:
Thank you for allowing us the opportunity to appear jointly before you today.
With me is Mr. Gary McNeil, executive director of GO Transit in Toronto; and Mr. Raynald Bélanger, the vice-president of commuter trains for Agence métropolitaine de transport. I am Doug Kelsey, president and chief executive officer of West Coast Express and SkyTrain in Vancouver. Together we represent Canada's three largest commuter rail operations.
To provide you with some background, our combined operations carry more than 125 million rides per year and represent more than $4 billion in combined public assets. The areas we represent serve approximately 30% of Canada's population. Canada's commuter rail authorities wish to make Canada's communities more livable.
As part of that, we believe we are an essential part of the solution to gridlock, greenhouse gases, and smog in Canada's urban centres. But to do more as governmental service providers, and to do more to help Canada meet its environmental goals, we require a long-term policy solution based on the principles of better and fairer urban corridor access and services for Canada's urban passenger rail authorities, at competitive rates, and based on reasonable contributions above the host railway's cost structure.
Our decision to make a joint submission to you today is the direct result of our shared interests, challenges, and points of view, as well as our dedication to serve the same ridership base as yours--the taxpaying public.
In our past submissions to the Canadian Transportation Act review commission and to this committee, we outlined the benefits of urban commuter rail service and voiced our concerns on a number of serious issues affecting our operations. We are very pleased to see that these concerns have been reflected in Bill , particularly the ability to gain access to the lines of federally regulated railways by means of the dispute resolution mechanism under proposed section 152.1 of the bill. Second is the ability to have the agency determine the amount to be paid to the host railway for such access under proposed section 152.2 of the bill, should commercial negotiations not prevail successfully. There's also the ability of urban transit authorities such as AMT, GO, and West Coast Express to purchase a railway line or corridor offered for sale at net salvage value under proposed section 145.
Under access for commuter rail organizations, proposed section 152.1 addresses a major concern experienced by commuter rail authorities--our inability to gain access to the lines of federally regulated railways under the Canadian Transportation Act as it now stands. Shippers who may feel they have inadequate service have recourse under the servicer provisions of the Canadian Transportation Act. Commuter rail authorities do not have that same protection because we don't currently have the right to access. Under the proposed section 152.1, if the service being provided to a commuter rail operator is inadequate due to the inability to gain access to the federally regulated railways line, that operator may apply to the agency for specific relief.
It's unfortunate that the environment in which commuter rail service providers operate can be highly impacted by host railways. We can face unreasonably high rates, restrictive covenant provisions, and in some cases controls over the actual service specifications of our rail operations, while at the same time not being properly credited for the extensive taxpayer-funded capital that commuter rail operations provide to the host railways.
These significant contributions benefit both the railways' asset bases and the movement of freight traffic. This has been an ongoing concern recognized recently by the government in two bills that have unfortunately died on the order paper, , and Bill C-44. The concerns have a long history.
Some of you actually may recall that an attempt to provide commuter rail operators with some legislative protection failed some 20 years ago, back in 1986, when Bill C-97 also died on the order table. It is our hope that the outcome will be different this time around and that we will be provided with the protection necessary to allow for future access, for future expansion, and for the viability of commuter rail operations in the metropolitan communities and regions that we serve. Without these protections, our ability to support the livability and mobility of our national and regional goals will be severely limited.
In the past, the railways have advocated setting costs for arrangements with commuter rail operators based on “supply-demand” pricing for commercial negotiations. This approach can have an adverse effect for industry, because there's often no other competition or, in most cases, what is termed no effective competition or true comparatives for similar types of service.
Commuter rail is a unique service, with supply driven by corridor, not price. The current rate structure offered to commuter rail operators reflects a clear example of pricing in an environment of no competition. The economies, in some instances, are so unfortunately unfavourable that, despite public demand for services, expansion may be financially prohibitive where the commercial negotiating environment allows for no equality or checks and balances that ensure a level playing field for establishing rates and services.
However, proposed section 152.2 of the bill would prevent such high rates from being charged. Specifically, proposed subsection 152.2(2) lays out a number of factors that should be considered by the agency in determining a rate for the use of railways, land, equipment, facilities, or services. Of particular assistance to commuter rail operators is proposed paragraph 152.2(2)(b), which stipulates that a railway company's cost of capital is to be determined by a rate that is set by the agency and applied to the important net book value of the assets to be used by the public passenger service provider, minus any amount paid by the commuter rail operator in respect of those assets.
The net book value of the asset is the original cost of the asset to the railway, less depreciation. This method of determination of the cost of capital reflects the real cost that the railway incurred to purchase the asset that is being used by the commuter rail operator.
