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Results: 1 - 7 of 7
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 19:33 [p.17281]
Mr. Speaker, my colleague on the other side just asked about the introduction of this piece of legislation. It actually started in 2008, with the rail freight service review. It was a two-year process. It was quite extensive and exhaustive, and there was enough guilt on the railway side as well as on the shippers' side when it comes to numbers to make it clear that something had to be done.
This measure was first introduced—in fact, I introduced it—in March in 2012, prior to the election, and then was picked up after the election, in December. This is a piece of legislation that has come a long way and has had lots of consultation.
My question for my hon. colleague is this. When the railway companies looked at this legislation initially, they fought against it, said they did not need it and said they would arrive at their service arrangements themselves. They said that it would drive negotiation away from the table. What I believe will happen is that it will drive both parties to the table, and if they cannot negotiate, it would be an arbitrated settlement. I wonder if my colleague would agree with me.
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 21:55 [p.17299]
Mr. Speaker, I take great interest in the debate this evening, as well as a bit of pride, because this legislation is very close to me. I was in charge of the railways at the time when the rail freight service review was happening and on behalf of the government, I was able to introduce the announcement to initiate this legislation.
Here we are going into third reading, which is great not only for the House but for the country because all parties are indicating their support for the legislation. It is a great legislation for a lot of reasons.
I will start with why it is here and why we need the legislation. I would like to go back a bit and explain to the House and Canadians what the problem really was.
At the time when I was put in charge of railways, in western Canada the on-time delivery for CN's cars was about 52% to 55% for grain shipments. That is not a good performance. How could western Canadian farmers get their products from the combine to the port and off to international markets when they could only rely on the cars being there at the proper time 55% of the time?
As my hon. colleague from Wascana mentioned, during the review CN upped its game considerably. New management came into CN and really concentrated on trying to up its game at the time, and it did. It went from 55% to over 90% within about a year to a year and a half period. That was strictly because the spotlight was on it and it put full attention toward upping its service because the service review was taking place.
A lot of the shippers came to us and asked that we keep the review going and keep the spotlight on the industries and the railways so they would up the game. We encouraged them to continue to have service agreements with all their shippers. They committed to doing that and signed as many shipping service agreements as they possibly could. In fact, I know there were some in some of the industries, perhaps the coal industry, for over a decade, so there were some long-term agreements that were signed at that time.
This legislation does not really speak to the agreements. That is intentional because they are so diverse. Producers cars would have a completely different need and service agreement than would shipping of a coal, potash or forest industries. However, they all want service. Under this legislation, those agreements would be totally flexible because they could contain all kinds of penalties. We are not privy to what the agreements are. We do not need to know what they are. However, when the two parties come to an agreement, they need to have some kind of mechanism to do things.
The first is to ensure that whatever agreement they do reach is complied with. That is what this legislation does. It has penalties that would go to either a shipper or a railway depending on which one breaches the agreement.
The second is there for when an agreement cannot be reached. If negotiations between the shipper, the railway, and so forth are done to the best of their ability, whether in the forest, egg, coal or potash industry, whatever the commodity, yet they cannot come to an agreement, then they are really stuck. This legislation is a way for them to reach a final arbitrated settlement that would give them clarity as to what was fair in an agreement. That is what the industry and the shippers have asked for.
Instead of being held ransom and saying they cannot come up with an agreement because no one wants to negotiate, they are saying, with this legislation, that if they cannot come to an agreement, there will be an arbitrated settlement. It does not say who is going to win or lose in that arbitration. Rather it calls for that to happen. Because of that, there will be a better system all the way around. If we go through the rail service review data carefully, as did the committee and the government, there was a lot of blame on both the shipper and the railway sides.
Let us not pick winners or losers. Let us just fix it in the best interests of this country. That is what this House is all about. It is about designing a piece of legislation that will move the country along. We do not really care who wins or loses. We want it to be fair so that both win. Canada wins because we move product to shore and on to international markets, where the real win is for the railways, the shippers and the country. That is why this should be supported.
International trade is really our stimulus for the future. We just came through a tremendous economic recession that has challenged the world. It challenged North America. It challenged the United States, our largest trading partner. Last year we had $528 billion in trade. Three-way trade between Mexico, Canada and the United States is almost $1 trillion per year. That is a large number, when we start talking about trillions of dollars.
About 40 million jobs have been created in our country because of NAFTA. I love the map at the Canadian embassy in the United States. The map shows for each state the number of dollars traded with Canada and the number of jobs created in that state because of that trade. It is very effective information that our American cousins need to understand more directly. Canadians also need to understand it. The number of dollars traded and the number of jobs created in each province is also on that map. I would recommend it to anyone.
Why do I mention that? It is because one of every five jobs in Canada is created because of trade, because of exports. Sixty per cent of our GDP is from that trade. Is it growing or is it shrinking? The last statistics I saw show a 73% increase in trade internationally between now and 2025. That is a large number. Those countries that capitalize on that growth in trade are the ones that are going to win. I like the way we are positioned to capitalize on that. We are about to sign a European free trade agreement, which I hope will work. That is 500 million people and $17 trillion in GDP in that market that we will be able to capitalize on. Not only that, but when we go to the west coast, with the trans-Pacific partnership, we will be talking about 110 million people and GDP of $17.6 trillion.
