That the House do now adjourn.
He said: I would first like to thank the Speaker for allowing me to bring this grain crisis to floor of the House of Commons tonight.
Mr. Speaker, I will be splitting my time with the member for this evening.
Over the next four and a half hours, farmers and their families will be watching MPs debate the crisis they are facing, and the money they are losing. I am hoping that many other Canadians will also be watching, so that they can have an understanding of the crisis at hand on the prairies. We hope that following this debate tonight that we can see more action from the government.
We have been hearing from many farmers and farm groups from across the country of the frustration they are facing with delays in shipping and the money they are losing.
This last fall, in November, I visited Manitoba, Saskatchewan, and Alberta. I witnessed firsthand the mountains of wheat, canola, and other crops that were building up outside of the grain elevators. I have seen the grain stored, not only in the elevators, but in machinery sheds and under tarpaulins.
At that time, many were very optimistic. The crop was good. The prices were good. They had customers. What more could one ask for?
I recall visiting Curtis McRae's farm in St. Andrews, Manitoba. He had over 30,000 bushels of wheat and 30,000 bushels of canola on his 5,000-acre farm; and it was a very impressive farm at that. He said that the local elevator was not taking any grain, as it was waiting for 600 cars to move the crop already at hand. That is just one example of the many thousands that we are seeing right across the prairies.
As a result, the prices started dropping. The prices have now dropped 40%. The problem is that there is no cost-benefit analysis and no business plan to manage the implementation of transportation. The even defended the railroad last fall, stating that the grain companies' performance was adequate. It clearly was not.
Promises were also made by the minister to bring forward new legislation to rectify the imbalance in the market power between the farmers and the railroads, to enable shippers to get a decent level of transportation service. Federal legislation introduced last June, the Fair Rail Freight Service Act, was supposed to deal with this situation. Well, it has not worked.
Many prairie farmers agree that the legislation needs to be amended to make it easier to hit the railroad companies with fines over these transportation bottlenecks. The current act is not effective.
We have to realize that over 95% of Canada's export grain is shipped by rail. Canada is the top canola producer in the world and the second largest exporter of wheat. We had over 100 million tonnes of crop out west this year. What a bonanza and opportunity we could have had, and there were customers for the crop.
When we look at the nation's two major carriers, CNR and Canadian Pacific, they say they are each providing 5,000 cars a week, and one is at 5,500 cars, to move the grain. However, that is not even half as much as we need.
Not only do we see this on the prairies with the railroads, there were 20 big ships waiting for grain in Vancouver and 5 ships waiting at Prince Rupert, the two grain terminals on the west coast, and that was on October 31. Today, there are between 30 and 40 vessels waiting to be loaded in Vancouver alone.
We can see that there is a big problem. We have the crop. We have the customers. We have the ships. However, it is just not getting there.
Ships have been idling for as long as six weeks in Vancouver, waiting for grain. It costs $12,000 to $20,000 every day in demurrage penalties. Who is going to pay for that?
I was talking to a farmer yesterday from Saskatchewan, and it is going to come right out of the farmer's pocket. That is who will end up paying for these delays.
Canadian-based grain companies have been charged more than $20 million in fees for delays at the port of Vancouver since August, according to the Western Grain Elevator Association. Some grain companies have sales for China, but they are not able to transport all their grain.
What has happened? What are all of the rail services being utilized for? They are being utilized for crude oil, potash, and other products. They are getting priority. The grain farmers are not, though, because there is no watchdog over the whole system. This is leaving as much as 3 million tonnes of grain stuck in the Prairies.
Canadian railroads shipped 34% more cars of fuel, oil, and crude petroleum in October. They are shipping more products than in the year before.
CP Rail reported a 19,900-car shortfall, according to a January service report. Outstanding grain car orders for CN totalled over 17,000, according to the January 17 report.
Let us look at some of the prices. Less than a year ago, wheat was selling for $9 a bushel; now, farmers are getting less than $4 for the same quality of wheat. That is less than half the price. The fuel costs are all the same, the seed prices are all the same, and the fertilizer prices are all the same, but let us look at the prices the farmers are getting—and those prices are only if they can sell it and get it to their customers.
The problem is not a lack of a competitive transportation system, but that the grain is in competition, as I said, not only with oil but also with potash and coal. These are other commodities that are taking up the rail space. They accounted for 54,000 cars in November. That is a big increase from the year before.
