Mr. Speaker, today I rise to speak in support of Bill . I will focus my remarks on how this bill will contribute to strengthening the shipper-railway relationship as it facilitates the commercial negotiation of service agreements.
Canada's freight rail network is a vital link to global markets and supply chains, because it facilitates the import and export of millions of dollars worth of commodities and manufactured goods each and every day. Our economy relies on the billions of dollars of revenue generated by Canadian manufactured goods and export commodities, such as grain, pulp and paper, coal and potash. Canadian consumers and businesses also depend on containerized goods, arriving daily from Asia and Europe, moving to cities across the country in an efficient manner.
Bill will help the thousands of companies that rely on rail to ship these goods and will help the Canadians who are employed by these sectors. Given the importance of rail to Canada's economy and trade, ultimately Bill C-52 will contribute to Canada's economic growth and job creation.
The goal of Bill C-52 is to support the adoption of service agreements between shippers and railways. Service agreements can help strengthen the shipper-railway relationship. They can make it easier for businesses to plan how they will transport their goods to market. In recent years, the railways and their supply chain partners, including shippers, ports and terminals, have signed many such agreements. These agreements have improved rail service, collaboration, communication, and ultimately, supply chain efficiency. In short, service agreements are a tool to bring greater certainty and reliability to rail freight service.
This bill supports best practice in the industry. To achieve this, Bill has two parts. It would provide shippers with the right to a service agreement, and it would offer service arbitration to establish the terms and conditions of service in the event that negotiations fail. Most importantly, the new provision would create a strong incentive for the parties to negotiate service agreements commercially.
A shipper who wanted a service agreement could approach a railway. In turn, the railway would be obligated to respond to the shipper within 30 days. This would ensure that shippers and railways would first try to reach commercial solutions to tailor their service relationships.
In the event negotiations failed, the shipper would then turn to service arbitration to receive an imposed service agreement. However, before arbitration could begin, the shipper would be required to provide advance notice of 15 days to the railway. This 15-day period would further support commercial negotiation, as it would allow both parties one last chance to reach a compromise before service arbitration started.
In the end, it is expected that the current use of service agreements would be expanded. Going forward, any shipper who needed a service agreement would be able to obtain one either commercially or through service arbitration.
Some may try to say that this proposed legislation would be adding red tape and would burden rail companies. To this I would like to respond, no. We are providing a solution in case of service failure. We expect railways and shippers to continue working together and building on the success of the proactive measures from the rail freight service review.
This proposed legislation is important, because it provides the framework to enhance the standard level of respect for service agreements. This has many benefits. By facilitating better collaboration between shippers and railways through negotiating service agreements, parties could then agree on clear service elements and performance standards. Shippers and railways would clearly know what was expected of each other and would be able to work better together to make their day-to-day interactions more efficient.
Service agreements could also strengthen the relationship between shippers and railways by determining what to do when there is a service failure. Communication protocols could be put in place and recovery plans could lay out how and when service could resume.
Canadian shippers and railways could also use service agreements to lay the foundation for how they could expand their businesses together. Negotiations on a service agreement could be an opportunity for a shipper to discuss traffic growth plans and see how railway service could be adapted to respond to growth. The legislative right to a service agreement, supported by an arbitration process if commercial negotiations fail, would therefore be quite powerful.
Across Canada, shippers, whether large or small, whether shipping intermodal containers or raw commodities, would be entitled to obtain service agreements establishing a road map with the railway to achieve the benefits I just explained.
However, do not take only my word for it. This is what Mr. Rick White, General Manager of the Canadian Canola Growers Association, had to say about Bill . He said:
The Canadian Canola Growers Association is pleased to see the inclusion of a number of important elements in Bill C-52, including the right to negotiate a service level agreement if commercial negotiations fail.
With over 85 percent of canola seed, oil and meal exported to more than 50 markets worldwide, effective and efficient rail service is critical to the success of farmers and our entire industry.
That brings me to Canadian trade and our gateway and corridor initiatives. The railways played a primordial role in Canada's settlement and economic expansion, and they continue to play a key role. Rail networks are a core part of Canada's transportation system.
Our Conservative government has worked to strengthen Canada's transportation system in various ways, including with strategic gateways and trade corridor initiatives. Through these initiatives, our Conservative government, along with its partners, has made significant investments to reduce congestion along key corridors and to build capacity to capitalize on growing trade opportunities. Our gateway initiatives also encourage stakeholder engagement and dialogue as a key means of improving how our gateways function. Evidence shows that this gets results. Through working together, stakeholders have been able to address operational issues and enhance the performance of our gateways.
The proposed new legislative measure on service agreements supports such partnerships. It is through such partnerships that we can achieve an efficient and reliable supply chain. This would allow us to meet demand in existing, expanding and new trade markets. In this sense, the legislation would support our government's economic agenda.