It is only reasonable and fair that the prices being charged for such use reflect the actual cost paid for the asset. Higher costs incurred by the railway to replace assets can be passed on to the commuter rail operators once the asset has been purchased. The cost of upgrades is also a factor for consideration by the agency in proposed paragraph 152.2(2)(c). Hence, there is no need to use another valuation method such as what is referred to as replacement value. Being charged excessive prices for access to operating services and infrastructure places an excessive cost burden on the Canadian commuter rail industry and the taxpayers we all serve. We are confident that proposed changes to the act will address many of our concerns in relation to service and pricing in the future.
In terms of rail line transfer and discontinuance, clause 39 of Bill proposes a change to section 145 of the act by including urban transit authorities in the list of entities to whom a rail line must be offered for sale at net salvage in the process to abandon a line. This change reflects the real possibility that a commuter rail service may be provided on a line that a railway company wants to abandon because the line is no longer used for freight traffic. Allowing an urban transit authority to purchase the line for net salvage value reflects the fact that commuter rail service is a beneficial public transportation service. It also reflects the reality, faced by many urban transit authorities, of tight operating budgets within which to provide the services we do provide.
In conclusion, we point out that the provisions of Bill , when enacted, will not cause moneys to be spent from the federal treasury. The provisions of the bill contemplate the payment of fairer rates by commuter rail operators and reasonable contributions over the railway's costs. The only change to the system is that commuter rail authorities will have the right of access, a right that will level the playing field and create much-needed opportunities for commuter rail to benefit the livability of our urban centres, the economy and the environment, all for the greater good of the taxpayer and the numerous federal ministries that will benefit from the passage of this bill.
Mr. Chair, I thank you again for allowing us the opportunity to appear jointly before you today. This will conclude our formal remarks, and we'd be pleased to answer any questions that you may have.
:
So the context is a difficult one. For example, when the draft revision of the act was done, the arrangement we had with Transport Canada was that CN would allow the department to have access to the contracts so that it could examine them and form an opinion about them.
However, perhaps I can give you some examples of new projects, regarding railway infrastructure costs, for example. Those are examples of operating costs because the operating contracts are technically confidential.
With respect to railway investments, I also have to be careful because that could also be interpreted as being confidential, but the project is currently under way.
I can give you the example of the construction of a two-mile section of railway line. We have examples that confirm that, under the worst-case scenario, that could cost between $2.5 million and $3 million, and we estimate it will cost $6 million.
As you can see, it's difficult. We don't have access to the details; we're operating in that dynamic. Whether it be for a $5 investment or a $10 million investment, you have to fight the same fight every time in order to try to find reasons to justify the cost, particularly when you build on a railway right of way.
:
The first thing is, if it did not happen, I think we'd all be extremely disappointed, to say the least, having spent literally years trying to get this through. In the case of West Coast Express, there would be no expansion considered when our number one complaint from our customers is they want more service.
The timing is also very important because these are not short-term projects. You have to work on these literally for years in the planning stage. The business cycle to actually put a new service in can take a lot of time, particularly with the capital. We also have to compete internally for the value of what we do. If it does not happen, our cost structure will be far higher than what potentially could be considered...to perhaps not even consider expansion.
In our case, if you look at abandonment, you look at costs. In the case of the Arbutus corridor, I think the railway was looking for $100 million. I think it was well profiled across the country, and it's a very strategic corridor. Part of this is also the strategy of long-term planning and protecting these corridors, and making sure that urban transit authorities get to put their oar in the water, if you will, about commitments and the long-term plans. If it's still unknown and the rules of the game are not known, they can get lost. We saw that with the Arbutus corridor case, which ultimately ended in the Supreme Court of this country.
You could be looking at somewhere between a difference of what a railway might see on Arbutus corridor, of $100 million, which I think was the advertised price...whereas somebody else might see half of that. The debt servicing on that is about $5 million a year just for the capital portion, let alone the operating cost structure. As other people look at other corridors--ultimately, in this case, the Canada line was put down--those get lost in the comparative, because people elect to move on in their conversation.
Part of this legislation will cost us in operating. I would estimate even some of our track rates, as our contracts expire, could go down as much as 80% plus, which is extremely significant in what our operating cost and our viability will start to look like. What's really important here is that the railways still make a reasonable return. It's critical they do, because if not, capital dries up and moves elsewhere. They have to be protected so that there's a reasonable return.
I think the challenge is, what is reasonable? Without checks and balances through legislation such as this, then you have to negotiate with a monopoly. Can there be negotiation with a monopoly? Yes, but it's defining what is reasonable in negotiations. If you look at the average contribution of a railway in this country, they're making something less than 30%. We are in the three to four digits in some cases, historically. There's a significant impact by not putting this in place quickly so we can get on with our long-term planning to serve the customer.