We have a loaded rail cars waiting at the elevators for up to 11 days. Then we have the demurrage fees, which I have already talked about, adding up to $20 million.
We look at all of these losses. What do they add up to? We are figuring out now that they add up to $1 million a day, all of which will come out of the farmers' pockets. Overall, they are losing $1 million a day. What does the minister do? He throws $1 million at the whole project for a study. It does not take much of a study when we call these growers from all across the country.
Let us have a look at some of the farm leaders across the country and some of the newspapers that we get in the Prairies. I will name a few of the farm leaders. I will quote what they say in some of the articles.
The first one comes right out of the Canadian Press. This gentleman is from Keystone Agricultural Producers. My colleague knows very well that it is the biggest agricultural organization in Manitoba. The article says:
Doug Chorney of Keystone Agricultural Producers said the backlog is so bad that mountains of wheat and other crops are building up outside jammed grain elevators.
As prices fall, farmers are wondering what good a record bumper crop is to them if they can't get it to market.
“There is grain in piles across Western Canada”, Chorney said from Brandon, Man. “This creates big cash-flow problems for farmers. We all have bills to pay”.
The minister came out and said that the government will give the farmers a small advance payment. The farmers have all these piles of grain, and the government is going to give them an advance payment. That has to be paid back. It is only going to be paid back if they sell their grain. I do not know where the rationale is, and I do not think that farmers feel any more confident.
That is in Manitoba. Let us move over to Saskatchewan.
Norm Hall is the President of the Agricultural Producers Association of Saskatchewan. I will quote from the newspaper what he said about the legislation that the Conservatives brought forward in June:
Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said the Fair Rail Freight Service Act is just not effective.
He said the legislation needs to be amended to make it easier to hit railway companies with fines over transportation bottlenecks.
“There are no teeth...to make sure that it happens”, Hall said.
The legislation does include a provision for possible penalties of up to $100,000, but only if a government arbitrator decides a signed service agreement between a shipping company and a railway has been violated.
What is that going to do to make the rail service accountable?
That was out of Saskatchewan.
The Conservative members from Saskatchewan or the Prairies must have had an earful when they went home and were at the curling rink or hockey rinks over the last few weeks. It must be a hard go for them. However, there are answers and there are solutions out there.
Let me move over to Alberta.
Lynn Jacobson, president of—
Mr. Speaker, it is really important that we recognize the simple fact that Canada has the best wheat in the world, yet throughout the Prairies there is wheat sitting in bins. There is wheat covered by light plastic sitting in fields. Let us imagine the frustration of the farmer in the Prairies today, who has poured his heart and soul into producing the best wheat in the world, but the Government of Canada has not done enough to ensure that the wheat moves out of the Prairies to the west coast, where we have dozens of empty ships ocean waiting to receive that Prairie wheat.
How do we describe the feelings of the farmers in rural Manitoba, Saskatchewan, or Alberta, given their efforts not only to produce wheat but to contribute immensely to the Prairie economy through the thousands of jobs, both direct and indirect? If we try to get an understanding of how the farmer has been impacted, we would get a better appreciation of the negligence of the government in not doing what it should have been doing.
What we are debating today should not be any surprise. We had wonderful crops last fall. It is no surprise that we needed to be able to get that wheat to the ports. What has the government been doing to address that issue?
My colleague said it offered just over $1 million. One could talk about falling short on that front, but the biggest failure is the government not recognizing early enough the need to deal with the transportation and handling issue. That has to be the biggest disappointment for the farmer today.
I have had the privilege of being born and living in the Prairies. I go to the Prairies every weekend. It is my home. I have been on many different farms as a guest. I have been a passenger in some of the gigantic tractors. I remember driving down Highway 2 a couple of years ago late in the evening and seeing a sequence of 14 or 16 lights. It was combines working together to pull the wheat off the ground.
It is impressive to know that our product feeds many parts of this world. At one point or another, virtually any country that imports wheat has looked to Canada to provide it.
I can appreciate that the handling and transportation of wheat and other products are of critical importance and I do not claim to know all of the details of how that is managed. I look to individuals within my caucus, in particular my colleague from , who has time and time again raised this issue on behalf of the Liberal Party as the deputy leader. He is an individual who has served the Prairies, representing not only Saskatchewan but the Prairies as a whole to ensure we see the farmers' issues being brought to the House as often as possible.
