Interventions in Committee
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View Pat Finnigan Profile
Lib. (NB)
I want to welcome everyone to this special meeting in early March.
Pursuant to Standing Order 106(4), four members of this committee have requested a meeting to discuss their request to invite grain producers and officials to provide an update on systemic issues in Canadian grain movement, the backlog of grain shipments, railway delays and fulfillment performance in order to improve grain shipment along the value chain.
I will open the meeting.
Mr. Berthold.
View Luc Berthold Profile
Thank you very much, Mr. Chair.
Also want to sincerely thank my colleagues who agreed to set aside a few hours during their week off to be here. It shows the importance of this issue not only for members, but also for western grain producers who are facing a major crisis.
I would like to move the following motion:
That, pursuant to Standing Order 108(2), the Standing Committee on Agriculture and Agri-Food immediately invite grain producers to provide an urgent update to the Committee on systemic issues in Canadian rail transportation and the backlog of grain shipments, given that grain farmers are facing costs incurred on unfulfilled orders, and given that delays compromise Canada's competitiveness in export markets; and that the Committee invite officials from CP and CN to provide an explanation on railway delays and fulfilment performance in order to improve grain shipment along the value chain.
View Pat Finnigan Profile
Lib. (NB)
Thank you, Mr. Berthold.
You've all heard the motion.
Are there any comments on this?
Mr. Berthold, go ahead.
View Luc Berthold Profile
Thank you very much, Mr. Chair.
The committee's Conservative and NDP members called for this emergency meeting because farmers need the government to take action now. We are united in our willingness to find immediate and long-term solutions. I am convinced that the committee's Liberal members also have the willingness to find a solution.
The situation is disastrous. When the government began an ideological battle by introducing Bill C-49, an omnibus bill from the Minister of Transport, all the observers warned it of the dangers of a new crisis.
We have all seen the figures. Between the two of them, CN and CP fulfilled 32% of hopper car orders last week. CN fulfilled 17% of the orders, and CP fulfilled 50% of them. Combined, last week marked the worst performance so far for the 2017-18 crop year.
Farmers are forced to absorb demurrage fees. We don't often use that term. I will give the definition of “demurrage”, for those who are not used to hearing that word. Demurrage fees must be paid by the charterer to the ship owner, in a voyage charter, when the time it takes to load or unload exceeds the laytime set out in the voyage contract. It's good to use the proper term.
In order words, the grain remains in elevators.
We learned that there are 35 vessels in the Port of Vancouver, we think for grain. Another five are waiting in Prince Rupert. With every unfulfilled order, Canada's reputation as a reliable trading partner is taking a hit. To quote an editorial:
Increasingly, our reputation among global customers is that of a supplier with aging and inadequate transportation infrastructure which fails to deliver its products on time, whether it’s canola or crude.
This has very real implications at a time when we want to expand market access, maximize our crops' yield, and increase our exports.
Every unfulfilled order undermines the reputation of reliable partners for Canada.
Unfortunately, the Liberals have ignored our advice to pass a separate bill on grain transportation and have not extended or made permanent the provisions of the Fair Rail for Grain Farmers Act. So protection for grain producers disappeared on August 1, 2017. Consequently, as predicted by the official opposition and a number of observers, a crisis occurred. It did not take two years; the first winter following the end of protection ensured by Bill C-30, a crisis situation arose in grain transportation.
Allow me to read a few excerpts of comments made on June 5, 2017, at second reading of Bill C-49, since that's pretty important.
My colleague Kelly Block, who is the transportation minister within our shadow cabinet, took the floor to speak to this omnibus bill. If people are still unsure that it is indeed an omnibus bill, here is how Minister Garneau himself described it, on June 5, 2017:
Specifically, the bill proposes to strengthen air passenger rights; liberalize international ownership restrictions for Canadian air carriers; develop a clear and predictable process for approval of airline joint ventures; improve access, transparency, efficiency, and sustainable long-term investment in the freight rail sector; and, increase the safety of transportation in Canada by requiring railways to install voice and video recorders in locomotives.