:
I'll try to be as brief as I can on a multi-year journey.
I used to work at Rocky Mountain Railtours as vice-president of operations. Having negotiated track rate contracts with VIA Rail, CN, and CP, I had seen some agreements before. Without getting into any details, when I first arrived it seemed just excessively high. I had limited experience in it, frankly.
Our contracting is very important, but what contracts are we talking about? The first one was a crewing agreement, so it expired in the first five years. We renewed it. I would applaud Canadian Pacific for being very responsible. We got some significant reductions out of it, and we signed up that contract. It made sense, and it was reasonable for both parties.
In the case of the operating of the track rate agreement, it was very evident to me that it was excessive in terms of rates. If you used a typical long-run variable costing type of calculation, which is a fairly standard type of calculation, you were looking at a four-digit type of long-run variable cost or margin of contribution. The rates were extremely high. But if you compare them to the same type of calculation, using the same methodology, for other types of what the railways' average contribution is--as I said, they're less than 30%--using the same methodology, I got 30%, with something that has quite a number of digits added on to it.
As for the process we went through, we really tried to negotiate first, on multiple occasions. In fairness to the railway, there was a 20-year agreement in place, so why would they want to make the change? What I ultimately had to do was work to create the willingness not to go back and be retroactive, because that's not appropriate, but to correct a pricing change, as most people who have been in business have had to make pricing changes.
Pricing changes are not uncommon in business on a regular basis if something's out of whack. I have done them. I used to work in a multinational organization, and they're very common. You don't have to change the contract, you just change what is called the price sheet at the back.
So over quite a long period of time, I attempted to do it through an appropriate commercial negotiation, if that could happen. Of course it couldn't happen, so I then elected to go to the Greater Vancouver Regional District board of directors in camera and the TransLink board of directors in camera. I reviewed this with them all. It was a very emotional meeting, frankly, and there was great anger once they saw what the real economics looked like. I wasn't able to share it with anybody, because that was actually one of the challenges.
I was even requested to do an editorial board review with The Vancouver Sun and The Province. I couldn't tell them anything, let alone the Minister of Transport at the time, Minister Collenette, because it had confidentiality attached to it.
So I basically met with every mayor in the whole Lower Mainland, and basically every mayor and every regional authority signed up support for trying to make a correction to this. It was exhaustive and it was challenging. Each step along the way, I communicated to the railway in question what I was going to do, in hopes that I wouldn't have to do it. I proactively communicated, saying I didn't want to do this but was going to do it if we couldn't get together.
Ultimately it came down to excessive public pressure, and it was tied into some other things strategically. At the time, I thought we had a very unique, never to happen again window, with the sale of BC Rail that was going to go on, along with some other interests that they had beyond, frankly, a relatively small commuter rail operation. I had to strategically tie in to all of those leverage points.
Ultimately it ended up with the chief executive officer and president of CP Rail having to come in, and I applaud him. Rob Ritchie, who is now retired, deserves a tremendous amount of credit for starting to put a dent into getting to the right thing. Are we there today, where we need to be? Absolutely not, but I do applaud the CEO for making an appropriate acknowledgement.
:
That's a very good question, and I probably have two comments.
One is that we are very much interested in the goods and passenger movement solution--for all our respective regions. It's how you balance both, not that one is more important than the other. If we can't get the people to work on the commercial movement it doesn't help a lot, and vice versa for the goods movement.
Have we negotiated? The answer was no. As I said previously, West Coast Express will not expand until such time as we see this legislation. We have not even entertained conversation with the railway, because we know what the discussion will look like. Once we have this tool, we will then start what we hope is a new definition of commercial relationships, with more checks and balances.
To the second part of the question in terms of how you balance goods movement on a track that's perceived to be busy--I use the word “perceived”--in the case of West Coast Express, I think this is where this legislation is really crucial. West Coast Express and, I'm sure, GO and AMT have all brought significant capital to the table. That benefits the goods movement beyond when we don't even run. For example, in West Coast Express's case, I actually retained the ex-CEO for BC Rail to give me some advice about our Mission-to-Vancouver corridor. He's also the ex-general manager for Canadian Pacific Railway who was actually involved in the start-up of West Coast Express. So I had a pretty good idea of what our circumstances would look like.