Our former critics and the current critic are working with the . They have been saying that we need to bring this crisis to the floor in the form of an emergency debate. It does not happen very happen, where the Speaker acknowledges that what we have brought forward requires an emergency debate. We are pleased that via the Liberal Party critic we were able to bring this forward for debate tonight. At the very least, it is highlights how critically important it is that this issue be dealt with. It is a crisis. People do not have be in economic ivory towers to comprehend the situation and the degree in which intervention is needed.
We are looking to the government to come up with ideas. A Conservative member stood up and asked us for our ideas. I am looking forward to the government members coming forward and sharing their ideas. More importantly, I would like to hear what the government has done to date that should have prevented this from taking place. How is the government going to make amends to the farmers and others it has virtually destroyed?
It has been pointed out that there is a 30%, 40%, 50% loss of revenue. Those are incredible losses. Let us imagine having our own business that hit with a 30% to 60% loss of revenue, and the impact that is going to have. We already ask our farmers to work 7 days a week, 16 hours a day, especially at certain times of the year.
We are looking for the government to come up with ideas. The deputy leader of the Liberal Party has talked about the Fair Rail Freight Service Act. The Liberal Party has been talking about transportation for months, both inside and outside of Ottawa. We recognize the need has been there. My colleague made reference to the fact that he was out in the Prairies just last fall, talking about the piles of wheat that were accumulating back then. This should be no surprise.
We have to ask, why? Where has the government been? The government needs to start demonstrating that it really understand what is taking place and tell the farmers and others who are watching tonight exactly what it is prepared to do to resolve this issue.
A boat sits out in the Pacific Ocean, and every day it costs $15,000 for it to just sit there empty, waiting for the wheat. There is nothing like having a boat go into port, getting a partial deposit of wheat, and then having to go back out and wait for the same company to have another deposit delivered for transfer to the boat.
There is a coordinating element that has been lost. There is no doubt in my mind that some of the actions of the government have caused the problem. That is something I believe many farmers out west understand and will remember. They are watching what the government is doing.
The farmers on the Prairies are starting to lose confidence in the Conservative government in a significant way. We hope to continue to raise the issue, whether it is here inside the House or outside the House where the farmers are, in the prairie regions, and to talk and communicate.
The leader of the Liberal Party constantly tells us that he wants us to connect with Canadians. We are connecting with farmers and are going to continue to hammer home the message that the government needs to stand up and start taking responsibility and being more accountable to the farmers, especially on our Prairies. This is a time of need and we want the—
Mr. Speaker, we are here tonight because we are dealing with a record crop in western Canada. All players in the supply chain are looking at solutions for getting grain more quickly to port. Let me share what Mr. Gary Stanford, president of the Grain Growers of Canada, said:
We had a record crop last year with a significant increase in yields. A buoyant farm economy, better genetics, increased usage of new and better fungicides, overall better agronomics, and better utilization of micro-nutrients in fertilizer application were all contributing factors
As many in the industry have said, higher crop volumes are expected to be the new normal, and our government is taking action to help the industry prepare for that.
Our government also understands the challenges that Canadian farmers are facing. Canadian farmers face some of the longest inland distances to market of any exporting nation. On the Prairies, grain travels an average of 1,500 kilometres to reach a port terminal. In addition, in 2012 farmers paid over a billion dollars to move grain by rail. Grain growers deserve an efficient, reliable, and predictable rail service to get their crops to market.
World demand is growing and while the bumper crop is posing frustrations for our grain farmers, it also represents an opportunity for the industry to find new efficiencies. That is why we are working with stakeholders on a number of fronts to make the supply chain more competitive. Over the past months, the minister has met on several occasions with key players throughout the grain sector to find long-term solutions. With the new reality of larger crops, this holistic approach is the best way forward, and is certainly much more constructive than pointing fingers. That said, as we are working with stakeholders to identify improvements going forward, we expect all players in the supply chain to step up their game.
I would like to talk about an important action our government is taking to protect the economy and Canadian grain producers.
Our government is concerned about the potential repercussions of the CN strike on hard-working Canadian farmers, the manufacturing sector and exporters. We were disappointed to learn that the union representing CN workers, Teamsters Canada, gave its strike notice. A strike would have damaging effects on our economy, farmers in the Prairies, auto workers in Ontario and proud forestry workers in Quebec.