That is how the minister himself described Bill C-49. You will understand that we are far from Bill C-30, which focused only on grain transportation.
That is one of the reasons why the consideration of Bill C-49 is taking so long: the government wanted to make an omnibus bill focusing on several different topics and concerning a number of stakeholders. It was clear that its consideration would take time.
My colleague Mrs. Block reiterated the following, during the study of Bill C-49, at second reading:
Furthermore, when I introduced a motion in transport committee last week calling on the committee to write to the Minister of Transport and his government House leader to ask them to split the bill into the following sections, rail shipping, rail safety, air, and marine, to provide an enhanced and possibly expedited scrutiny, every single Liberal member voted against it without even a single comment as to why.
In short, on June 5, 2017, we already asked that Bill C-49 be split, so that we could study the protection of western grain producers more quickly.
The Conservatives responded positively to the request of their Liberal colleagues from the transport committee to expedite the study of Bill C-49. The Conservatives agreed to return to committee a week before Parliament resumed. NDP members were also in attendance. If I remember correctly, they were also fully prepared to review the bill and to dedicate a whole week to that study in order to expedite the process. After the summer break, all the committee members came here and spent a week discussing Bill C-49. We knew it was important.
However, there was a major issue. When we were studying Bill C-49, the provisions in Bill C-30 had already expired nearly two months before. So the protection was already gone. Those are the arguments my colleague Kelly Block reiterated when the committee studied Bill C-49.
Let me draw your attention to another excerpt from Mrs. Block's comments:
In the fall of 2016, the Standing Committee on Transport, Infrastructure and Communities undertook a study of Bill C-30 and held a number of meetings on the merits of these measures and whether they should be allowed to sunset. We were assured that if we lived with this extension, these issues would be dealt with by August 1, 2017.
Unfortunately, the government did not keep its word. It did not ensure that those provisions would be dealt with by August 1, 2017.
Mrs. Block concluded her comments with the following:
In conclusion, this much is certain: the key measures in Bill C-30 will be allowed to sunset on August 1, before this legislation receives royal assent. The Liberals have had nearly a full year to get new legislation in place but failed to do so, and shippers will suffer the consequences.
On June 5, 2017, she predicted that this would happen. Unfortunately, we are now facing that situation.
The Liberal government and railway companies have been inactive since August. It was business as usual for everyone. It was only yesterday that the Minister of Agriculture and Agri-Food bothered to take the first step to resolve the crisis: he wrote a letter with the Minister of Transport asking railway companies to prepare a plan to resolve the crisis and to post that plan on their websites by March 15. However, since the consequences of this crisis are being felt every day, last week we asked the government to act now, to implement the necessary tools and use its power to resolve this crisis as quickly as possible.
It seems that the calling of this emergency meeting had the positive effect of getting things moving. The Minister of Agriculture and Agri-Food has at least written a letter. This is a step in the right direction, but we have to go much further. We were expecting the minister to call a Cabinet meeting to adopt measures and make things happen, so that this crisis would be resolved immediately. The presentation of a plan and measures to ultimately find a solution should not be endlessly postponed again. The crisis is happening now.
This leads us to conclude that the government, aside from this letter, is once again relying on luck and the good faith of railway companies, instead of taking action and implementing the necessary measures to ensure that grain is shipped to markets, that farmers are paid and that this season's exceptional crop yields would not be compromised owing to a lack of planning by those who have the power and the tools to take action.
It's simple: the Liberal government must take immediate action to address the backlog in grain delivery and provide the tools needed to hold railway companies accountable for inadequate services. Inaction is costly. Talk to the president and chief executive officer of CN about that, as he lost his job because CN had not managed to provide a quality service. CN clearly indicates in its press release that it fired its president and chief executive officer for that reason.
If CN has realized that it should have taken action earlier, I don't understand how none of the advisors and other employees who are working at the offices of the Minister of Transport and the Minister of Agriculture and Agri-Food saw this crisis coming. Will a minister have to be fired for inaction—
View Pat Finnigan Profile
Lib. (NB)
Just a moment, Mr. Berthold. I was just told that there is no sound for the meeting on ParlVU. So I propose that we take a break for a few minutes to try to resolve this technical problem.