We found, with the $64 million of upgrades, putting in centralized train control systems--we double-tracked a significant portion of it and increased a lot of crossings, which brings a lot of very important strategic flexibility--in fact, we actually brought more capacity over a seven-day period than we consume. That benefits the goods movement. We don't run on the weekends. We'll do freight railways, and the goods movement gets the benefit from that. We only use one track; most of it is two tracks. Goods movement gets the benefit. When you put in centralized train control, you fundamentally get a step change in capacity versus a manual type of train movement. Just the capital alone brought us capacity far beyond what we consumed. That would be allowed to be contemplated in the future as part of this legislation.
:
Thank you for being here with our committee. I'd like to add to the answers Mr. Bélanger provided earlier, in view of the fact that these facilities, particularly in the Montreal region, are of great concern to us.
As regards sidings, which the bill addresses in clause 42, or proposed section 146.2, it seems to me this is quite weak on the matter of making lines available. It states that “a railway company shall prepare and keep up to date a list of its sidings and spurs that it plans to dismantle.”
You contended earlier that you had even identified one railway line that could be of use to you, but that is not on the list of available lines. I'd like to hear you say more on the subject.
I would also like you to make me a recommendation as to what we could add, that the railway company should determine the availability of certain lines. Even if they aren't to be entirely dismantled, the company could keep an up-to-date list of available lines.
That would be important, if we want to think about development. I'll leave you with that.
:
In fact, we have to be consistent. The bill gives citizens an arbitrator, which is the Canadian Transportation Agency. As regards noise, the Canadian Transportation Agency is now responsible for deciding these matters.
We can deal with that and agree with people to find solutions. Moreover, I can give you a host of examples on this subject. This kind of disturbance mainly arises when you introduce a new service.
In overall terms, passenger trains are much less noisy than freight trains or than cars moving around switching yards. When a two-mile long freight train passes by, it generally makes a lot of noise.
With regard to our railway operations, we have locomotives that are not very noisy. These are trains that have 10 cars and therefore pass by quickly. The train passes a level crossing in 10 seconds, so that you don't hear it any more.
So we realize that, with time, people learn to live with the noise. Often, when we establish measures, we realize that the environment produces more decibels than the train. We see that often, particularly in the Montreal region, where there are a lot of highways. People are used to the ambient noise of highways. When we measure sound or noise levels, we realize that the highway often makes more noise than we do.
:
Be careful with your answer, because it could get you in trouble.
There are other cities, too, that are looking at transit of this nature.
This is probably off topic a bit, but when we have the three gentlemen here representing the three largest groups in our country, it might worthwhile to pose this question.
We have a lot of competition around the world in terms of who's providing the construction and the methods and who's actually doing the work and getting the contracts. Here in Ottawa we see that it will possibly be a company located in Germany. Some people in our country say that these contracts should have special initiatives that would support Canadian industry.
In your experience, in terms of already negotiating some of these contracts—we have the World Trade Organization, we have NAFTA—some countries give a little edge to their homegrown industries and build certain components into the contracts to ensure their own technology and some of their own innovation will be part of that new construction. Could any of you give a little information to the committee on the parameters under which you have to work in terms of offering a contract to the world? Companies from Spain, Germany, and probably from even China eventually will be competing for these, but we want to support Canadian industries and would like to see them more involved. I don't mean only Bombardier. There are others, too, that are making railway cars.
What parameters restrict better involvement by Canadian companies in competing for these contracts for mass transit?
Mr. McNeil has had the most recent experience, I would think.
:
The only comments I might add would be that philosophically—and I think a lot of it is philosophically based—the taxpayer expects us to pursue value, and value can manifest itself in a whole bunch of different ways.
We have suppliers. I not only run West Coast Express, I also run SkyTrain. That carries about 70 million people a year. There are certain elements that we can't get here in Canada, technologically speaking, because there are no drivers on the system. It's fully automated. We work with suppliers all around the world. We do encourage Canadian involvement on some, so we meet with suppliers and have annual supplier sessions. We ask if they have ever thought of looking at something or other, and that maybe it could be a Canadian solution.
I also think if you look outside this industry at the whole construction of the vehicle.... We can look at the automotive industry. The components are coming from all over the world, so part of it is how, in fact, they are net packaged or put together. The actual ownership, a lot of times, can be redefined. Fundamentally, whether the whole vehicle is built in Canada, or parts are built in Mexico, with some in Kuala Lumpur, etc., the main construction parts can be part of the negotiations.
Ultimately, as an operator, we really have to proceed in the taxpayers' best interest for the best value.
:
I'll start off, as the senior person here in both age and length of negotiating time.
GO Transit has been negotiating with the railways for 40 years. For the most part, it has been a healthy negotiation with the railways. I'm not here to put the railways down. They negotiate tough. They have an asset they know is valuable. They want to maximize their profit, and so they bargain hard.