The total impact of a work stoppage is estimated at $450 million per week.
Canadian farmers have harvested record crops. At the same time, our government has opened markets for our exporters. Our government is working hard to support growth in this sector, and a devastating strike would threaten our grains and our gains and would hurt workers and their families. Today, at the Port of Vancouver, container ships are waiting to be loaded for export. Our government will not allow other obstacles to prevent Canadian exports from getting to market. A strike would compromise our recovery.
Therefore, our position is clear. Our economy must be protected. Our product has to get to market. We must protect jobs. That is why, today, our government is taking action to protect the Canadian economy and Canadian farmers by giving notice of a bill to get CN back on track.
I have received confirmation that our government welcomes a tentative deal to protect Canadian jobs and the economy and to prevent a strike at CN Rail. Our said:
I am pleased that the parties continue to make every effort to settle their differences. It is essential that employers and unions work together to come to agreements that are in the best interests of everyone involved.
They are reaching a tentative agreement, but of course this still has to be finalized. I would ask the members of the opposition to support the type of legislation we are proposing if this tentative deal is not finalized.
As well as taking action on a potential CN strike, our government has taken steps to improve the performance of the entire rail supply chain. This includes investing $1.5 million in a special crops Canada-led multi-sector collaboration project of the pulse, oilseeds, and grain industries to improve supply chain efficiency and reliability; passing the Fair Rail Freight Service Act, which creates a process to establish service agreements; investing $25 million to support grain shipments through the Port of Churchill; and implementing marketing freedom for western Canadian wheat and barley growers.
We are also working to help farmers get their crops to market by bringing industry groups together through groups such as the commodity supply chain table, the crop logistics working group and value chain round tables to facilitate comprehensive industry-led solutions.
On Monday, we further acted to respond to early recommendations of the crop logistics working group by pursuing enhancements to the grain monitoring program to improve the frequency of reporting, and by committing to providing an ongoing forum for representatives across the industry to discuss improvement throughout the supply chain.
The crop logistics working group has clearly identified a need for a fuller measurement of the transportation system from farm to point of sale. The working group said that a broader, more timely system is needed to deliver the kind of information required to support the efficient functioning of the crop logistics system. In other words, to improve productivity, timely and transparent measurements are needed.
Building on their recommendations, we are taking action to expand the mandate of the grain monitoring program to incorporate that information and to increase the frequency from quarterly reporting to monthly reporting. Expanded monitoring will provide a much clearer picture for all players, helping them to improve planning and to cut overall costs.
The proposed expanded range of metrics and reporting frequency would include railway order fulfillment information; weekly loads on wheels by carrier; the covered hopper car fleet size and grain service for both mainline carriers by class of service on a weekly basis; terminal unload performance by railway; western Canada railway grain traffic to eastern Canada, United States, and Mexican destinations; U.S. grain traffic to western Canadian destinations; and western Canadian grain traffic shipped to port in containers.
Our common goal is a more transparent system, so that all players in the supply chain, especially farmers, have the information they need to make the right decisions for their businesses and for our economy as a whole. Together, a better flow of information will help build a more reliable, predictable, and efficient transportation system.
These concrete actions build on our previous investment of $1.5 million under Growing Forward 2 to identify key areas of improvement in the supply chain and develop the tools and technical support to get there. This is a five-year, long-term collaborative industry effort led by Pulse Canada.
With matching industry investment, the goal is to improve the efficiency and reliability of the supply chain from farm gate to port terminal. The whole idea of increasing our logistics capacity is being able to figure out where we are at, where we are short, and what needs to be done.
I would add that we have the support of the Grain Growers of Canada in this way forward. As well, the Premier of Saskatchewan spoke today to a trade summit in Saskatoon, where he said:
We fully support the federal government in any measures they can take to address this situation.
As many in the industry have said, these kinds of crops are the new normal. Everyone has to improve, and that includes the railroads. Since day one, our government has been there for Canadian farmers and we are there for them today.
Our government knows that Canada's grain industry drives our economy and jobs with over $20 billion of our exports. The fact is that agriculture is a growing economic powerhouse in Canada and around the world. Agriculture is a big reason that Canada's economy is leading the industrialized world. That is why our government continues to ensure that farmers and food processors have the tools they need to continue to grow our economy and to employ Canadians.
