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THE STANDING SENATE COMMITTEE ON TRANSPORT AND COMMUNICATIONS

EVIDENCE

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OTTAWA, Tuesday, March 27, 2018

The Standing Senate Committee on Transport and Communications, to which was referred Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, met this day at 8:15 a.m. to give clause-by-clause consideration to the bill.

Senator David Tkachuk (Chair) in the chair.

[English]

The Chair: Honourable senators, welcome to this meeting of the Standing Senate Committee on Transport and Communications. The committee is completing its study of Bill C-49, the Transportation Modernization Act.

There are two parts to the meeting today. For the first part, we are pleased to have appearing before us the Honourable Marc Garneau, Minister of Transport. He is accompanied by, from Transport Canada, officials Helena Borges, retired Associate Deputy Minister, and Alain Langlois, General Counsel and Deputy Executive Director. Welcome to our meeting.

I invite the minister to make his opening remarks, and then senators will have questions.

Hon. Marc Garneau, P.C., M.P., Minister of Transport: It is a real pleasure to be back in front of this committee.

[Translation]

Thank you for all the work you have done these past months. This bill is very important to the transportation sector, and I know you have examined it very carefully. I thank you for that, and I am pleased to be back here today to answer your questions.

Since you already have my remarks from yesterday before you, I will not take the time to read them.

[English]

Today, perhaps as an opening, I’d like to make three points. First, a great deal of work went into the preparation of this bill, as I am sure you’ve had the chance to notice during the past few months, particularly with respect to the modernization of freight rail legislation.

This was a very long time in coming; I would say decades. There have been conflicts between the railways and shippers, whether we’re talking about grain, potash, minerals or containers, that go back a very long time ago.

We have tried to achieve with this bill a balanced and fair approach for both sides, recognizing that there were some long-standing grievances with shippers that needed to be addressed, while at the same time recognizing that our railways carry all of these commodities. They must remain viable economic entities and do important things like renew their infrastructure on a periodic basis.

We tried to achieve what I would call exquisite balance between the two. After we brought forward the bill, we were told by shippers that many of the things they had been asking for were in the bill. We also received positive comment from the railways.

Were they both 100 per cent happy? No. You will have seen this yourself, and they will probably have proposed some additional measures and perhaps not emphasized the fact that a lot of things were given to them in the process.

Simply, if we start to add things or remove things, it will create an imbalance. This is a very balanced budget. I mention that as an opening comment.

Second, I am well known in the House of Commons for repeatedly saying that rail safety is my number one priority. I’ve probably said it a thousand times since I’ve been the Minister of Transport, and I want to make that point again.

There are too many derailments and uncontrolled movements in the country. We have 10,000-foot trains that carry dangerous goods that we need and that have to move around. I will do everything possible to improve rail safety in the country because I regard it as my number one priority.

Finally, on the issue of passenger rights, the passenger rights that will be developed by the Canadian Transportation Agency after this legislation is approved will achieve for the first time something that is clear, easy to understand and will apply to all airlines. I would add, as well, airlines, not necessarily Canadian airlines, that are coming into or leaving this country. This will be a comprehensive passenger rights bill.

I would simply add that some misconceptions and bits of information have been circulated with respect to passenger rights which are not accurate. I welcome the opportunity to clarify some of those points this morning.

Having said that, I will gladly now take your questions.

Senator Plett: I have two questions, but before I go into them let me just say that I agree with the minister 100 per cent that rail safety should be our number one concern. It is mine as well, so we are certainly on the same page there and on passenger rights, as well, being a top priority.

I think we agree with the intent of the bill. I think where we may disagree is how we achieve that at times, but certainly not with the intent.

We have had, I am not sure how many witnesses. Certainly the clerk could tell us that. We have had witness after witness after witness come in here. Out of all the witnesses, only two that I recall were actually entirely happy with the bill and did not propose any changes whatsoever. They said, “This is good the way it is; we don’t need anything changed.” In my office, it’s the same thing. They came in one after another after another proposing different things.

The only ones that didn’t were the railways. It seemed to me, minister, that the railways had a heads-up in knowing what was to be in the bill and knowing when the bill would be introduced.

My first question is: Were the railways given a heads-up? Were they part of the negotiations of this at the exclusion of other people, such as the airlines and so on and so forth?

Mr. Garneau: The answer is no, the railways were not given a heads-up. I did not hear their testimony in front of this committee, but I will tell you that I had very active discussions with the railways throughout the process.

They may not have indicated any displeasure with the legislation, but I can give you the example of MREs. They would like to get rid of MREs. They have been very clear about that for a very long time. They had some reservations about some aspects of the LHI, and they were quite candid about that.

Having explained to them that we are achieving a balance, if can I give the example of MREs, we are retaining MREs but we are making some adjustments to incentivize the railways to renew their rolling stock. It’s absolutely essential that they do continue to modernize their railway stock and, in some cases, increase it to deal with, for example, greater quantities of grain.

I don’t know how they came across to you; but I can tell you that, as with shippers, nobody was 100 per cent happy with this thing, and the railways were not shy in letting me know about it.

Senator Plett: They certainly didn’t indicate that to me in my office. Anyway, that’s kind of a segue into my next question.

I’ve had farmers, producers, elevator people and many others come into my office, as we all have witnessed here and as I’ve, to talk to us about temporary measures. We had a temporary measure in Bill C-30 that dealt with the long haul interswitching.

Farmers have been pleading for that amendment. Right across the board, when they were coming in here, they were asking us if we couldn’t change that one thing.

The railways were in my office and they were here. They said, “Senator, approve this bill, pass this bill, and we will again give good service to the producers, as we did when we had Bill C-30.” The railways are literally saying that once we pass legislation they will give good service.

You have suggested that once this is passed the railways will be able to give good service. They can give good service. They have admitted they can give good service. They have admitted they did give good service.

Now we have the producers and the farmers saying, “We would like this service, but we cannot afford to wait another crop year to get it.”

I feel that the railways especially and possibly the government, and I would like not to believe the government, are holding our farmers to ransom when they say, “We cannot afford to wait another crop year. We want this badly. We need this badly. This is unfair.” They are not going to give us good service unless you pass this bill.

I find it reprehensible that our two railways would hold our grain farmers to ransom and that our federal government would be part of helping them hold our farmers to ransom.

Why didn’t we give a temporary measure so that Bill C-30 could have continued until we passed this bill? Then there would have been a smooth transition and they would have got the service they deserved all along.

Mr. Garneau: Thank you, senator. I realize you come from a western province and that you deal with grain farmers. However, you’ll forgive me for not sharing your perception with respect to the railways. You’re making it sound as though they were virtually holding the farmers to ransom. That is definitely not the situation.

In fact, if you look at not this year but at the last three years with respect to the movement of grain, these were fairly healthy crop years and the grain moved well.

This year has been extremely troublesome. I won’t go over the history of what I’ve had to do and the responses that now come from the railways; but I think it’s false to suggest that the railways are waiting for this in order to suddenly change the way —

Senator Plett: They said they were, minister.

Mr. Garneau: I disagree with that perception. The railways have to come across and deliver from a business point of view as they did in the previous three years with respect to grain after the very bad 2013-14 season.

When you are dealing with a provisional bill that is to sunset at some point, you have to make a decision about when you’re going to sunset that. You also have to try to efficiently move the replacement bill as quickly as possible.

It is the right thing to do for us to proceed with Bill C-49. In the coming grain season the situation of other commodities will be such that we will be working with the new rules. I think they will be good for everybody.

Let me talk about the shippers. They had asked for a definition of adequate and suitable rail service which we provided. It said that railways should provide shippers with the highest level of service that can reasonably be provided in the circumstances.

They asked for reciprocal financial penalties. We provided those reciprocal financial penalties.

They asked for more accessible and timely remedies for shippers on both rates and service to support balanced negotiation. We have gone in that direction.

They asked for a new mechanism, long-haul interswitching, especially for captive shippers who only have one railroad they can make use of.

They asked for new reporting requirements for railways on rates, service and performance to enhance transparency.

They asked to retain the maximum revenue entitlement. We have retained that.

They asked for supporting investment by the railways in the hopper car fleet so that there would be more hopper cars available. We’ve made this bill such that we are still incentivizing the railways to invest in new rolling stock.

We have done a great deal to modernize the legislation to try to achieve the balance that I spoke to you about. Not all of it are the railways happy with, but they have accepted it and will be moving forward with these new regulations.

[Translation]

Senator Galvez: Mr. Garneau, thank you for appearing before our committee this morning to answer more of our questions. There is something else I would like to thank you for. We all know that transportation is complex. That, combined with aging infrastructure, can be problematic from a safety standpoint. It’s clear you had to work very hard to modernize these laws.

[English]

Nevertheless, we have heard from a lot of witnesses and some preoccupations have been revealed to us. In particular, I want to give you the opportunity to clarify. You said that you wanted to clarify a couple of things.

My first question concerns the data available with respect to the capacity and the occupation of the rail space during transport. If I want to know how much oil, how much grain or how many minerals are being transported and when and how, I seem not to find this information. Yet, I think this information ensures transparency, equity and fairness in discussions between shippers and movers.

My second question is with respect to the bill of passenger rights that will be developed later, after this legislation is passed. We need that but the process is not very clear. What will be the process by which this bill of passenger rights will be developed?

All we know is that the CTA will have a pivotal role. Therefore, my secondary question about the CTA is: Who nominates the president, the chair and the executive of the CTA? Is there a rotation that ensures sometimes it’s the shipper? What is the appointment process for the president, chair or director of the CTA to ensure that there is no imbalance with respect to aviation, for example?

Mr. Garneau: On the first part, I agree with you that having greater knowledge of what products are in the supply chain with respect to transportation when there is a missing ingredient, which was brought up by Mr. Emerson in the CTA review. We listened to that very carefully.

We announced that Transport Canada would be investing $50 million in a database. This will give much greater awareness in real time of the supply chain so that we know, in order to make it as efficient as possible, what is moving where, at what time, and by whom.

That is one of our long-term aims because, otherwise, the process is less efficient than it could be. That’s one of the things that we have taken to heart. As I am fond of saying, the more efficient we make the transportation system, the better it is for Canada’s economy. We can’t afford not to optimize it, because ultimately it affects our customers who can go elsewhere if we don’t move goods efficiently.

With respect to passenger rights, once the bill is passed the process is that cabinet approves the GIC nomination of the president of the Canadian Transportation Agency. The person at the moment is Scott Streiner, and there’s a membership in the CTA. This is a quasi-judicial body, as you know, that operates independently, for good reason, from Transport Canada. They will be tasked with coming up with the regulations that will form the passenger bill of rights, as we loosely call it.

This will be in the form of regulations. Regulations are better than putting it in legislation because legislation is more difficult to change. Regulations are a more flexible tool.

By the way, the United States and Europe do it through regulations as well, so we’re not different in that respect.

The process is that the CTA will go out and consult with stakeholders. In the end, once they have finished the consultation proceedings, they will come up with a proposed passenger bill of rights, which will be submitted to me at Transport Canada for final approval.

That will then become the regulations. These will be clear and simple to understand. They will address issues such as delays, overbooking and tarmac delays; having children under 14 stay with their families at no extra cost on board the airplane; and baggage, damaged or lost, and musical instruments, which are very important for people who make their living that way.

This will be a comprehensive set of requirements that will apply to all aircraft entering, leaving or domestically moving across Canada. I emphasize that again. If it’s a foreign airline coming into Canada, they will be subject to it.

There are no baseline national regulations at this time. This is what we are to put in place. They will then be embodied in the tariff, which is the ticket, all that small print people never read that is part of the contract when they buy a ticket.

There will be recourse in the cases where violations occur that are within the control of the airline, where compensation must be paid out.

