[Recorded by Electronic Apparatus]
Tuesday, November 21, 1995
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[English]
The Chairman: Colleagues, welcome back after a hard week in the constituency office. We're back here on the Hill and for reconsideration of Bill C-101, the act to continue the NTA as the CTA and all the changes therein.
As requested, the Assistant Deputy Minister, Moya Greene, and officials with the ministry are before us to wrap up the show. We welcome them back to the committee and thank them for their cooperation.
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Moya, I understand you had a brief statement to make before we went to questions.
Ms Moya Greene (Assistant Deputy Minister, Policy and Coordination, Department of Transport): Mr. Chairman, I would just like to make two-minutes worth of opening remarks.
On behalf of my colleagues, Kristine Burr and Jean Patenaude, and on behalf of the Department of Transport, first we would very much like to thank the committee for the time and effort the committee has put into this bill. As you know, this is an important bill for the transportation sector, and we're very grateful for the energy and effort that has been put into it. I understand that to date the committee has heard literally ``tens'' of witnesses, about 90 of them, and 130 different submissions. This is a very large volume of work. It's really very good of the committee to have put in the time on it.
When I appeared before the committee at the opening of your sessions, we had had the opportunity to hear from some of the interested parties from whom you have now heard. A number of provisions were particularly prominent in the debates that have taken place before you in the past few weeks. I'm sure we will have an opportunity throughout this afternoon to again engage on those, and I welcome that opportunity.
In particular, I'm talking about what I will call the process and decision-making issues, that is to say, the guidance that might be given to the agency in deciding matters before it and the powers the agency might have to control the process that the agency must supervise.
You've also heard a great deal about the line-discontinuance and conveyance provisions of the bill. I would like to spend some time on that this afternoon, because the committee's deliberations have identified a number of drafting errors we might like to make an attempt to clarify this afternoon.
For a whole host of reasons the deliberations of the committee have been very helpful to those of us in the department who have been working on this bill. Most importantly, these have identified areas where in a bill of this scale there has been maladroit drafting. In response to your discussions, in the past couple of weeks we have had an opportunity to suggest ways in which some of that maladroit drafting could be taken out of the bill.
Finally, Mr. Chairman, I realize this is a highly technical area and some aspects have caused the committee to become experts in highly technical matters having to do with rail transportation. Since you have done that, I would just like to say, on behalf of the department, we are grateful.
Thank you.
The Chairman: Thank you, Ms Greene.
We'll start our questions in the usual fashion.
Mr. Mercier, you have 10 minutes for questions.
[Translation]
Mr. Mercier (Blainville - Deux-Montagnes): I would like to ask you two questions.
If I had known that a good number of the issues raised in the brief would be about the concept of significant prejudice, I would have studied more carefully the amendments that the government wishes to propose. I regret I have not had the time to do so.
First, could you tell us if one of those amendments is aiming to clarify the concept of significant prejudice, an aspect that is a concern for many witnesses?
[English]
Ms Greene: Certainly the amendment the government would propose in response to many briefs the committee received includes clarification and a change in wording.
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Some of the interested parties who appeared before you pointed out that the words ``significant prejudice'' may be difficult to interpret. The government will therefore be proposing that those words in fact be changed to ones that are more in common parlance.
Second, the government will propose that criteria that in fact were suggested by National Transportation Agency staff for interpreting the clause actually be inserted into the provision.
Finally, the government will propose that the provision more clearly state that it is not a hurdle that someone must get over in order to have access to the agency, but rather a guideline the agency should bear in mind in the decision-making process.
So in those three ways our hope is that we will have clarified subclause 27(2) and responded to many of the criticisms that have been heard.
[Translation]
Mr. Mercier: I have a question about section 7, that states that the agency consists of three members. The last time you came here, you told us that this reduction in the number of members of the agency reflected the fact that its responsibilities had been reduced.
I understand that one of the amendments would increase from three to five the number of members. We are asking for more members. Why doesn't the government insert in that section a criteria or a requirement about geographical representation? Would it not be preferable to state that the members of the agencies must come from various regions of Canada so as to represent the country as a whole?