Let me give a few examples. Top of mind, of course, is marketing freedom for western Canada's hard-working wheat and barley producers. This year's record harvest clearly demonstrates that the end of the old single desk two years ago has reinvigorated Canada's world-class grain industry.
Our farmers seeded 2 million more acres of wheat and produced over 20 million more tonnes of grain this year over last year. Since the end of the antiquated single desk, western grain farmers now enjoy the basic right to make their own business decisions on the marketing of their crop.
Over the first 18 months of freedom, we have seen record farm incomes with a strong balance sheet, two million new acres of wheat, and wheat exports up by close to 20%, with sales to the United States up by half.
A Canadian Federation of Independent Business survey found that the vast majority of its agriculture members, over 80%, are positive on the impact of marketing freedom on their operations. It is called choice, it is called freedom, and it is clearly working.
Trade is an another excellent example of how we are strengthening the industry. To help our farmers find new markets for their high-quality crops, our government is moving ahead with the most aggressive trade agenda in the nation's history. I would remind those voices for protectionism who would build a wall around Canada that Canadian farmers depend on trade to market up to 85% of their products.
For 2013, all signs point to another record year. Our beef industry is back on the map, with our beef trade with China increasing sixfold last year alone. None of this would have been possible without a lot of hard work from industry and our government in working together.
Of course, the historic breakthrough on trade was our agreement in principle with the European Union on a comprehensive economic and trade agreement. This accord is without doubt the most comprehensive and ambitious trade agreement since NAFTA.
Upon ratification, Canada will be one of the only developed countries in the world to have preferential access to the world's two largest economies, the European Union and the United States. With Europe and NAFTA, that will mean access to more than 800 million of the world's most affluent customers.
Right now, our agriculture imports hit a tariff wall of almost 14%, so we see the kind of opportunity we are looking at in the world's largest and most affluent market for food. Under this agreement, tariffs will be eliminated on the vast majority of our agricultural exports, including wheat, which currently faces tariffs of up to $122 per tonne. Clearly, this agreement will mean more money in the pockets of our Canadian grain producers.
Likewise, the Canadian beef sector will secure new market access opportunities for exports of 65,000 tonnes, and the industry estimates that new beef market access under this accord to be worth about $600 million a year.
Additionally, increased access for Canadian pork products to the EU has been estimated by industry to grow by $400 million, or $20 a hog. For Canada’s economy as a whole, the agreement is expected to create an additional 80,000 jobs nationwide and boost Canada's GDP by $12 billion.
We are working hard now to finalize the technical issues, which would then allow the agreement in principle to be formally approved. We will also push forward on other trade agreements, like India and the trans-Pacific partnership, a vast market of almost 800 million people. As well, we have revived the South Korean trade talks.
Here at home, we continue to transform and modernize our agricultural industry to help farmers drive our economy and feed the world. Growing Forward 2, our five-year framework for agriculture with the provinces and territories, has a much stronger focus on proactive measures like science and research and less on the reactive measures of the past. Growing Forward 2 is driving innovation through investments of over $70 million in industry-led research clusters on grains and oilseeds alone. We are helping our grain sector to succeed.
We remain committed to developing a policy to manage low-level presence of genetically modified organisms in grain for food and feed. We continue to work with our trading partners and domestic stakeholders to develop an approach that is predictable, flexible, transparent, and proactive.
Also to drive innovation, the government recently introduced the agricultural growth act, to bring our plant breeders legislation in line with the rest of the world. UPOV ’91, as it is known, will strengthen intellectual property rights for plant breeders and help increase investment in research and development for Canada's crop sector.
These discussions have been going on for 22 years, and industry agrees it is time to invigorate investment, innovation, and growth in Canada's agriculture sector, right now. That will help our farmers remain competitive by providing them with access to the best new crop varieties, whether they are developed here in Canada or abroad.
Farmers have a bright future. My message to the House this evening is that we are taking action on the grain transportation challenges our farmers are facing. We are taking action on early recommendations of the crop logistics working group. Our government knows that action is needed now and for the long term. We will continue to take a holistic approach, working with all stakeholders across the industry.
The ministers of agriculture and transport continue to work with producers and the entire value chain to identify and generate new efficiencies. All stakeholders, from farmers to elevators to grain companies to railways, must look at the challenges of transporting this year's record harvest and identify improvements for going forward.
It is a competitive marketplace. Our farmers' renewed strength has also benefited from marketing freedom. Marketing freedom, coupled with a top-quality product, puts our farmers on a level playing field with any country in the world.