These are tremendous opportunities, not only with respect to China and India but with the trans-Pacific partners. It will depend on what we have to offer those markets. We are also working on a bilateral trade agreement with Japan. We are working on more trade with China. China is a big player, particularly when it comes to railways and moving products to the west coast.
What do they want? They want two things: food security and energy security. Canada can provide both, and railways are a major part of that. Before railways and shippers start saying negative things about each other, why do both groups not look at the opportunity before us? Why do we not look at the opportunity before Canada? Never has the opportunity been greater to create a winning situation for Canadian industries. It might be products manufactured and moved back and forth by rail, as we do with United States when we move automobiles back and forth by rail. We can actually supply for the United States products coming from China through the port of Prince Rupert two and a half days faster than any other port on the west coast. It is two and a half days faster, because it comes through Prince Rupert and goes right down to Chicago to supply the largest economy in the world: the United States. It is because of our railways and our system.
People have been criticizing this piece of legislation and asking why we did not include shipments to the United States in this rail service agreement. I can say that the United States is looking very closely at this piece of legislation. Americans are wondering how it is working, what kind of support it is getting and if it is going to actually do the job. I believe that it will do the job. The Americans are very keen to look at it and perhaps even use it as a model for their country. When that happens, there will be a continuous system between Canada and the United States, which is our largest trading partner and always will be.
This is a great piece of legislation for many reasons. When we look at the international markets, it is indeed amazing.
The railways carry a tremendous amount of freight, about 240 million tonnes of freight. About 70% of the surface freight in this country is moved by rail. That includes the bulk commodities such as grains, minerals, forestry products, energy products and so on.
I was talking to a representative of CN last night. He was telling me that the number of cars they are ordering to supply energy to markets by rail is off the charts. That is happening because of the resistance to pipelines. Whether or not the pipelines come, there is no question that rail will play a big part in moving our energy products to shore and beyond.
It is very important that this piece of legislation work not only for the agriculture sector, for grains and seeds, but for the energy sector, mining, potash and so on. It is a great piece of legislation that would go a long way in making certain that we level the playing field.
My hon. colleague said that CN used to be one of the worst as far as providing service. I would tend to agree with him. Perhaps now the reverse is happening, and CP is having more of a struggle providing service than CN. That is hard to argue with, and it is probably true.
We have heard arguments from the president of CN. He is asking why we are bringing in this legislation. He says that it will halt negotiations and drive people away from the negotiating table. It would do just the opposite. It would drive people to the negotiating table, because if they did not get a service agreement, there would be a very quick arbitration process in place through this legislation that would actually make sure they got a deal. That is what the legislation is designed to do. That is why it would work so well.
Would it be used an awful lot? Probably not. I hope not. I hope it is never used. If we bring it in, the jig is up. There should be an arbitrated settlement. If there is not, somebody will do it for them. They will do it quickly, and it will not cost a lot of money. Once the process has been challenged, a precedent will be set. The rest will fall in line with it, and the service agreements will comply.
I do not believe that this piece of legislation will be used terribly much, but it needs to be there, because the manager of CN or CP may not always be the most friendly guy who always wants to do the right thing. When we bring in legislation, it is for a long period and it is in the best interests of the country. It has nothing to do with the personalities of the people who were there.
I remember the forest industry. We were within hours of finalizing an agreement with the forest sector of this country. We brought them to the table. We did everything we possibly could to get them over the line. We could not quite get there. We would get there now, because we would have a piece of legislation that would arbitrate it. I will not say who would win or lose in that arbitration, because I do not know, but I do know that there would be an arbitrated settlement and they would move on.
It is really important that cars are placed in yards at the appropriate time for product to move from where it is produced to the market. That is the number one thing we can do to create the kind of economy, jobs and prosperity this country needs to move forward.
A lot has been said about the penalties that would go to the government. That is because we do not want winners or losers to use this piece of legislation other than as a tool to make certain that services are provided at the appropriate time.
There could be all kinds of penalties within their service agreements if the parties agreed to them. If the agreements were not recognized and not realized, the penalties would be a tool to make sure the service agreement was complied with.
It is a very great day for me. This has been a long process. It is a process that has had a lot of consultation.
I have quotes here from the agricultural, forestry, coal, potash and mining industries that say that this is a very big step in changing the dynamic between the railways and the shippers. They feel that they have a government that will back them in an arbitrated settlement process that does not play one against the other. It is truly there to try to make certain that an agreement works for both and that the service is provided in an appropriate way. Predictable service is something we cannot talk enough about. Unpredictable service is the number one thing that will retard the opportunity for shippers to be prosperous and get their products to market.
I want to commend the standing committee on transport. It worked very hard over a number of years to make this happen. The Minister of Transport has picked this ball up and has pushed it very hard. He has worked very hard to bring this to where it is tonight.