In my role as chair of the Standing Committee on Transport, Infrastructure and Communities, I had the opportunity, as the other members did, to hear first-hand from shippers and other stakeholders about the importance of this legislation. I was pleased to hear that there was an astounding amount of support for this bill, and the committee heard this testimony from the groups involved. Whether it was Port Metro Vancouver from British Columbia; the Manitoba Minister of Infrastructure and Transportation, Steve Ashton; or the Halifax Port Authority, Canadians from coast to coast to coast were supportive of this legislation.
That does not take away the fact that in agreements like this, not everyone gets everything he or she wants, but I think everyone would have to admit that we came out with a balanced bill. That is why I am here speaking in support of it.
Let me just take a few minutes to read some of the testimony we heard on this legislation:
Bill C-52 is extremely important to Port Metro Vancouver.... Past performance of the railways has made Bill C-52 necessary. I think the bill has appropriately walked the fine line of mandating action but allowing for the flexibility to tailor agreements to the needs of each shipper.... I would recommend proceeding with the approval of Bill C-52.
I think we need to accept the fact that in some circumstances it won't be possible for a party to actually, in good faith, negotiate an agreement. In that sense, Bill C-52 does suggest a mechanism for resolving that impasse.
The legislation includes the right to ask an arbitrator to establish an agreement. In that sense, Bill C-52 is an improvement and it needs to be passed.
I will not re-read the entire transcript of the meetings we held, but this gives the House an indication of the testimony we heard at our committee.
So far I have discussed the benefits of the bill in terms of the service agreements that are in place and how the bill expands Canadian trade. I have also gone over some of the testimony that was heard at the transport committee during the study of the bill.
I would now like to shift the focus to a sector that is very important to me, agriculture. I represent the rural riding of , and while shipping by rail is not extremely common in my neck of the woods, I have certainly seen that farmers are very concerned about how their product is transported from the farm to the markets.
Having been a farmer myself, I know that the agriculture business is full of uncertainties. That is why I am very happy that we will be moving forward with Bill to ensure that Canadian farmers will be protected by these service agreements so that they know they will always have a viable option to ship their product.
As I said, agriculture is one of the main pillars of my riding and certainly one of the main pillars of the Canadian economy. Canada's agriculture, and indeed the entire agri-food industry, plays a vital role in creating jobs and keeping our economy strong. However, our farmers depend on efficient, effective and reliable rail service so that they are able to move crops off the farm to valued customers, not just in Canada but around the world.
That is exactly what Bill will do for our hardworking farmers. It will ensure their right to a service agreement with railways to enhance clarity, predictability and reliability when shipping their product.
Furthermore, I would like to expand on the nature of the bill and indicate that the bill is not only a benefit to the shipper but that the rail services will also benefit from the changes that will be brought forth in the bill. The bill does not pit shipper against rail service. The goal of this legislation is rather to encourage railways and shippers to work together.
The fair rail freight service act would help shippers to manage and expand their businesses while ensuring the railways can operate an efficient network for the benefit of all users. This will ensure a strong, competitive rail freight supply chain, which is critical to the success of the Canadian economy. In these challenging global economic times, all sectors of the economy must work together to drive growth, create jobs and ensure long-term prosperity.
Before I wrap up my comments, I would like to proactively answer some the questions that opposition members of the House may have with regard to the bill. I will begin with the possible question that may arise about why the bill had not been tabled earlier. The response to this is quite simple: it takes time to get things right.
On this piece of legislation, we took the time necessary to hold in-depth consultations with stakeholders on the matter. We carefully reviewed the submissions that we received so that we could advance with a framework that would benefit all parties involved. It was a long process, but as members can see by some of the quotes I presented earlier, it has worked, and we have a very useful bill before us in the House.
I would like to take this opportunity to thank all the members of the Standing Committee on Transport, Infrastructure and Communities. I see members of that committee from all sides of the House here. We did not always agree on everything, but at the end of the day we have a good bill, and I would be remiss if I did not mention the strong work and support by the . This is a bill that many people, including shippers, have asked for, for a number of years. The minister has done it, and we are here today discussing it in the House.
Another question that is brought up around the bill is the notion that new provisions in the bill will negatively affect the efficiency of Canada's rail system. This is not true. The arbitrator must consider the efficiency of the rail network and railways' obligation to provide service to all shippers when making decisions.
Finally, I will respond to the possible question of why there is not a list of elements that must be included in a service agreement under the bill. This is because there is not a one-size-fits-all solution to these agreements. Every situation between shippers and rail services will be different and will require different needs. Therefore, this approach will ensure that the arbitrator has the flexibility needed to make the appropriate decisions.
