in the region, in particular the mayors, concerning relations with CN and CP. This is very important in connection with the subject we are addressing today.
We need to look at the role these companies are called on to play in our communities and see what a key role the railway has played in the history of Quebec and of Canada. In any history course, even at the university level, we still talk about the railway as a core element of our country's collective history. When we look at it that way, there is a duty to work with the various stakeholders. Today, we are talking about the stakeholders that ship various products, in the farming sector in particular.
In my riding, I am in an odd situation when it comes to this subject. On the south shore, Montérégie is located right in the middle between Montreal and the more urban part of the south shore, but also in a somewhat more agricultural and rural area. Let us not forget that there are also farmers in my riding. I can think of neighbouring ridings, like Shefford or Saint-Hyacinthe—Bagot, where there are people in the farming community who use the railway. We can really see how much the railway connects those regions to Montreal, and beyond there to other destinations, including Quebec City, Ottawa, or the other end of the country.
When we consider these facts, we feel we must take action to support our farmers, but we also want to protect the communities living alongside the railways. We therefore need CN to work with us. That is why this bill is important. We are talking about agreements with shippers, but this is also an indication of the need to go beyond that and call on CN to co-operate more on other issues. Those issues all involve the same objective: improving and making better use of the infrastructure we have had for over 100 years now.
Getting back to my previous point, when I was talking about the work I had to do with CN, I have to say that it is not always an easy company to work with, quite frankly. I say that with all due respect because good things have been accomplished. I would not want anyone to think otherwise, and I am definitely ready to work with them. However, the fact that we needed a bill to make CN co-operate on one particular issue shows that the company could do with an attitude adjustment and a little more flexibility given that it has a monopoly or a virtual monopoly on rail services in my region and across Canada.
I have seen this problem on two particular files, including the rail electrification one. This AMT proposal would modernize and improve rail services. It would reduce costs for producers using the services and for public transit users. Yes, it would be expensive in the short term, but in the long term, it would provide economic, environmental and other benefits.
We have had to deal with a lot of problems on this file. CN categorically refused without offering any explanations or agreeing to talk about it. This is another very important aspect of the bill before us today even though it is about a different issue with CN.
As for the other file, I heard a comment on the other side of the House about increasing train traffic. That is interesting, because that is exactly the kind of thing we want to see. That obviously means that the economy is doing well, including the local economy.
However, this increase is combined with the phenomenon of urban sprawl, which we are seeing more and more in Montérégie, particularly on the south shore. People are leaving the Island of Montreal to move to the suburbs, including our region. They are building homes around train stations to be able to use public transportation. II am talking about commuter trains. So these homes are seeing an increase in vibrations.
My riding office in Saint-Basile-le-Grand is in an old train station. It is no longer in use, but, obviously, since it is an old train station, we are close to the tracks and we feel the vibrations. It is not a big deal to us. It does not happen too often when employees work from 8 a.m. to 5 p.m. or 6 p.m., for example. However, I think everyone can agree that it can be more difficult for someone who lives close by.
Speaking about the importance of the railway calls to mind some comments made by one of the mayors in my riding. Gilles Plante, the mayor of MacMasterville, told me as well as CN officials that while he did not want to hinder CN’s work or impede rail traffic, he did hope that a happy medium could be found.
Co-operation with CN on this front is necessary, but not always easy to get. We are still waiting for answers to requests made by citizens regarding rail traffic.
There is a reason why I bring this up and relate these stories of issues that I have been focusing on since being elected to represent my riding. As I have said before, the aim of the bill is to compel CN to negotiate agreements with shippers to prevent the company from unfairly benefiting from the monopoly it holds over our producers, in particular farmers.
If I might digress for a moment, I would especially like to congratulate the member for Trinity—Spadina for her work, for the bill she introduced, which made the minister realize that the time had come to act on this issue.
This bill is seen as a step in the right direction. However, hard work is needed to sustain this momentum. I am hearing from the farmers in my region and I know that some colleagues represent ridings where farming is even more prevalent. The message is always the same when the topic of public transportation or the railway system comes up. They acknowledge that this is a very important industry, one that needs to be modernized.
We lag far behind Europe in this area. Of course I am not saying that everything is wrong. I am sure that a government member is prepared to rise and say that everything is going well. I am not saying that things are going badly, but simply because things are not going badly does not mean that things cannot be greatly improved. This is true of the railway system. Things are going very well back home. People benefit from the service, but much more could be done. If improvements were made to the rail infrastructure, the costs in the short term would be great, but in the long term, as I said, users and shippers could enjoy lower prices.
As far as urban sprawl is concerned, as I said earlier, this is a positive phenomenon. It means that people are settling in our region, that the population is increasing, that more families are moving into the area and that our local economy is thriving. These are things that I am very proud of and very pleased to see. Mainly it drives many of the issues I champion in the House and in my work as a member of Parliament.
However, that makes life tough for farmers because municipal elected officials, regional conferences of elected officials, RCMs, members of the National Assembly and so on all wind up facing the same challenges: finding a way to promote urban sprawl and growth back home, but also ensuring that our farmers still have an environment conducive to their production.
There are a lot of local products in the Richelieu valley, where my constituency is located, and they are the pride of our region. Tourisme Montérégie has done a lot of work, and even in the surrounding areas, in Rougemont near Marieville in my riding or elsewhere, local products are of outstanding quality. People attending the Chambly Bières et Saveurs festival in the summer can enjoy beer—it is very good—as well as superior-quality food products. We want to continue producing those products. They are healthful and good for the economy, and they are also good for our heritage, even though that may seem like a cliché. That, in a way, is our physical and environmental heritage.
The work we are doing with CN is extremely important: we are looking for a way to juggle the reality of modernization with that of agricultural tradition, which is very important in my riding. That is why I am very pleased to support this bill at second reading. It is a step in the right direction, as a number of my colleagues and I have said.