To win and maintain our markets, Canada must be competitive not only on price and quality but also on service reliability. The recommendations from the crop logistics working group are a big step in that direction. I am confident that they will help build a stronger supply chain for farmers over the short, medium, and long term. Record volumes present both challenges and opportunities for the industry, and the time is right for the Canadian grain industry to capture these opportunities in marketing their world-class products in a secure and profitable way.
Our government has always put farmers first, and it will continue to do so.
Mr. Speaker, I will try not to wave my arms too much, because it seems the parliamentary secretary believes that my arm waving annoys you, and I would never try to annoy the Speaker. Being a Scotsman, we are somewhat inclined to move our arms. At least we are moving our arms in the sense of having conviction and passion about doing something immediately and are not flapping our arms in the air trying to fly like a gull, when clearly we are not.
Ultimately, this really is about an emergency now, not in three or five years. There is no question that additional data will be a good thing and the round table will eventually be helpful. However, the round table that will come out with recommendations six months from now, in the initial report, and then in additional reports over the next five years, will not move one more bushel of grain off the Prairies in the foreseeable future.
Yes, there is a recommendation not only from the minister but from Farm Credit Canada that farmers should apply for advance payments. That certainly is a program to protect farmers, but in some cases, these farmers are going to actually have advance payments and will still have crops in their bins in April when they are getting ready to seed the next new crop. They will actually have to repay it by September and may not have the funds to do that.
Would the minister's position then be forgiveness for some of those things if they do not happen? Clearly if they are backstopping that, and they still run into difficulties, it is going to be farmers who take on additional debt for what was not their problem. They did not cause this logistics problem such that they cannot get grain out of their farms to ports and to their customers.
In fact, a couple of my colleagues down the way were at that committee hearing, the members for and . I remember it all too well. It was the minister who said that they just needed to get with the times and forward-contract.
I got an email from a farmer who forward-contracted in November. He said that he had not moved a bushel yet, and it is now February. When he forward-contracted, he had a price of $7. He is now looking at a base price of $4. No one is telling him who is making up the $3. He asked if the elevator company would be making it up and was told, “We don't know. We don't know what we'll be able to sell it for. We don't care what the contract was”.
There was another account of a farmer who had 85,000 tons of malt. Lo and behold, it never moved. Not one bushel moved. The buyout ended up being $1 a ton. They bought out his contract instead of honouring it. Instead of being able to sell it for $4.50, he ended up getting $1.
At the end of the day, it is farmers who are suffering, and clearly we need to do this.
For my friend across the way, the parliamentary secretary, a tentative agreement means exactly that. It means that both sides have said that they actually think they have a good deal. They will take it back to their membership. On the union side, the teamsters will. They will put it before their membership and ask them to ratify it. I would suggest that folks on the other side have a little faith in the process rather than jumping the gun. A tentative agreement has been reached, and 99% of the time the tentative agreements are actually ratified, because the members who have bargained on behalf of the workers are empowered by those workers to go and do that job for them, usually with marching orders as to what they need to bargain for.
It seems to me, according to the parliamentary secretary in his announcement, that there was a tentative agreement. That is a good-news story. We should accept it as a good-news story and not look to continue to swing at workers when there is not necessarily something to swing at.
What we need to do is look at some of the things that have happened in the last year, specifically at CP. There was an article in The Globe and Mail business section last week featuring the new CEO of CP. “Harrison's Revolution” was the title of the chart it had. What was it? It was the 90,000 carloads of crude oil CP moved in 2013, which was a 68% increase over 2012. That was a good-news story for CP, not for grain, mind you, but it was a good-news story for CP.
Four thousand five hundred and fifty jobs were eliminated. That is not a good-news story for those workers, their families, and their communities and not good for farmers, because these were folks who actually drove locomotives.
Eleven thousand rail cars were removed from service. Were they decrepit? Were they broken down or no longer functioning? No, they were just taken out of service.
Then what happened? Four hundred locomotives were taken out.
My colleague from talked about the need to put more locomotive power on the track. What did CP do? It took it out, removed it.
Everybody knew we were headed for a bumper crop. At the time that we were headed for a bumper crop, the railway took capacity out, to maximize its profit. What did it get? It got a better operating ratio, it had more profit, and its shares went up. Well done, CP. It made a business decision based upon itself, not the overall system.