View Luc Berthold Profile
No problem, Mr. Chair. That will give me a chance to take a sip of coffee.
View Pat Finnigan Profile
Lib. (NB)
We're back in session. The problem has apparently been fixed.
Go ahead, Mr Berthold.
View Luc Berthold Profile
Thank you very much, Mr. Chair.
I was at the end of my introduction.
As I was saying, the federal government must act right away. We cannot wait one or two weeks. The Liberal government must take immediate action. It has the means and the capacity to take action to ensure that this is working.
As I was saying, one of the two railway companies in question, CN, fired its president and chief executive officer owing to his inaction and the lack of services, according to the CN press release. There is a true crisis happening. People from the offices of the Minister of Agriculture and Agri-Food and the Minister of Transport should take note of what just happened at CN and understand the seriousness of the crisis and the urgent need for action.
I have also taken note of the apologies issued this morning by CN. That is an action I want to commend. CN recognized that it had failed to fulfill its duties in the case. Allow me to quote a few excerpts from the CN press release:
“We apologize for not meeting the expectations of our grain customers, nor our own high standards,” [Interim President and Chief Executive Officer] Mr. Ruest said. “The entire CN team has a sense of urgency and is fully focused on getting it right for farmers and our grain customers, regaining the confidence of Canadians businesses, and protecting Canada's reputation as a stable trade partner in world markets.”
CN decided to take action. All this is probably a consequence of the Canadian Federation of Agriculture's arrival in Ottawa last week, of the press conference held by western grain farmers and of the convening, thanks to our initiative, of this emergency committee meeting. When we invest all our energy in something and work together, we can achieve results. However, the committee has few means at its disposal. It has to rely on the decision of the government and the cabinet to expedite the process. That is what we want.
Time is of the essence; we called for this emergency meeting to recognize and resolve the worst backlog in a number of years in grain shipping.
Everyone here is aware that this is happening at a time when an ambitious export objective has been set—$75 billion by 2025. That figure comes from the Barton report. A study has even been undertaken to figure out how technological innovation can be used to achieve that export objective. Logically speaking, without an adequate transportation infrastructure and with companies being unable to send Canadian grain to markets, we will never reach that ambitious objective.
That is why it is important for us to talk about it. The committee should take note of this and hear what producers and railway companies have to say about the current situation in order to find a medium and long-term solution.
I repeat that, in the short term, the solution is in the hands of the Minister of Agriculture and Agri-Food.
The crop yield was very good this year. Farmers should not be punished for successfully increasing their production. However, they are literally paying the price of increased productivity because they cannot ship their product.
Right now, when we are trying to increase our access to markets, not being able to perform on contracts in a reliable and timely manner goes in the opposite direction of the one we want to take. There is a lot of volatility around access to markets, specifically given the renegotiation of NAFTA, but also the unexpected tariff increase on Canadian products in markets where Canada would like to expand, especially India.
Those situations are beyond our control; we cannot do anything about them. We have no decision-making power in what is happening abroad. However, we have a way to do something about our grain transportation system, as we are the ones who control it. We do not depend on other countries for that. It is up to us to implement appropriate measures to ensure that our grain is shipped to foreign markets. We have to implement everything to ensure that Canadian farmers have access to a logistical system that delivers their products to markets in a predictable and timely manner.
Todd Lewis, President of the Agricultural Producers Association of Saskatchewan, said that his year's shipments are disastrous and that we cannot allow ourselves another similar year.
Daryl Fransoo, Director of the Western Canadian Wheat Growers Association, said that a crisis is happening right now. The levels are astronomically bad. Farmers are getting together and trying to do something.
Wade Sobkowich, Executive Director of the Western Grain Elevator Association, said that the situation was not improving, but rather getting worse.
Art Enns, Vice-President of Grain Growers of Canada said that this situation is unacceptable and must change.