However, I believe that the committee work will be very important, and the work to be done over the next few months and years even more so. As I emphasized earlier, we have to prod CN on other issues as well. We have to demand even more from those people and from all stakeholders involved in railway issues, who will show us the way because we find it hard to move CN on these issues.
I would like to go back to the vibrations issue. This is fundamentally important for this bill because, once again, we are talking about shippers. Freight trains are increasingly long and that is very good. However, we wonder, and we have also put the question to CN, how it is possible to reconcile these two realities. My office is located beside the railway, and I also live near it. Sometimes drivers want to cross the tracks, and it is nearly rush hour and along comes a train transporting freight from elsewhere in Canada. Then they realize that the train is nearly 200 cars long. Sometimes people wait a long time at the stoplight. We realize that some work still has to be done to reconcile this urbanization reality with the fact that these trains have to pass through.
I am not saying that this is not important. I am referring to the situation facing my colleague, the mayor of McMasterville. We want to keep this in our municipalities. We do not want to tear up the railway. It is part of our heritage and we know how much it benefits our communities. No one would ever say otherwise. However, I think we need to do some work on it. This bill urges CN to do something for farmers. We could also urge it to do more for Canadians in the regions.
The railway is such an important part of our heritage. I recall a Knights of Columbus dinner that was held in November. One of the members, Gilbert Desrosiers, who is very well known in my riding, received a painting done by a local artist whose name escapes me at the moment unfortunately. It was a picture of what we, back home, call the black bridge. There is a large CN logo on the bridge. It is hard to miss. Whether you are on the Richelieu highway, on the shore or in a boat on the Richelieu River, you can see this railway bridge. It is practically an institution in our riding. It is part of our heritage.
I say that half-jokingly, but I am also serious. It illustrates people's sense of belonging. We want to make this infrastructure work in our region because we know what a remarkable asset it is.
I know that I am revisiting issues that I have already raised. However, since I have the time, I will again address the issue of the electrification of the rail line. It is very important, and CN’s attitude to this issue poses a problem.
I often have conversations with my colleagues, who are ministers and members of the National Assembly. We all more or less have the same vision as far as objectives for public transportation are concerned. A common vision in the region is a good thing, and helps steer progress.
On the other hand, it is understandable that the AMT has projects and that CN is a source of friction. Indeed, they have differing interests and their situations are not the same. Yet, what has been most disturbing in this issue is the lack of dialogue. When this decision was made, the AMT did not seem to know why; CN simply said that it was too expensive, that that was that, and that it was no longer in the cards.
Had the original developers of the railway, both in Quebec and elsewhere in Canada, said that building the railway was too expensive, little progress would have been made. That is precisely the kind of mentality that CN and CP need to do away with. We do not deal with CN and CP as much back home, but these companies still have a role to play, and some of my colleagues do deal with them. That kind of mentality cannot be allowed. We know that it is expensive. We know that it is an investment. I believe that, in the long term, it is going to help reduce costs and promote the kind of environment that is so important for our farmers.
For example, the closer one gets to the Cities of Richelieu and Chambly—which are in my riding and are adjacent to the municipality of Saint-Jean-sur-Richelieu, in the riding of Saint-Jean—the more railways there are. However, they are mostly outdated and no longer in use. The municipality would really like to use this infrastructure and space. However, CP is dragging its feet, at least I believe that it is CP that is doing so.
All of this to say that when a municipality wants to use infrastructure and cannot do so, it is extremely problematic. When municipalities ask for answers, there needs to be an immediate dialogue. CN and CP have everything to gain by engaging in such a dialogue. It can only help them to do their job.
A CN representative, who I will not name out of respect, told me that if Canadians were to communicate directly with CN and tell them about their problems, CN would be in a better position to respond. However, that might not be so easy since these issues are localized. That is no secret. Residents in the region communicate with their elected representatives. Residents with those kinds of concerns call their mayor, municipal councillor or member of Parliament.
When citizens call elected officials and the elected officials contact CN, I think that this corporation should understand that it is time for action. The fact that it does not come directly from a citizen is no excuse not to act. We are very ready to act.
I appear to be very critical toward CN and CP, but it bears repeating. We understand they have had great success and that they are still successful. However, in certain respects, they must be more open and engage in more dialogue.
This is why I am pleased that this bill was introduced. The government has decided that these corporations must speak and work with people. There are certain standards to be met.
If this is representative of things to come in terms of the railway, in my riding in particular, then I will be quite pleased to continue supporting them and engaging in a dialogue with them.
Mr. Dennis Bevington (Western Arctic, NDP):
Mr. Speaker, I am pleased to rise to discuss the bill, Bill C-52, an act to amend the Canada Transportation Act.
As the previous transport critic for this party during the 2008 to 2011 era, through that time I recognized that there was a great demand across the country for changes that would assist shippers in dealing with the duopoly of the rail system in Canada and the conditions that occurred.
Quite clearly, the concerns were greater among the smaller shippers than among the larger shippers. Therefore, the ones that could command the greatest use of the railway had greater opportunities to strike better deals. The problems lay in a stronger fashion with those that did not have the quantity and the continuity of freighting that would attract the rail systems.
I remember meeting with the pulse association, people who provide agricultural products that are not grain but beans, soy, peas and that measure of agricultural product, which is growing considerably in Canada but in smaller batches in different areas across the country. Their problems with getting their product through the rail system were paramount to them. They said they could not deal with the system as it is right now. The types of producers, the locations of those producers across the country and the nature of the product meant that the rail companies were not attracted to them as customers as much as they were to larger producers.
I will be very interested to see how it will play out across western Canada now with the loss of the single desk for grain, how that will play out with small producers, smaller aggregations of those who are moving grain.