Tonight is a wonderful evening. Think about it. When was the last time we had a substantive piece of legislation such as this that was agreed upon by everyone in the House? I can think back a long time. I know that there have been frivolous pieces of legislation that perhaps have had unanimous consent, but there have not been major pieces of legislation like this that are paradigm shifters that would change the dynamic. It is probably the most significant piece of legislation to come between shippers and railways in 50 years or more, so this is a very significant evening. It is a significant piece of legislation.
I am very proud to be lending my voice to it, and I look forward to the vote, which I hope will happen tomorrow. We will move it into the Senate and on to royal assent very quickly.
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 22:13 [p.17301]
Mr. Speaker, he is asking if the penalties are large enough to force compliance. It is $100,000 for every car that is not there on time, which is a fairly significant penalty. If it is not, we might have to go back and raise it.
I believe that it is significant enough. There is no one I know in the railway industry who would say that they would just pay the $100,000 and forget to bring the cars. I do not believe the railways will play that card. If that happens, there is an opportunity to go back and address it, but I would not do it at this stage of the game.
What is done for one is the same for the other. The penalty can be for the shipper as well as the railway. It is fair to say that it is a fairly significant penalty for every violation under this act. I do not expect that it is going to happen, but there are all kinds of tools to address it if it does happen.
There is an opening up of the entire railway act coming in 2015-16, so I do not believe that the railways are going to play silly with this piece of legislation. They will try to comply, because it is in their best interests to do so. It is in their best interest to make certain that they have the cars there appropriately and that the service agreements are fair for both. The shippers have to win for the railways to win, and the railways have to win for the shippers to win. If both win—
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 22:16 [p.17302]
Mr. Speaker, the bill is not designed to get into the service agreement.
It used to be that when a shipper ordered a car from CN and it did not show up, it was no big deal. There was no penalty, nothing. If a shipper had trouble with weather or unforeseen circumstances and the car could not be loaded fast enough and moved out, then CN or CP could ding the shipper significantly, without any recourse.
This piece of legislation does not talk about what is in the service agreement, so if someone wants compensation for lack of service then it should be put in the agreement. All we are saying is that if the agreement is not complied with, the penalties will apply. There needs to be a tool to make sure that whatever is agreed upon is actually complied with, and that is what this legislation would do. Complying with the agreement should not be a winner or loser within the agreement to use as a tool. If someone wants compensation, it should be put in the agreement.
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 22:18 [p.17302]
Mr. Speaker, our trade with the United States is a great success story. I always say that we do not really trade with the United States; we build things together with the United States. Our supply chains are intricately linked. It does not matter if it is the forestry sector, the beef sector, the auto sector, or many other sectors, we do things together.
When I talk to my colleagues in the United States Congress, I tell them it does not matter whether they go after international markets and sell products to China or Japan, or that we do. The United States ambassador says that for every dollar that Canada trades with Japan, 25¢ of that goes to America because our supply system is intricately linked. We need to collectively go after those international markets because of the productivity gain that we will create. Both the United States and Canada will capitalize on those growing international markets in a much better way.
By 2050, there are supposed to be an extra three billion people in the world, and two billion of them will move from poverty to middle class during that time period. They will need energy, food and all of the things we produce in Canada and the United States. Those are the markets we need to go after.
Thinning the border, creating the productivity gains by having a good railway system between Canada and the United States, is absolutely essential in ensuring that we capitalize on those markets. We are the most productive in the world. Canada has great systems. We have some of the best food. We produce some of the best things, whether it is our automobiles and so on.
Canada and the United States are great allies and partners. We do a lot of back and forth trade—
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 22:20 [p.17302]
Mr. Speaker, if the president of CN, Claude Mongeau, had impact on the minister, the bill would not be here. I have sat down with him a number of times, and he said we should not do it. He gave me all kinds of reasons why it would be a terrible piece of legislation. The railways are not really excited about this.
My argument to him was that if the railways do not want the bill, then they should have service agreements, and if they do not want service agreements, then they need the bill to be able to get them over the line. I would suggest that there is no impact there.
This is not a piece of legislation that either of the railways is excited about or interested in. They see the rationale behind the legislation. They are not supportive of the bill, but they are not saying anything very negative about it either.
Any time that both sides do not agree 100% on a bill, then that bill is usually striking the right note and balance. I think we have that here.
View Rob Merrifield Profile
View Rob Merrifield Profile
2013-05-29 22:22 [p.17303]
Mr. Speaker, my colleague is absolutely right. The creation of jobs and the growing of our economy is absolutely critical, and the railways play a major role in that.
As a government, we have been able to put a significant number of dollars into infrastructure to make certain that the gateway project on the west coast, the corridor project to the south, and the eastern project corridor to the east capitalize on those international markets. The infrastructure that is built there would not only creates jobs, but it would also create an infrastructure that would create jobs because of the kind of trade we are expecting.
We are a blessed country in so many ways and have so much opportunity, especially as we see this massively growing international trading relationship around the world. Healthy railways lend themselves to the success of our country and the kinds of job opportunities we will have for the future.
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