The real issue is that we don't have any right of appeal. That's really the whole process here, the fact that we're dealing with a monopoly. I don't have any other choice of where I can run my trains. There is that specific corridor, and that's it.
So when I say to them, “You're charging too much”, their comment to me is, “Take it or leave it.” As a public agency, I can't just leave it. I want to operate more train service for the public, but at the same time I have a fiscal responsibility I have to adhere to.
I have the ability to say, “If you're not going to settle on this thing, I have a right of arbitration”, which is an independent third party arbitration. Right now in my contract I have the right of arbitration, but typically it's done by an individual who's heavily involved in the railway industry. Not once has an arbitration ever been ruled in our favour.
The important thing for me now is that I have the ability to threaten to go to an independent agency, which means that the other party will bargain in good faith. That's the main thing.
I hope never to use the arbitration process. That's something I really hope. I would much rather deal face to face with, say, CN and CP. I would rather strike a deal, because that means we have to work together. If I have to go to an agency and go through an arbitration process, the railways can make my life hell, so I'd rather not go that route. I want to have a fair negotiations process. That's really what I want.
:
Perhaps I would just add that Gary used an important word: arbitration. Arbitrations are typically based on past precedents. We're fundamentally talking about a new relationship here commercially in how it should look. So you couldn't ever get there on arbitration with this kind of mechanism, using precedents as your vehicle.
I think Gary made an important point here: there are so many things we do agree with railways on. We have other agreements in place where we think there are alternatives of commercial negotiations that create that true competitive environment. So there are great parts of our relationship. In our case, with Canadian Pacific, they do a wonderful job, an outstanding job, and they should be applauded.
In this particular case, we see unfortunately that the elements are there but we don't have leverage to create that balance--not an advantage, but equality--in the discussion. I think most people look at it, and it's called “effective competition”. Where there is effective competition--that term that says there are similar types of services available--you can make choices if you don't like what's happening on that service. We don't have that, unfortunately.
As an individual who came from a background of network planning in a multi-billion dollar industry, I think we all know where the density is growing. The railways know where the density is growing. They just don't know what year it's probably coming and how the municipal political pressures start to build. You can follow it quite easily. So you have a pretty good idea of what the alternative is going to look like at some point in the future. Sometimes it takes years or even decades before it actually happens, but it's pretty obvious what it may very well look like when you have a corridor with capacity, or the capability of capacity, plus some contribution from different levels of government, to make it work for both railways and us.
The mechanism, as I said before, is crucial, and I was personally delighted in what Transport Canada had put forward in the bill. It said you have to negotiate commercially first. Trust me, I had attempted to take the railway, over our circumstance, to final offer arbitration, the first one probably in the history of the country, and unsuccessfully because I had a contract in place. Trust me, it is a painful, dirty process that you don't want to have to go through. And it's probably partially intended to be that way. To help people, do you really want to go?
But on this mechanism, we can't afford to put a load of people on a siding while a final offer arbitration process such as for shippers is settled. We can't do that. Our public measures our on-time performance in minutes, not while it sits on the siding for three days while we wait for the agency to make its determination when we put our case forward. We need a rule; the rule is hard, fast, and now. And it's not about taxpayers' interests. We don't want to be there, but we need the checks and balances.
:
I'm not sure, but I think GO's example was similar to ours with the West Coast Express. What kind of modal shift can you actually get for the person with the choice of a car who's commuting around Toronto, Montreal, Vancouver, Winnipeg, or any centre? For the dollars you put in, the modal shift that commuter rail generates is about 50% of our ridership with the choice of a car who are willing to park and say, you know what, I'll take a train. If our cost structures are not competitive and you put a bus in place, you typically get about a 12% to 15% modal shift.
That's not to say a commuter train is the answer for everything; it's just a tool in our tool box to solve problems. But where the circumstances are right and it's the right line, the right agreement, and so on, the viability for the modal shift far advantages putting commuter rail in.
I can't comment on what opportunities have been lost, but I know there's significant demand in our case. Our parking lots are full, our ridership is approaching capacity, and I suspect there'll be more trains coming.
But ultimately, down the road is to the railways. Don't just hit us on margin; help us where we can actually make it so economical that we can bring you more capital that benefits goods movement in the future, as well as passenger movement. And don't just look at it on a pricing basis—what can you extract and we can bear? That's not a good way for a long-term balance of prosperity for all of us.
:
Mr. Chairman, thank you once again.
I'd like to go back to the noise issue raised earlier by Mr. Storseth. A number of the affected parties with respect to rail noise in the country have come to see us or have spoken to us by teleconference, and have said that there are two weak features in this bill with respect to noise. To a certain extent, you're also in the noise business, and I'm sure you manage community expectations and challenges on that front.