The Conservatives sold the idea of getting rid of the single desk on the basis of enabling grain to be moved to different places by the producers in a fashion that would allow them to value-add to their product. Let us see what happens when this occurs in a system where the need for freight is paramount, where we have to move the product and where farmers are not protected by the larger system that existed under the single desk. We will see what that does and how it works. I am sure the committee will hear representation on that matter as well, as it moves forward.
In looking at the rail system, we have heard a lot of talk about infrastructure. The parliamentary secretary mentioned the great investments that the government has made in the rail system. I would raise, for instance, the investment the government is making in one of the big problems with our rail system, the level crossings. There are some 1,400 level crossings in this country. They are being added to incrementally by municipalities all across the country. The Conservatives identified $27 million a year over five years to invest in level crossings.
When we do the math, that does not turn out to be something that will really solve the problem we have with level crossings. Some level crossings can cost between $30 million and $40 million to fix. These are major requirements in the rail system.
If we take a good look at it, the rail companies are not primarily responsible for what has happened with level crossings. This is a co-operative effort that extends across governments, provincial highway authorities and municipal governments. Everyone has a hand in level crossings. Why does the federal government have to play a role? The federal government can be the final arbitrator there. With the profits rail companies are making, they should be a big part of this as well.
Of course, the government does not collect taxes in a decent fashion from corporations that actually make profits, and cannot reinvest for the public good and the good of those corporations. The chances of the infrastructure issues, that is, of rail being fixed across this country, are very remote if the present spending level of the federal government continues.
I am glad that the NDP has such a strong transport critic today, one who has pushed very hard on these issues.
The service agreement review went through and finished in 2011. Members are now seeing an act in front of Parliament, Bill C-52.
The first part of the bill sets up terms and conditions for contracts for railways and shippers. If a shipper wants to enter into a contract with a rail company, it can describe the traffic to which it relates, the services requested by the shipper in respect to the traffic, and the undertaking the shipper is prepared to give to the rail company with respect to traffic for services. How will one make sure that the rail companies will be well served when their cars arrive? How will all of this fit together?
Contracts, of course, do not apply to written agreements already in place. A company that has already established a written contract with a rail company is not available to deal with this under this legislation. They are locked in.
In the case of many of the larger producers, that may be to their advantage. They do not have to renegotiate anything. The ones that provide a lot of freight movement have a deal set up.
Seeing what is happening in the industry here with the failure of the pipelines that have been proposed for Canada, I would say that we are going to see greater rail traffic carrying oil and gas products across this country. That may change the dynamics of the rail system as well. The larger producers may find themselves competing with other very large producers as well. We will see how that plays out.
The second part of the bill deals with arbitration. Once one has established a contract or is unable to agree on a contract, there is a process of arbitration. That is good because, of course, it is sometimes very difficult to come to agreements.
Small producers in a remote location are looking for the rail company to arrive in a good fashion with the cars. They are going to leave them there. The cars are going to be in good shape. They are going to take the cars away after they have them filled.
There are many variations that have to be examined in a contract between two parties that carry out this kind of work. Is the shipper going to be ready to provide the product to fill all those cars when they are delivered at the site? If they are not, is there some measure of compensation to the company for leaving the cars there longer? If the company does not supply the cars in a good fashion, is there a way to compensate the shipper, who may be backlogged at the receiving area with the other mode of transportation that caused them to bring it to the railway? These are complex, detailed issues that have to be worked out between shippers and the rail company. Of course they will require some arbitration.
What is the hammer that the company keeps under this legislation when it comes to negotiating or dealing with arbitration? Under proposed subsection 169.31(4), the following applies:
|| For greater certainty, neither a rate for the movement of the traffic nor the amount of a charge for that movement or for the provision of incidental services is to be subject to arbitration.
There is the hammer for the company. It can set the rate for the cars sitting in the dock. It can set the rate for the movement of the material out of the area. It can decide the nature of the movement, the volume of the movement taking place, and how cost effective that is with its service charges that fit over top of that. All of those issues are not going to be subject to arbitration.
The company holds a very strong hand there when it comes to exactly what it is going to cost to do the work. Still, the arbitration should take into account the rates. In any business arrangement, the rates are very important. They cannot simply say “We are going to have a service contract, and you do not get to talk about the rates. The only thing you can talk about is what is going to happen”. Those two things have to work together.
The government, by excluding that from arbitration, has given the rail companies a very strong position in Bill C-52. I hope that it will be seen in committee as something that needs to be worked on. There needs to be some work done to make this fairer, more equitable to all of those concerned, especially the small producers across this country who do not have the leverage to make the deals, as was the case even before this bill.
After this bill there should be some leverage for those small companies so they can make sure that services are being provided to them in a good fashion at a reasonable rate. That is what we should be doing in government, being fair to both sides. The basis of government is trying to come up with solutions that work for all parties.
Some of the other concerns here also fit with small companies, the small shippers, such as the degree of difficulty they may have in working in arbitration, the timeframes that are outlined, the process that is outlined, all of which are very complex and very expensive. The costs will have to be borne by the shipper. The cost of the arbitration is to be split equally between the shipper and the rail company in all cases, according to this legislation.
How does that work? If the arbitration is in favour of the small shipper, they still have to pay the piper for the work they have done.
What I would like to see in this is some means of establishing rates and conditions that would apply across the country, so that some kind of equivalency develops among the arbitration systems and that, across the country, what is decided in one place has some relevance to what is going on in another, so that we have some fairness in the system.
I do not see that yet. Perhaps some of my Conservative colleagues who may have some ideas about that may want to express them. I think it is more likely to be taken up in committee, however. This bill needs a lot of work.
What is the record of this majority Conservative government in offering up amendments? I have to say it is abysmal. It is totally abysmal. These people do not believe in amendments. The Conservatives believe that what they put forward is good enough for the country. They are in charge and they know what is right. This is what has happened with almost every single piece of legislation that has gone through the House to date.