That’s the process. There will be consultation. The CTA will talk to the airlines and to interested parties so that we get a full assessment before putting these in place.

It’s important, when we look at this, not to cherry-pick what is done in one particular case in Europe or in the United States. It’s to look at the whole package. When Canadians see it, they will see that it is a world-leading passenger bill of rights.

The Chair: Senators, please be succinct. I hate to do this after two senators, but maybe in this round we could just one question and I’ll come back to you. Let’s give it a shot and see what happens.

Mr. Garneau: I will try to be more succinct as well.

The Chair: It’s a big bill and there is lots to explain. I totally understand, but we want to make use of our time and give everyone a chance to have at kick at the cat, so to speak.

[Translation]

Senator Gagné: Thank you, Minister. I think you have really taken a balanced approach to drafting this bill. My first question is about the Canadian passenger bill of rights. Bill C-49 does not allow third parties to file complaints under the future bill of rights. After the House passed the bill and you appeared before us in December, the Supreme Court ruled in Delta Airlines v. Lukács that it is in the public interest for third parties to be able to file complaints with the Canadian Transportation Agency and that such third-party complaints are consistent with the spirit of the legislation, which is to provide broader protection to Canadians.

Did your department reassess whether the new prohibition in Bill C-49 is appropriate considering the Supreme Court’s ruling in this case?

Mr. Garneau: A group like the one Mr. Lukács represents is entitled to file a complaint with the Canadian Transportation Agency if there is reason to believe something is unacceptable. If a complaint is directly related to the passenger bill of rights, such as overbooking, the person involved must file the complaint if the matter is not resolved immediately. Airlines generally resolve such matters right away.

If the matter is not resolved, the person involved files the complaint and receives the full amount of compensation. There is no intermediary. However, an individual can choose to be represented by Mr. Lukács or someone else. I would like to add one last detail. For example, if 10 people are denied boarding for reasons under the airline’s control and the airline does not recognize the complaint, and if one of those people then files a complaint with the Canadian Transportation Agency and the agency finds in favour of the complaint, the agency can, if it chooses, award compensation to the other nine people who did not file complaints.

It is important to understand the situation well. Mr. Lukács’ organization can continue to represent an individual if that individual asks it to do so. He can also file general complaints with the Canadian Transportation Agency.

Senator Gagné: Thank you. The Transportation Safety Board currently investigates two per cent of the reported incidents. If we want to improve our practices and minimize future risk, do you think looking at data from the other 98 per cent of incidents would have a major impact on public safety?

Mr. Garneau: As you said, the Transportation Safety Board investigates about two per cent of the incidents, which I would expect are the most serious cases. The other 98 per cent of incidents are important too. They might indicate that some practices are not appropriate and that some changes need to be made with respect to transportation safety.

That’s why it’s important to keep looking into these situations. In some cases, Transport Canada can decide to investigate if the Transportation Safety Board decides not to. If so, the department needs access to that data. It is also important to review safety management systems from time to time to make sure they are adequate and to see if there is any way to improve them.

It’s also important to do tightly controlled sampling to enhance transportation safety. For example, between 2007 and 2016, human factors appear to have been involved in 344 of the incidents reported. The Transportation Safety Board investigated 14 of them and found that human factors were undoubtedly involved in the incidents, but there was no way to prove it conclusively.

The recommendation is for routine sampling. So many trains criss-cross our country, and this measure will enhance rail safety. I am 100 per cent sure of that.

Senator Cormier: Minister, I want to thank you for including musical instruments. My background is in arts and culture, and this is an extremely important issue for the arts sector. I have two questions for you. The first is about interswitching and the second is about passenger rights.

The Port of Belledune in the northern part of New Brunswick, where I’m from, is one of 18 major ports. It has access to a single railway company, CN, so it is a captive shipper.

According to my information, there are exceptions in British Columbia and Quebec that ensure healthy competition through access to interswitching. Why isn’t that the case in the Maritimes? With respect to passenger rights, in the letter you sent us, you mentioned that all official language obligations fall under the Official Languages Act.

However, those obligations apply only to federal institutions, not to service delivery in both official languages across all federally regulated industries and sectors.

There are many examples of regulations setting out linguistic obligations. Clause 19 of the bill sets out airlines’ obligations towards passengers on domestic flights. That clause could also cover regulations stipulating service standards in both official languages. Why would your department oppose that?

Mr. Garneau: Thank you. In answer to your first question, we had to make a decision about interswitching. If we start making all kinds of exceptions across the country, we lose that necessary balance between railways and those who have goods to ship.

I’m very familiar with the Port of Belledune. It’s one of Canada’s 18 port authorities, and it’s an important port. I should note that all kinds of organizations submitted requests for exceptions. In developing our interswitching policy, we decided that it would not apply in certain corridors. We identified two small exceptions in northern Quebec and northern British Columbia. Canada’s rail network is very complex. We have 45,000 kilometres of rail line. We need to strike a balance based on all kinds of factors. That is why we could not grant every request for exceptions to interswitching.

Official language matters are governed by the Official Languages Act. They cannot be addressed in Bill C-49. As you know, Air Canada is the one airline that is the exception to that. When the Air Canada Public Participation Act was enacted in the 1980s and the Crown corporation was privatized, certain official language regulations remained in place. As a result, Air Canada is still required to comply with the Official Languages Act. The Commissioner of Official Languages and the House of Commons Standing Committee on Official Languages tabled a report in Parliament, and the government responded. Air Canada must comply, of course. Getting other airlines to comply would involve the Official Languages Act, and that is up to Canadian Heritage and Treasury Board.

Senator Cormier: Thank you for your answers, Minister, but I disagree.

[English]

Senator Eggleton: Thank you very much. I am here as a replacement for Senator Mercer, who is on medical leave. As such, I have not heard a lot of the testimony in front of this committee. I have not been able to ask a lot of the questions, and suddenly I have to come up to speed this morning.

I want to ask you about two things. One of the concerns over the passenger charter is the question of timing on the tarmac, the 90 minutes versus the three hours.

The 90 minutes seems to be airline policy. The three hours are actually mentioned in the bill, although maybe not quite in the same context. I would like your comments on that.

I would also like your comments on soybeans. According to the industry, this has become one of the fastest growing field crops in Western Canada. There is this maximum revenue entitlement, or MR. Maybe there is some question as to whether or not that should exist. Nevertheless, it does exist.

In this context, why wouldn’t soybeans be added to the list that is subject to the MRE?

Mr. Garneau: There is a perception that there is a national regulated standard of 90 minutes for tarmac delays. That is not the case. There is no national regulated standard with respect to that.

Some of the airlines, in their tariffs or their contract with the passenger who buys a ticket, have stipulated certain measures they will take in case there is a tarmac delay. For the sake of explaining this, some airlines have put things in their tariffs with respect to tarmac delay.

Air Canada says that it will not permit an aircraft to remain on a tarmac at a Canadian or U.S. airport for more than four hours.

Air Transat says that if the delay exceeds 90 minutes while at the gate, or four hours in the event of a tarmac delay, the carriers must allow the passengers to deplane. In fact the delay was over four hours last summer in Ottawa.

Let me also point out that in the U.S., air carriers must offer the option of disembarking after three hours on domestic flights or after a four-hour delay on international flights. In the European Union, the option to disembark must be offered to passengers following a five-hour delay.

There are variations. There are no national standards. One of the things we will do is put a national standard in there, which will be a regulation. Also, within those three hours, there will be a requirement to inform passengers on a periodic basis, to offer refreshments, to ensure that the air conditioning and the bathroom services are available, and to keep them informed.

Tarmac delays are complex. We have all been stuck on the tarmac. The question is that we’re waiting for the weather to clear or the air traffic control situation to improve. It’s a tough call. If you make it two hours and in the two hours you go back, it will be at least some time before you get back out there. If you would have waited another five minutes, you might have got off. It’s a judgment call. It’s a difficult one.

We think the three-hour tarmac delay is a fair one. It is one that is reasonable in the circumstances for both passengers and airlines. That’s what I would say on that.

The Chair: That would be the minimum. It wouldn’t mean that an airline couldn’t say, “We will go in 90 minutes.”

Mr. Garneau: Absolutely. An airline could say, “Our policy is that after 90 minutes we will deplane people.” If they wish to do that, good for them.

On the question of the soybeans, this is one of these questions of looking at the MRE, which was intended originally for grain on its way to the West Coast or Thunder Bay. It was a mechanism that had been asked for by the shippers and farmers to put a limit on how much the railways could make from their transport.

We have made changes the MRE. We are keeping it, but we are making changes to it. At this point we do not anticipate adding new crops to it. I would add that 65 per cent of soybeans are produced in the east of the country. It is a fast-growing crop, but we feel competitive conditions exist for soybeans. We decided it was not something we needed to add to the list of MRE products.

Senator Bovey: I want to pick up on the soybeans for a minute. Being a Manitoban, I know how that crop has really taken over the province of Manitoba, so I am not sure I accept the response.

Let’s flip it another way. With climate change, we are seeing different kinds of crops coming up. I would like to know what mechanism there is for adding crops to the list as new crops come into being because of the changing conditions around us. This is a serious problem in the west.

Mr. Garneau: I don’t want to give the impression that Bill C-49 is cast in concrete for all time. All of the different facets of this bill, whether it’s passenger rights or freight rail legislation, should continue. We will re-examine them in the course of time to see if it makes sense to make some changes. We will see how things will work out in the next two or three years.

We’re bringing in a whole bunch of new things: final offer arbitration and long-haul interswitching. A whole bunch of new things are being brought into this legislation. We will see how it works.

We believe we have come up with something very reasonable, but we will always be looking to trying to make it fair and balanced and improving it as time goes on.

Senator Bovey: I found it very interesting that the railways have to share arbitration data in the States but not in Canada. I wonder if you could address that.

Mr. Garneau: A lot of data is shared in both places. In a couple of cases we have decided it’s not necessary to share every piece of data. Some of it recognizes that there is a different approach in terms of protecting certain commercial-sensitive information.

We feel the information that has to be shared by the railways with the Canadian Transportation Agency will allow a fair system to work with service level agreements and final offer arbitration.

We feel we’ve made sure the important information that is required will be made available to make the right decisions.

Senator MacDonald: I am going to speak to you about the LVVRs. You mentioned that people support your position for wanting to do everything possible to improve railway safety. We’re all with you on that.

In the United States they have a mandatory PTC or Positive Train Control system. If we look at one of the more horrific accidents in the history of this country in Lac-Mégantic a few years ago, 47 people are dead and hundreds of families were impacted. Thousands of people affected, really. The centre of the town was incinerated and the entire community was traumatized. An LVVR would not have prevented that accident but Positive Train Control would have prevented it.

If safety is paramount and if this system is mandatory in the United States, including on Canadian trains that operate in the United States, why aren’t we implementing it in Canada?

Mr. Garneau: Positive Train Control has a lot of very desirable features. In fact, CN and CP are very familiar with it because, as you rightly pointed out, they have thousands of kilometres of CN and CP rail in the United States and, of course, have to conform with those rules in the United States.

However, having said that, the situation is a little more complicated than it appears at first blush. Positive Train Control just sounds like a no-brainer that everybody should have.

Quite apart from the fact that it’s very expensive, there are differences between how our railways operate in Canada versus in the United States. We continue to look at it here in Canada. It’s taken a lot more time to be implemented in the United States than was originally thought, for the very reason that it is complicated. It’s not always 100 per cent reliable, either. We’re trying to take an intelligent and pragmatic approach with respect to Positive Train Control.

As I said, safety is my biggest priority, but it’s more complicated than just saying, “Okay, we have to put Positive Train Control in place in Canada exactly as they’ve done in the United States.” It’s not as simple as that.