[English]
Ms Greene: In making appointments the government has general regard to the representational requirements of the country. I don't believe the government's position right now is that this needs to be specifically stated in the legislation.
[Translation]
Mr. Mercier: I don't have any other question.
The Chairman: Thank you.
[English]
Mr. Chatters.
Mr. Chatters (Athabasca): Regarding clause 67, at least it seems to be standard practice within government bodies when they disallow a rate increase to then refund moneys collected previous to that ruling. Yet that doesn't seem to be the case here with respect to the Canadian Transportation Agency.
Why do you not then do the same thing? If the Canadian Transportation Agency refuses a rate increase, why then is there not a refund provision provided for the moneys collected in between?
Ms Greene: The reason is mostly practical. If a rate increase were to be disallowed in the case of airlines, for example, it is very difficult to go back over passenger manifests and practically figure out a way to refund whatever portion ought to have been refunded.
Second, when that provision existed, which it did in 1988, it was never used once. So for those practical reasons, that it's not felt to be necessary, and second, that it is very difficult to do, the government has not proposed that we keep that section.
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Mr. Chatters: In clause 112 we propose changing the meaning of ownership of the railroad to operation of the railroad to provide more equality and economic stability for the short-line operators. What do you think about that? What's your opinion on that change?
Ms Greene: My concern would be that the law would effectively amend a whole pile of commercial agreements that are already in place, and we would not propose to do anything like that.
Many commercial agreements are in place between rail carriers, and these are negotiated as each of the parties feels necessary, with all the terms and provisions each of the parties feels are necessary.
The change you're suggesting would have the effect of amending many of these agreements. If the circumstances warrant that the agreements should extend to operation as opposed to just ownership, then the commercial agreements made between the parties can do that.
Mr. Chatters: Lastly, back to subclause 27(2), it seems to me that if this is not to be an impediment to access to the board, rather than tinkering around with definitions and stuff, as you say - it's not meant to be an impediment - why not just remove it? Why is it there?
It is our understanding from witnesses that this hasn't been a great problem with bodies coming to the transportation agency. There haven't been frivolous claims and those types of things. So why are they there? If it isn't an impediment, why are they there?
Ms Greene: As a matter of principle, the importance of the subclause is in signalling to everyone that a regulatory remedy should only be relied upon when it is really necessary, when there is something of importance, something consequential, at issue.
For many of the interested parties the agency is properly a free source of advice and recourse in commercial disputes primarily. So the government feels it is useful to signal and in fact reinforce the objectives of the bill in guidance to the agency.
When you are deciding to grant relief, not that you would keep anyone from the agency - you can lodge a complaint on any matter and the agency has to dispose of that complaint with dispatch - but when the agency is deciding, it's a reasonable signal to those who would seek the agency's process to know there should be something of consequence at issue.
Mr. Chatters: I could accept that if in your opinion in the past, there had been abuses of the system and frivolous cases were brought before the agency, but we heard time and time again that this hasn't been the case. Why do we need to send a signal when there hasn't been frivolous use of the process?
Ms Greene: The cases you hear about are the ones that come to conclusion with an actual decision on the record by the agency. Many shippers and railways will tell you that the reason there's not a huge body of case law from the agency is that the threat of going to the agency causes the negotiation to actually come to ground and settle in a way that is done essentially by the two parties. That's the reason you don't have this huge body of law.
Well, it seems to the government that before even the threat of accessing the agency should be permitted to temper a negotiation, everyone ought to be mindful that the agency's decision is going to be guided by whether or not the agency feels there is something consequential at issue.
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Mr. Chatters: Well, users of the railroads clearly view that as a signal that it's going to be harder to access the final-offer arbitration services process.
If it hasn't been a problem and there haven't been those frivolous cases, I still can't understand why you feel it's necessary to send that signal unless in fact you do intend it to be tougher to access the provisions.