Where are the amendments? When I worked in the transport committee, when there was not a Conservative majority, we worked together, we looked at the issues and we came up with solutions that were mutually agreeable. Then we created amendments that we all agreed with.
Transportation is a fundamental and vital service to this country. It is not something that should be dealt with by parties working against each other. I was always very pleased with the previous transport committee chair, the member for Brandon—Souris, who was very fair and understood that transportation was a vital and important part of this country, which needed to be expressed as such.
This bill should be amended. It should be considered very carefully for what it actually accomplishes and what it should accomplish.
Ms. Marie-Claude Morin:
Mr. Speaker, it is slowly happening.
Mr. Royal Galipeau: You are influential.
Ms. Marie-Claude Morin: I am influential, as my colleague opposite stated. I will start again from the very beginning because I lost my concentration somewhat.
As I was saying, transportation is an issue I am interested in and something that is also important in my riding. I will talk about agriculture a little later. I talk about it often because it is important to me and it plays a large role in my riding.
First, it is important to state that my party and I support the bill at second reading. We know that 80% of railway users are dissatisfied with the service provided.
It is important to say that some amendments will have to be made in committee. The bill must be improved so that rail transportation really improves in Canada.
After years of discussions, the Conservatives finally introduced a bill in response to a number of complaints from rail customers that received inferior service from the major railway companies for a very long time.
I would like to go back to the speech by my colleague, the member for Chambly—Borduas. Earlier he referred to the railway as part of Canada's heritage and to the sense of belonging that people attach to the railway in Canada. In my opinion and that of the member for Chambly—Borduas, that makes it more important to invest properly in this mode of transport, a fundamentally important one in a country such as Canada, which is very large and sparsely populated.
It is also important to say that everyone must come out a winner: the railways but also rail transport service customers, such as farmers and mining companies, which are often victims of the railways' virtual monopolies. We are talking about service disruptions, delays and disturbances that hurt the agriculture, forest products, mining and manufacturing sectors, which are not compensated for the losses.
A large portion of those goods is intended for export, which is very important for Canada's economy. Those sectors must be able to rely on effective transport in order to export their goods, not to mention the fact that many goods, as in the agricultural sector, are perishable. Producers therefore cannot afford major delays or service disruptions. Their products must be exported immediately.
Shippers have difficulty obtaining fair, reliable rail transport services. Some are not even able to secure contracts with major railway companies, and those that have contracts often suffer long delays or simply do not have enough cars at their disposal.
This entire situation undermines the ability of Canadian exporters to remain competitive in international markets, particularly agricultural products markets, as I said earlier. Farmers already face numerous uncontrollable challenges. Consider weather issues, for example, such as early frosts, excessive rain or too much sun. Farmers already deal with situations that are not easy to handle. That is the case with all farmers in my riding: we never know what will happen with the harvests, whether we will manage to make it to the end or whether everything will go well. The government thus has some responsibility toward these people, who feed Canada's population, and it must assist them, in particular by guaranteeing that their goods are efficiently transported. That is already a first step.
Following years of discussion, expert panels, an attempt at mediation and consultations with stakeholders, the Conservatives ultimately had no choice but to introduce a bill in late 2012, not very long ago.
One reason this bill was introduced was pressure from the official opposition NDP transportation critic, the member for Trinity—Spadina, who does an excellent job on the transportation file. My colleague presented a private member's bill, the Rail Customer Protection Act. The government then finally moved forward with Bill C-52.
For too many years now, farmers and other business owners have been subjected to bad rail service, and Ottawa has not taken action. Bill C-52 is a step in the right direction, but it is far from being perfect, since it does not include some major demands from shippers. I think that its wording is a bit ambiguous, which could create some loopholes. That will have to be considered in committee.
The committee will also have to consider the stakeholders affected by the problems, so it will have to consult farmers, for example, as well as stakeholders from the forestry and mining industries. That would be worthwhile. As I said earlier, 80% of customers are not satisfied with the services. That is a big number. If I had a business and 80% of my customers were not satisfied, I would be on the brink of bankruptcy.
Canadian shippers deserve fair and reliable service. They also deserve to be protected.
Every year, this situation costs the Canadian economy millions of dollars. We are talking about jobs and about goods that are lost or do not make it to the right place. Every day, many industries have to deal with rotting crops, work interruptions in plants and mines, and missing cargo. This is a real problem. Clearly, it hurts shippers and, as I was saying earlier, it hurts our global competitiveness. It costs us jobs.
The current bill is a bit weak.
I have only one minute left. I always get carried away and I did not even get to half of what I wanted to say. That is okay. I will continue quickly.
I find that the bill is a bit weak. It does not necessarily cover existing contracts. That could be something to look at in committee.
I would like to close by saying that 70% of our goods are shipped by rail. That is a good reason to invest properly in this means of transportation and to protect the shippers who use this service so that they have a fair and reliable way of transporting their goods.
Mr. Fin Donnelly (New Westminster—Coquitlam, NDP):
Mr. Speaker, I rise today not only as the member for New Westminster—Coquitlam and Port Moody but in my capacity as western economic diversification critic for the NDP.
Like my NDP colleagues, I will also be supporting Bill C-52, an act to amend the Canada Transportation Act, to send the bill to committee for further discussion. We do, however, have serious concerns with the bill as my hon. colleagues before me have pointed out, including the member for Trinity—Spadina, who is the NDP transportation critic. She outlined some of those concerns in her speech earlier.
Rail transport is the backbone of the Canadian economy. More than 70% of all surface goods in Canada are shipped by rail, so we can see how critically important it is to get this right. Eighty per cent of service commitments for agricultural rail customers are not met by rail companies because of issues such as delays, insufficient number of rail cars, inefficiencies and unreliable service. The rail freight service review found that 80% of shippers are not satisfied with the services they receive. Eighty per cent is a significant amount. Over three-quarters of all customers have a concern.