We know we need to get grain off the Prairies. The primary mode of transportation is rail. We have two railways in this country, CN and CP; and we have short lines that do great work, but primarily we are looking at two. We have, basically, a duopoly in this country.
I take my friends from the Liberal Party back to 2001, when they were the government. There was actually a review done on rail, at the time—the esteemed Justice Estey was actually part of that—as to whether we should have open access. That was part of it. Senator Banks was also part of that review. The recommendation of Justice Estey was that he thought open access should be part of the changes, making more competition on the rail between CN and CP, allowing other players in. Short-line railways, at the time, were very keen on it. Short-line railways, today, are still very keen on it, by the way. That would help with this emergency access, by the way, at the moment. Short-liners are willing to step up to help if CN and CP cannot.
The review panel, with Justice Willard Estey, supported it. Senator Banks supported it. It was supported by the Canadian Wheat Board. It was supported by the grain commission and growers. It was support by a number of other folks. The three major players that said they did not want it were CN, CP, and Transport Canada.
We cannot talk about CN and CP, in the sense that they are private businesses. I guess they make those kinds of decision.
However, Transport Canada is ours. It belongs to the government. We deal with that. We have a . We have authority there.
In the irony of ironies, in fact, it was actually hypocritical. At the time, CN and CP said they did not want open access to their lines in Canada; they were lobbying the U.S. government to have open access into the United States on its rail lines. Therefore, while they thought it was good for them and the U.S., they did not want to do it in Canada. They wanted to close off that loop, just to protect themselves, and got access into the United States.
The irony of all that is at the time this review was done, 12 years ago, we actually may have had more competition than we have now. There is no guarantee of that, none. We do not know if indeed those competitors were committed; perhaps they would have been taken over or perhaps they would have gone out of business. We are not necessarily certain.
However, what it points to is that, indeed, open access is an alternative to be looked at.
The government is asking for ideas from this side of the House. I am happy it is asking. That would be one idea we suggest looking at. It is not simple to do. Running a railway is not an easy business. Allowing other access on one's rail line requires logistical support and planning. For sure it does; so it has to be well thought out. However, it ought to be thought about, at this moment, at this juncture in time. We could do it for a short period of time to see how it works out. Maybe it is a longer term strategy. Maybe that would come out of the round table.
However, I have to be honest. I have this vision of a round table. I remember the railway set I got when I was a child, many years ago, growing up in Glasgow, Scotland. It went round and round and never went anywhere.
I have this vision that nothing will happen with this round table and train that goes round and round. The grain will just not move. It will not do what all of us want it to do. I do not think that anyone in the House would say we should not bother with it. The problem is that there are solutions that need to be explored, and we cannot worry about it in five years or two years. We all know there are farmers who are hurting now. We have all received emails from across the country and the Prairies from farmers who are saying they are broke because they have not moved anything. They do not get paid if they do not move it, and they cannot move it.
I talked to a gentleman just the other night from the Port of Vancouver. He said straight out that his bins in the port are half empty and that he was shuttling ships up and down the berth. He said he fills one third here and moves that one up, like parking cars. Then he moves another ship in and fills it a third and then moves it back and brings the other one back. He said he now has ships at anchor off Vancouver Island because there is no longer room to put them in Burrard Inlet. Clearly, the backlog is not at the port. Rather, it is inland, as we head. One of the ways to solve it is to look at open access. I think the government should look at that.
Looking back in time, I found that the two railways got together in 2000 for what was called the Fraser Canyon deal. They both run west up one line through the Fraser Canyon. For those who may not know, the Fraser Canyon is a bit of a bottleneck for the railways. It is part of the geography of the country we live in. What amazes me, and I have always wondered about this, is when companies say it is snowing. Yes, it is. It is winter. It is Canada and it snows in the mountains. One would think that a major railroader would think about those issues. We understand it slows things down, but the Fraser Canyon piece was done because the two railways got together and said it would be more efficient for them to do it that way: going west, they go up one side where the grade is lower, and they go back on the other side where the grade is higher, because for the most part they are coming back empty, especially the hopper cars. In doing that they created efficiencies for themselves and did not pass any of the money back. That is not unusual. If it was good enough for them to do that in 2000 and they were more efficient, at this moment in time when we need them to be more efficient and need more capacity on the Prairies to move grain, it is another idea for the government to pursue with the railways, because talking clearly has not had any major effect on them.