Ms Greene: No, and on your point about final offer arbitration, just for the purposes of clarification I should make it plain that final offer arbitration is not a proceeding in front of the agency. So subclause 27(2) has no application at all to final offer arbitration.
But on the substantive point you raise, which is why it is necessary to send that signal, my personal view is that over the years there has developed a reliance on the agency as a silent mediator in commercial negotiations.
Mr. Chatters: It's worked. It's been effective, hasn't it?
Ms Greene: Well, it is effective to the extent that people actually solve their differences; yes, it is effective. But it's not effective if people are using access to the agency, which is freely available, to skew negotiations.
Mr. Chatters: I think you're sending a pretty clear signal that access won't be as easily available to the agency.
Ms Greene: Well, I think access to the agency will be very widely available in the sense that the agency has to accept all complaints from all classes of shippers. The agency has to deal with them with dispatch.
But it's reasonable to reinforce that if a regulatory agency is going to be called upon to decide a matter and has to decide a matter, then in making that decision the regulatory agency is going to consider the importance of the issue it is being called upon to decide.
Mr. Chatters: Okay, thank you.
The Chairman: Thanks, Mr. Chatters.
Mr. Fontana, please.
Mr. Fontana (London East): Thank you, Mr. Chairman.
Thank you, Ms Greene, and all involved at Transport Canada who have put forward a pretty substantive piece of legislation that hopefully will turn the page on ensuring that this country has a viable, affordable and competitive railroad system.
As you know, on the conveyance section of this bill some of our witnesses - municipalities and other parties - indicated.... I think there are certain obligations on the part of the railroads to put that three-year plan in place, but how this system works....
I know there are certain changes being contemplated to ensure that in fact that system will work with some sort of integrity, that it will not be abused by the railroads but in fact will work in a very proactive way, the way it was designed, to ensure that there was sale...the continuation of rail in those areas where the main-line carriers decided they wanted to convey it to someone else, and therefore the impetus is on short-line creation. If in fact no other operator is found, obviously it will be offered to the three levels of government.
I understand there are certain changes being contemplated to ensure that the integrity of that three-year rolling plan does work effectively. I wonder if you could bring the committee up to date as to where you are coming from on that issue.
Ms Greene: This committee pointed out that we had a real flaw in the drafting in that provision. As the provision currently reads in the bill, the railway is permitted to amend the plan, and immediately on amendment to step through the sale-discontinuance process. That means they could amend and the very next day put a notice in the newspaper for a segment of the line, allow the 60 days for interest to be expressed and then allow the period of time for negotiations to be concluded. If there were no negotiations, or no interest expressed, simply after the 60-day notice in the newspaper, without any general notice being provided through the 3-year rolling plan, a line theoretically could be discontinued.
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That is a flaw in the draft. The government will be proposing, in that amendment provision, when a plan is amended the railways will not be able to activate the sale discontinuance process so as to discontinue a line unless there has been general wide notice through the plan for 60 days that a segment of line is coming up to be put through that sale-discontinuance process.
That means if a railway has put out the three-year rolling plan and a line is not included in it, the railway can amend the plan and can start the sale process, can give notice, but the railway cannot discontinue that line unless it had been showing on the three-year rolling plan for at least 60 days.
So that will mean...not that I believe railways would try to use the amendment provisions to avoid the notice that is being protected in the three-year rolling plan, but just to make sure that no one could abuse that amendment process to basically take a line out of service without giving anybody a fair opportunity to know there is a plan to discontinue on that line.
Mr. Fontana: Secondly, Mr. Chairman, we talked a lot about a balance in this committee with both the carriers and the shippers. Obviously we're trying to get the balance right to ensure that we have viable railroads and, at the same time, shippers who are able to compete in the world marketplace to serve their clients, the producers, and so on, and we at the end of the day have a much more efficient transportation system.
With any new legislation one would like to have some idea of how well it's doing in its consequence and as a result of this new regulatory framework. I wonder if you could outline for the committee how many points of opportunity there are for the government, this committee, the House of Commons, to in fact assess the impact of the new Canada Transportation Act to ensure that it's working as we hope it will work in terms of creating more opportunities for short lines, better systems, better assurances for the shippers, and at the end of the day have a very competitive viable railroad industry.
