That the fifth report of the Standing Committee on Transport, Infrastructure and Communities, presented on Tuesday, May 31, 2016, be concurred in.
He said: Mr. Speaker, it is my privilege today to move concurrence and speak in support of the report of the Standing Committee on Transport, Infrastructure and Communities, which contains the text of a resolution to postpone, for a period of one year, the repeal of certain provisions of the Canada Transportation Act that were enacted by the Fair Rail for Grain Farmers Act.
The resolution, if approved by this chamber, would allow a one-year extension of the government's authorities over four key provisions related to: first, minimum grain volume requirements; second, operational terms related to the arbitration of service level agreements; third, compensation for rail service failures; and fourth, differentiation of interswitching distances by region and goods.
Those who were here at the time will recall that the Fair Rail for Grain Farmers Act was introduced in May 2014 to address the backlog of grain shipments that emerged during the winter of 2013-14 due to a record-sized grain crop and extreme cold conditions that significantly impeded the ability of the railways to move grain across the Prairies.
When introduced, the legislation received all-party support. At that time, we recognized the need to act quickly to ensure grain continued to move to port and to preserve Canada's international reputation as a reliable supplier of grain.
I am pleased to say today that the system has fully recovered from those challenges of the winter of 2013-2014 and a healthy grain crop is moving well through the supply chain this crop year. As of the end of April 2016, which represents the latest data available at this time, rail shipments of grain from Western Canada to all destinations were almost 34 million tonnes, over 5% higher than at the same time in the previous year. Shipments out of western ports to export destinations through April of this year are over 27 million tonnes, which is 7% higher than the same period last year.
Our Grain Monitor is also reporting that rail service has been strong and vessels are spending less time in port than in previous years. With the freight rail system currently performing well, we have the opportunity to consider the best approach to ensuring optimal performance over the long-term. Indeed, the government is in the process of doing this and our assessment will be informed by the findings of the Canada Transportation Act review.
As well, some will recall that in the summer of 2014, the CTA review was accelerated by one year and the review panel was asked to give grain transportation priority consideration in its mandate. The CTA review, led by the Hon. David Emerson, took a broad look at Canada's transportation system and made a number of recommendations on grain transportation in particular and the freight rail system more broadly.
Stakeholders across our nation were active in providing their perspectives on the challenges and opportunities facing the transportation system in the years ahead as part of the overall review.
The tabled the review report in Parliament on February 25, 2016. It provides a source of independent advice as work continues to support the government's agenda as it relates to the transportation system.
In order to allow a comprehensive consideration of the long-term future of Canada's transportation system, while providing policy predictability to stakeholders, on April 22, the , together with the , announced the government's intention to work with Parliament to postpone the repeal of the Fair Rail for Grain Farmers Act provisions, which are set to expire on August 1, 2016.
I am here today to seek support for the resolution, which would do exactly that.
In April, the gave a speech in Toronto at the Economic Club of Canada, stating his intention to develop a long-term vision for Canada's transportation system that is focused on the future and on the outcomes we as a nation want to achieve. They include better growth, more competition, and better service.
Over the coming months, both the minister and the House of Commons Standing Committee on Transport, Infrastructure and Communities are taking the time to fully consider the future of transportation and how it can enable economic growth, job creation, and overall Canada's competitiveness and performance in global markets.
We want to ensure Canada's transportation system is innovative and adaptable to the changing trade flows globally and to assure Canadians that we are pursuing these goals along with a strong commitment to public safety and sustainability.
The government is carefully considering the CTA review report which includes recommendations on a range of issues, many of which were raised in stakeholders' submissions. We are interested in hearing the perspectives of all stakeholders on these recommendations and more broadly, on a transportation system as a whole, and not just one sector or one mode.
Collaboration with all key partners will be essential to move forward and ensure that Canada's transportation system is well positioned to capitalize on global opportunities, contribute to a higher-performing economy, and meet the evolving needs of all Canadians.
In this context, the minister and Transport Canada officials have started a wide-ranging stakeholder engagement exercise that will continue over the summer to discuss and further elaborate a long-term agenda for transportation in Canada, including elements related to freight rail transportation.
The House of Commons Standing Committee on Transportation, Infrastructure and Communities has also committed to study the issues related to freight rail transportation as it relates to grain shipments in Canada.