The first issue they raise is the applicability of municipal bylaws to noise generated by rail companies. The second has to do with the sanctionability of the bill in terms of what kinds of sanctions are available to the CTA with respect to penalizing or pursuing rail companies.
Can you give us a sense of what you deal with every day in managing on both those fronts? Do you think it's a competitive disadvantage? You're in different businesses, but are you having to deal with things that another segment of the economy doesn't deal with?
You deal with this issue, I'm sure, every day. Can you comment generally on those two aspects of the noise question?
:
It's in Langley. So as a resident I see no need to restrict the activities of the railways regardless of what's on the track, whether it's freight movement, a coal train, potash, or the Rocky Mountain VIA Rail train. So as a citizen I'd say it's not appropriate. There's so much investment this nation has made in the railways and around the railways, we have to optimize the asset, the plant, together.
Most people are moving in, and they're either building or have taken over something that has a railway line. It's not hard to find out where it is and do some due diligence before you make that purchase. If you make the purchase, it can also be factored into the purchase price, so it's relative to supply and demand. But I think it's unfair to make the railways responsible for all those restrictions.
On the decibel levels, some trains are louder than others. Sometimes it's also the length of the train. Our passenger trains are light, move fast, accelerate quickly, and slow down quickly, so we're probably in a slightly different circumstance compared to a typical freight train. We have yards that we work in. In the case of West Coast Express, there are no residents around those yards, for the most part. There are a few in the downtown one, but we have worked with those people. We shut locomotives off at certain times. There are best efforts that can sometimes prevail, and it has worked out quite nicely.
:
If I might add to this, right now the locomotives we're buying have very high restrictions, not only on noise but also on emissions. We could still reduce that, but there comes a point when it's useless. Also, most of the time we're running on welded rail. Welded rail reduces the noise extensively.
As we all said, the surrounding noise is worse than ours. That doesn't mean we're not trying to reduce it, but I don't think we're creating a problem. That would be for the agency to decide or resolve. But noise is part of the railway, and noise is a very subjective issue, like temperature. For me right now, it's 90 degrees here, and I'm sure it's not the same for you. It all depends on how you see it.
When I was a youngster, I was living right next to a sumping yard--24 hours a day. After two days my father said, “We're not going to live here; we're moving.” We couldn't sleep. But after a few years, when we went on holiday somewhere, we could not sleep because the noise was not there.
It's not a noise that is like a pitch noise, and it doesn't last long. When a train goes by, it doesn't last long. It's five or ten seconds. It's not like the autoroutes, where it's a constant pitch all day. That's bad. That's what can damage the ears. But our noise, I would say, is a friendly noise.
That's my point.
:
Mr. Chair, with your permission, before discussing Mr. Bell's motion, I'd like to raise a procedural matter.
I introduced a motion for Mr. Duchesneau and the President and CEO of ADM, Mr. Cherry, to appear before the committee. However, I have not had an answer. Since then, the committee has considered other motions on two occasions. I want to discuss the motions with my colleagues, but I would like us to make sure that the witnesses we have agreed to summon can appear.
I've spoken to the clerk. He told me that he had sent Mr. Duchesneau e-mails, but that he had not received any reply. That's a problem for me. I'd like someone to tell me that we've contacted Mr. Duchesneau and Mr. Cherry to ask them when they will be available so that we can set a deadline.
I want to discuss other subjects, but, if my subject is not addressed and if this is a way of pushing back the appearances of these witnesses, I will oppose my colleagues' motions, not because I disagree with them, but because I simply want to have mine examined.
Early on, when we talked in this committee about some of our priorities, one of those was safety--air, water, and rail safety. Going back, we did have CN here, talking about the particular increases they had had in derailments and accidents, particularly in 2005. They indicated that they had taken steps to reduce those in 2006--year to date, so far. Going back and looking at what happened with the number of derailments, particularly in British Columbia--although there were some in Alberta as well--with the change of ownership from BC Rail to CN, there were an inordinate number of derailments, in particular, and accidents in 2005 and in 2006.
One of the notable ones was where a chemical derailment occurred in the Cheakamus River in B.C. and resulted in a substantial negative environmental impact--a huge fish kill, for example, that has affected the run on that river drastically, devastatingly. Subsequently, a locomotive accident resulted in the death of two rail workers in 2006, when the locomotive left the tracks and two rail workers died.