I wonder if you could perhaps highlight those points of opportunities for elected members of Parliament to have input as well as to assess the impact of this new legislation.
Ms Greene: There are a number of reviews proposed in this bill. First, annually the Minister of Transport will report on what is happening in the whole transportation sector, including the sector's response to this new law. Those reports will obviously come before this committee, and as it does with many transportation reports, this committee can hold whatever deliberations it feels necessary on them.
Secondly, the agency will be asked every year to give a report on how the statute itself is working as a legal instrument. Are they noticing problems that come from the drafting in the bill? Again, these reports from the agency will be a sort of flare to the committee so that the committee can understand whether there is there something peculiar in the legislative drafting here that is causing a problem in either the agency's ability to control its process, or in the decision-making, or in any aspect of the administration of the bill.
Thirdly, the government is proposing that in two years' time there be a review of the entire efficiency in the western grain transportation system.
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As you know, with the repeal of the Western Grain Transportation Act there are a number of provisions that deal specifically with the handling and transportation of western grain and a drive to incorporate efficiencies in that system that will be subject to review in two years' time. That review as well can be laid before this committee so that if any problems are identified, or efficiencies that the committee feels ought to have been realized but have not, or efficiencies that should be reflected in the rate scale are not, these can be highlighted for the committee and adjusted.
In four years' time, there will be what is called a ``comprehensive'' review of the act, the act's impact on the whole sector, including the western grain sector, the ability of the agency as a regulatory body to administer the act, and how the sector has changed in response to a whole bunch of other environmental factors that will have occurred over that four-year period. This will be a major review that will basically look back over the preceding four years and ask, what has changed and what has been the impact of this legislation on the change, and what are the other environmental considerations that now have to be brought to the fore as we go forward?
So on an annual basis there will be an opportunity to know what's happening in the sector; on an annual basis there will be an opportunity to know what's happening with respect to the administration of the law; and in a much more comprehensive and systematic way, there will be an opportunity in four years' time to understand how the whole environment is being affected by the variety of factors that affect transportation, including this act.
The Chairman: Thanks, Moya.
Mr. Hubbard, please.
Mr. Hubbard (Miramichi): Thank you, Mr. Chairman. We've heard evidence and concerns by citizens about rights of way that might be abandoned by the railway companies. With that, of course, looking back on the past, we've had railways operating in Canada since Confederation and two major ones have emerged. We've seen what has happened with CN Express or Route Canada.
I'm concerned with the fact that under the short line provisions of this act, where a short line may become a provincial responsibility, rights of way would be transferred to companies that would operate under provincial jurisdiction, and having done so, they may find themselves not in business very long. Railway property would revert to be sold for commercial purposes.
Would the department be willing to either offer or entertain a motion, a resolution, or an amendment that will enable us as Canadians to maintain a vested interest in that property, even though it may be transferred through this act and by sales to short line companies, that this vested interest would be maintained as a part of the federal responsibility of our national government?
Ms Greene: That's a very difficult question. My personal view is that on the one hand, we have to give some credence to my colleagues in provincial ministries and colleagues in provincial legislatures that if a piece of property, whether it be operated by a provincial short line or by anybody - a provincial retailer - is considered to be essential for some public purpose, they will respond to that sense of public purpose and they will act. They have tools available to them to act. They have provincial expropriation laws.
In the case you cite, if a provincial short line were to fall into bankruptcy such that the land might basically be available as part of the asset base for distribution to creditors, if a provincial government is not happy with that result because it feels the land is of such significance for a legitimate public purpose, then the provincial government has the wherewithal to intervene, with the power of the provincial treasury behind it, and take the land over.