I just want to talk about the importance of rail to my riding of New Westminster—Coquitlam. Specifically I am talking about Port Moody where we are celebrating 100 years of history. Just this weekend I was at a book launch hosted by the Port Moody Heritage Society for Tracks in Time. Obviously the title is in reference to trains and the influence that trains have had on the development of our community and on the west coast, and in fact, of all Canada. The rail system is of critical importance to our community. We celebrate the Golden Spike festival in Port Moody every Canada Day. This just points to how important trains are to our community.
Talking about the importance of trains not only to the community but to the rest of my riding, it is important to focus on the efficiency and the service that trains provide to Coquitlam, Port Moody and of course New Westminster. It is important for the economy not only in my riding but in western Canada and indeed all of the country. It is critical that we look at ways to improve train service in this country.
I want to provide a bit of background. I know other colleagues have commented specifically about what the bill would do and would not do and some of its shortcomings.
Rail freight customers from farmers to mining companies are suffering from the virtual monopoly of power of the railway companies. In most parts of the country shippers cannot choose between rail service providers because they only have access to either CN or CP. Even in a few places where both rail companies provide access, one is virtually priced out of the market, leaving the shipper with no real choice. Shippers routinely suffer from service disruptions, delays and various forms of non-performance by CP and CN. Deliveries and pickups are not done on time or skipped completely. Frequently the number of ordered rail cars is not matched by the delivered rail cars and sometimes cars are damaged.
A broad range of industries are affected by the situation, especially agriculture, forestry and mining. In western Canada these industries play a significant part in the economy. Chemical and automotive businesses in the rest of Canada are also affected.
A large portion of these goods are destined for export. Lacklustre rail services are thus hurting Canadian exporters' abilities to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets such as Japan and China because they are delivered faster and more punctual than soybeans from Canada, despite the fact that the total distance covered is significantly shorter for products from Canada. For years shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 a “talk it out and wait” tactic was employed, starting with the promise of an expert review panel.
The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later, in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably, with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician, University of Calgary Chancellor Jim Dinning, failed. Dinning released a report in June 2012.
The Minister of Transport promised government legislation on the topic to be tabled in the fall. Parallel to the end of the mediation process, the member for Trinity—Spadina tabled a private member's bill, Bill C-441, the rail customer protection act, in June 2012. The private member's bill, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise and actually table legislation.
The shipping community is organized in a coalition of rail shippers. The coalition is a loose and rather informal entity. Organizationally this group is attached to the Canadian Industrial Transport Association. The coalition consists of 17 members that represent mining, forestry, agriculture, chemical and manufacturing industries. One of the original 18 members repeatedly has been brought up in the U.S. Senate, both on the floor and in committee without decisive legislation as of yet.
The surface transportation board, a federal body, is working on regulations to address pricing and service issues, while judges have repeatedly supported shippers in court cases. I just wanted to point that out.
What is the NDP are looking for? What can be specific about?
We know farmers and the mining and forestry companies have been hurting for years due to unreliable freight services, without getting any help from Ottawa. To truly address the issue and also to give the NDP leverage in rural areas, the member for Trinity—Spadina has become an advocate for strengthening the shippers' position. She has been very active on this file.
The NDP position is quite simple. We are standing with business and exporters and we are committed to getting them the fair and reliable freight services they deserve. That will have an impact on not only western Canada but on the entire Canadian economy.
The member for Trinity—Spadina has worked on this issue, including forging ties with key industry associations and tabling an NDP bill. One of the goals is to continue to grow those ties with the NDP as the party that stands up for legitimate business interests and pushes back against market power abuses.
While Bill C-52 falls short on a number of stakeholder demands, it is prudent to support the bill as the shipping community is largely content with the legislation. They are also quite desperate to see some legislation address their issues.
The task is now to address the shortcomings and strengthen the bill to the benefit of the shippers and also to promote our involvement with the entire process. That is what we are doing here. We are trying to highlight some of those key issues that need to be worked on at the committee stage.
Bill C-52 will only cover new service agreements, not existing ones. Many shippers will be stuck with unreliable and unfair services, without any conflict resolution process in the case of violations to existing service agreements. Arbitration is only available for shippers that are negotiating new contracts.
Instead of offering quick and reliable help through conflict resolution to shippers, Bill C-52 would give arbitration a narrow scope for a small group of shippers and the outlined arbitration process could end up being too costly for companies like the Canadian Propane Association and others.
I want to finish by letting the House know there are others that support the position we are bringing forward. They are key stakeholders, like agriculture, mining and forestry industry associations, that have been calling for freight legislation for years, for example, Pulse Canada, Grain Growers of Canada, the Forest Product Association of Canada and the Mining Association of Canada.
In conclusion, I want to say that we are in support of it at second reading. The NDP will push for amendments at committee stage to protect shippers from the abuse of market powers through the right to comprehensive service agreements and conflict resolution processes.
Mr. Robert Aubin (Trois-Rivières, NDP):
Mr. Speaker, I must say, I have rather mixed feelings as I begin my speech, because I feel like I have become an expert in the moonwalk, that dance move that makes you look like you are going forward when in fact you are going backwards.
When I first learned of the problems in the area of rail freight transportation, I had the impression, given the response and the private member's bill introduced by my colleague from Trinity—Spadina, that we were moving in the right direction. Today, however, when I see what is in Bill C-52, I really feel like we are taking a step backwards. Nevertheless, there are enough things in this bill that we do agree with for us to support it at second reading. In committee, we will try to make some changes and some significant improvements.