I think there will be few of these arbitration decisions, but there would be that flexibility for the two parties to sit down, and the arbitration process would occur only when a custom-made deal that works for both parties cannot be worked out.
To conclude, service agreements are an important commercial tool that supports the shipper-railway relationship because they bring clarity and predictability to rail service. As some associations put it after the tabling of the bill in December 2012, this will serve as a platform for continued collaboration with Canadian railways.
This bill would work wonders for shippers and rail services in Canada and would be of enormous benefit to all sectors, including the agriculture industry.
The government's objective is to facilitate the adoption of service agreements between shippers and railways for those shippers who want one, and Bill would accomplish this.
I urge members to join me in supporting this bill. I hope that my colleagues across the way will show their support for this bill and vote in favour of its passage.
We have heard from many members during the discussion on this bill, and while I mentioned agriculture quite a bit, because there are a lot of agriculture products that travel, the bill would affect everything from forestry to fertilizer to potash. Therefore, this bill is very important.
Saskatchewan is the largest producer of potash in the world, a lot of which is exported, and rail allows it to get moved. As well, the mining industry transports all kinds of products. There is even talk right now of more crude oil moving by rail. I think we all have to admit that pipelines would be the preferred route, but business will always look at every opportunity out there, and rail is one of them.
Mr. Speaker, to begin, I would like to tell you that I will be sharing my time with the very able member for .
I am pleased to rise in the House today to discuss the bill that would give customers of railway companies the right to establish service agreements with those companies and would create an arbitration process in case of failed negotiations. Despite its weaknesses, the bill is very important for the Canadian economy, especially for the agricultural, mining and forestry sectors, which depend heavily on rail transport.
The bill is not perfect. Still, we appreciate that after so many years of fine words and no action, the Conservatives have finally acted and introduced the bill.
On this subject, I would like to thank the hon. member for who, by introducing her own bill on protecting customers of railway companies, was able to prod the Conservative government into action. The government presented its bill six months later. Better late than never.
My speech will have three parts. First, I will highlight the importance of strengthening the position of shippers in Canada's rail transport sector. Then I will show that the bill does not go far enough to improve services and protect shippers. Finally, I will propose amendments based on the recommendations presented to the Standing Committee on Transportation, Infrastructure and Communities by the Coalition of Rail Shippers.
Why is it important to take action to improve rail transportation services? Because rail is among the most-used means of transport in Canada. In Canada, railways transport more than 70% of goods shipped on land. The economic power of railways is considerable.
That leads me to my second point. Despite the importance of this mode of transportation for many shippers, service interruptions, delays and various problems with productivity are common among rail transporters. This situation affects many sectors, including natural resources, agriculture, forest products, mines, chemical industries and the automotive sector.
In terms of agriculture, 80% of service agreements are not complied with by the railway companies. This means delays or trains that simply do not arrive, damaged rail cars or not enough rail cars. In addition to the losses caused by this kind of problem—such as harvests that may rot—the poor quality of rail transport services undermines the ability of Canadian exporters to compete in world markets. This situation costs the Canadian economy many hundreds of millions of dollars every year.
Let us now try to determine the source of these problems. One of sources of these problems is, of course, the virtual monopoly. As the hon. member for said earlier in his question, the problem is the monopoly held by the railways in Canada. In most regions of the country, shippers cannot choose their railway carrier because they have access either to CN or to CP. Even in cases where both companies are present, one of the two usually charges prices that are much too high, which does not leave shippers with much of a choice. To some extent, the monopoly situation was made possible by the Liberals when they were in power. They are the ones who privatized CN in 1995. By failing to set out protective measures for shippers, they reinforced the virtual monopoly we have today.
At the time, one option would have been to privatize railway activities while ensuring that the rail transportation system remained public, which also would have been beneficial for VIA Rail. Right now, VIA Rail mostly has to use rented tracks belonging to CN.
When I was deputy critic of transport, I met with the Western Canadian Shippers' Coalition and it let me know what it needed to help foster economic growth in the west, on the Prairies. I am sure it is going to be happy to see this very bill come to life. It has been waiting for more than five years. It has been waiting for seven years for this legislation to come to life.
Just to clarify for Canadians, the Western Canadian Shippers' Coalition is made up of important Canadian companies, like the Alberta Newsprint Company, Al-Pac Forest Industries Inc., Canadian Forest Products Inc., Canadian Oilseed Processors Association, Canadian Wheat Board, Coal Valley Resources Inc., Coalspur Mines Ltd., Dunkley Lumber Ltd., Grand Cache Coal Corporation, Lehigh Cement, Chemtrade, Millar Western Forest Products and Suncor, among many other important Canadian companies. Many of these companies are in the natural resources sector.