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I guess my personal view is that the best test of whether or not something is in the public interest these days is whether or not a government is prepared to take taxpayers' money and apply it to that purpose. There's no shortage of tools available to legislators, whether they be federal or provincial, to spend on behalf of public purposes, to acquire property on behalf of public purposes. The fact that the land has moved from federal jurisdiction to provincial jurisdiction means that the decision-making on whether or not that particular parcel is necessary for a public purpose also moves to provincially elected people and provincial representatives.
Second, Mr. Hubbard, I don't think it's jurisdictionally possible for the federal government in a federal statute to reach into an area that is now within provincial jurisdiction and to try to exert a federal jurisdiction over that area.
So for those two reasons - one, if there's a public interest, people elected at that level can act to protect the public interest; and two, it doesn't seem jurisdictionally possible for the federal government to purport to impose its public purposes on areas that are now within provincial jurisdiction - I don't think I would recommend that.
Mr. Hubbard: So this land that was either given to railways by the Government of Canada or expropriated from citizens through various acts would not be either offered back to the Crown or back to those private citizens in return for an equitable amount of money, but simply would fall into the hands of short-line companies, and it would be under provincial jurisdiction.
Ms Greene: Yes. It would be under provincial jurisdiction. Of course, as long as it's operated as a short-line rail network, a whole battery of federal and provincial public purposes are being served. You have continued rail service and you probably have continued rail service at a lower cost. But once it comes into the provincial jurisdiction, I think the reliance has to be placed upon provincially elected people to decide whether this is a case where the public purpose requires that we take a parcel of land, or that we spend for a parcel of land.
The Chairman: I think the parliamentary secretary has a point of clarification.
Mr. Fontana: On a point of order, Ms Greene, I think the premise of my colleague, when he uses the words ``gave the railroads land'' and ``expropriated''.... While there were some evils of the past, I'm sure, the fact remains, in both railroads there was a real covenant or partnership with the Canadian government, who wanted to build a country and therefore imposed some conditions when it gave that land to the railroad companies: that they build a railroad and therefore invest their money, private money and government money on behalf of CN, for that matter, to build a railroad, and that they build communities, create jobs and help with our immigration and help build the country.
I don't want you to leave the impression that in fact all that land was given for nothing and that the railroads didn't do anything with that land. They created wealth for the country - and for themselves, obviously.
So I'm sure you would want to correct the record, Mr. Hubbard.
Mr. Hubbard: It depends on your third-grade history.
Some hon. members: Oh, oh.
The Chairman: Thank you, gentlemen.
Mr. Benoit, please.
Mr. Benoit (Vegreville): I want to talk about the most common areas of complaint and concern that shippers hit on throughout the meetings I and others attended. These are subclause 27(2), subclause 34(1) and clause 113.
First I just want to make a comment and ask a question on subclause 43(1), that the CTA must make an annual report to the public by May of each year. In fact, that report is made to the Governor in Council, so it isn't a public report. I'd just like to ask why.
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Ms Greene: It is in subclause 43(3). It's tabled in the House of Parliament. It is a public report.
Mr. Benoit: Good. You've clarified that. The complete report will be tabled in the House of Commons?
Ms Greene: Yes.
Mr. Benoit: Subclause 27(2) - and Mr. Chatters had asked some questions on this before - was I think a concern of all the shippers who came before the committee. Their concern was that where an application is made to the CTA by a shipper in respect of transportation rates or service, the CTA may grant the application in whole or in part only if the CTA is satisfied that the applicant would suffer significant prejudice.
I think most shippers - probably all the shippers, but certainly most - felt subclause 27(2) should be thrown out entirely. I would just like to ask you why that clause can't be thrown out entirely.
Ms Greene: I think the clause serves a useful purpose because of the reasons I gave before.
Mr. Benoit: And those reasons were...?
Ms Greene: It is a signal that a regulatory remedy should be invoked only when there is something of importance at issue. If shippers want an agency that is going to be accessible to all classes of shippers for all types of complaints, which shippers do want, then it is reasonable that agency decision-making should be guided - not that the decision-making should be foreclosed, or become a hurdle - by the agency's assessment that there's something important at issue.