It is important to note that in 1995, there was a re-engineering and modernization movement that led to the privatization of CN and CP. That is no secret. A neo-liberal ideology prevailed over an objective analysis of the facts demonstrating the importance of this service, which is crucial to Canada's economic development. Although railways remain publicly owned in many countries, here in Canada, it was decided to go for broke, and since then, we have seen the privatization of profits and the socialization of costs.
Balance sheets and recent decisions relating to public transportation show beyond a doubt that the return paid to shareholders takes precedence over developing business services and moving goods and people. The reason I refer to moving goods and people is that a choice was made to prioritize shipping goods over carrying people, something else that is uniquely Canadian. Canada is one of the rare countries to have made that kind of choice.
I will leave it to my colleagues to imagine the passenger transportation challenges that await us in the years to come given that the coalition of private shippers has been complaining for years about the poor quality of the services they receive, and they are the priority clients.
Rail shipping is the backbone of the Canadian economy. Over 70% of all goods shipped by land go by train. The reason is relatively easy to understand: you do not need a university degree in geography to see that in our country, rail shipping is often bulk, and it would be difficult to replace it with shipping by truck. And shipping by boat, which is sometimes more economical than by train, is not available everywhere, for fairly obvious reasons.
Canada was built by the train, and the railway is a vital link between communities in an enormous country. So we might be surprised at the present state and poor quality of rail shipping services. The Conservative government is not the only one responsible for this situation, but it is guilty of not tackling the problem head on in time to rectify this situation.
Day in and day out, the Conservative government claims to be working for the Canadian economy, but everywhere in the country, businesses are suffering from unreliable service, the result of which is hundreds of millions of dollars in economic losses every year. In addition, poor service leads to higher prices for some goods, chemical fertilizers being one example.
To put it more simply, over 80% of rail shipping services customers are not satisfied with the services provided by rail carriers—in other words, nearly everyone. This is 80% of loyal customers. MPs may have experienced this themselves, as customers of a store or a business. They may have started by getting excellent offers so they would become customers, but as soon as they became regular customers, they were taken for granted. And then their relationship gradually deteriorated and all the benefits were offered to new customers to expand the customer base.
That is something we see in Bill C-52, when it says that agreements governed by the new law will be made only with new customers, new contracts. And so anyone who has been using the services for years, and who is a long-standing loyal customer—if we can talk about loyalty in the case of a virtual monopoly—will not have access to the same rules that Bill C-52 seeks to put in place.
Clearly, there is room for improvement. We could make these improvements in committee if the government would be open enough to come to the table and participate in meaningful discussions and listen to the best suggestions to get the best bill possible.
I would like to come back to the fact that 80% of customers are dissatisfied. Something had to be done and something still urgently needs to be done, but the Conservatives clearly have not done anything because this matter has been dragging on not just for weeks and months but for years.
Why have the Conservatives taken so long to do something? Here is what I think may be happening.
First, rail freight customers are often farmers or mining companies. These customers have to deal with large railways that have a virtual monopoly over rail transport. I spoke about this earlier.
In most regions of the country, shippers cannot choose a rail transportation company because they have access to only one or the other. Even in cases where the two railway companies are present, the competition struggles to play the role it should and to influence the basic economic principle of supply and demand.
Why do we now have to legislate? Why can the stakeholders not come to an agreement among themselves? In all likelihood, CN and CP benefit from the tacit support of the Conservative government and, in that context, they are not at all prepared to make real concessions.
The result, as has been mentioned, is that 80% of rail freight customers—shippers—are not satisfied with rail freight service. So, of course, they have asked the government to take action and to introduce legislation that would require CN and CP to reach agreements on the level of service provided to shippers. After years of empty words, the Conservatives are now being forced to act as a result of pressure from the shipping community and the NDP.
Under duress, the Conservatives finally introduced a bill designed to solve some of these problems after the NDP critic's bill was introduced last spring. That bill, which was entitled the Rail Customer Protection Act, was much clearer and covered all customers.
The government is using half-measures. Quite frankly, although the Conservatives' bill is a step forward, it is a weak step. Here are some reasons: the protective measures do not cover existing contracts between shippers and rail transport companies; the bill offers only a limited arbitration process for unsuccessful negotiations of new contracts; the arbitration is available only for shippers who are negotiating new contracts instead of providing fast and reliable help for all shippers; Bill C-52 will cover only new service level agreements, not those that already exist.
Furthermore, the fines mentioned in Bill C-52 would go to the government and not the shippers. We could talk all night about the amount of these fines, which seem a bit weak to me for such big companies. The ability to interact, discuss and negotiate is undermined when the fines go into the government's pocket, which supports what I was saying earlier that, rightly or wrongly, CN and CP probably feel like the Conservative government is in their corner.
I will move on from what is missing from the bill, since I am running out of time. I will no doubt have an opportunity to speak more to this in committee. I have a short conclusion.
Rail transport is not the only file on which the Conservatives have been dragging their feet. They implemented new railway safety measures. They made cuts to VIA Rail Canada and prevented the introduction of high-speed rail in Canada.
The Conservatives simply do not give Canada's rail network the attention it deserves.
Ms. Alexandrine Latendresse (Louis-Saint-Laurent, NDP):
Mr. Speaker, I am here today to speak to Bill C-52, which would amend rail transportation legislation.
It really surprised me that I could find something to be angry about in a rail transportation bill. Perhaps "angry" is a bit strong. Exasperated may be a better word.
What could I find so exasperating in an attempt to provide recourse for unsatisfied users of rail shipping services? It is very simple. It is as though the government is pretending to fix the problem to give the illusion that it is taking action. Members will notice that I said "exasperating" and not "surprising", since this is becoming a trend.
Bill C-52 is another example of the Conservative government's chronic mismanagement. Rail transportation fuels Canada's economy. Of all the countries in the world, Canada is one that was built by the railway. The railway was behind every aspect of our growth.
The quality of rail infrastructure still has a direct impact on Canada's entire economy today. This is not news to the government; it knows that.
Usually, the Conservative government—as patriotic as ever—would defend our businesses' access to the rail system. Nearly 150 years ago, at the start of our Confederation's growth, it was the country's lifeblood. It was an almost heroic era when Canada dreamt of defying the world.
That was the 19th century. While the situation is quite different today, it is easy to explain. Rail companies are extremely prosperous and make ridiculous profits. And that is understandable because without them, Canada would be paralyzed and would have almost no economy.
A crucial detail that I should point out, even though it may be useless to do so, is that there are only two rail companies in Canada. The minister spoke of a “duopoly” when describing the situation, and that was fine in the first hour of discussion. But I do not like that term because “duo” means “together”, not just “two”. And that is the crux of the issue.
The ridiculous profits I mentioned keep piling up. Let us face it, there really is no competition. These two companies share all of Canada's rail transportation business and more, and they always have. These are two major, historic Canadian companies, if we can still call them Canadian now that they have been privatized.
That is the government's only motivation: do not upset the large corporations that are raking in huge profits. If any disputes arise between those companies and the small shippers, let us give the companies the power to shut them up quickly. Some would even say with nickels and dimes.
One might speak out and say that it is counter productive, that it is irrational to do that. Yes, that is true, but this would be forgetting that, first and foremost, these people, the government and the railway companies, know each other and talk to one another. These people are perhaps not exactly in collusion, but they definitely share certain sympathies. Yes, they are sympathetic to one another.
In addition, in the intellectual shackles of puritanism, which is the basis of the entire Conservative approach, it is clear that the fittest gets his power directly from God and must not be opposed. Success comes from God almighty. Put that all together and there you have the inspiration for Bill C-52 and for everything else, of course.
Here is what bothers me about the result, Bill C-52. I already know how the Conservatives will respond: “The economic recovery is too fragile. We must not make any waves. We have to ensure that we have everything going for us. We cannot do anything to compromise the railways' efficiency, not for the measly crumbs, not for a company worth, at worst, $100,000.”
After all, we are not reinventing ourselves. These people are not likely to engage in such deep reflection now in the middle of February.
This is the same old story. After dragging its feet for so long, now the government is stubbornly defending a characteristically weak and contemptuous bill. Let us rename it: Bill C-52, an act that says that railway companies can break any contract they like for $100,000, and be done with it. What a bargain.
Rail lines are real structures that result in exchanges and economic benefits that are just as real. There is a direct impact at all levels of economic life. If remote shippers can no longer rely on the two national companies, they might not exist at all. If shippers are neglected, they and their communities are not being allowed to participate in the country's development.
All paths starting on the margins lead to the centre. Coming from a government that claims it will leave no stone unturned to achieve prosperity, it is rather strange. For people who take every opportunity to proclaim to the world that supporting the right is the best way to ensure the well-being of business, it is more than revealing.
Is that the Conservative government's great recovery plan for outlying regions? Yes, undoubtedly. Bill C-52 is striking proof. Develop resources, process them, but do not try to sell them because all the railway cars are taken. This is more proof that there is no plan and that this will have to wait, again. However, be happy, there are a lot of people lined up to talk to the government and you can chat with them. There is the manufacturing sector, my entire generation and all aboriginal peoples of Canada. You will surely find something to talk about to pass the time.
I would like to acknowledge the work my colleague from Trinity—Spadina has done on the issue before us today. I say "colleague" because that is how we refer to each other here, even though I would prefer to use a word that better represents the respect I have for her. She not only wants to do everything, she can do everything. If the official opposition transport critic says that she has met with all of the stakeholders, it means that she has met with all of the stakeholders, even the ones who were hiding. And if she says that a clear majority does not like anything in this bill, it means that there is damning and incontrovertible evidence.
The government can pull all kinds of adjectives out of the Oxford English Dictionary to defend itself, evade the issue and have us believe it worked very hard to restore balance, but no one is listening. That is what I find so exasperating. I hope I am being clear. I find the gaps in logic between what this government claims it is doing and what it is actually doing appalling. The urgent need to fix the problems with the rail companies was a perfect opportunity for the overconfident Conservative government to show that it could do its job. And what happens? It is the first to jump into bed with the rail companies. Nothing gets in the way of love, not even having the lights out.
When Canada has a problem, it would make sense to look elsewhere to see if other countries have found solutions, not to copy them, but to at least draw some inspiration from them. We do not live in a vacuum. And I mean that in a geographic sense, because intellectually speaking, it is obvious that the other side has sucked people in with their empty rhetoric.
Over the past 50 or so years in Canada, the concern that we used to have for our rail system has all but faded. When passenger rail travel became less common, trains and the incredible rail system that stretches like fingers across the country no longer captured our imagination as they once did. The superhuman effort that rallied half a continent quickly died. Yet trains in Europe are flourishing. How often have I heard Quebeckers talk about travelling in Europe and how astounded they were by the quality of rail infrastructure in the European Union?
The pride that you feel is overwhelming when you arrive at Berlin's central station and see “Bombardier” in huge, white letters in the middle of the large window. But you quickly see the unbelievable difference between the European trains that Bombardier builds and the antiquated trains we have here because there is no political will.
The European Union will stop at nothing to ensure that its rail system, which is a huge tangled web of railways that it inherited from the national systems of 27—soon to be 28—countries, is the most competitive in the world. Europe understands our own historical example better than we do ourselves. Without an outstanding, competitive rail system, our country would almost not exist. Bill C-52 may look like a simple legal adjustment concerning a situation that the public can quietly neglect. In fact, quite the opposite is true: it is the government that is neglecting it. When blood flow is cut off to an organ, it dries up and dies. And nolens volens, the rest of the organism will die along with it. That may be a somewhat silly and dramatic image, but it is fair to a certain extent.
In closing, a country is like a house and Canada is like a house built on a beautiful, huge plot of land. It is a land of dreams. We can build little out buildings, create gardens and build a chicken coop. The house itself, which is already huge, could easily be improved, since we have the wood and the carpenters needed to do so. When the NDP has the last word in the affairs of the house, we will work hard to make this house, which we all share, more comfortable, more manageable and even more beautiful. We will add new rooms for children and grandparents, as well as a library and bicycle storage.
For years the Liberals spent their time changing the carpets and arguing about what to call the house, and the Conservatives boarded up the windows because it was too drafty and heating is too expensive. You have to spend money to make money. The right-wing faction should understand that.
The Conservatives need to create jobs in rail transportation instead of allowing themselves to be wooed by the rail companies who have everything to gain by seducing them. In any case, that has already happened, and here is the result of their six years of efforts: Bill C-52.
Ms. Irene Mathyssen (London—Fanshawe, NDP):
Mr. Speaker, rail freight customers, from farmers to mining companies, are suffering because railway companies have a virtual monopoly when it comes to the vital rail lines that Canadians need to get goods to market.
In most parts of the country shippers cannot choose between rail services because they only have access to either CN or CP. Even in the few places where both rail companies provide access, one is usually priced out of the market, leaving the shipper with no real choice.
Shippers routinely suffer from service disruptions, delays and experience all kinds of examples of non-reliable performance by CN and CP. Deliveries and pickups are not done on time or are skipped completely. Frequently the number of ordered railcars is not matched by the delivered number of railcars and sometimes cars are badly damaged.
When a shipper contracts a specific number of railcars, that shipper needs to know those cars will be available. Anything other than this kind of reliability is bad business and bad management. Unfortunately, we know that 80% of the service commitments for agricultural rail customers are not met by rail companies.
After years of talking, the Conservatives have finally tabled legislation to address a number of key rail freight customer grievances after years of inferior service by the big rail companies. Bill C-52 is a step forward, but is far from a perfect solution.
Key demands from the shipping community have, quite simply, not been addressed. Bill C-52 would also create loopholes because of its ambiguous language. The Conservative language is weak. Its protective measures do not cover existing contracts between shippers and rail companies and offers only a narrow, costly arbitration process for failed negotiations for new contracts. Key demands like the shippers' call to include penalties for rail companies in service agreements, performance standards and an easily accessible conflict resolution process were ignored.
While NDP members will support this legislation, we will also push for amendments at the committee stage to protect shippers from the abuse of market power through the right to comprehensive service agreements and conflict resolution processes.
Rail transport is the backbone of Canada's economy, with 70% of all surface goods shipped by rail. It is crucial to make rail freight services work for both rail companies and shippers. We cannot take the importance of the railroad for granted.
It is also critical to note that current pricing for rail freight services is also damaging Canada's shippers. Bill C-52 explicitly excludes pricing, despite the calls from all parts of the shipping community to address the pricing regime. This has a significant impact on Canada's trade deficit, which is, by the way, ballooning. It reached almost $2 billion in November alone. We cannot afford to lose even more ground when it comes to global competitiveness for Canada's products.
A broad range of industries are affected by the situation created by the virtual monopoly of current rail service providers. I have already mentioned agriculture, but we must not forget other key industries like forestry and mining as well as chemical and automotive businesses. Many of the goods produced by these industries are destined for export.
Lacklustre rail services are hurting Canada's exporters' ability to compete in global markets. For example, soybeans from Argentina enjoy a competitive advantage in markets like Japan and China because they are delivered faster and more punctually than soybeans from Canada, despite the fact that the total distance that needs to be covered is significantly shorter for products from Canada.
Rail freight is not only central to Canada's economy; we also need strong rail freight services to take trucks off the road and tackle greenhouse gas emissions. While the overall share of surface transport for goods remains high for rail, frustrated companies switch to trucking where possible and the environment loses.
Rail freight is only one aspect where the Conservatives are slow to act. From new rail safety measures to cuts at VIA Rail and blocking the introduction of high-speed rail in Canada, Conservatives do not give Canada's rail network the attention it deserves.
The bill has taken a long time to come to the House. For years, shippers have been unhappy but no concrete action was taken by the Conservatives. Since 2007 they employed a talk it out and wait tactic, starting with the promise of an expert panel review.
The rail freight service review started in 2008. The independent panel tabled its final report in early 2011. Half a year later in the fall of 2011, the Conservatives initiated a mediation process that did not yield any results. Presumably with the tacit backing from the Conservative government, CN and CP were unwilling to make any meaningful concessions. The mediation process, led by retired Conservative politician and University of Calgary chancellor Jim Dinning, failed. Dinning released his report in June 2012 and the Minister of Transport promised government legislation on the topic to be tabled in the fall.
Parallel to the end of the mediation process, fortunately, the member for Trinity—Spadina tabled private member's Bill C-441, the rail customer protection act, in June 2012. The private member's bill by the member for Trinity—Spadina, coupled with advocacy work from the shipping community, put pressure on the minister to follow up on his promise to actually table legislation. However, CN undertook a massive lobbying effort last year, first to prevent any effective bill, then to have it watered down. Dozens of documented visits to government offices and a media campaign show the determination of CN to keep the status quo.
Rail customers have banded together now and are organized in the Coalition of Rail Shippers. The coalition is a loose and informal entity, but it wants something positive for its industry. It wants something positive for the people who produce the goods, who create the wealth in this country, the men and women who do the work to make this country tick and be productive.
Shippers are having a hard time getting fair and reliable freight service, and that is simply unacceptable. We can and should do better for those that rely on our rail system. Our manufacturers, farmers and resource industries depend on our rail system. If rail were made more fair and affordable, consumers would also see an advantage.
This is a country that emerged as a strong, independent nation because of the accessibility of our railways. Let us not abandon those who would continue to build our Canada.