The purpose of this motion is to suggest that we need to have an inquiry that spells this out. We heard they're down. We heard they rose, particularly in 2005. I think if we have a proper inquiry, we would have a baseline in the future to judge the actions of the railways as we go forward. I think we need to have this inquiry that would go back and spell out exactly the increase. Then if there has been a decrease, as they state, we can be aware of that and of what steps are being taken. We have a responsibility for the passengers, we have a responsibility for the public, we have a responsibility for the railway workers, and we have a responsibility for the environment. I think in line with our priority of rail safety, this would be appropriate.
I'm recognizing, in terms of timing, that at a committee meeting I wasn't able to attend, there was a suggestion, when another request for information came up--not on rail safety, but on another matter--that there was the desire for this committee to move ahead with Bill and to finish Bill C-11 before we moved on to other issues. I'm not suggesting that this jump in priority. Safety, of course, is the top priority, but I'm suggesting that if we start to put the wheels in motion or get this on track--no pun intended--that we at least will have the ball rolling and we can then move into this in a timely manner.
I was provided with some information that you're going to table, Mr. Jean. Perhaps I could make reference to it, Mr. Jean. Can I indirectly...?
No.
Mr. Don Bell: All right, I'll paraphrase it, then.
Last year, in 2005, particularly at the time of the Cheakamus spill in August, there were a number of things ordered by Minister Lapierre and the transport department, in the previous government, and there was a series of targeted inspections as a result of that. Following that, there were some other incidents. There was a specific order from the minister in September or October, I think it was, for a four-week audit of CN safety management systems, which occurred between November and December last year. The commitment was that this audit would be made public when it was received.
At that time, there was an order from the minister, as well, limiting the length of trains as one of the issues of the difference in the management systems between CN and BC Rail, as well as perhaps the unfamiliarity with the unique B.C. conditions--the curvature of the track, the difference in elevations. That report was to be made public, and I gather it was received by the new government somewhere in the spring, in April or May, and I note that there were meetings. Minister Cannon apparently met with the railways, CN in particular, in May of this year. The audit was not made public.
Subsequent to that, there was a unique, first time ever, section 32 order by the minister in July, after the railway deaths on the locomotive. And that order was not made public. We discussed that. It was raised at this committee in terms of the fact that we wanted to know what the detail of the audit was and what the order was, why there was this unique section 32 order to address the deficiencies and the safety management program.
I understand that CN had appealed the Transport order, and I now understand that CN has submitted a plan, as recently as a week ago, to come into compliance with that order, the minister's order. I congratulate the minister on having taken the action to bring this order in, except that I don't know what the order is. But if it's going to result in safer rail, that's the purpose.
I understand that CN retains the right, once the department determines if CN has in fact complied with the order, to appeal. My concern is that we need to know what the audit said, and it should be a public record, because we're dealing with public safety. We should know what the order was and why and how they've complied. Generally--not to pick on CN, but CN is the particular railway that's in question here now--there were other derailments by other railroads, and we need to look into that issue of rail safety.
We said at the beginning of this term that this was going to be a priority of this committee. I would like to have an action motion on file indicating that we're going to do this and do this as soon as it fits appropriately into our time schedule.
Therefore, the motion I submitted was that this committee conduct an in-depth inquiry into rail safety, and in particular, the recent CN accidents in British Columbia and western Canada, including a derailment that caused an environmental catastrophe in the Cheakamus River and a locomotive accident that resulted in the deaths of two rail workers in June 2006.
:
You're going to see very soon, sir. It's a summary of what's taken place since some of the accidents. Certainly 2005 was what you would call less than a banner year in relation to what took place with CN and just generally with railway safety.
Less than a month after the British Columbia derailment, in which two crew members, unfortunately, were killed as a result of the accident, the minister took it upon himself to issue, for the first time ever, a ministerial order, under section 32, to make CN come into compliance with some of the other.... I think there were something along the lines of 59 enforcement actions.
Of course, there has been an action plan, as Mr. Bell said, put forward, as of October 18. Indeed, you'll see, since some of the actions were taken by this government and the previous government, that industry-wide accidents are down by 14%, and derailments are down by 30%. Obviously the corrective actions did do something.
Notwithstanding all of that, Mr. Bell, with respect—and I was born in British Columbia, and it has a place in my heart and always will—we are a national committee, and we have a responsibility, I think, to all Canadians. Certainly, I think, the people in Alberta who suffered the response from Wabamun would like to be part of any kind of study. As has been said by all members here, rail safety, airline safety, and all safety issues are a number one priority of this committee and a number one priority, quite frankly, of this government.
So I think we're being a little bit premature in doing, first of all, a study just of British Columbia, and I would like to encourage all members of this committee to include all of Canada and all Canadians in any rail safety study that's done by the committee.