So for those two reasons - to reinforce the principle by which regulatory agencies are in business and for which they are in business; and to make it plainer than it is without the provision - the decision-making is to be guided by the agency's sense that there's something important at issue.
If I could just add, when you do a bill of this scale no one has a monopoly on artful drafting. I'm prepared, as is anybody, to say that in lots of places we could have been clearer or we could have said something in a better way. As I read through the briefs, I heard people saying they were concerned that this was going to be a hurdle or a fence and that there would have to be a prior decision made by the agency before you got to the main event. I guess this was made a worry to people by language such as ``only if''. Well, I would say we can clarify that this is not a hurdle to a decision. It is a guide inside the decision.
Mr. Benoit: Why not just leave it out entirely? It wasn't in NTA, 1987.
Ms Greene: The NTA, 1987, was a very fine piece of legislation, but no piece of legislation is perfectly complete.
Mr. Benoit: But if you're changing it, if you're adding it in to this piece of legislation, there must have been a problem not having it in the 1987 act. What was the problem?
Ms Greene: I don't think people thought of it in 1987.
The Chairman: Maybe your question could be addressed if you flipped it and asked Ms Greene what would happen if subclause 27(2) were not in the bill.
Mr. Benoit: What would happen if it were taken right out? I'll get to that.
Come on, let me go on with my own line of questioning here.
Some hon. members: Oh, oh.
Mr. Benoit: The next question I was going to ask you was how often that caused a problem under NTA, 1987, not having that in.
Ms Greene: I can't answer that question. No one can, because -
Mr. Benoit: How many -
The Chairman: Let her finish her question.
Ms Greene: I was going to say that the number of cases that actually get to decision in the agency is not a reflection of the use to which the provisions are put. Final offer arbitration, for example, has only been used once, but shippers will tell you that final offer arbitration is incredibly important as a section in this act, because it allows them to have leverage in a negotiation. Shippers will tell you that they do not often go to the agency for competitive line rates, but having line rates in the bill allows shippers to have leverage in a negotiation.
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In the vast number of cases shippers do not go to the agency right through to the end of decision-making, but shippers will tell you that all of these provisions in the act work because they provide leverage in a negotiation. It is the threat of their use, the threat that you would go to the agency, that advances the negotiation.
Mr. Benoit: Clearly, this reduces the leverage shippers have.
Ms Greene: I don't think it reduces their leverage in the sense that shippers can still go to the agency on any matter at any time and get a decision with dispatch. I think it is a signal to reinforce that the agency's regulatory apparatus should only be activated when there's something important at issue.
Mr. Benoit: I have a lot of difficulty understanding, if it hasn't been a problem in the past, if NTA, 1987, worked well without this clause, why on earth we need it now. The shippers certainly don't want it. That's pretty clear.
Ms Greene: I know.
The Chairman: What would happen if it wasn't there?
Mr. Benoit: Yes, what would happen if it wasn't there?
Thank you, you finally got me to that.
Ms Greene: Given the debate we've had over this section, I think that now if it wasn't fair the perception would be that the shipper community has unbridled and unrestrained access. If we had not had such a huge debate on something that.... I guess it's surprising, the amount of debate. If we'd not had such a degree of prominence attached to this provision...perhaps not a lot. But now that there's been such a prominence attached to the provision, if it were to be removed the perception would be that the regulatory agency is there to mediate in all circumstances, without any restraint.
Mr. Benoit: It seems to me that the effect of this depends on whether you're looking at it from the railways' point of view or the shippers'.
So you're saying the shippers didn't know this was here before, and suddenly, because of this new piece of legislation, they're going to take advantage of this clause of the bill if subclause 27(2) isn't in there?
Ms Greene: You're asking me for a personal opinion. What I'm saying is that if we hadn't had such a huge debate about it, I don't think very much different would have happened. But now that there's been a huge debate about whether or not access is being curtailed or whether the shippers have a higher onus, if it were not there I think the view would be that the regulatory agency is there to mediate, in an unbridled way, all manner of disputes, whether important or not.
The Chairman: Thanks, Mr. Benoit.