Finally, the Premier of Saskatchewan, Scott Moe, said the following:
“We need the grain moving.”
I quote: “We need it moving sooner rather than later,” Moe said, warning there “is a cash crunch that is coming.”
We will certainly have the opportunity to talk about that. Transportation and shipments are being discussed a lot, but let's not forget the producers who cannot be paid because they cannot ship their grain to market. This is a disaster for many farmers in the west.
The grain crisis of 2013-14 cost the Canadian economy $8 billion. This loss affects not only the farmers, although they do bear the brunt. It is also a direct loss to our economy.
There are reports indicating that losses will be higher this year. This is unacceptable. We cannot constantly undermine our own growth. As everyone knows, people want more Canadian products because they are the best in the world. Technology is being considered as a way to meet export targets, but what good does it do if the higher yields of perishable crops are lost?
We have to find a long-term solution. The solution must not only provide quick relief, although we do want an immediate solution. The committee must definitely hear the solutions that grain producers have to suggest and recommend. We must hear what explanation CN and CP have for the disaster this year, what they have done, what they will do to remedy it, and what they will do to help. We must also ask the government what it is going to do for grain producers in the west, who will unfortunately suffer major economic losses if nothing is done to help them.
We can't keep talking about these problems year after year. We need a viable solution specifically for Canada in order to resolve the systemic issues in grain shipment.
Clearly, we will always be at the mercy of the weather. We live in Canada and have winter every year. Unfortunately for those who do not like winter, it is part of life in Canada. Why? Because we are in Canada. It is unacceptable for the rail companies to use this as an excuse.
In conclusion, this study is intended to identify the systemic problems. We want to hear from stakeholders who want a plan and action immediately, but who also want us to find a way to prevent this crisis from happening year after year. We want to make specific recommendations to the government to find solutions to the grain shipment crisis in Canada. We are asking for the support of all MPs around the table, that is, of all members of the committee. We cannot say it is not our problem, because it is Canada's problem. When Canada is unable to export its grain or sell its products abroad, it is our responsibility to address the problem. It is a problem for agriculture, because we are talking about agricultural products.
There is more for us to do than consider Bill C-49. We must also do an exhaustive review of the problems that undermine grain shipment and provide viable and feasible solutions immediately.
View Pat Finnigan Profile
Lib. (NB)
Thank you, Mr. Berthold.
Mr. Breton, you have the floor.
View Pierre Breton Profile
Lib. (QC)
View Pierre Breton Profile
2018-03-07 13:22
Thank you, Mr. Chair.
I will be very quick.
First I want to thank my opposition colleagues for tabling this motion. We are essentially in favour of the motion tabled today. We would, however, like to propose a few amendments, which I will mention right now.
We would like to use an already scheduled meeting, the committee's meeting on March 21, 2018, to discuss this issue. So we are taking immediate action. In the first hour of the meeting, we could meet with CN and CP officials. In the second hour, we could hear from representatives of the Grain Growers of Canada.
We would also like the list of witnesses to be sent to the clerk no later than 5 p.m. on March 15, 2018.
View Pat Finnigan Profile
Lib. (NB)
Thank you, Mr. Breton.
You heard the amendment.
Would anyone like to comment?
View Luc Berthold Profile
Mr. Chair, may we have a copy of the amendment?
View Pierre Breton Profile
Lib. (QC)
View Pierre Breton Profile
2018-03-07 13:23
I do not have a copy but I can read it out or the clerk can.
View Pat Finnigan Profile
Lib. (NB)
The clerk will read out the amendment.
Ariane Gagné-Frégeau
View Ariane Gagné-Frégeau Profile
Ariane Gagné-Frégeau
2018-03-07 13:23
The amendment proposes that a meeting be held on March 21 during which the committee would hear from CN and CP officials from 3:30 to 4:30 p.m., and from the Grain Growers of Canada from 4:30 to 5:30 p.m. The amendment also proposes that the list of witnesses be sent to the clerk of the committee by 5 p.m. on March 15.
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