I know there are a lot of numbers being thrown around. Let me provide some other numbers, because we know they are being bandied about tonight. This is what CN booked for the full year last year. For 2012, it booked 597,000 potash and grain cars. In 2013, it booked and handled 572,000. It is down, not up. At this moment in time when there was a bumper record crop on the Prairies, CN's carloads were down, not up. I cannot suggest that it took cars out of service, because it did not do that, unlike CP, which took its capacity away to increase its share of profits. CN just did not deliver the cars. My colleagues have talked numerous times about a large number of orders for cars. Even the minister said that he wants to know why, if an elevator orders 150 cars, it gets 100. Why does he not know? This has been going on for months. I would have expected the minister to be out there saying, “I no longer want to ask the question. You are going to answer it and answer it now. I do not want to hear any chin-wagging stuff about it being winter. I want to know where this stuff is coming from, because clearly it is not happening. We have all heard it.”
We, as legislators, as the policy makers, have the stick when it comes to the railways, because clearly the elevator companies do not. The grain farmers certainly do not. The profits were up for both railways last year and they are singing a merry tune to their shareholders, so why would they do something different? Is it in their best interests to do something different?
I would suggest that they probably would not. They have a record year in their profit bottom line, the share price is up, and the bonus is good. Why would they want to put excess capacity on the line that they might use for a couple of months but have to carry the overhead for six months or a year? Their bottom line would shrink. Why would they do that?
They are not service providers from the goodness of their hearts. They are service providers to make money, and we should accept that. Most of all, the government should know that, as it set it up that way.
If we want the railways to provide a true service to farmers who are in an emergency situation and need to move the grain off the Prairies, then it is going to take more than sitting down with them and asking for a favour.
I would suggest that the minister sit down with the railroaders and dangle a carrot, and when they refuse it, hit them with a great big stick. Tell them that they are going to do it or we are going to start talking about the fact that what they own is from the wheels up, but we own the track. That is the way we are going to make them move.
At the end of the day, if we own the track as the Canadian government, the railroaders will move. Then we can make decisions about open access and short-line railroads helping out, because they can and they have the initiative to do that.
We can bandy about the politics of the Wheat Board, and a lot of us would like to go back to that. One thing is clear: the logistics end of the Wheat Board worked. Now, it might not have worked as well as everyone would have liked, but we threw it all out and had nothing to replace it with.
Now we have a five-year study. Mr. Bacon says that we need to put back in place something to get the crop from the farm, to the elevator, to the railway, to the port, to the terminal, and into our market. If we do not do that, he says we will tarnish our image, which is already starting to tarnish.
When we become an irregular supplier, when our customers see us as unable to get product to them, what will they do? I will bet Australia, the Americans, and Brazil will be knocking on their door saying that Canadians cannot deliver but they can.
There is an emergency debate for a reason: it is indeed an emergency. It means action, not words. I would enact it now, but I am not the government, and those are the rules of the House.
Therefore, I look to the government. Where is the action plan? Heaven knows it has enough billboards hanging about with wonderful colours. It has a lovely green on it, and I spotted orange on it once. Maybe somebody put a dash of colour in it. Show us some action on this. It is time for action from the Conservative government.
The minister and, quite frankly, the need to simply say that we have to actually act and that we are going to move forward on this. Farmers depend upon it, and it is not just farmers.
I will end with this.
There are a number of things happening across the broader economy. There is a mill in B.C. that has shut down because it cannot move product either. There are millers saying that they do not have product, and so they will probably have to go idle for a while. A canola plant in the western provinces last week went idle for a couple of days and it could not get rid of its crush. Where was the crush going? It was going to farmers who had cattle to feed. However, none of that happened, none of that moved, because as this bottleneck gets bigger, the backup impacts more than just the farmers. However, clearly, they are the ones with the most need at this moment in time because, unlike others, they do not get paid if they cannot deliver.
As I said at the beginning, these farmers have contracted to sell their grain months ago, but they still have it, through no fault of their own. They took the government's advice on the CWB and when it left they said they would forward market, do all the great things the government said, and at least they would have market freedom. The problem is that they are free to keep all their grain in their bins, which is free to them because they cannot get a nickel for it if they cannot move it.
Clearly, the obligation is on the government to show initiative, to make a decision, and to act.