Mrs. Terrana, please.
Mrs. Terrana (Vancouver East): Regarding clause 97 and the aboriginal issue, I am still not satisfied with the writing. As you know, the aboriginal people have expressed some concerns. What are we prepared to do in this area in order to make things a little easier for them, to have a better understanding of where they stand with their reserve land in case of the sale of track lines?
Ms Greene: We are still talking to our colleagues in the Department of Justice to see if there's a way we can properly and legally make it plain that nothing in this bill is meant to in any way take away from any of the rights aboriginal peoples now have.
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This is an area of the law that I am certainly no expert on. All I can tell you is that we're still engaged in discussions with people who are expert in this area.
Mrs. Terrana: Well, there might be a new way of approaching the whole issue.
Ms Greene: We're still having discussions on the point. I understand the concern that there be absolute clarity, that nothing is being done in here that could compromise the rights of aboriginal people. It's finding a way to do it that will neither compromise the rights of aboriginal people nor call into question other legal matters. I'm just not sure - I'm not through those negotiations yet - whether we're going to be able to do something.
Mrs. Terrana: Hopefully we will.
I also want your thoughts on captivity. As you know, the railway has proposed that we introduce a captivity test, but of course the farmers in the west are not very keen on it. Can you give me your thoughts on this issue?
Ms Greene: In Canada we have never had a captivity test as a fence to a regulated remedy, really. Other jurisdictions do.
The reason has been that even though in good theory you could say that you don't need regulation if you have competition, that if you have alternative ways to get your goods to market then you don't need any of this, even though that is theoretically true and I think everybody would agree that regulations should be a last resort, not a first, and should really only be available for those who can't find their solutions in a reasonable market where there's more than one supplier, we've never really gone that route in Canada. Many would say we haven't gone that route because it's so difficult to define who is captive. I think it's becoming less difficult to define, and in the future we may be able to find a definition of captivity that most people would find acceptable.
I say it's becoming less difficult than it was in the past because we're seeing the inroads the trucking industry is making in even long-haul moves; we're seeing the inroads the trucking industry is making for kinds of traffic that even 15 years ago would have been considered natural rail-traffic base and is no longer considered so. I think our understanding of captivity has really developed with developments in the transportation industry, and so in the future we will not have the difficulty we have had in the past in defining captivity.
My definition of ``captivity'' - not that it matters a whit for this bill - is do you have available to you a practical transportation alternative in any mode? That's my definition.
Mrs. Terrana: That's a simple definition, too.
My last question still has to do with the farmers in the west and the fact that it is now established in clause 120 that you have to provide at least 20 days advance notice of a freight rate increase. They would like that 20 days to be brought to 30 days.
Ms Greene: I have heard that representation. I would respectfully ask the committee to keep it at 20 days for this very simple, practical reason: to go to 30 days really requires the railways to have two separate bookkeeping systems on rates.
Secondly, while I know it's generally felt to be preferable to have longer periods of notice rather than shorter periods of notice on things like rate increases, many of the very same shippers that would ask for 30 days in the Canadian act manage quite comfortably when they are shipping into the United States for those same commodity groups with 20 days in the U.S. So for those two practical reasons, I would ask the committee if they could keep to the 20 days.
Mrs. Terrana: Thank you.
The Chairman: You're asking for consistency.
Mr. Comuzzi.
Mr. Comuzzi (Thunder Bay - Nipigon): Thank you, Mr. Chairman.
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When Mr. Fontana was talking about the review process, which I agree with, over the four- or five-year period...but having sat on this committee for a few years, we have found that some of these review processes involved very expensive reviews.
One of these, the Transportation Safety Board review, cost something like $7 million or $8 million. One of the more recent review processes within the last two years cost $5 million or $6 million.
I am wondering, Ms Greene, whether you considered those cost aspects. If you haven't, would you consider those cost aspects when it comes to going through this extensive review process for the next three or four years?