Discussions with stakeholders, including ministerial round tables, have begun and focus on broad themes, including strong and strengthened trade corridors, green and innovative transportation, the traveller, waterways, coasts, the North, and of course, safety.
Postponing the repeal of the Fair Rail for Grain Farmers Act provisions will allow us to fully assess the freight rail transportation system for all commodities, in the context of responding to the review of the Canada Transportation Act.
We know full well there are a range of views on the provisions in the Fair Rail for Grain Farmers Act. That is why we want to situate our consideration of these issues in the broader context, one that encompasses the whole freight rail transportation system. That way, we as a nation can align the transportation system overall to meet the future needs and support economic growth for our great nation.
Approval by this chamber of this resolution would provide predictable conditions for shippers and railways to plan for the upcoming year while we undertake this very important work.
Mr. Speaker, it is a privilege for me to stand in the House to talk about the provisions we have before us.
I have the privilege of serving as the official opposition representative responsible for agriculture. I can tell members that I may be seen as having a little bit of a conflict of interest here, because in fact, I am a farm kid. I am a farm kid who is very proud of the work my parents did and the work my family continues to do, which is being grain farmers on the prairies.
I think it is important that we reflect a little on the people who would be mostly impacted by the provisions being looked at today. Of course, this is an extension of something the previous government did, so let us look back in history at what brought us to sensing the necessity of moving forward on the Fair Rail for Grain Farmers Act.
I would note that as a farm kid, I came to recognize one reality very early in life, which is that a farmer does not make money every year. As a matter of fact, growing up, I understood very clearly that farmers often go year after year hoping that next year will be better or that the next year might have a different result than the year previous. That is what is required to be a farmer. A farmer must be an optimist by nature, otherwise he would be a depressed person.
Of course, there are so many things that determine whether a farmer might be successful. One of the most important things is the uncertainty of the weather. I can say that having grown up as a farm kid, I still look at the weather forecast like I am a farmer, wondering if it is going to rain when it is dry and if the rain will stop when it is wet. It may be something that comes through the bloodline.
I am not sure if that is the reality or if as a kid it was impressed upon me so clearly the fact that if it rained when it was dry, it was important for the family's well-being, and if it stopped raining when it was wet, that was a good thing for the family in the same way. Of course, we were always concerned about those considerations. We were also concerned if there was an early frost that might impact the family's well-being.
We know that a farmer has to bank and gamble that one year in every so many years will be a good year, because a farmer cannot continue indefinitely not making money on the farm.
In 2013, we had a bumper crop across the Prairies. This was a unique reality, and an important one. It was important because there were many farmers across the Prairies who had been struggling in the previous years. Of course, there were a number of reasons for that, weather, of course, being a big factor. However, this was an incredible year in that we saw the yields across the fields of the Prairies and across Canada go up by about 33%. That was an important year.
It is also important to recognize that for farmers to make money, they have to get that product to market, so farmers became concerned very quickly as they saw the amount of the crop coming off the fields. They saw the yields, and they recognized that the grain was going to have to move.
There were some realities in terms of the weather conditions that developed over the months that followed the harvest, and there was some difficulty in trains moving because of inclement weather. However, what became a major concern to farmers across the Prairies, and I heard it first-hand, not only from my own family members but from my constituents from corner to corner in my constituency, was that the grain was not moving and that it was detrimentally impacting the bottom line for farmers.
There were many farmers who were fearful that if they could not get the product moved, they were going to have massive spoilage, because much of the grain that had been harvested was not in proper long-term storage, because it was such a bumper crop. There was also a recognition that if the crop was not moved, it was going to mean that farmers were not going to be able to pay their bills. That was the reality we found ourselves in.
We also found that while the rail companies said they were doing everything in their capacity to move grain, farmers were not seeing that reality on the ground. They were not seeing the rail companies responding to their expectations with the speed they would have expected. Therefore, the previous government, after a significant amount of deliberation, made a determination on a number of fronts, and the result was the Fair Rail for Grain Farmers Act.
This act had a number of provisions. One was to ensure that better information would flow from the rail companies to the shippers. That was important, because in the absence of information, it is very difficult for farmers, shippers, and those people on the receiving end of the shipments to plan and to understand what is happening and what could be done to improve the system.