Quite frankly, I would invite the members to read what took place and what has happened with this government and the previous government, and then address one particular question: what else could have been done? I don't think anything further could have been done, except to stop all the railroads across Canada. And I don't think anybody wants that to happen. Certainly the minister, within 28 days of the final episode in B.C., issued a ministerial order, and as I said, that has never been done before.
I would invite the members to read this report and come back with any suggestions. But the reality is that we have a very busy agenda. The first thing after Bill is safety of the transportation sector across Canada.
Quite frankly, I don't want to just study British Columbia. All geographic areas of this country place certain challenges before us, and we have to study rail safety across the board and across Canada to do justice to all Canadians.
I would recommend, though--and I think Mr. Bell has brought up a good point--that the safety study should not just include what we were going to study, but should have a specific emphasis on employees, on people who are users of the rail line, and on the environment. So a particular emphasis on those would be appropriate--not in this particular motion, but certainly, if it be the will of the committee, we should study them at great length, as far as safety goes.
:
There are two interesting things in Mr. Bell's motion.
It's curious, because, personally, I would have liked to know the details of the matter. I like what the minister has done — I'm saying that in a nice way — intervening under section 32 of the act. However, I would have liked to invite Transport Canada representatives to appear very briefly in order to determine what happened in this matter.
My problem is that a review application has been filed by CN. If there is a review application and the matter is before the courts or I don't know where, can we discuss it or not? There are factors that escape me. I also would have liked to see the action plan that the company submitted before we make this decision. Is it possible to see it, even though that took place in camera or in another context?
We've already decided to consider the matter of railway safety, and I'd be in favour of that. However, my problem is that Bill C-11 must be examined first. I'm going to support this question, provided we examine Bill C-11 beforehand.
In this specific matter, I'd like to know whether it's possible to have a meeting with Transport Canada and CN representatives so that they can come and explain themselves and give us details. I like the way the minister has proceeded. However, can we get these documents if the matter is before the courts? That's a problem that's preventing me from making a decision today.
So I ask Mr. Bell to wait until the next meeting, because I want more information. Is that possible or not? I'd like Mr. Jean to tell us. I would have liked to examine this matter because I find the solution an interesting one. If we can examine these ways of doing things, that will help us in our own matters.
:
Quite frankly, Mr. Chair, I'm glad this is a transportation committee, because I'm getting motion sickness.
I think it's a good motion, but we're already dealing with it. I think it was the number one priority of the committee, quite frankly.
I'd put forward a friendly amendment. I think that crossing out British Columbia.... Indeed, what's less significant...the people at Wabamun? It's not mentioned in here. We are a national committee, not just a geographic one.
At this stage I would invite all members to participate in the vote tonight, especially the members on this side of the House. Could we take this home, look at it, see what the minister and the department have done? I think you'll be quite impressed if you haven't had the opportunity to read it. Just as a matter of record, I believe it's very obvious that this government is participating in a conciliatory and cooperative manner. We're providing this information at first blush. I would encourage the members to think about that when we work through this. Let's get to the work of the legislation and move forward on the issue of safety, which we already have before the committee.
:
Okay, I just wasn't sure who wrote this. There's no letterhead, no nothing, no indication. There's a date on it, Mr. Chairman, but it gives us no idea as to the source of this.
I think I actually want to go through a number of these bullet points, which are very interesting, because the more I read them, the more I believe Mr. Bell's call for an in-depth inquiry is justified. Obviously the department has taken some action, the details of which we have no knowledge. We have no knowledge, Mr. Chairman, of the targeted inspections listed under bullet point three. We have no knowledge of the four-week audit of CN's safety management systems under number four.
Obviously the felt that rail safety was of such import that he met with the president and chief executive of CN. Clearly then, it must be a very important issue, which again I think justifies our committee looking at it.
Somebody made reference to earlier to an action plan, copies of which we have not seen. The committee hasn't seen a copy of the action plan that was just referred to; that's not in our possession.
Someone raised the question on the other side, on the government side, saying, what else could have been done? I thought that was exactly the import of this motion, to have the committee inquiry find out precisely what might have been done in response to a number of these accidents.
Of course, there is section 32--and I'm very cognizant of what Monsieur Laframboise said earlier about the fact that the minister came and testified and said he wasn't able to speak about this issue because it was now subject to appeal. It doesn't mean that we can't look at some of the grounds that were used to justify section 32, to my knowledge, and it certainly doesn't mean, Mr. Chairman, that we couldn't examine the grounds for appeal, of which we have no knowledge, put forward by CN to the Transportation Appeal Tribunal of Canada.
So I'm of the view that this is now a pretty important and front-of-mind issue for many Canadians, not just in western Canada. I would strongly support that we move in the subcommittee to define when we can get to it.