Senator Griffin: Some people have already asked parts of my question, but I’ll still follow up for clarification.

One of my big concerns is the Maritimes. I am from the Maritimes. I am also chair of the Agriculture and Forestry Committee. One of the concerns is the lack of communication and consultation with maritime stakeholders.

I am not sure why a decision was made favouring CN versus captive shippers because you had a media release on May 18 that said captive shippers would have access in all sectors and regions for a competitive railway network.

Is the Maritimes not a region? We only have one class 1 railway.

Mr. Garneau: This is a good example of trying to achieve that proper balance. As you know and as you pointed out, CN is the only one that operates there. It serves a number of markets in the Maritimes. For us to have accepted a LHI modification that would apply in the corridor would have violated our decision. We are making exceptions for two corridors, the Kamloops-Vancouver corridor and the Quebec-Windsor corridors, which are very competitive as it stands at the moment.

Another thing that has to be looked at is that where we have accepted it, we’re talking about very remote regions that have only one way of getting things. There are some options within the Maritimes, certainly from other modes of transportation.

Again, it’s a balancing decision that we have to take. We’re not discriminating against the Maritimes, in our opinion. We’re trying to make a set of rules that applies for all of Canada, and we think we’ve achieved that.

[Translation]

Senator Boisvenu: Welcome, Minister. We are always happy to have you here. I have a question that was raised by witnesses about changes to the competition commissioner’s role. I realize there might be political reasons for that decision. That is your prerogative. However, I would like a professional explanation. The commissioner has the authority to study files like this, especially in the case of a joint venture, to determine whether the Competition Act has been infringed. I’m trying to understand why this would be brought to you rather than the commissioner, who has the experience to make a final ruling in such files.

Mr. Garneau: We plan to maintain it at both levels. The competition commissioner will continue to do his job with respect to joint ventures. That hasn’t changed. However, the way it was implemented discouraged airlines from creating joint ventures because they could work with airlines from other countries to create and operate joint ventures. That requires a lot of investment. Plus, the competition commissioner could, at any point, be it six months or four years after the joint venture was established, say no, it’s not competitive, it’s anti-competitive. We don’t accept that. We decided to set up clearer rules and timelines around that for everyone. We decided that there has to be a time limit for considering joint venture proposals. Decisions have to be based on two criteria: competition, because airlines need to decide if the investment is worthwhile should the proposal rejected; and public interest. I have done everything I can to increase competition in a way that benefits passengers. If passengers can get more choice at a more reasonable and affordable price, that will be a good thing. At the same time, I can assure you that I will always seek the competition commissioner’s opinion because I don’t want to create an anti-competitive situation for other competitors in the same space as the airline that’s proposing the joint venture.

[English]

Senator Mitchell: With respect to allowing shippers with access to 30-kilometre interswitching or LHI, commonly called reasonable direction exclusion or exception, could you please describe or explain why it is that you’ve done that in this bill?

Mr. Garneau: If a shipper is within 30 kilometres of the regulated interswitching, we consider that person or that shipper already has certain advantages because they are within 30 kilometres of having a choice.

Yes, there will be instances where, perhaps, they’re going against the grain in terms of getting to that interswitching location before going the other way; but we consider this to be a small price to pay for the fact that they have the option of choice because of their location in proximity to an interswitching location, versus a captive shipper hundreds of kilometres away from everything that has only one line.

We wanted to keep the 30-kilometre interswitching that has been around for a long time. We felt this was a good measure, and it’s cost based by the way. We didn’t feel there was any necessary need to change that whilst LHI, of course, is up to 1,200 kilometres or 50 per cent of the whole haul, whichever is greater. That will be based, except for 30 kilometres of it, more on commercial rates, competitive rates.

Senator Plett: First of all, I have a very brief comment and then just a follow up to what Senator Mitchell said.

Minister, you talked about CN getting more hopper cars into the system. We’ve heard here time and time again that there are hopper cars sitting all across Western Canada in sidings and not being used. The hopper cars are there.

As a follow up to Senator Mitchell’s question, I asked CN, so I am going to ask you. We have a good idea what it is costing western Canadian farmers to have to go in the wrong direction. I asked CN what it would cost them if that was taken out.

If they wanted it in so badly and you wanted it in so badly, and you say this has been costed, I would like to know what it costs CN if we would take that out of there and give western Canadian grain farmers what they truly need and desire.

Mr. Garneau: Again, Senator Plett, we feel we have gone a very long way. I have pages of testimonials from grain shippers and others whose reaction to this bill was very positive when it was first introduced.

Is it perfect? No. Again, I come back to the issue of trying to achieve a balance that looks at both sides. It’s easy to take one side. You can always come up with an example of something that could be better on both sides. However, in my opinion, this is an exquisitely balanced bill.

Of course, I will await Senate amendments, but I think we’ve achieved something that is fair and balanced.

The Chair: Before I ask the minister to leave, I’d like to thank the committee for its hard work and diligence.

This is the last of our hearings, and we’re going to begin clause-by-clause consideration.

It has been a pretty cramped process. We’ve had a lot of witnesses and a lot of information. This is a very complicated, complex bill, important to the whole country and important to all our regions. Even though our relationship with you, minister, at the very beginning was, you might say, a little testy, it is because we all want the best thing for Canada, as I know you do. Then, of course, you had to appoint Senator Mitchell as the transport critic, so it got a little testier. Nonetheless, we’ve succeeded in completing our witnesses.

The minister and a number of public servants will be in the audience in case we have technical questions as we go through it clause by clause.

Thanks very much to all of you

Mr. Garneau: Very quickly, thank you for your comments. The real experts are on each side of me, Helena Borges and Alain Langlois. Please do not hesitate to ask them any questions during clause-by-clause consideration.

The Chair: I will begin clause-by-clause consideration of Bill C-49.

I am just going to go through the process because it is complicated, but I think we have great clerks here, and I think they’ve done a superb job in organizing ourselves. Victor and Shaila have done an excellent job putting all of this together.

I advise members that we have officials here from Transport Canada. I’ve asked two of them to sit here. I didn’t want a whole table. They know who everybody is in the audience, so they can identify who can answer a technical question that we may have by just going out and seeking them. That will be helpful to us.

I remind senators of a number of points. I’ll call each clause successively. We have 98 clauses, so we will consider them in groups of 10. If there are any clauses within each group for which a member has an amendment or for any other purpose, please let me know and we’ll open up that grouping.

I ask you to read your amendment first and allow the staff to distribute copies of your amendment. You already have them all, so I think we’re good. If anybody needs one, we’ll get it to you before we begin debate.

Following a review of all the clauses in that grouping, if any have been postponed or stood by, they would then be considered one after the other in the order in which they were deferred.

If a senator is opposed to an entire clause, I would remind the committee that the proper process is not to move a motion to delete the clause but, rather, to vote against the clause as part of the bill.

Finally, I wish to remind senators that if there is ever any uncertainty as to the results of a voice vote, which I am going to try to keep to unless you ask, then we’ll do a roll call vote which provides unambiguous results. For any tied or negatived vote, or if it is tied vote, of course, you know the motion falls.

Are there any questions before we begin?

Seeing no questions, is it agreed that the committee proceed to clause-by-clause consideration of Bill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts?

Hon. Senators: Agreed.

The Chair: Shall the title stand postponed?

Hon. Senators: Agreed.

The Chair: Shall clause 1, which contains the short title, stand postponed.

Hon. Senators: Agreed.

The Chair: Honourable colleagues, is it agreed, with leave, that the clauses be grouped in groups of 10?

Hon. Senators: Agreed.

The Chair: Shall clauses 2 to 10 carry?

Hon. Senators: Agreed?

The Chair: Shall clauses 11 to 20 carry?

We have amendments in that grouping, but we don’t have amendments on clauses 11, 12 and 13. Shall clauses 11 to 13 carry?

Hon. Senators: Agreed.

The Chair: Agreed.

Senator Boisvenu has an amendment.

[Translation]

Senator Boisvenu: I move that Bill C-49 be amended in clause 14, on page 7, by adding after line 18 the following:

“(3.1) The factors that the Minister may consider to determine whether a proposed arrangement raises significant considerations with respect to the public interest under subsection (6) and, if applicable, to render a final decision regarding the arrangement under subsection 53.73(8), include the arrangement’s effects on

(a) competition;

(b) air carriers;

(c) air service;

(d) aviation safety;

(e) the environment; and

(f) passengers.”.

The bill does address matters of public interest, but the term is not defined. As we have seen, the U.S. does specify what constitutes a matter of public interest, and several elements of this bill are modelled on American legislation. This amendment simply clarifies what factors raise considerations with respect to the public interest.

[English]

The Chair: Everyone has the amendments in front of them. Senator Mitchell.

Senator Mitchell: Thanks, Mr. Chair, and thanks, Senator Boisvenu.

I just want to say that I certainly appreciate the sentiment in this amendment, but I think it’s unnecessary to some extent and redundant.

The fact of the matter is that these joint ventures are about competition, so competition inevitably will be discussed.

The fact of the matter is that they will involve, by definition, two carriers. To the extent that they consider competition, they will have to involve the consideration of other carriers, so air carriers are covered.

The fact that they involve absolutely and specifically air service, it’s inevitable that will be considered.

The fact that it’s all about air travel, it inevitably addresses passengers.

The two issues of aviation safety and the environment would be considerations made by airlines and by air regulators for all airline travel, regardless of what happens in joint ventures.

I simply think, for the economy of wording in legislation, this is just more words than we need. It doesn’t really accomplish very much. In a sense, it’s micromanaging it.

[Translation]

Senator Boisvenu: I put a lot of stock in what we heard from the former competition commissioner. He has done this kind of analysis and told us that the notion of public interest is not defined. I listened to the minister this morning, and he was talking about transparency. When a term is not defined in a bill, that transparency objective is not met. If this element is in the bill, those who have to work with this provision will know that the analysis is based on specific public interest criteria. Without this, the term “public interest” is meaningless. I am trying to honour the fact that the bill aspires to transparency.

[English]

The Chair: Are there any other comments?

If there are no further comments, it is moved by the Honourable Senator Boisvenu that Bill C-49 be amended in clause 14, on page 7, after line 18.

Does everybody have the amendment in front of them?

So, I don’t have to read it. All in favour?

Hon. Senators: Agreed.

The Chair: Opposed?

Passed.

We have adopted the motion in amendment, and we’re now going to the second item.

We don’t have to declare. The motion in amendment has been declared. It has passed so we are done that.

We’re going to the next clause. Senator Boisvenu has another amendment, I believe.

[Translation]

Senator Boisvenu: I move that Bill C-49 be amended in clause 14, on page 7, by adding after line 24 the following:

“(5.1) Within 10 days after the day on which he or she receives the notice with the information referred to in subsection (2), the Minister shall make public a summary of the proposed arrangement that does not include any confidential information. The Minister shall give interested persons at least 20 days to present observations, in writing, on the significant considerations with respect to the public interest that the proposed arrangement raises.”.

My goal here is the same: transparency. I realize that the new legislation will give the minister more power than the commissioner. I understand that the minister has a political interest in that being the case, and I agree with him in part. However, I think it’s important for the bill to have a degree of transparency with respect to how much time the two parties have to respond rather than just making a decision. There is basically no appeal process otherwise. People affected by the minister’s decision have to be able to understand the implications of that decision. That’s why that consultation option should be there and parties should have 20 days to tell the minister what they think, basically.

[English]

The Chair: Any debate? No debate.

It is moved by Senator Boisvenu that Bill C-49 be amended in clause 14, on page 7, after line 24.

You have the motion in front of you, so I don’t have to read the text of the motion. Is it understood that is okay? Are we happy with that?

If we are, is it your pleasure, honourable senators, to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: Agreed. I declare the motion in amendment carried.

We are on to the next item now, which is Senator Boisvenu’s amendment number 3.

[Translation]

Senator Boisvenu: I move that Bill C-49 be amended in clause 14, on page 10, by replacing line 9 with the following:

“53.77 (0.1) Every two years after the day on which an arrangement is authorized, the Minister shall review the arrangement to determine the concerns, if any, that it raises with respect to the public interest and competition.

(1)The Minister may, at any time after the sec-”.

This clause simply gives the minister the authority to review arrangements on a daily basis. Usually, once a bill becomes law, legislators review and can amend it every five years. I’m proposing that the minister review the implementation of the act every two years and look at any public interest and competition concerns that have been raised. This is just about giving the minister a timeframe within which to evaluate the implementation of the act.

[English]

Senator Mitchell: Again, I disagree with this.

First, I think it’s very prescriptive. It’s directing the minister to do something he may well or she may well be inclined to do in any event. In the absence of any consideration the minister might make as to whether there have been complaints from passengers or competitors, it just seems to me, again, to be more legislation than is actually required.

It’s also true that if the concern is that the root of this is competition, as the minister reiterated just moments ago, the Commissioner of Competition will be involved at any time the Commissioner of Competition wants to review these arrangements.

The other thing is that if there is continual consideration that arrangements may be reviewed. Whether or not that’s necessary, it can unsettle the arrangements that will be between a Canadian air carrier, often, and an international air carrier. It’s not just within the Canadian context where the perspective may be different from an international context.

I would say this is not necessary and that we would have every reason to believe that a minister would want to review these and certainly want to supplement the reviews of the Commissioner of Competition whenever he or she decides that it should be done, too.

[Translation]

Senator Boisvenu: It is an internal review within the department; it isn’t a public review. It’s a review that gives the minister some power to look at the scope of the agreements between joint ventures. Because we know that aviation, in particular, is a very fast changing world. An agreement that is signed today, that is reviewed in two years, may have a completely different scope depending on how the companies apply it. With companies like Air Canada and Lufthansa, among others, we’ve seen how this agreement has grown in the last two years. This allows the minister to really see how these agreements are evolving, and it will eventually allow him to amend the act so that he has control over it. That was my main concern. I don’t know if you understand.

[English]

Senator Eggleton: This strikes me as micromanaging and getting beyond what the Senate should be doing in terms of sober second thought. We’re getting deeply into a lot of areas that I think the government is quite capable of handling.

I would like you to comment a bit on that. I don’t think our purpose here is to go through every little detail on every little thing and micromanage the entire system. It seems to me that’s what you’re doing.

[Translation]

Senator Boisvenu: The goal isn’t to micromanage. The goal is to give the minister a new power, which was partly a power that belonged to the commissioner. I agree with this position. So the minister will allow joint ventures to operate within agreements. What we’re asking the minister is to say whether it is possible that you now have that responsibility. That every two years, after such an agreement is signed, you do at least a review of it. No company would do it. The minister authorizes agreements, and he is given an obligation to take a critical look at these agreements two years later. I don’t think this is micromanagement.

[English]

Senator Mitchell: In response to Senator Boisvenu’s point that this allows the minister to do reviews, the act already allows the minister to do reviews. The bill, as it is written, says:

The Minister may, at any time after the second anniversary of the day on which an arrangement is authorized, notify the parties of any concerns raised . . . .

The Chair: May.

Senator Mitchell: It is changing “may” “to shall.” The minister will be required to allocate resources which cost money and may not be necessary.

I would rather leave it at “may.” If there is a concern from Transat about the particular joint venture between Lufthansa and Air Canada, or if there is a concern by passengers that it’s not working out to get into the depths of China by that joint venture, which was supposed to do that, okay, the minister would then have a reason to do it. If, in the off-chance suspicion that something might be going wrong, they have to do it, it could well be a waste of resources.

Senator Plett: Very quickly, chair, I don’t know that I am vexed about this amendment one way or the other. When Senator Eggleton and Senator Mitchell say it’s not necessary but they don’t come up with any specific reason why it shouldn’t be there, those are two different things.

We already have amendments. If the amendments we have so far passed here pass in the chamber, the bill is going back. The government can choose whether or not they are going to accept it. Clearly, when Senator Mitchell uses the terms “may” or “shall,” those are in opposition to each other.

Senator Boisvenu thinks the minister “shall.” That is a very definitive amendment and not just micromanaging, so I would suggest we vote on it.

The Chair: It is moved by the Honourable Senator Boisvenu that Bill C-49 be amended in clause 14, on page 10, at line 9.

You have the amendment in front of you. Is it your pleasure, honourable senators, to adopt the motion in amendment?

Some Hon. Senators: Agreed.

Some Hon. Senators: No.

The Chair: Do you want a voice vote?

Senator Eggleton: Show of hands.

The Chair: All those in favour of the amendment? Seven.

Those opposed? Two.

Motion carried.

We have completed the amendments. Shall clause 14, as amended, carry?

Hon. Senators: Agreed.

The Chair: We’re now going to clause 15 and we have two amendments.

Do you want to be on there, Senator Cormier?

Senator Cormier: On mine because I proposed it. I don’t mind.

The Chair: Go ahead and move it.

Senator Eggleton: I just want to move the amendments that Senator Mercer proposed. I want to make it clear, though, I am an independent Liberal.

The Chair: So, you’re not in favour of that amendment?

Senator Eggleton: I am not giving an indication that I will support every one of them, but some of them I will support, some of them I will not, and some I may abstain on.

In the particular case, I don’t know whether you want to put Senator Mercer’s name on here. I am certainly happy to let Senator Cormier take it.

I just wanted to note it, as an expression of Senator Mercer’s own feelings about the matter. Perhaps you could move them by Senator Mercer and Senator Cormier.

The Chair: I can’t move by Senator Mercer because he is not here.

Senator Eggleton: Okay.

The Chair: Senator Eggleton is named. You’re full members of the committee once you’re on the committee, according to whip.

I will have Senator Cormier make this motion.

[Translation]

Senator Cormier: I move that Bill C-49 be amended in clause 15, on page 13, by replacing line 13 with the following:

“owned directly or indirectly by one or more non-Canadians authorized.”

[English]

The Chair: Senator Cormier, you moved:

THAT clause 15, on page 13, Bill C-49 be amended by replacing line 13 with the following:

“owned directly or indirectly by one or more non-Canadians authorized.”

Do you want to say a few words about that?

[Translation]

Senator Cormier: Yes, in fact, I am not a legislator, but it is a matter of vocabulary interpretation. According to the information available, there is a principle of law by which the legislator does not speak for nothing. In principle, the interpretation of the legislation, according to which every word is presumed to have a meaning, the use of the words “directly” and “indirectly” in only one of the two subparagraphs above could very well be interpreted for the courts as being the expression of a deliberate policy to allow a group of foreign air carriers to indirectly hold more than 25 per cent, and likely up to 49 per cent, of the voting rights of a Canadian air carrier.

So the proposed amendment aims to standardize the vocabulary issue between the two paragraphs, since subparagraph 55(1)(c)(i) talks about “directly” and “indirectly”, and subparagraph 55(1)(c)(ii) doesn’t mention “directly” or “indirectly”. So there is the motivation.

[English]

The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: I declare the motion carried.

Shall clause 15, as amended, carry?

Hon. Senators: Agreed.

The Chair: Agreed.

Now we’re going on to the next one. We have a clause with no amendment. That’s a big surprise.

Shall clause 16 carry?

Hon. Senators: Agreed.

The Chair: Now we go to clause 17.

On clause 17, we have an amendment.

Senator Gagné: I sent you a briefing note last Friday with some tables that show you visually what are the amendments. We did distribute this to you just before the meeting.

[Translation]

I move that Bill C-49 be amended in clause 17, on page 13:

(a)by replacing lines 28 to 33 with the following:

“67.3 The Agency may, to the extent that it considers it”; and

(b)by replacing line 35 with the following:

“of the same flight all or part of its decision”.

It doesn’t say much. I’ll refer to the text. In fact, the other clause is about the people adversely affected and also the rights of the travelers with respect to the air passengers bill of rights. To summarize, the current legislation allows a third party, and therefore third parties that are not adversely affected, to complain about air transport. It allows the Transportation Agency to determine whether the complaint will be heard. As I mentioned when I asked the minister in January 2018, after the passage of Bill C-49 and the appearance of Minister Garneau, the Supreme Court recognized the importance of the complaints filed by public interest groups in Delta Airlines v. Lukács.

I think it’s important to point out that Bill C-49 would no longer allow third parties to intervene, such as advocacy groups. I am thinking of an example such as the Council of Canadians with Disabilities, which could no longer intervene in the context of the bill of rights. It could not intervene on anything related to the air passengers bill of rights.

In my opinion, given the Supreme Court decision that was made after the bill was passed in the House, it should be reconsidered because that decision was made after it was passed. So, just to reiterate, under the bill of rights only the person adversely affected can make a complaint. The minister answered my question: outside the bill of rights, a third party can file a complaint. When the bill of rights is involved, only the person adversely affected can.

Senator Boisvenu: In the first part of the amendment, in section 67.3, you state, “The Agency may, to the extent that it considers”. Is that an addition to section 67.3?

Senator Gagné: I’m not adding anything. Do you have the table I distributed? The amendment removes “person adversely affected” because it has been introduced. I’m removing the subsection entirely.

Senator Boisvenu: I understand.

Senator Gagné: That’s why the amendment, as proposed, says nothing. You almost have to see it…

Senator Boisvenu: I understand.

Second, looking at the line where it says “passengers of the same flight”, the part that says “as the complainant” is what you are removing.

Senator Gagné: Are we still on clause 17?

Senator Boisvenu: We are at section 67.3.

Senator Gagné: Yes.

Senator Boisvenu: I’m reading your phrase and the one in the bill. The three words that will be removed are “as the complainant” to allow a third party.

Senator Gagné: That’s right.

[English]

The Chair: Senator Mitchell would like to speak to this amendment, and I think Senator Bovey would also.

Senator Bovey: Are we on 67.4?

The Chair: Yes.

Senator Bovey: I think the draft says 67.3.

The Chair: We have three, and we will have to move another amendment if we move this one and the first one doesn’t work.

Senator Mitchell: This is really a question of just how it has been interpreted.

The fact is that this section is very specific to regulations made under proposed subsection 86.11(1), the charter of passenger rights. It would be in those cases that you would have to have a complainant. In other words, something would have had to have happened to a traveller who then complained. It’s very specific.

Everything else such as some of those things that are still in tariff, as they all are now, will be moved into rights. Any policy issue will still be open to a third party to make the representation to the minister, to committees, to senators, to MPs and to the agency as well.

In a sense, if you have a problem with the charter, proposed subsection 86.11(1) and you’re not a passenger who had that problem, then you have a policy issue. You can take that to the Canadian Transportation Agency, no problem.

On the other hand, if you are a traveller who has a problem with the charter of rights, who has been offended and it hasn’t been handled quickly by the agency or the airline, then you can go and find Mr. Lucasz or a third party advocacy group to help you represent your case.

In effect nothing is changing, except where this new add-on, a charter which everybody wants, has been created. Because it’s an individual’s rights that we’re talking about, you have to have an individual with the problem.

In addition, the CTA can go beyond just reconciling the problem with that individual who has brought the problem to them. They can reconcile a whole planeful of individuals if they determine the problem addresses other people.

It’s really an add-on; it’s not detracting from anything that already exists.

Senator Galvez: My understanding was the same, but after reading the rationale of the amendment of Senator Gagné, I think this amendment offers two extra securities. One is not clear. Everybody is confused with it. It’s not only unclear for us but for many people. Second, we don’t know when the bill of rights for passengers will be available.

I asked Mr. Garneau today, and he explained the process but he didn’t give any calendar date.

What will happen between today and when the bill of rights comes about? Will it take two years? Will it take one year?

Senator Mitchell: Nothing will change until the charter of rights is created. This wouldn’t be an issue. Anybody can present, as they can now, to the Canadian Transportation Agency.

While there may be some debate about the interpretation, that’s why we’re having these kinds of debates. It’s extremely clear it’s only when it’s prescribed by regulations under proposed subsection 86.11(1) and that it would have to be filed by a person adversely affected.

Proposed subsection 86.11(1) will be the section of the bill that will create the charter. It’s very clear that it’s only with the charter that you need to have a complainant. Even at that, the complainant can bring a third party representative to work with them on it.

Senator Gagné: I have one more comment. I think the agency will only grant standing if there is a public interest reason to do so.

[Translation]

I think the government’s intention is laudable, but as long as the new regime is undefined and its effectiveness is not demonstrated over time, it would be premature, if not unreasonable, to prohibit any consumer advocate groups from intervening.

[English]

The Chair: It is moved by the Honourable Senator Gagné:

THAT Bill C-49 be amended in clause 17, on page 13,

(a) by replacing lines 28 to 33 with the following:

“67.3 The Agency may, to the extent that it considers it”; and

(b) by replacing line 35 of the following:

“of the same flight all or part of its de-”.

Is it your pleasure to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: Agreed.

Shall clause 17 carry?

Senator Day: As amended.

The Chair: Yes, it is amended. So, now, shall it carry?

Hon. Senators: Agreed.

The Chair: We have another amendment in clause 18, on page 14, by Senator Gagné.

[Translation]

Senator Gagné: I move that Bill C-49 be amended in clause 18, on page 14,

(a)by replacing lines 17 to 21 with the following:

“Agency receives a written complaint,”; and

(b)by replacing lines 23 to 24 with the following:

“to some or to all passengers of the same flight, all or part of the Agency’s decision”.

It’s the same reasoning, in practice. All we’re doing is removing the references to the complaint of the person adversely affected.

[English]

The Chair: All right, are we good? We have the motion here in English. It may not correspond to the same numbers on the same lines exactly, but it does because she was reading the French version. That’s why the translation may have confused us.

Senator Mitchell: Just for the record, I oppose this one for the same reason I opposed the last one.

The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: Shall clause 18, as amended, carry?

Hon. Senators: Agreed.

The Chair: Carried.

We will go to clause 19 and Senator Boisvenu with an amendment.

[Translation]

Senator Boisvenu: This is my last addition request.

I move that Bill C-49 be amended in clause 19, on page 15, by adding the following after line 26:

“(d.1) respecting the carrier’s obligation to make the terms and conditions of carriage of the body of a deceased person or other human remains readily available to passengers in language that is simple, clear and concise;”.

You know my position with respect to victims of crime. The complaints I receive most often about air transportation is the lack of information. When the event happens in countries where families are on vacation, families are caught a little off guard. They have to deal with the Canadian embassy because the airline hasn’t provided adequate information. So, the airline is given a bit of a social responsibility to inform families if something bad happens when they are travelling. What service does the company offer to make the transport of a body and human remains, among other things, easily accessible to passengers?

[English]

The Chair: Any discussion?

As there is no discussion, all in favour?

Hon. Senators: Agreed.

The Chair: Agreed.

Shall clause 19, as amended, carry?

Some Hon. Senators: Agreed.

The Chair: There are other amendments on clause 19. Sorry about that. That is my fault.

Senator Eggleton: I’ll move it on behalf of Senator Mercer. He’s concerned about the tarmac delays. Whereas the standard in the industry appeared to be 90 minutes, in this bill we’re talking about three hours in place of that. He’s looking to have it minimized as an inconvenience to the passengers.

Of course, the minister has explained what exactly the parameters are of all of this, but I’ll move it on behalf of Senator Mercer.

Senator Mitchell: I oppose this amendment. I think the minister explained very well why they have arrived at the three-hour line. I would like to emphasize where the 90 minutes, which sometimes is four hours depending on the circumstances under the current regime, applies. It applies in a very inconsistent way and isn’t driven by legislation or regulation.

There is leeway. Now, if an airline breaches three hours, there will be specific penalties. It’s not unreasonable to give a bit of leeway from 90 minutes to three hours. In fact, it’s tougher than the four hours currently being used, depending on the situation or depending on the airlines.

There’s another consideration to make as well. If the delay limit is too short, you will end up having a lot of cancelled flights. In developing this policy, they tried to find a balance between what’s reasonable for passengers, remembering, as the minister said, there will be standards of service and care and so on required within this charter of rights. The balance with that and the desire for not cancelling airline after airline flight, which has many consequences, one for the traveller at that moment, and two, for the cost of running an airline.

If you’re cancelling flights, people are missing connections and airplanes are sitting empty, that costs money. It means that it has competitive issues and also costs the traveller money.

While the intention is good, I think really and truly the balance reached at three, Senator Plett, is more appropriate.

The Chair: Is there any further discussion?

Senator Plett: Senator Plett didn’t move the motion, but since he addressed Senator Plett, let Senator Plett make a comment to it then.

The Chair: Absolutely, Senator Plett may make a comment.

Senator Plett: I really believe, for all of us who fly quite often, to sit on the tarmac for more than one and a half hours is absolutely unacceptable. The airplane can taxi back to the terminal. Unless it is for safety reasons, then I think an hour and a half is plenty of time.

Again, I am not sure why I was called out on this. It was Senator Mercer’s motion, but since I was, I will support the motion.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Agreed.

We have another amendment by Senator Cormier to clause 19.

[Translation]

Senator Cormier: I will start by reading the motion.

It is moved that Bill C-49 be amended in clause 19, on page 15, by adding the following after line 38:

“(1.1) The Agency shall, after consulting with the Minister, make regulations in relation to flights within Canada, respecting the carrier’s obligation to provide services in both official languages.”.

That’s the proposed amendment. I’ve given you where it is in the document. I would like to provide an explanation for that. First, it must be said that the Emerson report made a clear ruling on this. It requested clarification of the obligations of airports and airlines to provide services in both official languages ​​by working with industry and official language communities. The proposed amendment requires the agency to create obligations through regulations after consultation with the minister for service standards in both official languages. The obligations prescribed by the amendment relate only to domestic flights in Canada, so are not subject to the restrictions of the Montreal convention or the findings of the Supreme Court judgment in Thibodeau v. Air Canada, and the amendment does not provide for subjecting airlines to obligations under the Official Languages Act.

Contrary to the opinion of the Minister of Transport, the proposed amendment does not require related amendments to the Official Languages Act, which as I recall, applies to federal institutions but does not apply to the provision of services in both official languages in all industries or sectors regulated by the federal government, namely airports, aerodromes and the airlines. Some regulations in the Railway Safety Act, the Canadian Aviation Regulations, and the Motor Vehicle Safety Regulations already contain provisions that clarify the language rights issue.

According to the testimony we’ve heard, for customer and customer-service reasons, companies are already in the middle of this. Further to consultations with the minister, the amendment proposes working on regulations that would allow Canadians traveling to Canada — whether with different companies within Canada — to access services in both official languages. That’s the spirit of the amendment.

[English]

Senator Plett: I am not sure what it means to have services in both official languages. Right now, I think it’s more often that we have a live presentation in English and occasionally a recording in French. I think that’s probably more often than the other way around.

If that is considered services in two official languages, I have no issue with it; but I do have a problem when we are putting restrictions or rules of this nature onto private companies.

If Air Canada was still a carrier that was controlled or was a division of government, then certainly I would support it; but when we have private businesses and we are invoking issues like this one, depending on what the level of service would be, I am a little reluctant to support this.

[Translation]

Senator Cormier: If I may, I would like to add some information. You’re right that most of the time on plenty of routes, official languages are handled with a tape, to use an old word, that allows access to the information in French. But for safety reasons, for instance, when someone gives us instructions in English and provides visual cues, and these cues aren’t available to us in French, there are challenges. Also, these companies are federally regulated. We’re in Canada, a bilingual country.

When people travel between two regions designated as bilingual, I don’t see why it would be like this. What’s more, the companies told us that they were already moving in that direction. I would like to point out again that the spirit of the amendment is that things are done after consultation with the minister. The minister will have the opportunity to engage with companies on this matter. It’s an obligation that opens a dialogue and helps to find solutions to this significant problem.

If we decide to put provisions relating to musical instruments in the act, I think our fundamental rights in terms of official languages should be respected. This proposed amendment isn’t closed. It opens a dialogue between the Department of Transport, the minister and the airlines. I think this amendment is quite valid.

[English]

Senator Plett: If your suggestion is that there be dialogue or it opens up consultations, maybe I didn’t read it properly. If that’s all it is, then certainly I have no issue with dialogue.

The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: Agreed.

On to the next amendment by Senator Mercer, who is not here.

Senator Eggleton: I’ll move it. He is getting into the rights charter for air passengers and saying that:

“86.12 (1) Three years after the day in which this section comes into force, and every five years afterwards, the regulations made under section 86.11 shall be reviewed by any committee of the Senate, of the House of Commons or of both Houses that is designated or established for that purpose.

(2) The committee shall, as soon as possible after the review is completed, submit to Parliament a report on the review.”.

I think these kinds of reviews are very vital to ensure that we’re keeping up with what passengers expect and what passengers need in terms of service.

I move the amendment.

Senator Mitchell: First, no one would dispute that this charter should be reviewed. It seems to me that specifying three years after the day might imply that it shouldn’t be reviewed before that, which is problematic.

Second, the implication of the wording is that it will be “reviewed by any committee of the Senate, of the House of Commons or of both.” What happens and who decides if the Senate says to the House of Commons, “you do it”, or the House of Commons says to the Senate, “You do it,” and neither wants to do it? It does imply that it’s either/or.

Finally, it’s not as though this charter will not be highly public and highly reviewed, or that third party advocates will not be scouring it and representing their concerns about both what is in it and what is not in it to the CTA, the minister and any number of people who are access points to the public policy process.

I think it’s micromanaging and not necessary.

Senator Eggleton: I don’t think reviews are micromanaging at all. They are throughout our system. I’ve never seen one done in less than three years after such a major piece of work, as this will be, is put into effect.

It does leave it open to both the Senate and the House of Commons. It says “or both Houses,” if they wish to review it.

Senator Day: I am just looking at the English and the French here. In the final line under 86.12(1) it says:

. . . shall be reviewed by any committee of the Senate, of the House of Commons or of both Houses that is . . . .

The words “that is” concern me from an English point of view.

Could we not make good sense of this by taking out “that is” and saying, “designated or established for that purpose?”

If you look at the French side, it says “constitué ou désigné pour les examiner,” without any “that is” in there. It just means the committee constituted or designated to perform that review.

The Chair: Do you know why “that is” is in there?

Senator Eggleton: No, I have no idea.

The Chair: Do you have a problem with this?

Senator Eggleton: It seems to work either way, so fine.

The Chair: Are we okay with Senator Day’s subamendment, and do we need a motion on the subamendment?

Senator Eggleton: I’ll just change it here and make it easier for you.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Shall clause 19, as amended — we’re finally done — carry?

Hon. Senators: Agreed.

The Chair: Now let’s go to clauses 20, 21 and 22. We have more paper here than I know what to do with.

Shall clauses 20, 21 and 22 carry?

Hon. Senators: Agreed.

The Chair: Good.

Now we go to clause 23.

Senator Galvez: I move:

THAT Bill C-49 be amended in clause 23, on page 18, by replacing lines 6 to 8 with the following:

“(1.01) the Agency may, of its own motion, conduct an investigation to determine whether a company is not fulfilling any of its service obligations.

(1.1) For the purpose of an investigation conducted under subsection (1) or (1.01), the Agency shall allow a company at least 20 days to file an answer and, in the case of an investigation conducted under subsection (1), at least 10 days for a complainant to file a reply.”.

The rationale of my proposed amendment is to provide powers to the agency. The agency could initiate investigations with evidence of real or emerging problems. It should alleviate shippers from pursuing FOAs and protect the shippers.

Some arguments in favour of this amendment are that presently the agency can only act if there is a formal complaint from a shipper. This is problematic because shippers are discouraged from making a complaint due to fear of retaliation from rail carriers. The agency submits to only addressing those issues for the shipper, so no wider systemic issues.

Another argument is that the own motion power could allow for the agency to address issues affecting multiple shippers, or even industry, proactively dealing with systemic issues.

An industry or group of several shippers, rather than individual shippers, could bring a complaint to the agency. For example, in 2013-2014 the grain transportation crisis cost $8 billion in losses.

With amendments, this still leaves the agency with more own motion power than the NEB, the CRTC and the proposed Canadian Energy Regulator Act.

These are the reasons and the arguments for moving the amendment.

The Chair: Any other discussion?

Senator Mitchell: The issue that underlines this request is addressed in the bill in a number of different ways. The agency should have some flexibility in pursuing a complaint by a shipper concerned about retaliation.

In fact, in this bill there is provision for a shipper to advance a complaint anonymously. That specifically is taken care of.

The other issue, in a way, that Senator Galvez is driving at is to say that the CTA should have a broader policy point of view. If they begin to go down that route, a number of things happen.

One is that it detracts from the ministry’s responsibility to do policy. This is, after all, a regulatory agency. That distraction can diminish its work on its regulatory side, but it can also cost a great deal of money. In some senses that makes this demand a Royal Recommendation because it would actually require money to allow the agency to do this. I am just not convinced that it’s necessary.

I might also say that it’s only looking at whether or not the railroads are fulfilling their service obligations because that’s how companies are defined in the bill. What about shippers? This is a shipper-specific rebalancing that offends, to some extent, the balancing that has been achieved in this bill.

Senator Galvez: We have heard many witnesses disagreeing with what you just said and that this amendment will ensure security for stakeholders.

I want to mention that this recommendation was in the David Emerson review. This type of power given to the agencies is already given to the United States, so we are not inventing anything new.

The other point is that, yes, of course, the government has the power to regulate, but the agency should be able to have some autonomy in deciding some issues the agency sees in practice, in the real world.

The Chair: Is it your pleasure, honourable senators, to adopt the motion in amendment?

Hon. Senators: Agreed.

The Chair: Shall clause 23, as amended, carry?

Hon. Senators: Agreed.

The Chair: Shall clauses 24 to 28 carry?

Hon. Senators: Agreed.

The Chair: On clause 29, we have an amendment, surprisingly.

It is to clause 29, on page 22.

Senator Plett: As you all know, we have had a lot of back and forth here, mostly in one direction. Grain producers, certainly in Western Canada, have voiced this to each and every one of us individually, and certainly here at committee, over and over again.

I would like to move, and then explain a little further:

THAT Bill C-49 be amended in clause 29, on page 22, by replacing line 32 with the following:

“the movement of the shipper’s traffic in the reasonable direction of the traffic and its destination;”.

The key problem is with the long-haul interswitching provision in this bill. The most serious problem with the mechanism is that it stipulates shippers either have an interchange within 30 kilometres of their facility or are dual served by two railways at their facility cannot apply for an LHI order, regardless of whether or not that interchange or dual service is going in the right direction of the shipment.

The minister verified that today and seemed to think it wasn’t a big thing.

Second, if the purpose of the mechanism is to create competitive options, this prohibition clearly goes against the spirit of providing for competitive options if the only option you have isn’t going in the direction in which you want to send railcars.

As I said in questioning earlier, I have asked the railways to give me an idea of what the downside of this is, and they have not been able to explicitly tell me what the cost would be. The government hasn’t been able to tell us what the costs would be.

The producers across the country have been asking for this amendment, so I don’t think I need to explain my motion any further, chair.

Senator Mitchell: Colleagues, I disagree with this initiative. It is really the heartland of the evolution at the basis of the policy of rail transport in the country.

The evolution is from a nationalized railway utility-based pricing system, to a much more competitive market-based commercially negotiated pricing system.

LHI, long-haul interswitching, is based upon the premise that the government will impose a price on the railroad for what they can charge. Every time you use it, you step back toward the utility-based, non-market direction.

In this case it is “a reasonable direction.” If a farmer or a shipper has a chance within very close range to get to the railroad systems of the two competitors, this initiative is telling them to use that, even though they might have a chance to go the other way and get a regulated rate. Ultimately, it has some implications for how much business American railroads will get as well.

They can go a bit the wrong way, having competition to compensate any rate issues because they are going the wrong way to get to two railroads, or they can go the other way and re-emphasize a utility-based, government-based pricing regime. That’s why it’s part of the balance between these two things.

I haven’t heard that much at all from shippers “across the country” saying they want this. The railroads have given up a lot. The 1,200 kilometres of LHI is a long way for regulated pricing. That’s a lot. The most before was 160, and only then for a short period of time.

I don’t think it’s unreasonable this provision, as it stands, should be left in that bill. That’s why I think this amendment is out of order.

Senator Plett: I will speak very quickly. This is clearly a huge issue in Western Canada. We have two colleagues from Manitoba, plus me. We have an interchange at Emerson that is less than 30 kilometres away from the elevator, but it’s in the wrong direction and with the wrong rail line for those particular export services.

Colleagues, this is a huge thing for Western Canadian farmers who live in certain parts of each and every one of our provinces, especially the Prairie provinces.

I ask CN again: “It’s a big deal over here, but how much of that business do you actually care about?” In the big scheme things, you would think this was a problem to them. I asked at committee, and I got blown off by CN by saying that it simply wasn’t significant. I forget the exact answer the lady gave me, but she made light of it.

It is a big issue for Western Canadian grain farmers, whether or not Senator Mitchell believes it. He’s part of one of those provinces that is clearly affected by it.

I don’t think we need to debate it any longer. That’s my motion. I would like to call the question.

The Chair: Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

The Chair: The next amendment is from Senator Plett.

Senator Plett: It’s really the same thing. It amends the same clause 29, on page 23, by replacing line 24 with the following:

“in Canada and is in the reasonable direction of the shipper’s traffic and its destination;”.

It’s basically adding the same thing to the next page.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Agreed. We are still on clause 29. The next amendment is by Senator Griffin, please.

Senator Griffin: I move:

THAT Bill C-49 be amended in clause 29, on page 24, by adding the following after line 26:

“(5) For the purpose of paragraph 3(b), an interchange located in the metropolitan area of Montreal is deemed to be the nearest interchange and to be located outside the Quebec-Windsor corridor if

(a) the point of origin or destination of the movement of the shipper’s traffic is located in New Brunswick or Nova Scotia; and

(b) the shipper has access to the lines of only one class 1 rail carrier at the point of origin or destination.”.

You were here when I asked the minister why the decision was made to favour CN versus captive shippers, especially in light of his media release of May 18, saying that captive shippers would have access in all sectors and regions for competitive railway networks.

I asked him if the Maritimes was not a region. His answer was that there were other means to move goods.

Have you ever been to Prince Rupert? I have. There are highways in Prince Rupert and in northern Quebec, so products can be moved by other means.

We’re talking about the class 1 railway here. We’re not talking about the Quebec North Shore and Labrador Railway, so I think the Maritimes got left out in this, and I want the Maritimes to be included.

Senator Mitchell: I love the Maritimes. I want you to know that. Having lived there, I love them. I also want the Maritimes to have a railway system. There is only one train company of the two major ones that operates in the Maritimes. CP pulled out because it couldn’t make any money there.

It is true that the economics of a single railway in that region can be in question, but keep in mind that the witness testimony we had was from one company in particular that raised this point very articulately. They are a major exporter of potash and account for 25 per cent of the tonnage of CN in the Maritimes.

If we allow them to enter into LHI, which is what this is about, then we go to a regulated cost-based rate. Once again, that drives the idea that we’re getting away from the evolution where we want to go to a market-based free enterprise commercially driven kind of a system every time you go to more LHI.

The consideration has been made. There has been a great deal of consultation, assessment and analysis. The determination was made that LHI wouldn’t be extended in the interest of, among other things, making those lines at least to some extent profitable for CN so they can sustain their network in the Maritimes.

Senator MacDonald: I certainly support Senator Griffin’s motion in amendment. There is no history of CP ever being in Nova Scotia, Senator Mitchell. They hardly could have pulled out of the place if they never were there.

I don’t think people understand exactly how unfair this is to the Maritime provinces, particularly New Brunswick and Nova Scotia which still have rail infrastructure connections to the rest of the country.

As it is currently written, LHI would not be an option for shippers from Western Canada to maritime ports. The nearest interchange of Saint John, Halifax and Montreal is right in the middle of Quebec-Windsor corridor exclusion zone, despite the fact that CN is the only rail carrier in Atlantic Canada. There is a lack of competition there.

If CN doesn’t provide reliable and cost competitive terms of service to Saint John or Halifax, shippers will not have alternatives to LHI. In comparison, routes out west have natural competition between CP and CN Rail.

There is one exception to the LHI Quebec-Windsor exclusion zone when shipments originate in northern Quebec. However, this exemption isn’t available to western Canadian shippers seeking competitive rail options to the Maritime provinces. We think we should have the same options and the same opportunity to compete, so I support the amendment.

Senator Day: I am from the Maritimes, as you know. I also know that there was a wonderful line from Montreal to Saint John, New Brunswick, operated by CP for many years. When we started breaking ice in the St. Lawrence we no longer had a viable port in the seaway. That resulted in the winter port in Saint John dying, basically.

That’s the reason, when you get government interference in a particular area, there are pretty serious ramifications elsewhere.

Were there any companies in the Maritimes that asked for the amendment you are proposing?

Senator Griffin: Yes. There was a relatively poor job done on consultation with maritime ports. I think my staff did more consultation with the maritime ports than the department did. The department was very late coming to it once the question started to be raised. Yes, the ports say that this would be helpful to them.

[Translation]

Senator Cormier: If I may, Senator Day, I had exactly the same comment from the Port of Belledune, which has a good relationship with CN. There is no doubt. It also mentioned the important need for an amendment.

[English]

Senator MacDonald: I want to add to this. You asked if there were any representations from companies in Atlantic Canada. There certainly was from out west.

Under Bill C-30, the potash companies were able to move potash through Saint John, New Brunswick. It has been very good for potash in Saskatchewan. They see the ability to make money and to save money going through Saint John being taken from them under these provisions. They are very important.

The Chair: You have competition west but not east, so that’s why they wanted this provision. It allows them to get more competitive rates, even though it’s a monopoly carrier.

Senator Day: I find myself in a bit of a dilemma here because the potash coming from Saskatchewan and being shipped to tidal waters in Saint John, New Brunswick, is great for the port, exactly; but it is not good for the closed potash mines 50 kilometres from Saint John to bring in potash from Saskatchewan.

I just want to point out the dilemma that we have here. Government regulation in relation to one activity has an impact on other activities.

The Chair: I don’t think it will have any effect on New Brunswick.

Senator Day: The potash mines are closed.

Senator MacDonald: They were closed before.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Agreed.

Senator Day: I am staying on that, please. Could I be recorded as abstaining?

The Chair: Senator Day wants to be abstained. The motion is carried.

Shall clause 29, as amended, carry? All in favour?

Hon. Senators: Agreed.

The Chair: Don’t go to sleep on me now. We’re almost done.

Senator Day: Abstain.

The Chair: Next clause 30. Shall clause 30 carry? All in favour?

Hon. Senators: Agreed.

The Chair: Agreed.

Shall clauses 31 to 40 carry? Agreed?

Hon. Senators: Agreed.

The Chair: Shall clauses 41 to 45 carry, agreed?

Hon. Senators: Agreed.

The Chair: On clause 46 we have amendments.

Senator Galvez: I move the following amendment:

THAT Bill C-49 be amended in clause 46, on page 37,

(a) by replacing line 3 with the following:

“46(1) Subsection 161(2) of the Act is amended by, and (b) by”; and

(b) by adding the following after line 7:

“(2) Subsection 161(2) of the Act is amended by striking out “and” at the end of paragraph (d), by adding “and” at the end of paragraph (e), and by adding the following after paragraph (e):

(f) the request of the shipper, if any, for the Agency to determine the variable costs of the movement of goods to which the arbitration relates.

(2.1) The Agency shall, at the request of the shipper made in accordance with paragraph (2)(f), determine and provide to the parties, within 10 days after the day on which it refers the matter for arbitration under subsection 162(1), the variable costs of the movement of goods to which the arbitration relates.”.

As you know, final offer arbitration is the only remedy available to shippers to challenge excessive freight rates. This proposed amendment requires the agency or requests of the shipper to provide an arbitrator with the cost determination for the purpose of FOA, increasing transparency and fairness.

I believe the opinions of the stakeholders and the speeches of the witnesses that arbitrators should have access to all relevant information and access to rail costs and information necessary to do proper due diligence. Access to costing will allow the remedy to function properly and ensure that all relevant information is provided to the arbitrator. I am pushing for transparency in information, and my question earlier to the minister was in that direction too.

This amendment will also assist in re-establishing the balance of risk that is essential to the effectiveness of the final offer arbitration process.

The Chair: Please go ahead, Senator Mitchell.

Senator Mitchell: Colleagues, this amendment isn’t necessary as it is in the act now that the CTA is empowered to collect all waybill data from the railroads. That’s all national cost data. The arbitrator is permitted to access that information. The arbitrator is also permitted to specifically request analytical support on costs and other factors in making an arbitration decision from CTA staff.

Senator Galvez said that transparency of information was very important. The shippers want to see what everybody is paying, everywhere. Who wouldn’t? However, that’s not fair to railroads trying to structure a competitive position.

The Chair: They show them in the States.

Senator Mitchell: They don’t necessarily show them. First of all, in the States they have many more railroads, so you can’t tell which railroads the information is about. That is one thing. Here, the railroads will have access to the aggregated national information, so they will be able to make their determinations based on that. They can also hire experts, as they can do now, which gives them insights into that. I am simply saying that this infers that there will be complete transparency. I doubt that you actually get that in the States.

It would be like saying to the shippers who are arguing this, some of whom are major mining companies, for example, that we should release the costs of all of their mining competitors across the country so that they can see how they compete and maybe can raise their prices a little more.

If you want to create some form of competition, there comes a point at which you need to at least honour confidential information. I think that’s captured in this arbitrator structure. The bill is going a good, long way by requiring all waybill information to come to the CTA and be aggregated and open in that way.

Senator Galvez: I have a couple of things. First of all, the amendment is not requesting complete and 100 per cent transparency to everybody. It’s only when there is a conflict and at the request of the shipper. The final decision still remains with the agency. That is one thing.

The other thing, as the minister said today, is that eventually there will be all the data, but right now it is not there. It will reassure everybody, and the transparent provision will become a reality with this amendment.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Shall clause 46, as amended, carry?

Agreed. Shall clauses 47 to 59 carry?

Senator Plett: Wasn’t there another amendment to clause 46?

The Chair: Yes, but my amendment was the same as that of Senator Galvez. Senator Galvez is done and I am done. What a team.

We have three people moving the amendment to new clause 59.1, on page 42, after line 22.

How do you want to handle it?

Senator Plett: Since Senator Mercer isn’t here and you made the offer before, why don’t we have Senator Griffin’s name and my name put on the motion? I’ll let her speak to it, if that’s all right.

The Chair: Excellent.

Senator Griffin: If I don’t carry the day, you’ll come in and clean up.

The Chair: You’re a lot shorter than Senator Plett, Senator Griffin. Carry the day.

Senator Griffin: I will move the new clause 59.1, on page 42:

THAT Bill C-49 be amended, on page 42, by adding the following after line 22:

“59.1(1) Schedule II to the Act is amended by replacing “Bean (except soybean) derivatives (flour, protein, isolates, fibre)” with “Bean derivatives (flour, protein, isolates, fibre)”.

(2) Schedule II to the Act is amended by replacing “Beans (except soybeans), including faba beans, splits and screenings” with “Beans, including faba beans, splits and screenings”.”.

I have had a lot of representation, both when we had our Agriculture and Forestry Committee trip last week to the West, plus what we have heard here at our own committee meetings. This is something that is highly desirable by Prairie producers of soybeans. In 2002, when Schedule II was created, soybeans weren’t really a big crop on the Prairies. Now they are the third largest crop in Manitoba and soon to be the second largest.

This amendment reflects the wishes of Grain Growers of Canada, which represents 50,000 grain, pulse, corn, oilseed and soybean farmers from across Canada. That’s why I am bringing forth the motion.

Senator Mitchell: First of all, in a sense the argument that soybeans have done so well they need this begs the question as to why they would need it. If they have done so well without the MRE, which is a regulated rate mechanism, then why would we need to give it to them?

Just to clarify, the MRE is a counterpart, a sister or a brother to the LHI. It’s a regulated rate. It limits the amount of profit that railroads can make on MRE scheduled crops.

First, if soybeans have done so well as to be close to being the second largest crop, you could raise the question as to why it would need the MRE.

Second, Emerson said that the MRE should be done away with.

Third, while it’s a good question, an interesting hypothesis and is well raised by the senators, we don’t know how much soybean is actually moved. We don’t know what their costs are relative to the costs of their competitors around the world. We don’t know what percentage of their costs are related to rail costs, which are pretty much the lowest rail costs in the world. We don’t know how reducing the amount of money that CN, CP and other railroads can make on this increasingly big part of their business will affect their ability to reinvest in the capital intensive lines the railroads use to go and pick up the soybean.

It’s an interesting question that should be referred, perhaps, to the senators’ own Agriculture Committee, but I don’t think we have enough information here to say we have given the proper sober second thought to something that could have a very significant, fundamental restructuring of the economics of the rail system, given that we have now just passed the reasoned direction and have sent LHI into the Maritimes. These are all pretty significant economic matters, and we’re piling on to them.

Let’s step back a bit. Let’s take it to a committee. Let’s do the detailed work so we can, with some deep credibility, bring back an amendment like this one if senators decide. I don’t think that’s the case now.

The Chair: That’s what this committee studied.

Senator Bovey: I happen to think there is credibility to this coming forward. This is a big issue. It’s an issue that has to be put into context with climate change. We will see increasing numbers of plants and crops.

We know it wasn’t originally on the schedule because it wasn’t grown when the schedule was developed. It wasn’t something left off the schedule at the time because it was a major crop. It wasn’t on the schedule at the time because it wasn’t a crop at the time.

We have to be very careful not to discriminate against new crops coming in as a result of the changing climate. We have done due diligence on this. This has been a consistent concern. This is one I really support. If the other senators had not come forward with the amendment, I would have.

Senator Plett: Senator Bovey said exactly what I was going to say. To add to that, Senator Mitchell, I agree with you 100 per cent. This should go to committee. That’s what we are. It has gone to this committee. Senator Griffin has travelled the country, and it has gone to her committee. On fact, two committees have done exactly what you suggested.

Chair, I think we should call the question.

Senator Day: It seems to me there is strong support for this amendment. There are indications of at least three amendments on this issue, so I am quite prepared to strongly support this amendment.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Shall clause 59.1 carry?

Hon. Senators: Agreed.

The Chair: Next is clause 60. Shall clause 60 carry?

Hon. Senators: Agreed.

The Chair: Now we will go to clauses 61 and 62, but we will jump to clause 62 on the advice of the law clerk. Our clerks have reordered the amendments to permit the committee to consider amendments that have consequential impacts on other parts of the bill. Therefore we’ll stand consideration on clause 61, if you will allow me to do so, proceed to clause 62, and then we’ll come back to clause 61.

On clause 62.

Senator MacDonald: I am not quite sure of the logic of our advisers on this, but I’ll go with it. Clause 62 deals with data scrubbing. This amendment also relates to the destruction of data upon leaving Canada. It would amend the regulatory provisions to add the word “destruction” to the removal of data.

It really ties into the one that comes before it. I am not sure why they sequenced them this way.

The Chair: We’re all on MM-3, right? We’re amending clause 62.

Senator MacDonald: We’ll go back to clause 61.

The Chair: Yes. We’re amending clause 62.

The Chair: We’re on MM-3. Do you want to speak to that one second?

Senator MacDonald: It’s very difficult to speak to that because it’s tied into the amendment that comes before it. We’re bringing this forward on the advice of the legal experts, but I am not particularly sure why they are doing it. They just said that it had to be done this way.

Shaila Anwar, Clerk of the Committee: The reason why is that there are a number of amendments being proposed to both clauses 61 and 62 but to different parts of clauses 61 and 62.

There are some amendments that are consequential, so you have to adopt one and then the other, and there are some that are in conflict. This was the order that was determined. One of your amendments is consequential to the other, but they don’t relate to Senator Mercer’s amendments or to Senator Gagné’s amendment. This was the advice that was given.

The Chair: Do we have three amendments on the same thing, really?

Ms. Anwar: There are six amendments to the two clauses. It is a bit confusing, but the advice given was to deal with yours first on clause 62, and then we’ll go back to clause 61 afterward.

Senator Mitchell: I might be able to clarify the three different sets, for what it’s worth, because I am very interested in these.

The Chair: Okay.

Senator Mitchell: Senator MacDonald, if I am not mistaken, has destruction and U.S. but also wants to do away with video. Senator Mercer wants to do away with any information going to the company, so that whole company section, whether it’s post-accident or proactive information. Not to speak for her, but Senator Gagné is okay with LVVR except for proactive to the company.

Senator Gagné: Random sampling.

Senator Mitchell: Yes, random. That’s where we are.

I could solve this problem by just selling everybody on LVVR the way it is, and that would be that.

Senator Gagné: So you won’t be speaking.

The Chair: Will any of them be in conflict if we pass all three?

Senator Mitchell: Yes.

The Chair: What happens if Senator MacDonald’s amendment passes? What happens to the other two amendments?

Senator Gagné: I could still have the one on the random sampling, I guess.

Senator Mitchell: It wouldn’t be video.

Senator Gagné: It wouldn’t be video. If Senator Mercer’s amendment is adopted, then mine is obsolete.

The Chair: But Senator MacDonald’s is not.

Senator Gagné: Exactly.

The Chair: We could do Senator Mercer’s and Senator McDonald’s,and then you don’t have to do anything, right?

Senator Gagné: His is obsolete also. If we accept Senator Mercer’s, then his audio is obsolete, is it not?

Senator Mitchell: No, Senator Mercer would be left with just audio. That’s what would happen. You don’t have any problem with that. I have a problem with it.

Ms. Anwar: You can deal with Senator MacDonald’s two amendments, then with Senator Gagné’s and with Senator Mercer’s two amendments, and then adopt the two clauses one after the other, whichever is easier. It’s a little confusing, I know, but it’s because there are consequences.