Ms Greene: Mr. Comuzzi, I can give you my personal undertaking that we will consider those cost aspects. As you know, the Department of Transport and all departments of government are under enormous restraint efforts, and perhaps money was a little freer even five or ten years ago.
With the changes that are taking place at all levels of government, but certainly in the department for which I work, to the extent that I have anything at all to do with getting those reviews under way, I can tell you that it will not be possible to spend those kinds of dollars.
Mr. Comuzzi: Perhaps just as a thought, maybe the transportation committee itself could analyze some of those review processes as time goes on.
The first question I have is with respect to the abandonment procedure. On royal assent of this bill, both railways have indicated they will follow that procedure and file their three-year plan for abandonment. Then there's a procedural aspect, 60 days, and so on.
Once those three-year plans have been filed, if a community or a customer that would be directly affected by any one of those proposals filed by the railways decides that at that point they should not rely on the railways to act.... Once it's filed, then it's up to the railway to trigger the mechanism any time within that three-year period. If a community or customer wants to trigger the mechanism, is there anything within the bill to protect the community or the customer to say: we're not going to have this service in the next three years; what should we be doing now in order to guarantee ourselves adequate transportation facilities for our product or for the well-being of our community? Is there anything in there now that allows the client to trigger the mechanism?
Ms Greene: It's not in the bill, but it's in the nature of dealings with a very important couple of corporations.
If I were the clerk of a municipality, if I got the three-year plan and on that three-year plan there was a segment of line important to the mayor, the older people and the people of that community, as the clerk of that municipality I would immediately make a connection with the railway involved. I would say, can we be involved and can we be kept apprised of how the process is going? If there is no sale, can you let us know when there's going to be a sale notice on this line? If no sale emerges, can you just keep us posted?
I suspect that if a clerk of any municipality in this country were to do that, to send such a letter to our two railways, they would be kept apprised. It would be in their own best interest. At the end of the process, it may be the municipality with which they would be negotiating for the transfer of that segment of line for the net salvage value, for at least something for the railways.
This has been done in the past and I would expect that it would continue to be done. In fact with a three-year rolling plan, communities and municipalities are going to be better apprised of the intentions of the railways in a larger context, in the context of a whole network.
This bill doesn't have to speak to that. That would be the common course of business.
Mr. Comuzzi: Thank you.
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Finally, the bill addresses fundamentally the carriers and the shippers, but often producers are not shippers and perhaps are outside the parameters of the bill. Would you explain to us how those people who are not the shippers but are directly affected by the workings of this bill are protected?
Ms Greene: They're protected in a number of ways. I dare say you're talking about grain producers who may use -
Mr. Comuzzi: Basically, those who are involved in the shipping process.
Ms Greene: - shipping consortia to negotiate for the transportation.
As you know, there's a whole set of provisions, separate protections, that apply to the transportation of western grain. Grain producers have predetermined rates. They have the protection of maximum rates, which can go up by no more than the rate of inflation. They have the protection of knowing that any efficiencies that are realized have to be reflected in the rate scale so that these efficiencies will be shared with the producer in a lower rate scale.
These are protections that other commodity groups do not have. In addition, these producers have all the protections of the CTA. That is to say, if transportation by one rail line is considered to be too expensive, these producers will have access for the first time, because they didn't apply under the Western Grain Transportation Act, to the competitive line provisions of the bill. They will be able to make confidential contracts, which will enable them, like other producers, to use confidential contracts to their benefit to work out longer-term rate security with the railroads.
Although it is true that particularly grain producers are not the actual shippers, in those cases, in the case of grain, I believe the bill contains a number of very significant protections that were not there.
The Chairman: Thank you, Joe.
Thank you, colleagues, for asking the appropriate questions again. We've been doing it for the last four or five weeks. We've worked as a team with the department, I think, to try to clarify the matters of concern. We bear down tomorrow, beginning at 3:30 p.m., with a clause-by-clause examination of this bill.
Colleagues, you will all receive sometime tomorrow a copy of all the amendments from all parties in one document, so that we won't have any hitches and we can run through the bill, clauses 1 to 283.
This meeting is adjourned.