The government tends to think that it is the best friend of the resource sector. The sector relies on the government as a regulator to ensure reliability in terms of service. The result, if it is done properly, is that companies prosper and flourish. Without leadership, without the government taking on its role as regulator, the companies simply endure or, even worse, sometimes flounder. This legislation would allow the companies to simply endure. It is not good enough to let them prosper and flourish.
The NDP would prefer to see these companies prosper and contribute to the health of our resources sector and the agricultural sector. In committee, there were amendments proposed by these two sectors. The NDP listened, but the government was in such a rush to fall behind, that it really did not listen to what these companies were asking for. I am going to read what the companies asked for and what the Conservatives did not consider.
One thing they wanted to do was to fix the service agreements. They wanted, one, to include details on service agreement components; two, a deletion of the term “operational” as it would limit the ability to negotiate and arbitrate service agreements; three, to include a dispute resolution mechanism in service agreements for breach of contract; four, to limit the ability of railway companies to levy penalties and charges that are not in the service agreement; five, to limit arbitration for failed service agreement negotiations to matters raised by the shipper; six, to limit railway companies' ability to raise network issues in arbitration, for example, finding convenient excuses for not agreeing to shippers' demands in contract negotiations and arbitrations.
New Democrats felt that these were very reasoned amendments and the government had a choice: it could listen to the resource sector and Canadian farmers or it could listen to a monopoly with a long history of manipulating government throughout Canadian history. Unfortunately, it looks like it chose, for these amendments at least, the side of the monopoly, as the member for mentioned.
Mr. Dan Albas: Duopoly.
Mr. Jamie Nicholls:It is a duopoly. Sure, I will give him that.
I would like to read a quote about monopolies, which goes like this:
They had begun to consider the Government...as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
That is a quote by Franklin Roosevelt, a democrat. Contrary to allusions by the government, the “D” in NDP stands for “Democratic”. We are the only party over the past 50 years to stand up for the democratic rights of all Canadians and not just a select few. When we hear the smears from the other side, we know our principles. We do not abandon those principles for the sake of power. We do not remain silent in the face of adversity.
As I mentioned before, for competition to flourish in our country, sound, organic and healthy competition, it requires co-operation. The government should have listened to the good people who work on the farm or the people who work in the resource sector. Instead, time after time, Conservatives choose to listen to the privileged few to enable their abuse of power and give them carte blanche to crush Canadian competitiveness. Canadians deserve better.
In 2015, the NDP will provide the leadership to steer our economy out of the perilous straits, out of scandal and corruption to that prosperous future Canadians long for and desire.
Mr. Speaker, I am pleased to stand in the House to speak to Bill . This topic has been a very important one for my constituents and for people across rural communities and, particularly, western Canada.
Before I go further, I want to acknowledge the hard work of my colleague, the member for , who for years has been a real advocate when it comes to fairness in the transportation industry. She has worked very hard on reforming this act, in particular, and bringing the NDP position forward.
The NDP position is fundamentally one of seeking fairness and a fair playing field for those who depend on rail service as part of their work, business and industry and, very important, the communities that depend on fair rail service to ensure their employers and industries are dealt with appropriately.
We in the NDP have made it clear that we support the bill at this point, but we believe it must be strengthened as we go forward. We are not pleased with the delays that the government has allowed and also the kind of cowering we have seen from it, which is not a surprise, to major corporate interests in this field.
As we know, the proposed bill will give rail freight customers or shippers the right to service agreements with rail companies. It also puts in place a Canadian Transportation Agency-led arbitration process for failed negotiations and penalties for those who violate the arbitration results.
Key amendments that the shipping company pushed for and that were championed by the NDP were unfortunately defeated in the committee. Without these rejected amendments, we believe the bill remains a partial success for the shippers and it must be strengthened in the future.
It is important that we indicate to stakeholders and to the government that this is not a done deal. As with anything, but particularly when we talk about this area, the bill needs to be further strengthened.
Bill partially addresses the fact that rail freight customers, known as shippers, have been suffering from insufficient freight services stemming from the abuse of market power by the large rail companies.
The Conservative government has finally tabled legislation, after years of talking and inaction, to address the fact that many shippers cannot even get a service agreement as rail companies have not been willing to negotiate.
As the bill only covers new service agreements, current agreements and contract violation, which are all a major source of revenue loss for shippers, are not affected by Bill C-52.
Certainly in terms of the stakeholders that have been involved, I would like to read into the record some of the stakeholders who have spoken out in support of the NDP broader position, which is that the act must be strengthened.
I recognize that the wish for this act to be strengthened comes in large part from people who work in the mining industry. As someone representing an area that depends on mining and as someone who is proud to say that I come from and live in a mining town, I recognize that in order to ship the ore and the goods that are needed for the mining industry to both do its job and to export its product, fair rail services are essential.
The Mining Association of Canada, as represented by Pierre Gratton, indicated: