Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 4 - Evidence
OTTAWA, Wednesday, March 28, 2001
The Standing Senate Committee on Transport and Communications, to which was referred Bill S-3, to amend the Motor Vehicle Transport Act, 1987, and to make consequential amendments to other Acts, met this day at 5:35 p.m. to give consideration to the bill.
Senator Lise Bacon (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, we welcome today Ms Lisa MacGillivray, who is the president of Canadian Industrial Transportation Association.
Please proceed.
Ms Lisa MacGillivray, President, Canadian Industrial Transportation Association: Honourable senators, I should like to express my gratitude to the members of the committee for inviting us to speak on Bill S-3. The Canadian Industrial Transportation Association is a national association of purchasers of transportation services. These shippers are Canada's manufacturers, distributors, primary resource extractors and wholesalers. The CITA's membership annually purchases over $6 billion in transportation services and, as an aggregate, contributes over $120 billion annually to the gross domestic product.
Highway trucking is vital to shippers. For this reason, CITA will limit its commentary today to specifically address the clauses in the bill that pertain to commercial trucking.
While other modes of transport have a vital role in the safe and cost-effective transport of goods, it is relatively safe to say that virtually all transported goods will at some time or another during transport cover a few miles on a truck.
In highway transport, the federal and provincial governments share jurisdiction. We all know that highways fall under provincial jurisdiction. However, the Supreme Court ruled in the mid-20th century that the federal government should oversee interprovincial truck transport and establish minimum standards for operating authorities and terms and conditions of service.
Generally speaking, this works well. Canadian and North American jurisdictions respect one another's regimes, making the free flow of goods over boundaries a reality. With the advent of deregulation, the Government of Canada became less interested in economic regulation while maintaining a strong voice in establishing safety standards, which brings us to where we are today.
The proposed amendments to the Motor Vehicle Transport Act complete a deregulatory cycle for commercial truck transport. These amendments firmly establish that Transport Canada will deal with safety standards.
However, it is worth noting that Transport Canada has been charged with overseeing the implementation of the National Safety Code since 1987. After 14 years, it remains a source of ongoing debate between provincial and federal highway administrators.
Canada's shippers have a very simple and straightforward request. In the interests of properly examining carriers who will carry out the contract of highway transportation, they need to be assured that the carrier who is deemed fit for interprovincial carriage in one jurisdiction is deemed similarly in others.
It goes without saying that MBTA has high ideals in mind. There is nothing more defensible than safety. However, unless the modus operandi of both the federal and provincial regulators undergoes a profound shift in direction and resolve, quite frankly, honourable senators, Bill S-3 will not be worth the paper it is written on.
The issue for Canadian shippers is not whether Canada requires consistent national safety standards for commercial highway transport -- we are not arguing about whether we ought to be able to choose safe carriers -- but rather, how do we get there from here? Again, quite frankly, if it is in the national interest to have safety standards for interprovincial trucking, it is the view of the CITA that the national government must take that lead. It has become apparent that either the federal government issues interprovincial safety certificates itself or it continues the current practice of delegating this authority to the provinces. Time has shown that the government department prefers to delegate this role. The issue is that there is absolutely no incentive for the provinces to adhere to the national standards set out in the act. It is the view of the CITA that if the government wishes these national standards to be effective then it will need to participate in the funding of these programs.
It is also the CITA's view that this proposed legislation offers an opportunity to harden the negotiator's resolve by instituting a series of deadlines either through legislated periods or through delayed proclamation. In this regard, CITA supports the recommendations that you heard earlier from the Canadian Trucking Alliance.
CITA also recommends strongly that the federal government assume a leadership role in developing a database of interprovincial safety-certified carriers to further assure shippers that the safety ratings tool is, indeed, national, and to encourage the use of safety ratings through easy access to them.
In closing, CITA reiterates its support for Bill S-3 as an interprovincial and international commercial trucking safety framework. What is missing is the means to fill out the framework into practical legislation that will serve Canada's shippers as they continue to make safety compliance a key indicator of carrier suitability.
I should like to make one other point about which I am sure you will hear later from my colleagues from the forestry industry. Other than the safety aspects that the MVTA is focusing on, there remains one other issue of economic regulation, which is entirely beneficial to the shipping community. I refer to the fact that the federal government will establish the standards for the bill of lading, which is the shipping document that goes with the cargo, as well as establishing a standard of liability limit on the carriers. This is the case now. Certainly, it is CITA's view that while we are betwixt and between the new regime and the old regime and the advent of the requisite regulatory standards being Gazetted, there should be some assurance that the current standards will apply until the new ones are ready to be implemented.
Madam Chairman, that concludes my formal statements at this point. I welcome your questions on this issue.
The Chairman: Do you feel that there is an existence of differences between the provinces regarding the application of the National Safety Code? Is that your message today?
Ms MacGillivray: Certainly, it is a surety that the provinces are implementing the National Safety Code as they have interpreted it. Thus, what we are getting, as a shipper is trying to move cargo across the country, is an inconsistency in the different regimes with which a shipper has to deal. This causes problems. There are issues of productivity as well as increased costs as you have to devote some degree of time trying to figure all this out. Whether or not a carrier that is deemed safe in one regime is, in fact, deemed safe in all of them, is another question. There are half dozen or so points of the National Safety Codes that are consistent across the country. This causes a problem as we are trying to do internal trade within Canada.
The Chairman: Do you feel that we need more legislation to reinforce safety? What is your position on the National Safety Code?
Ms MacGillivray: The national safety standards as they stand are fine. If implemented consistently across all the provinces, then they will stand us in good stead. The problem is with the implementation phase. The problem is that there is no incentive for the provinces to adhere to a national code.
Is more legislation required? Not on the code itself. However, I implore the members of the Senate to help us find a way to get the federal government and the provincial governments moving toward a common goal with some degree of discipline.
The Chairman: That is well put. Were you consulted when the Canadian Council of Motor Transport Administrators established the National Safety Code standards? Do you think the National Safety Code reflects the general opinion of truck drivers?
Ms MacGillivray: The CITA and its predecessor, the CITL, have been associate members of the CCMTA for a long time, certainly long before I came to the organization. We support the National Safety Code. Obviously, many of the standards have more to do with trucking operations in which shippers might take an active role. I would say that with regard to a majority of the standards we leave it to the truckers to work those things out. Again, what the shippers require of the code is very simple. What they require is consistency.
One of our basic needs is that shippers have a tool with which they can measure the safety compliance of a carrier. Shippers need to be reasonably assured that they can hire a truck in New Brunswick and have that same truck run all the way west to Vancouver without worrying about weights, dimensions and the different aspects that the provinces get into. We leave to the truck operators the individual matters, such as logbooks and how they are filled out.
Senator Forrestall: I want to ask you about your position on the observations of Anthony Downs, a senior fellow in the trucking association. Last week, he made points in a fairly major address that dealt with accommodating future, safe and sustainable growth in the trucking industry. He draws a very interesting conclusion. As I look to the future of the U.S. ground transportation from 2000-20, I approach it with that fear that we all have -- how on earth is anything going to be able to move in 20 years, let alone move safely?
He got me thinking about what must be an enormous cost to trucking in North America. We are just dealing with Canada, but it is applicable in a global sense. At certain times of the day, virtually nothing moves, except the dial on the radio in the traffic jam.
He drew a rather interesting conclusion. He said:
You may be surprised that I have not predicted more radical technical and other changes in ground transportation over the next 20 years. But when I look back 20 years to 1980 --
And I ask you to cast your mind back to that time and think about whether this is true.
-- I do not see evidence of many radical changes from then until now. And high-tech ideas like high-speed automated highways being proposed by many futurists frankly strike me as ludicrously costly and ineffective. My only radical conclusion is that, in spite of all our problems, I optimistically believe the nation will continue to be able to move around well enough during the next 20 years to maintain a rising standard of living for most Americans.
That applies to most Canadians as well.
On the subject of traffic jams, we have not done anything radical. Some of us have had the privilege of seeing smart highways in various stages of development and being tested. They are wonderful. When you drive down the Eastern Seaboard of the United States, it is not long before you know where your comfort lane is. You get in it and you stay there. You are in a little cocoon and you feel relatively safe. That is the only radical change of any consequence in the last 20 years. Regardless of where you are between New York and Washington, there is a traffic jam at five o'clock.
What is your organization doing about that? I am concerned about the lost revenue as a result of 20 million trucks tied up from Los Angeles to Halifax in the morning, at noon, and late in the afternoon. This is gradually becoming a major financial burden to the industry and to the consumer.
Is this a matter that concerns your group? If so, what are you doing to relieve yourself of that enormous burden, which must eventually be picked up by taxpayers, that is, the cost of a very valuable 18-wheeler making great progress at four miles per hour on the freeway?
Ms MacGillivray: As you have already ably described, the people who are buying transportation services do pay a cost for that congestion. We are wasting money when the trucks are not moving. The delays have become even more acute in the last 10 to 15 years as Canada took on, just in time, logistics pipeline methodology, whereby, rather than warehousing raw materials, a truck rolls up to a plant and offloads the materials just as they are needed on the assembly line or in the manufacturing process.
This is not a Canadian phenomenon. This is something that is taking place all over North America. Obviously, if Canadian companies are out of step with this economic efficiency, they will be uncompetitive in selling their products.
The CITA is very much cognizant of those issues of infrastructure. The infrastructure that we enjoy today is between 30 and 40 years old and at the end of its lifetime. The highways and streets were designed in the late 1950s and early 1960s with a 30-year life span. We are at the end of that. We were so proud of ourselves for the Seaway, locks and the TransCanada highway system that we spent 25 to 30 years patting ourselves on the back rather than reinvesting and maintaining our assets.
CITA has been actively promulgating the idea that if we are going to create economic prosperity for the next 20 to 30 years there is a profound need to look at how we create transportation policy at municipal, federal and provincial levels and come up with a unified vision for a national transportation strategy. How can we best utilize the assets that we already have, such as the Seaway, North America's only transcontinental railway system, and our network of highways, to ensure that each one is utilized optimally? How can we level the playing field for all the modes to ensure that shippers make the most cost-effective, environmentally friendly, efficient and safe choices possible?
Currently, our transportation regulation and legislation is done in a piecemeal fashion. There has been an effort in the last 10 years to have large omnibus bills, but things are still done in a piecemeal fashion. We need to look seriously at structures that were put in place 60 to 70 years ago, to see whether they can continue to survive or whether they are needed in today's environment.
There is no doubt that the shipper community has been very strong on the need for pilots, not only in the St. Lawrence but all over Canada. There are all sorts of things that, from a shipper's perspective, are not required, yet they continue to pay for them. We believe that with a national transportation policy and a fairly disciplined look at what infrastructures are required for the next 20 years to continue Canada's prosperity, the shippers can assist to alleviate some of the congestion.
The other half of the issue, of course, is the social one. Yes, there are many trucks on the roads, but there are also many cars on the road. Canada is in love with the automobile. In the last 20 years, Canadians have wanted to live in the suburbs, with 50-by-75 foot lots. This causes incredible strain around our urban centres. All communities and all stakeholders have a role to play. It should not be left to the transportation industry to solve this issue on its own.
Senator Forrestall: That is the dilemma we face. You cannot get into too much trouble if you are only travelling 10 miles an hour. You get into plenty of trouble if you are travelling 110 miles an hour. That is a particular concern of mine. I do not know how to resolve the problem in our Canadian system, the archaic system of the provincial, federal and municipal approach. We are all public bodies. We put the money in and so we want the control. That is what we have been doing for 80 or 100 years.
Is anyone in the industry in Canada, to your knowledge, putting money to address some of concerns for the future and trying to find answers to some these difficult questions of funding of transportation, not to mention the safety aspects?
Ms MacGillivray: There are many consultants out there who are benefiting from the number of studies. This is an issue that has plagued urban areas in Canada for some time.
In the Toronto-Montreal corridor, the railways have tried to institute what they call the iron highway or expressway, which is basically another kind of intermodal transport whereby a truck's trailer will be deposited on a flatbed and rolled along, the tractor rolls off the flatbed, and another tractor will meet the flatbed at the city at the other end. This is designed to take some of the congestion off the 401, between Toronto and Montreal. The CITA supports that kind of project. Canadian Pacific has put a fair degree of investment into this project.
One of those trains can take between 200 and 250 trailers off the road. It is like trying to empty the ocean with a thimble. It is a good start, but it will not solve the problem tomorrow.
Senator Callbeck: In regard to your comments on the uniform bill of lading and statutory conditions, I have a question. I understood you to say that the federal government set the standards for that liability. Do the provinces have any input into that?
Ms MacGillivray: This is an issue that the federal government has delegated to the provinces. There needs to be something in the act that says that a bill of lading issued in the Province of Ontario is good for Canada if it is going across a provincial boundary. It is as simple as that.
They do not have to list every single provision that ought to be in a bill of lading; they just have to say that one ought to exist and should be recognized in all jurisdictions. If you ship something from Ontario and you have an issue with the cargo, you will take that to an Ontario court and they will deal with any kind of remedies that you require. It is a full delegation operation from the federal government.
If that provision is not there, then interprovincial transportation will not be in anyone's jurisdiction, which will cause a problem.
Senator Callbeck: Right now we have a standard bill of lading; correct?
Ms MacGillivray: There is a bill of lading. The provinces establish the standards for the bill of lading and the provincial standards do not differ substantially from one to the other. Even there, I cannot say that there is a national bill of lading. There are just 10 bills of lading that are incredibly similar to one another.
Senator Callbeck: Really, the federal government has not had anything to do with it. The provinces have come up with their own bills of lading that seem to be pretty similar; is that correct?
Ms MacGillivray: Again, there is that requirement that the federal government establish jurisdiction over that.
Senator Callbeck: Do you want the federal government to set the standards?
Ms MacGillivray: We would like the federal government to continue to control that provision that will delegate the authority to the provinces.
Senator Callbeck: You mentioned the problem with the implementation of the safety code. As I understand the proposed legislation that we have before us, if the province does not abide by the criteria that is set up for the safety certificate, then the minister has the power to take the authority away from the province to license ex-provincial trucks. Do you take that from this legislation?
Ms MacGillivray: To my knowledge that has never happened. What we are saying is that within the CCMTA there are endless rounds of consultation. Philosophically, it appears that no one really wants to take a leadership role in establishing the national standards.
The provinces are implementing different aspects of the National Safety Code. The problem is that is that they have their own versions, standards, and how they evaluate whether or not a carrier is compliant within their jurisdiction.
As a case in point, Ontario, for many years, has had a regime of the commercial operators registry, whereby all commercial carriers must be registered and are on a point system as far as compliance. If an operator get a speeding ticket, the procedure is much like that of a demerit system. If an operator surpasses a number of points, based on the size of the fleet, that operator might get a letter. For many years, Ontario was the only regime that had that. Quebec has been trying to implement something similar in the last couple of years. In other jurisdictions, there may be different iterations of that. Even amongst provinces, you cannot get a good picture of a trucker's compliance with that province's regulations.
To take this back to the shipper, when a shipper is trying to choose whether a carrier is compliant, they must first sort out what the standard is for each province. Then they must sort out whether the standards are being enforced consistently. Then they must decide whether that carrier meets, or exceeds, their comfort level.
In regard to the current aspect of whether the minister has the ability to take away an operating authority or the province's ability to license an operating authority, we are saying this needs to be reiterated and beefed up, saying, "Okay, guys, on this date, let's make sure that we're all going in the same direction and we're all going to be at the same place."
Senator Callbeck: I do not mean that that is in the existing legislation.
I understand that is in the proposed legislation before us with regard to a province not abiding by the criteria for the safety certificate.
Ms MacGillivray: We have no problem with that, but, again, there is no deadline established. It could be another 16 years before someone says, "Goodness, there is no consistent standard." We have been working on a national safety code since 1967, and we are still not there.
Senator Callbeck: You would like dates for implementation of all these safety codes?
Ms MacGillivray: We would like strong incentives, be it a staggered proclamation or an actual deadline. This is not to say that there are not issues. This is not to say that one jurisdiction does not have a point with the continued debate. We want that to be combined with renewed resolve by the federal government to help some of the provinces with the implementation of a national standard.
Senator Callbeck: In terms of giving more money?
Ms MacGillivray: Absolutely. There are varying degrees of studying the issue. Ontario has had a safety code in place for 18 months. Quebec is currently implementing one. There are codes being put in place in the Maritime provinces and perhaps in Alberta. It varies greatly across the country.
Senator Callbeck: The federal government was giving the provinces money, but did it run out in the year 2000?
Ms MacGillivray: I believe it ran out prior to that. In the very early years, I believe the federal government was funding some of the programs; however, it died out as a result of deficit cutting.
Senator Callbeck: Currently, there is no federal money going to the provinces; correct?
Ms MacGillivray: Not to my knowledge.
Senator Eyton: I am mildly surprised to see you here. I do not mean that you are not welcome; it is lovely to have you here. I am associated with a number of the companies that are members of your organization and I find it very difficult to imagine a shipper at the Noranda smelter even thinking the words "safety compliance regime," "national safety code" or anything like that. I would have thought that a shipper is a shipper and he is looking for someone reliable with whom he has experience who will give him the right kind of service at the right price. It is hard for me to accept that what we are talking about here today is current, topical and hotly debated among your members. That is why I am mildly surprised that you are here.
However, you are saying that it is a concern, it is an issue, and it is debated?
Ms MacGillivray: Yes, absolutely. Safety is important to our association. A shipper who is choosing a carrier wants to ensure that the risk of hiring someone to ship the goods is mitigated as much as possible. One of the easiest ways to do that is to check out a prospective carrier's compliance. Our large members have the ability to require, particularly in regimes where they maintain records of compliance, drivers to show their safety ratings or even their compliance sheets -- their CVORs.
Senator Eyton: Would that happen on a regular basis?
Ms MacGillivray: Absolutely. My members will check that. However, in order to get anything useful, you have to ask the carrier to supply it. Then, there are situations where accidents might happen, particularly as the roads get more congested and the truckers are having to deal with population on the roadways as well as the general hazards of moving things along.
Senator Eyton: Do our shippers in Canada enjoy good services and good prices relative to someone 100 miles south? Do we have comparisons?
Ms MacGillivray: I would say that they are.
Senator Eyton: Is it more expensive for us to move goods?
Ms MacGillivray: It is difficult to say because of the difference in the dollar. I would say that the systems are comparable, although it is difficult to compare because the systems are very much different in terms of how they regulate themselves and how they manage the safety issue.
It is rather disappointing that a country with only 10 jurisdictions seems to have more trouble than a country with 50 jurisdictions in establishing a national vision for safety.
Senator Eyton: Returning to the shippers, do you think our shippers are roughly competitive with shippers 100 miles south on the same band?
Ms MacGillivray: I have not heard complaints on that issue. The trucking industry does not suffer from a lack of players who want to carry their traffic at this point.
Senator Eyton: You spoke about varying standards, and I recognize that it is difficult when they are inconsistent. Is there anyone that is almost perfect? It seems to me that if you are at the top of the class in every category and every respect, everyone would welcome you and you would not have a problem. Is there anyone like that, or is that a foolish question?
Ms MacGillivray: Ontario seems to be more advanced in this area, but then Ontario has philosophical differences with the other jurisdictions on how to carry out a safety audit.
Senator Eyton: So it is more on the compliance side than the actual standards side?
Ms MacGillivray: It is the standard as well. Ontario demands that all truckers shall have a facility audit. An inspector will look at all records regardless of what a carrier's compliance level is and whether there has been one accident or 100. In other jurisdictions, a carrier might be audited if he is red-flagged because of transgressions or a high accident rate. In some jurisdictions, inspections might even be random. This is the issue. If, for example, Prince Edward Island deems one of my members to be safe there, does Manitoba hold him to the same level?
Senator Eyton: I was looking at the toughest jurisdiction, which is perhaps Ontario.
Ms MacGillivray: Yes, Ontario, and Quebec is coming along nicely.
Senator Eyton: Are you suggesting that the federal government should simply enact a national safety code and cooperate through funding in compliance? The provinces and Ottawa have been talking to each other for a long time and they have not got very far.
Ms MacGillivray: A fair degree of delicacy is still required. This is something that will be implemented and enforced in the provinces. There is still a need to consult with them on how this can be best achieved. We need a carrot and a stick to bring everyone along to the same end.
Senator Eyton: After years, we are still not there. In an earlier sitting, we were told that something like 75 per cent of revenue in the trucking industry comes from international or interprovincial activity.
That clearly is a federal jurisdiction. Is it not time to say to everyone to stop playing games, here is the standard, and here is how we will comply? It seems to me that you have a lot to say about it, considering your financial stake.
Ms MacGillivray: There is still a need for consultation. As I said before, there are issues amongst the provinces. I do not think that they are being difficult because they want to be. They have issues with some of the things, and how they will be implemented. That needs to be recognized.
Senator Eyton: How long would you give them? This cannot go on. There cannot be multiple years while we push, pull, change a bit and look for a consensus. It seems that the federal government, having jurisdiction over three-quarters of the revenue, should take a leadership position.
Ms MacGillivray: Off the top of my head, I think that six months might be a little soon. After four years or so, if the legislation contains some sort of review mechanism, to take stock of where they were, that might be reasonable. There are programs that need to be implemented. There are things that will take time to get started.
There are some jurisdictions that have not started on even the safety code aspect of the national safety rating. There needs to be more time, but, again, I would say that seven years to ten years might be a little too generous. A reasonable amount of time might be three years to five years.
Senator Adams: How many members in your association? Are there members in Ontario only, or across the country?
Ms MacGillivray: Our membership is national. We have members in every province, whether their head office is there or they have plants there. I am more intimate with the Ontario regulations than I am with some of the others. Certainly, our members are large companies, as well as small companies.
Again, many of the standards for purchasing transportation services are established in the larger companies. It would be beneficial as a public good to ensure that the small and medium-sized shippers have all the tools they need to ensure that the carriers they are considering hiring have a good safety compliance record.
Senator Adams: Does your association offer training programs in the field of safety or for licensing?
Ms MacGillivray: The easiest way to do it would be to have a central database available on the Web. If a trucking sales representative comes into your office, you could enter his name and access his safety record in Canada. Therefore, it is deemed safe in the U.S., if they have jurisdiction to go down there. We are looking for that.
Senator Adams: A driver does not drive in the same weather every day. It gets dark in the night. There may be freezing rain and snow. The problem is sometimes the driver, sometimes the truck, and sometimes the safety of the roadway.
Most of my travel is by plane. Sometimes the pilot stops some place and runs around the aircraft to see if something is loose.
How does safety work in the trucking industry? Does the driver have to check the tires, say, to see if anything is loose? Is there a safety log in the truck?
Ms MacGillivray: Again, these are operational issues that the shippers really do not get into as far as how the trucker operates his business.
If a trucker is being pulled over for non-compliance or if it is discovered that the logbooks are not accurate, the safety record will indicate that. A random check is done on a yearly basis in mid-June. All the provincial jurisdictions have safety check day. There is a national road safety day. Jurisdictions set up road checks to try to identify some of those issues that you are raising.
Shippers rely on the overall rating that a jurisdiction gives a carrier; it is that rating that allows a shipper to determine how a particular carrier is complying with the individual standards within the safe operation of a truck. I do not think you will see a shipper doing circle checks of a carrier as the carrier backs up to the loading bay. There is also a question as to whether or not people are qualified to look at those sorts of things. It is beyond the realm of the shipper.
Senator Forrestall: All of us want safety, there is no doubt about that. In that way, the producer of the service and the benefactor of the service benefit.
You suggested in your comments to Senator Eyton's observations that this matter went back in your mind to the 1980s. This is now 2000.
I remember in Nova Scotia working with other premiers and the federal authorities to try to do something about a national safety code, one stop shopping. It has not worked. If we look at Europe or any of the rapidly developing areas of the world, the system that we have does not work. It is not solving our problems. It does not leave the planet with the vaguest idea where to go, except scrambling for more road space, which in turn leads to congestion and a draining of the monies available for maintenance of the existing highway structures. They then become unsafe. It is a vicious circle.
Is there anyone that could better do it than the municipality, provincial or federal authority? What would happen if we were to give $800 million to the private sector, the truckers themselves, and tell them to solve the problem? I would be quite prepared to give them 20 years. They might make a dent. Respected infrastructure analysts in the United States say that we are spinning our wheels. As long as the politicians are doing it, we are not going to build a road through a swamp because a bird made nests there. You are not going to get decisions.
You may end up with, in some cases, the absolutely correct decision, but that will not serve as transportation safety. It will not service the producer of the service or the consumer of the service. Where we are going? Perhaps it is time to look at another way or to consider other options.
That is why I suggested to you earlier that perhaps, in an organization such as yours, you should begin to tackle these problems yourself. That could be done with the knowledge that when you had a solution that made sense to the user and the producer -- those people concerned with safety, which is my basic concern -- then just maybe you might have the right solution.
You will not find that solution as long as you ask the elected representatives. If we talking about the GTA, say, one person will want the Gardiner Expressway in one place while another elected representative will suggest another place. In this scenario, neither the consumer of the service nor the provider of the service is considered in the equation. They have nothing to say.
There are the institutions that make their points at the annual conventions that deal with transportation. I watch and read with great hope and enthusiasm, but one year goes by and I wonder what happened with the idea. Nothing happened. It was dismissed by the bureaucracy, conflicting ends, and probably desirable goals, on the part of different political levels of government.
I should like to know your reaction to the idea of the private sector having control of the highways. I have no idea how much the federal authority transfers to the provinces for the TransCanada under that formula. Is it $800 million? Would that just be a drop in the bucket?
Mr. Martin Brennan, Special Adviser, Library of Parliament: The amount that the federal government spends at the moment is much less than that. I might be able to find you a figure in a minute.
Senator Forrestall: Whether it is $80 million or $220 million is not the point. My question is this: Might that money not be better employed if the private sector had the opportunity to resolve the transportation issues?
What is to be done with taxicabs in downtown Toronto, I do not know.
How do you react to the idea of privatization of some of these major concerns?
Ms MacGillivray: Far be it for me to refuse $800 million. However, it is a question of balance. No one group has all the answers. Allowing the private sector to try to resolve the transportation issues pertaining to a certain problem is how, in 1919, the federal government ended up with CN Rail. I have a fair degree of caution over your suggestion. Certainly, roads are generally built for commerce. We build roads and the infrastructure so that we can move goods. As populations become more mobile, their interests have also become a part of the equation. Can a private sector resolve all the highway infrastructure problems? Certainly, they would think that they could. However, it might leave a fair degree of Canada's constituents in the dark.
The federal government has a role because this issue is in the national interest. Without the federal government taking the leadership role, the piecemeal nature of Canada's transportation system would deteriorate even more, almost to the point of paralysis. The issue is that, for some time, there has not been that national vision; we have allowed the assets that we have to deteriorate, because there has been an abdication of responsibility. I do not think that handing it over to one interest will solve that problem.
Senator Forrestall: The one interest, of course, is the industry. You are endeavouring, with one stroke, to do what I have suggested. I am offering you different tools with which to do it.
I understand your reluctance. I only suggest to you that governments have failed, to the best of my knowledge, for 35 or 40 years -- Liberal, Conservative and socialist governments. We have not been able to unite to achieve much in the field of safety. We must find a way to do this. We cannot sit around for the rest of this century and waste it.
I suggest that we have not had any direction for 20 or 30 years, although we have had changes and we have accommodated things. However, nothing has improved, and traffic does not move any faster. The national railway, for example, moved at 3.5 miles per hour in the 1920s; it is up a little over 4 miles per hour now. I should like to see comparative figures for trucking. I do not think that they move much faster. We do specifics to accommodate production, but nothing will change. I am becoming radical, and I do not know what it is. Thank you, I appreciate your view.
Senator Callbeck: Do you have any concerns for the trucking industry in terms of hours of driving? I understand that, in Canada, the hours of driving is the highest in the world. There is a proposal to increase it even more. Are you concerned about that, or any other issues?
Ms MacGillivray: I believe that the proposal currently being debated is to reconfigure the allowable hours, as they stand now. Canada and the U.S. did a joint study on sleeping patterns, which might seem odd, but it was a study to determine the alertness of drivers, as they went through their role. Based on those studies that showed when drivers were most alert and how much rest they needed to continue a certain degree of alertness as they were driving for many miles, they came up with the proposal for the changes. Canada then adapted those changes to be consistent with Canadian circumstances. Once you are distanced from the border, the urban centres are further apart. For example, an exhausted trucker does not want to reach the end of a five-hour section 200 kilometres west of White River and find nothing but deer. The changes for Canada have been adapted in consideration of the needs.
The changes that have been suggested are based on good scientific fact and good scientific theory. The debate should probably be around whether this is a reasonable change that will maintain productivity for both carriers and, subsequently, for the shippers.
The standards are reasonable. The proposed changes are reasonable. That is an observer point of view. Certainly the trucking organizations would have a far more eloquent position on it than I do. It falls under their purview and how they manage their drivers.
Senator Callbeck: The hours do not concern you. Do you have any major concerns about the trucking industry today?
Ms MacGillivray: Again, we get into this idea that there does not seem to be either a unified or a national vision for how trucking, rail and marine services will be optimized in the next 20 years. Our concerns are that shippers are held to make sure that they hire safe carriers and then the tools to allow them to do that are not available. Our concerns are the ability for Canada to access, in a competitive way, the U.S. and into Mexico. We have a number of concerns about the trucking industry, but nothing that is tantamount to the sky falling in tomorrow or that sort of thing.
Senator Callbeck: With respect to the safety code, is it fair to say that the federal government should take the initiative, that is, sit down with the provinces and map out a timetable and give them some money to implement the various parts of the safety code?
Ms MacGillivray: Yes; that is correct.
The Chairman: Thank you, Ms MacGillivray, for your time. We wish you a safe trip back home.
Our next witnesses are from the Forest Products Association of Canada.
We want to welcome Mr. Murray and Mr.Terry. Please proceed.
Mr. David W. Church, Director, Transportation, Recycling and Purchasing, Forest Products Association of Canada: Honourable senators, thank you for giving us the opportunity to speak to you this evening on Bill S-3.
To make you aware, Domtar has facilities in the following places: Windsor, Quebec; Cornwall, Ontario; Ottawa-Hull; St. Catharines and Espanola, Ontario; and also in Vancouver, British Columbia. By now you should have copies of our submission in both official languages. They were sent to you last week, but I have a few other copies with us.
You can see that our concerns are fairly specific and deal with the continuation of federal authority over bills of lading and conditions of carriage as they relate to extra-provincial and international trucking. Some of you may be wondering just what FPAC is. FPAC was created February 1, 2001, following almost a year's work by a group of industry CEOs who believed that the forest products industry should be speaking with one voice on federal and international issues and approved a recommendation that the Canadian Pulp and Paper Association be replaced by a new organization with an expanded membership base. In addition to representing companies that manufacture pulp, paper and paper board, the Forest Products Association of Canada also represents companies in the solid wood business.
Last year, the industry shipped a record 31.6 million tonnes of forest products to customers in Canada and to over 100 countries around the world. Approximately 21.7 million tonnes of our products, or 69 per cent, were shipped within North America. While rail transportation is primarily utilized by our members, the transportation of forest products by truck has become increasingly important in recent years primarily for shorter distances and for mills located in or close to urban centres.
Our members negotiate freight rates with motor carriers and rely upon the uniform bill of lading and statutory conditions of carriage as the basis upon which forest products are transported by extra-provincial and international truck transport.
Under the Motor Vehicle Transport Act, 1987, provincial transport boards in each province were entitled to issue a licence to a person to operate an extra-provincial truck undertaking on like terms and conditions and in like manner as if the extra-provincial truck undertaking were a local truck undertaking. This provision constitutes the basis upon which the provincially enacted uniform bill of lading and statutory conditions of carriage are given effect by provincial boundaries. These uniform provisions preclude the necessity for individual negotiations of terms and conditions of carriage with each of the many truck carriers our industry utilizes. Moreover, the uniform bill of lading and statutory conditions of carriage provide consistency as to the rights and obligations of shippers and carriers and also provide a large measure of certainty as to the manner in which those rights and obligations are to be interpreted. FPAC strongly submits that they should continue to be effective even though the provisions of the MVTA, 1987, which give them force and effect, are being repealed with the proposed enactment of Bill S-3.
Proposed section 16.1(1)(h) of Bill S-3 permits the federal government to make regulations for the attainment of the objectives of the proposed act and to prescribe the conditions of carriage and the limitations of liability that apply with respect to extra-provincial motor carrier undertakings. Clause 16.1(2)(b) provides that a regulation made under subclause (1) may incorporate, by reference, all or any portion of another document as amended from time to time, including the law of a province relating to motor vehicle undertakings.
We have been assured by Transport Canada, in an exchange of correspondence that is attached to the submission, that the statutory provisions contained in Bill S-3 will ensure the continuation of the uniform bill of lading and statutory conditions of carriage that currently govern extra-provincial truck transportation arrangements between shippers and motor carriers. While FPAC supports the enactment of Bill S-3, it strongly recommends that the two sections that I outlined be implemented without substantive change in view of these assurances received from Transport Canada.
FPAC also urges the committee to recommend to the government that a federal regulation incorporating by reference the provincially enacted uniform bill of lading and statutory conditions of carriage be promulgated at the same time Bill S-3 comes into force and effect. This will ensure that there is no lapse in the extra-provincial effectiveness of the uniform bill of lading and statutory conditions of carriage.
Mr. Terry and I will be pleased to answer any questions you may have.
The Chairman: I refer you to page 3 of your presentation. You recommend to the government that "a Federal Regulation which incorporates by reference to the provincially enacted uniform bill of lading and statutory conditions of carriage," and so on. What kind of specific problems are you talking about if we were to adopt a federal regulation?
Mr. Church: It will mean that the bills of lading provisions that are currently in existence will continue to have effect extra-provincially and internationally. Thus, the same regime that is in place now will continue to be in effect when the bill takes effect. What we are asking for is that the current regime continue on after Bill S-3 is adopted and that the federal regulation be enacted or promulgated to ensure that the bills of lading will have effect.
Senator Forrestall: Perhaps I missed something, but I did not know we were going to drop it. What leads to your concern that what you do not want to happen may happen?
Mr. Church: When the discussion paper came out about three years ago, it made reference to the repealing of all the economic regulations with respect to motor vehicle transport. The only issues remaining would be the safety issues.
We do not have a problem with that, except for the one specific provision that deals with the extra-provincial and international effect of bills of lading, that the federal government must retain authority over that, because it is only the federal government that has authority.
When the previous bills were introduced, Bill C-77 and I believe Bill C-28, we just wanted to ensure that that provision was included in the bill and that somehow it did not get dropped. That is the reason we are here. We were concerned that in the process of deliberations by this committee and others in the House of Commons that this provision may be dropped. We believe that it is important to ensure that the uniform bill of lading and standard conditions of carriage remain in effect. The only group that can do that is the federal government, because only it has the authority. Thus, it is more a precautionary measure than a concern about what is in this bill. It is the retention of the provision in the bill. We like what is in the bill with respect to that.
Senator Forrestall: Who would benefit from the removal of these two clauses and in what way?
Mr. Church: I am not sure who would necessarily benefit. There may be some carriers that might benefit from it. To be honest, I am not sure. It was more a protection of the status quo. I am not sure that there was anyone who would win by its removal.
Senator Forrestall: I would rather ask you some questions about what happens with our friends to the South. Frankly, in this committee we have not had any in-depth discussion in this regard. We are aware the matter continues to arise. I wonder why, because I do not know who is trying to shoot it down.
Mr. Church: It really is a recognition that this bill is what we have been looking for. We are supportive of the bill. Generally speaking, when our industry comes before a parliamentary body, we have concerns with a provision or we are upset with something or we are looking for amendments. In this case, we are supportive of the bill.
Senator Forrestall: Some things move ahead by leaps and bounds, and other things move ahead inch by inch. This is one of the inch-by-inches situations.
I wonder if we could take you away from bills of lading for a minute or two to the question that we are trying to address, and that is the code. Do you have any problems with it? Do you think it is going in the right direction? Is it going fast enough or too slow? Do you have any general observations about what the bill is trying to achieve?
Mr. Church: As I indicated, Mr.Terry has operations in Quebec, Ontario and B.C., and with the consolidation in our industry, we have companies now with operations right across the country. What we would like to see is uniformity. We would like to see uniformity of vehicle weights and dimensions, sizes of equipment on the road, hours of service and safety code provisions. In that way, we would know that a trailer that takes on a load in Quebec City can move to Manitoba, that the standard in Quebec is applicable right across the country, and ideally, right across North America.
Senator Forrestall: That is interesting. Why did you not say all of the Americas?
Mr. Church: In our industry, when we are shipping by surface transportation, we are shipping within, for the most part, Canada and the United States. By and large, when we ship farther south the product goes by ship.
Senator Forrestall: It will go by vessel.
Mr. Church: That is correct. It goes offshore.
Senator Forrestall: Would that hold true with the movement around the East Coast and to Europe? Of course, it would have to go to Europe by vessel, but would you move it by ship from Vancouver to, say, Liverpool?
Mr. Church: Yes. Most of the tonnage from our industry, such as pulp and newsprint in British Columbia, comes from mills in remote areas of the country. If it is going to be shipped offshore, it will go by rail, for the most part, to the port of Vancouver, and then we will be shipping by vessel.
There is some tonnage, newsprint, for example, that goes by ship down the coast of British Columbia to California. There is a certain amount of tonnage that likewise goes from the East Coast by vessel to the Carolinas and Florida. However, the vast majority of the tonnage in North America moves either by rail or truck.
Senator Forrestall: There is an increasing amount that is moved by truck?
Mr. Paul Terry, Corporate Manager, Transportation and Logistics, Domtar Inc., Forest Products Association of Canada: It has got to the point where it depends on the commodity you are selling.
Senator Forrestall: Round logs, for example.
Mr. Terry: Round logs are typically going from bush operations to sawmills. Typically, your mills are close to your harvest operation, so trucks are better for the short hall. Most raw materials are moved by truck because the manufacturing plants are closer to the raw material. However, from the finished goods perspective, we are dealing with North America and it is customer-driven at that point in time. The customer dictates the mode of transportation, usually based on its size. If it is a customer, for example, who does not have a rail siding and the order is from us as a manufacturer, then it is up to us to get it to that customer in the mode of transportation he can receive by.
In the event that it is a long haul and the customer can only receive by truck, we might choose to rail a significant portion of the distance and then reload it onto a truck to get it to the customer. There are many different combinations that we use to get the goods to the customer.
The trick with the majority of our products is that we are dealing with just-in-time deliveries. Thus, our customers are telling us that they would like our product delivered at such and such a time. We are in more of a pull mode than a push mode. We have to back everything up at the mill level to ensure that we manufacture and ship on time so that the goods are at the customer's door when he requires it.
Senator Forrestall: Staying with the area of safety, what are the principal causes of accidents for trucks carrying lumber and products? Is it the same general cause today as it was, say, 10, 20 years ago? Has the cause of accidents today changed in the nature of the accident itself, what causes them?
Mr. Terry: The majority of significant accidents that have been brought to our attention have been as a result of weather conditions. Hitting black ice in northern Quebec or northern Ontario is a common occurrence. The majority of accidents are not necessarily traffic-related. That is not to say that we have not had any of our products involved in accidents in high urban areas. For the most part, most of the accidents that I can recall over the years have been single-vehicle accidents strictly related to weather.
Senator Forrestall: Trucks leaving the road or losing their load.
Mr. Terry: Yes, or losing control or their tracks on a curve, that sort of thing.
Senator Forrestall: I suppose that that is a good omen and indicates that safety is of vital concern to every trucker. Trucks are major investments. I wonder about the philosophy in the trucking industry with respect to logs or forest products. Is that philosophy any different than that among drivers carrying wheat by truck, which is a growing reality on the Prairies?
Mr. Terry: We have noticed a significant change in the trucking industry in terms of the technology of 20 years ago. You see 18-wheelers today and they are much more aerodynamic, much more comfortable for the drivers.
Senator Forrestall: They drive faster, too.
Mr. Terry: Some of them drive a little on the fast side. Some of them have cruise control, if you can believe it. There are new innovations such as trip odometers, chip technology and computer technology. Speed and RPMs are being so as to know exactly how fast the drivers are going and who is doing the proper shifting in terms of fuel efficiency. They have many more details on the efficiency of their operation today. Shippers can use that information to train new employees, to implement progressive shifting in terms of better fuel economy and to design better safety training programs for the drivers. Technology has helped them move forward.
Senator Forrestall: What is the situation with tire technology?
Mr. Terry: Tire technology is changing significantly. Some carriers have switched from dual-axle trailers to wider tires, single axle. That has proved to have some efficiency and gains of economy.
There are some associations that are working on studies of tire pressures, to determine the effects of certain pressures on efficiency, safety, and so on. We are involved with them as well in the forest products industry.
Senator Forrestall: Do you suppose I will live to see the day when I can drive from Halifax to Ottawa and not see 200 or 300 blown tires along the TransCanada?
Mr. Terry: I certainly hope so.
Senator Forrestall: Has anyone ever made an estimate of blown tires? As often as I see blown tires, I see a truck going behind the trucks picking up the blown tires.
Mr. Terry: One of the difficulties is the cost of scale. I do not know what it costs to buy a brand new tire today, but there are companies that will sell tires that have retreads on them. Typically, the blown tires that you see on the highways are tires that have been retreaded.
Senator Forrestall: If you are careful, the economical tire should be somewhere in the middle or the back, where it is more comfortable. I just wonder when we will get a tire on the road that can hold up, even in situations of inappropriate inflation or deflation or rough edges along the road or potholes.
Are truckers happier today than they were 10 years ago? Is it an improved and safer situation today?
Mr. Terry: The trucker today is a very different trucker than he was 15 or 20 years ago. It is tougher to get truckers today. There is a significant driver shortage. However, the manufacturers are using technology to make it better, to make it safer; on the whole, it is getting better.
Mr. Church: You read in magazines that the trucking industry has had to respond in Canada and the United States to a driver shortage. The industry has had to provide better working conditions. That is the nature of business. If they want to attract good people to operate their equipment, they must offer quality of life and enable drivers to get home on a regular basis. The trucking industry is responding to the needs.
Senator Forrestall: What is the turnover of drivers? You see young fellows operating those mammoths down the road.
Mr. Church: I do not know what the turnover is in the trucking industry.
Senator Callbeck: I am sure you are well aware of the concern expressed regarding the implementation of the safety code, that some provinces are proceeding faster than others. Is this a major concern with you?
Mr. Church: It is a concern to the extent that we use the trucking industry to move our product. We are concerned about safety. Each of our companies has as part of its mandate to provide a safe environment for its employees and to ensure that the product gets to the marketplace in a safe manner.
Anything that can be done to provide a safe environment and have uniformity is what we would like to see. We would be supportive of that. How you can accomplish that, I am not sure. Certainly, we want the uniformity in both hours of service, safety issues and vehicle weights and dimensions. That leads to efficiencies if you can do that.
Senator Callbeck: You want that, but is it as major a concern as for the last witness we heard? I do not seem to detect that it is.
Mr. Church: It is not a major concern to us. We have not had uniformity in terms of safety. Thus, we have had to live with that. Perhaps Mr. Terry can speak to it better than I can, but I have not heard many of our members speaking about the lack of a national safety code.
Mr. Terry: I would say that having the national safety code will ensure that the carriers that we hire are playing within the same guidelines and have the same rules. The majority of our mill locations are in Ontario and Quebec. We ship right across the country. We have a mill in Vancouver that ships back in this direction, too.
We have many carriers that we use going east and west. We need to be able to use those carriers back and forth as efficiently as possible, and not to worry about their particular issues at the industry level.
We want to ensure that the carriers we choose to move our products are from a safe company and that they have the training, the personnel and the infrastructure in place to provide the type of service that we would like to purchase.
Typically, we sell our products at destination, which means we are responsible for that product until it gets to the customer. We want to ensure that those carriers are applying due care and diligence to get our product to the customer on time and in a safe manner.
For those reasons, we want to ensure that those carriers that we pick have those same philosophies as well. If we choose a carrier that does not have safe practices and is constantly getting into accidents, causing our products to be late or damaged, filing a claim against the carrier for damaged products will do us no good in the end because we will have lost our customer.
Senator Callbeck: In other words, any problems that exist because the provinces are not all the same and have not implemented the safety code at the same pace, you let the carriers work out?
Mr. Church: I would say, yes.
Senator Callbeck: That is not your problem?
Mr. Church: It is up to the carriers in the provinces, and perhaps with federal government oversight or assistance, to develop the national safety code.
Senator Callbeck: It seems strange to me. Of the two groups before us tonight one is certainly putting a lot more emphasis on that than the other.
The CCMTA were here and spoke about their membership, which is very extensive. Is your group a member of the CCMTA?
Mr. Church: We are an associate member. Thus, we receive information from the CCMTA on their activities. We have worked closely with them on cartwheel security. I am not sure if you are familiar with that, but it is an issue that deals with how to ensure that the cargo within a flatbed trailer or closed van is secured to the point that if there is an accident or an incident short of an accident the load will remain within the vehicle.
We have worked with the CCMTA task force -- which includes Canadian shippers and carriers, the provinces, the American forest and paper association, American shipper, carriers and state officials -- to develop a common cargo securement standard, a model regulation. So we do work with the CCMTA on some issues. However, on issues related to things like hours of service and so on, we tend to leave those to those who are more qualified to deal with the issues than we are.
Senator Callbeck: In other words, you are not on any of their standing committees.
Mr. Church: We are only an associate member. I do not think that we are eligible to be on their standing committees.
Senator Callbeck: Would you leave the hours of service up to the carrier, too?
Mr. Church: That is right, in terms of developing those standards, yes. We believe that they are more qualified than we are.
Senator Adams: You mentioned Quebec. You say that you have a different tonnage across the border between Ontario and Manitoba. How does it work with the different provinces, when there are different tonnage payloads for the trucks? Must you meet the standard of the other province? How do you address that?
Mr. Terry: To determine payloads across provincial boundaries, you must look at the mill where the product is manufactured and destination. For example, if we ship a product from one of our Quebec mills into Detroit, we must go with the lowest common denominator in terms of payload, because we are passing through Quebec, Ontario and the state of Michigan. We must ensure that we have the lowest common denominator of those three jurisdictions. That is a good example from there.
Coming from Vancouver back into Ontario is a different issue; we could have a larger payload.
Typically, we find that our customers do not want that; they have not ordered a higher payload so they cannot utilize a trailer that could take a higher payload. Therefore, we use a smaller payload trailer. Is also customer-driven in terms of the different jurisdictions. We must play the balance.
Senator Adams: Are there regulations regarding time concerning shipping your product to other countries or across Canada? Do you have so many hours to get there? With respect to timing, how does it work between the buyer and the shipper?
Mr. Church: Generally, you work backwards from the time the customer wants the product delivered. If he wants the shipment to arrive between two o'clock and four o'clock in the afternoon in Detroit, a company typically backs up in consultation with a trucking company to determine the window. They determine when to load in order to arrive between two o'clock and four o'clock in the afternoon.
That is typically the way that it works. The production schedule is then worked out so that the product is manufactured, put in the warehouse, loaded on the truck, and then the truck goes off and arrives at its destination between two o'clock and four o'clock Friday afternoon.
Mr. Terry: A typical contract for a carrier represents that the delivery must be done within a reasonable time. You build up a rapport with your carriers in terms of your mill origins and your destinations so that you get used to the fact that within a 500-mile radius it is next-day delivery. If it is over that, it is two-day delivery, and so on. You get to know those different factors.
On the flip side, if something has to be delivered, say, to Toronto on a Monday but is still being manufactured until Friday some time, it will not get there on time. In that case, there are other options with the carriers, team drivers, which is an extra service. If you are late in manufacturing, and you must still make delivery, you can hire team drivers. The product then goes straight through without stopping.
Senator Adams: If a truck rolls over or a product is damaged, who is responsible -- the trucker, you, or the insurance company?
Mr. Terry: The carrier is responsible for having public liability and property damage for the goods. Once he signs a bill of lading, the goods are his responsibility from shipping to destination. Therefore, he has the insurance for the goods. As a shipper, we would file claim against the carrier if the goods were damaged.
The Chairman: Thank you, Mr. Church and Mr. Terry, for your presence here. Feel free to send us further information, if you have more to give us. It will be distributed to the members of the committee.
Honourable senators, tonight we must adopt the budget for our committee. I will appear before the Internal Subcommittee, and I need a motion.
Senator Forrestall: You need authorization?
The Chairman: Yes.
Senator Forrestall: I move that the budget for the Standing Senate Committee on Transport and Communications be submitted. The summary of expenditures are on the documents in front of everyone.
The Chairman: The total amount is $43,400. I intend to discuss a subcommittee on transportation safety at that meeting as well.
Is it agreed, honourable senators?
Hon. Senators: Agreed.
The Chairman: Carried.
The committee adjourned.