There were a number of other provisions, including one of the most important, which is the provision for inter-switching. Inter-switching is the ability of a shipping company to use a railway that it does not necessarily own for a portion of track length. In the past, there has been an ability for inter-switching for a certain length of track. However, that needed to be extended to ensure that there was a more competitive environment such that if one company was not serving a community, another company could come in and actually service those communities and respond to the demand in those communities.
This is important for us to understand. Those parliamentarians and Canadians who live in urban centres may not understand what happens in rural communities. In the communities I represent, we have the provision of service by only one rail company. It is CN, and there are other communities that are serviced only by CP or other short-line rail companies. In most rural communities, there is not an alternate service provider.
Canada exports significant amounts of grain. As a matter of fact, the vast majority of what we produce actually gets exported. It is some $21 billion in exports on an annual basis. If farmers want to get their product to market, they are limited in how they can move it. In most communities, moving that $21 billion worth of grain means that farmers depend on a single rail company. They do not have alternate ways to move the product, with the exception of trucking the grain out. In many cases, the trucking of grain long distances is cost prohibitive and actually would reduce the profits to the point where many farmers would not be able to move their product in a competitive way. Therefore, farmers and shippers depend on a single rail company in the vast majority of rural communities across the Prairies and in many farming communities across the country.
The inter-switching provision is an important one. It allows rail companies to compete with one another in communities in which they do not have rail service or a track specifically. Rail companies are able to move into those communities and pick up the demand being created by the amount of grain or the number of shipments to be shipped that are not being serviced by the rail company that exists there today. There is evidence that as a result of that provision, we have a seen a change in the attitude of the rail companies that serve those communities where they have seen competition increase.
I heard the Liberal member across the way talk about the necessity of competition in the scope of the entire review. I am thankful that the government has extended these provisions. Obviously we have been asking for this. It comes as no surprise to the government that we are supporting this. This is what we have been asking for, so we appreciate this.
However, as we look at the CTA review, it is important that we listen to the stakeholders. I have heard consistently from the canola producers, oat producers, barley producers, and wheat producers that inter-switching is a game changer for their ability to move their commodities in a way they have not been able to in the past. They have seen that not only is there the possibility of competition within their communities but that as a result of that possibility of competition within their communities, the regular transport company is being more responsive to the demands and the expectations of those shippers in those communities. They are moving the product faster and moving it in a way that responds to the demand.
No perfect system can be created within the Canadian context. Grain comes off the fields in the fall. It happens in September and October. The weather starts to get nasty in some parts of this country at the end of November, and it is difficult to move massive amounts of commodities during the winter, especially if we have inclement weather.
I am, like my dad, an eternal optimist. I believe that this year could see another bumper crop. I have to believe that, otherwise I would not be a good farmer. I would not be a good representative of farmers if I did not believe that there was a possibility of a very good year. I believe that we have the possibility of having a bumper crop again this year.
I also believe that we might have inclement weather this winter. That is the natural reality in this country. We might end up with a nasty winter. The last time this happened, we ended up with a major backlog of grain on the Prairies. There need to be tools in the government's hands so that it can respond to these conditions to ensure that we get grain moving. Farmers need to be able to get their product to market. That is essential for the survival of the family farm throughout the Prairies and throughout Canada.
While the rail companies might be trying to do what they feel they need to do, their priorities are sometimes different from those of farmers and governments. Governments have a responsibility to respond to the expectations and the demands and the needs of constituencies across this country. I am optimistic that we will have a problem with rail service this fall in so much as I am hopeful that we will see another bumper crop across the Prairies.
The government needs the tools that are included in the Fair Rail for Grain Farmers Act. It contains the right combination of tools to ensure that information flows so that inter-switching is available to the rail companies to ensure that there is competitive behaviour in a significant number of communities that currently are serviced by a single rail line.
It is important that we continue to have the provisions of the act until such time as the government completes the CTA review. Looking toward that, I would respectfully ask that the government consider what we have learned thus far, and that is that inter-switching, or some version of inter-switching, is essential to ensure that pressure is put on companies that service communities in a monopolistic way.
I am not saying that there is necessarily a rail monopoly in Canada, but there is a rail monopoly in the vast majority of rural communities in this country. The extension of inter-switching into these communities is absolutely essential if we are going to have a competitive market and all of the positives that flow out of competition in terms of providing adequate service for those communities.
It is absolutely essential that we continue to allow information to flow and that we continue to get good data. The act obviously delineates the data that needs to be collected and that needs to be provided. It is not as good as it should be even now, but the information that is required through the act is essential so that we can continue to build a better system that will provide better service for farming communities, and more importantly, will continue to provide better service for farmers across the country.
My family has seen the evidence of bad rail service. It has suffered as a consequence of that. My family is exactly the same as every single family that lives in our region. I have seen first-hand the impact on people and their families and their farms. It is not only the financial stress but the individual stress that bad rail service places on farms and farm families.
Let us never lose sight of the fact that we need to move forward on these provisions to ensure we help support the people who produce the best quality and most highly-demanded product that we produce in Canada. We should be proud of the people who produce our agriculture commodities. We need to continue to defend their interests and ensure they have a bright, strong and prosperous future.
I thank the government for moving on extending these provisions. We will continue to call on the government to make the provisions of this act permanent, especially those I have spoken about today. These have been a game changer as far as moving grain in our country and this should be the new norm.
Mr. Speaker, I, too, want to thank the government for moving forward in this way. I also want to point out that this is the beginning of a process, not the end. I know it is an interim measure, but interswitching has been useful, and it is gaining in use, with producer cars and so on. A lot of short line rail now make use of that interswitching. This reflects the new reality.
Years ago, there were some 1,700 or 1,800 points where people could actually deliver their grain, but they could not. The Wheat Board made their permit books only good to one elevator. Now they can deliver it anywhere they want, but there are less than 300 catchment points. The interswitching, extended to 160 kilometres, starts to reflect that new reality, and I know my friend understands that. In some cases they are going to have to go further than that, writing a permit to go 200 or 220 kilometres.
The other thing that is so important to continue on with is the data, the information. However, it has to be a two-way street. There is a lot of information from the shippers going to the railways so they will know what cars to deliver, but the shippers are not getting the information back from the railways, or when they get it, it is out of date, or they have withheld cars, and so on. It is the only way they could have a road map, a plan, for what is happening.
It is easier to do right now because of all the bulk commodities. Grain is about the only one that is moving with any kind of volume. Oil is down. Coal is down. Potash is down. It is not a question of track capacity or cars. It is a question of engines and crews. Right now, CN is fulfilling its obligations about 80% of the time and CP is at a dismal 60% to 62%, even with all the other commodities down. A lot more work needs to be done.
This is the beginning of a process. No one is addressing the adequate and suitable language that needs to be attached into the next tranche that is going to be worked on. Then there are reciprocity and penalties. When the railways bring a car and the elevators do not load it quickly enough, they charge them for a demurrage day. However, when the railways do not bring the car and it is late a day, there should be the ability to have that reciprocal penalty. I know my colleague understands a lot of this.
Again, this is the beginning of the process. It gives us some breathing space but, certainly, a lot of this work needs to be done to really keep the lens on the railways to ensure they measure up.
Mr. Speaker, I would like to say at the outset that I am sharing my time with the member for .
Before I proceed with my speech, I just want to comment on the mention made by my colleague in the Conservative Party. I have been working very closely with the NDP agriculture critic, sharing great frustration with the breadth of the issues in transportation and that for this area of agriculture, it makes common sense for those who are dealing, day in and day out, with agriculture issues that maybe these matters to do with the transport of our agricultural products should be going, at least in part, to the agriculture committee.
We will continue to pursue that. Lord knows and those of us who are on the transport committee know that we have a lot to deal with anyway.
I feel confident in sharing that prairie farmers will be greatly relieved that the government has at long last, and at the very last possible moment, taken action to extend the time period for the application of the emergency legislation enacted last year under the .
One important provision, as we have discussed here, of that law postponed the expiry of the extended access by farmers to interswitching from 30 to 160 kilometres until August of this year. Were this action not taken, farmers would have been greatly disadvantaged.
Greg Sears, chairman of the Alberta Canola Producers Commission supported this extension, which is also endorsed by the Agricultural Producers Association of Saskatchewan, the Canadian Canola Growers Association, the Barley Council of Canada, the Canadian Oilseed Processors Association, Cereals Canada, Prairie Oat Growers Association, Grain Growers of Canada, Pulse Canada, Western Grain Elevator Association, and the Inland Terminal Association of Canada. They all support this.
Mr. Sears said:
Extended interswitching is being used by grain shippers and is emerging as an effective tool to provide better rates and service between two Canadian Class 1 railways, as well as other North American railways. Time is of the essence to ensure this provision does not lapse before parliament adjourns for the summer.
Farmers, especially in the Prairies, need better access to interswitching to get their crops to market. This was identified as a key issue in the Emerson report, but extended rights under the are set to expire August 1 of this year. This means that many farmers could lose access to markets this season, which would lead to severe hardship.
On May 13, at the request of the Canadian grain, canola, and pulse growers, I put this exact request to the government on behalf of agricultural producers. I asked that the government commit to legally extending these rights for fair rail before the House rises in the summer. While the made a commitment in April of this year, it was not until today that any action occurred.
This motion will ensure extended access for at least another year. For this coming year, Canadian grains and pulses will potentially reach markets in a timely manner. This is critical to provide expanded options for producers to access markets, thereby making grain sales more competitive. However, as grain producers have advised, they require longer-term solutions than just a one-year extension.
Again, as Greg Sears has expressed:
Truth be told, all farmers would benefit from 1,000 kilometre interswitching or open running rights because there are still major farming areas not receiving any benefit from the extended interswitching, such as the Peace region of Alberta that is over 500 kilometres north of Edmonton.
As Mr. Sears reminds us, agriculture is among the most trade-dependent sectors with the majority of product exported. He reminds that rail remains the only economical option to ship those products from prairie to port.
This makes prairie producers almost entirely dependent on the railways for the long-term viability of our Canadian farms. Farmers are reminding us that Canada cannot afford a repeat of the 2013-14 shipping debacle and the damage to the Canadian agriculture industry as a reputable supplier of high-quality grains and oilseeds.
In the farmers' view, these measures are critical to correct the imbalance of market power controlled by the railways. As submitted by the Agricultural Producers Association of Saskatchewan, further measures will be needed to “address the fundamental problem of railway market power as the primary factor constraining rail service and commercial accountability in the grain transportation system.”
The president of the Canadian Federation of Agriculture, Humphrey Banack, an Alberta farmer, has said that extended access to interswitching is critical in order to hold rail companies accountable. He recommends that the extension continue, at a minimum, until after the Emerson report is considered and acted upon by the government in a process, he stresses, of direct consultation with the agricultural producers.
As my Conservative colleague has stated, what would be absolutely critical is that, as the government moves forward to review the Emerson report and all of the issues that arise out of the , the producers themselves play an active part at the table and not be peripheral. It is absolutely critical to our economy at this time, particularly in areas such as Alberta, where the economy is suffering. Agriculture has always been an important part of the revenue for my province and contributes to the wider Canadian economy. It is absolutely necessary that we get this right and that we do not let the rail companies continue to, frankly, railroad our farm producers.
I am very happy to support the motion, which I contributed to at committee. It is very important that any review of the motion be further expedited so that the farmers have some kind of clarity and are not left hanging, as they were this year, right to the bitter end.
Mr. Speaker, I am pleased to speak today about the motion from the Standing Committee on Transport, Infrastructure and Communities.
We have been calling for the Liberal government to take action on the grain transportation file for a long time. The report simply requests that the changes set out in Bill , which expire in August 2016, be extended for one year. I agree with that request and will support it when it comes time to vote.
Before explaining why it is important that the government extend these provisions of Bill , I would like to give my colleagues in the House a little bit of background about the grain transportation crisis. About two years ago, I spoke specifically about Bill in the House.
The combination of an excellent harvest and a harsh winter uncovered major flaws in our grain transportation system that cost farmers and the Canadian economy between $7.2 billion and $8.3 billion.
Although the government at the time had known since the fall of 2013 what our farmers would be up against, Bill was its belated response to this major crisis. The opposition parties and stakeholders had to pressure the government for months before it did anything.
Unfortunately, the bill did not go far enough. What is more, it was temporary, as members can see from the provisions that expire in August.
The Premier of Saskatchewan said that the bill was flawed and disappointing. Throughout the crisis, the Conservatives acted as if the situation was out of the ordinary, even though farmers had clearly indicated that the system was broken and the duopoly of Canadian Pacific and Canadian National over the market was allowing the companies to provide inadequate service without fear of repercussions. There is still an imbalance of power between farmers and the railway companies.
In an attempt to address the many shortcomings in Bill , my party proposed a number of amendments: implementing mandatory reporting of the price of grain throughout the transportation system; requiring adequate service in all corridors; ensuring that producers in all affected regions would be consulted about the regulations; requiring the government to work with the provinces to develop and implement a plan for open access running rights to ensure effective competition in the rail service; imposing a moratorium on the closure or delisting of producer car sites; increasing fines and directing those revenues to compensation programs for producers; and opposing the temporary nature of the provisions in Bill , which suggested that systemic structural problems were actually temporary and exceptional.
Unfortunately, all of the amendments that the NDP presented in committee were rejected. By the end of winter 2015, the delayed delivery of more than 11,000 grain shipments prompted us to try again. Despite Bill , there was another crisis.
As a result, I moved another motion in the Standing Committee on Agriculture and Agri-Food for the immediate study of problems related to the transportation of grain and agricultural products. Subsequently, my colleague from moved a motion in the House.
His motion, which was adopted unanimously on April 22, 2015, called on the House to recognize that an increase in rail service and capacity is essential to the livelihood of Canadian agriculture and that changes to legislation are needed to address the structural gaps in our system.
When I spoke to the motion, I made sure to emphasize how important it is for the government to listen to all stakeholders. That point is important and remains valid.
The current government should improve the system. It should implement the recommendations of all stakeholders, the experts, and especially farmers.
I am pleased to see that the said that he would take the Emerson report as advice only and that his government would consult stakeholders before making any decisions.
I can tell him right now that producers and shippers are not keen to abolish maximum revenue entitlement and interswitching. Stakeholders all agree, as do the parties here in the House, that these two measures should be removed.
As Dan Mazier, the president of Keystone Agricultural Producers, said:
“The report doesn't address [the lack of competition in grain transportation] at all, and this is the fundamental thing those in the grain industry believe lies at the heart of all of our problems.”
Since the beginning of the year, stakeholders have also all agreed that it is important to extend the provisions of Bill , which expire on August 1. All of the groups I met with mentioned this to me. The members of the Standing Committee on Agriculture and Agri-food received many letters to this effect from such organizations as Alberta Barley, Alberta Canola, Alberta Pulse Growers, Alberta Wheat, and Grain Growers of Canada.
They wrote to us to encourage the fact that we need to act very quickly and that the pro-competitive measures introduced in Bill C-30, the Fair Rail for Grain Farmers Act, do not expire on August 1.
Among the other measures, the legislation provided for the establishment of minimum grain volume targets for railways, gave authority to the Canadian Transportation Agency to establish regulations governing rail service level arbitration, and provided for the extension of railway inter-switching distances from 30 km to 160 km, in Alberta, Saskatchewan, and Manitoba.
Parliament must pass a resolution prior to August 1, 2016 to extend these elements of railway regulation or Canadian shippers will lose these important shipper protection measures.
The report presented to the House by the Standing Committee on Transport, Infrastructure and Communities goes precisely along the same lines. That is why we support it. However, the government must adopt a long-term vision and address producers' concerns. This is important. A number of agronomists and officials at the Department of Agriculture and Agri-food have said that crop yields would only increase.
If the government does not improve our system, we will see more crops like those we saw in 2013 and more crises like the one we experienced in 2014-15. The government must show leadership and must implement long-term solutions for producers.
I sincerely hope that the Liberal Party will keep its promises on this issue and that its decisions will be consistent with what it said and did when it was in the opposition. It is one thing to get all worked up to defend producers when one is in the opposition, but it is another thing to do so when one is in government.
Since the beginning of their mandate, the Liberals have not had a great record on agriculture and agri-food, but they now have an excellent opportunity to take action and to stand up for producers. We hope that they will take this opportunity today and will take action quickly.