The Chair: Why don’t we do Senator MacDonald’s and get that over with? Then we’ll deal with how we deal with the other two.

Ms. Anwar: That will be MM-3.

Senator MacDonald: MM-3.

The Chair: Are we good with that?

Senator Mitchell: Are you going to address it?

Senator MacDonald: I have already addressed it.

Senator Mitchell: As I understand it, Senator MacDonald, MM-3 is about adding in the management of information regulation for its destruction.

Senator MacDonald: Yes.

Senator Mitchell: What I know is that preservation and retention are in there, which seem to me to imply that if you are going to be regulating preservation and retention, you would have to be considering destruction. Perhaps I could ask the associate deputy minister to give us some insight.

Alain Langlois, General Counsel and Deputy Executive Director, Transport Canada: The regulation-making power is a respecting power. If you go to the head of paragraph, it is respecting information in company records. It’s a very broad regulation making power. It includes pretty much everything that could be dealt with, with respect to the information.

There is a list of things that have been included for clarity. Destruction is not there but, as was pointed out by Senator Mitchell, the preservation is there. It is already in. I would see adding it as merely a clarification because in my view it’s already there.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Agreed.

Now we go to MM-2, which is clause 61.

Senator MacDonald: I move:

THAT Bill C-49 be amended in clause 61, on page 43, by adding the following after line 32:

“(2.1) If the company referred to in subsection (1) operates railway equipment that crosses the Canada-United States border, the company shall, in the prescribed manner and circumstances, destroy all the information that was recorded under that subsection before the railway equipment departs from Canada.”.

This amendment will require any recorded data be deleted when a locomotive leaves Canada for the U.S. This will be consistent with the principles and protections guaranteed under PIPEDA.

This addresses concerns raised by railway workers regarding privacy. The Canadian workers, the data and locomotives would be accessible in a foreign jurisdiction. The Privacy Commissioner has also raised concerns in this regard.

Senator Mitchell: I am quite concerned that information could be destroyed the moment you cross the U.S. border. For example, there are probably some proponents of the thought that LVVR should at least exist for post-accident so that if you had an accident 50 metres before the U.S. border, you would have LVVR information. If you had an accident one minute over the U.S. border, you wouldn’t under that consideration. I think that makes it problematic.

Lots of air carriers have recorded data. They land in the States. I know there was some concern on the part of the unions to the tune of, yes, but it’s only two hours. It’s two hours of data that could be taken right off the plane right now. We have experience with that, and it’s not happening.

It is very important that we have LVVR. It’s important for safety and for addressing human error, which isn’t addressed by Positive Train Control or any of these other digital or mechanized kinds of systems. We have 17,000 kilometres of Canadian railroad in the U.S. The U.S. has about 600 in Canada and we have 45,000 in Canada. We have almost half as much or 50 per cent as much railroad in the U.S. as we do in Canada, and we’re just going to wipe out all the data. I don’t think it would be appropriate to do that.

Senator Plett: I said at the outset that I was not necessarily going to oppose some amendments here. We had already passed some amendments. If we passed the same amendments in the Senate, or even one amendment, it’s going to go back to the house for them to deal with, and they can deal with them as they see fit.

Clearly, something is going to pass, but I want to be on the record that I support the video cameras. I find myself for the second time in my life agreeing with Senator Mitchell.

Nevertheless, I would hope that this will not come to a recorded vote because, quite frankly, my preference would be not vote on it and pass these amendments so that we can deal with them in the chamber. That’s just for the record.

Senator MacDonald: Senator Plett keeps bringing up LVVR. This is about data in general. It’s my wish that the data they will be wiping out will be audio data and recorded digital data. If I get the first amendment passed, there will be no LVVR to wipe out.

The Chair: All in favour?

No one said aye, so we’re done with this amendment.

All opposed?

Some Hon. Senators: Opposed.

The Chair: It’s on division.

Do we want to have a roll call?

Senator Griffin, how do you vote?

Senator Griffin: Aye.

The Chair: We have a request. I have to go through this. I’ll ask the clerk to name all of the senators who are present who are entitled to vote at this time.

Senator Plett: Could I have a clarification, please, before you do this? I am sorry. I was trying to get this through my mind in a real hurry.

Senator MacDonald made a very interesting comment at the end, and I would like that explained. If this passes, will we have no video recording or will we have video recording?

The Chair: We haven’t gone to the video recording yet. He said if the future one passes, yes, we will. Then we won’t have any video recording.

Senator MacDonald: If the future one passes, there will be data recorders, but there won’t be video recorders.

The Chair: Yes.

Senator Day: It says, “destroy all the information that was recorded” in the subsection, “all the information.”

The Chair: I think we have to go to a voice vote here.

Senator Plett: Why not a show of hands?

The Chair: We can that, I suppose, if everybody is in favour of that.

All in favour of the amendment? Opposed? It does not carry. It’s defeated.

Next is TM-6 or RG-3.

Ms. Anwar: You will do MM-1 after. We have another amendment with Senator Mercer and Senator Gagné.

The Chair: On clause 62, and then we’ll go to clause 61.

We’ll continue with clause 62. We have Senator Mercer, TM, which is Senator Eggleton today.

TM-6, I think it’s called, is on your sheet.

Senator Eggleton: TM-6 does deal with the LVVR technology. Senator Mercer’s amendment, which is on two pages that you should have in front of you, deals with the whole issue of privacy and the matter of access of the company.

I am not convinced this is the route to go, so if somebody else wants to move these amendments, they can do so. If it’s a matter of courtesy of putting it on the floor, I am happy to do that, but I will not be speaking in favour of it. I would like to hear from other people as to their point of view.

The Chair: TM-6 is on the floor. Debate.

Senator Mitchell: I would like to start with a question. Am I correct in saying that this amendment will allow the TSB to have retroactive, prior to accident information and random proactive information? Is that right? I want to be sure.

The Chair: I am not sure. It’s not my motion.

Helena Borges, Associate Deputy Minister, retired, Transport Canada: I believe Senator Mercer’s amendment would basically strike out the use of companies, which is under subsection 17.9(1) in the act, use by the railway safety inspectors and use by the minister. The only entity would be the safety board, which is not listed under those clauses.

Senator Mitchell: I am very concerned about this amendment. There is a strong argument to be made for the company having information. Yes, there is a privacy trade-off between them and government having information that’s provided by LVVR, but consider that there are tremendous restrictions, including $250,000 fines against the company and $50,000 fines against individuals who might misuse that LVVR information for disciplinary matters, for example. That’s prohibited.

If you are to allow the government to have information, in a sense you’re creating two separate regimes of responsibility for safety. You’re actually putting more responsibility on the government for rail safety than you are on the company.

I am saying, “What?” Of course the company should be as responsible for safety as the government. That means whatever information the government gets under LVVR, the company should get under LVVR.

I don’t say that lightly. If they could misuse that, target individuals and so on, I would be concerned, but they can’t. They will be fined if they do. The data is encrypted. It will be collected only randomly.

Then there’s the issue as to whether we should have pre-accident data, immediately before the accident, or proactive data. That’s an interesting trade-off, because if you accept that there should be before the accident data, then you set a threshold for an incursion into privacy. That threshold is an accident that may actually hurt or in fact kill people.

Wouldn’t it be better to set a threshold where we didn’t have to have the accident in the first place, where we could avoid that problem? That’s why I think you have a legitimate regime of proactive, randomly based, highly secured and regulated information both for government and for the companies so that you can begin to address one of the fundamental issues. I alluded to it before and I’ll allude to it again. It isn’t just about digital this and digital automatic stopping mechanisms or Positive Train Control. It isn’t just about better rail and so on.

The Chair: I want to finish this. We’re at 10 after. I know you are trying to wrap up.

Senator Mitchell: There is also a component of human error that we need to be able to address.

The Chair: We have a motion on the floor by Senator Eggleton that I am not sure he agrees with.

Senator Eggleton: No.

The Chair: He doesn’t agree with it. Do we really have a conversation here or not?

He moved it. All in favour?

Senator Plett: Excuse me. Did he move it?

The Chair: Yes, he moved it.

Senator Eggleton: I’d prefer if someone who is in favour of it moved it; but to get it on the floor, as a courtesy to Senator Mercer, I am willing to put it on the floor. I am not convinced it’s the way to go.

The Chair: Any in favour? Opposed?

Some Hon. Senators: Yes.

The Chair: It falls.

We are going to RG-3. Let’s deal with it.

Senator Gagné: I have a comparative table here that did I pass out, just to see how it looks visually. I move:

THAT Bill C-49 be amended in clause 62, on page 44,

(a) by replacing lines 10 to 14 with the following:

“for the purpose of determining the causes and contributing factors of”; and

(b) by deleting lines 20 to 22.

The Chair: Maybe you could explain what that means to us.

Senator Gagné: Yes. Just to start off, I’d like to say that I believe installing LVVR is a violation of the rights of railway industry workers to privacy. Nonetheless, I believe that the use of information recorded using LVVR technology has safety benefits.

Bill C-49 will give two rail companies not only access to footage related to all incidents and accidents but also to randomly selected footage for purposes of prevention. The relevance of studying footage related to incidents and accidents is obvious.

Two per cent of incidents reported to the TSB are investigated. That means 98 per cent of the incidents reported are not investigated. Rail companies would have a large volume of relevant footage to which they don’t currently have access. They could thus improve their practices and security measures.

In light of this, it was not demonstrated why companies should also have access to additional, randomly selected footage that is not linked to any incident or accident, particularly as a chair of the TSB recognized that these companies have often a privileged, more disciplinary approach rather than one based on prevention. That is why I propose we delete all access to information that is randomly selected.

Senator Mitchell: My arguments earlier address this as well. Just to emphasize, this would mean that the government would have more responsibility than the companies for safety, if all we’re going to give companies is retroactive, after the fact.

In fact, the Transportation Safety Board explicitly has asked for it. This is at the top of their want list for safety. Again, a whole range of possibilities could actually prevent the accident before it ever happened and before we needed to look at it retroactively, if they were given some random, proactive, highly regulated highly secure information.

I feel very confident that privacy concerns can be met that way, and that this is very important for the other set of this set of rights, and that is public safety.

The Chair: All in favour?

Hon. Senators: Agreed.

The Chair: Opposed?

Some Hon. Senators: No.

The Chair: On division.

Next is MM-1 on clause 61.

Senator MacDonald: I move:

THAT Bill C-49 be amended in clause 61, on page 43, by adding the following after line 28:

(1.1) The prescribed recording instruments referred to in paragraph (1)(a) that are used to record the interior of the railway equipment shall not be capable of making a visual recording by any means.

This amendment would prohibit the use of video cameras to record the interior of locomotive cabs. Voice and data recording, black box technologies, as well as forward-facing cameras could still be used. I firmly believe that these inward-facing cameras are an intrusive, arbitrary and unacceptable invasion of privacy.

This also addresses concerns raised by railway workers unions, including Teamsters, Unifor and the Canadian Labour Congress. They felt that the video recording within the confines of a locomotive cab is an intrusion of privacy.

As we heard, locomotives are not just confined work spaces. They are change rooms as well. If safety is the ultimate priority, then Positive Train Control would be and should be mandatory. For the record, CP and CN are two of the most profitable railroads in the world. They presently are required by law in the U.S. to use PTC technology.

Currently, cameras are not mandated in the cockpits of aircraft or in the wheelhouses of ships. Until such a time as they are mandated, railways workers should not be subjected to a double standard.

Senator Mitchell: Of course, I support strongly both voice and video. The point was made by the Transportation Safety Board chief that both are very important. In fact, she explicitly used the example of the Burlington railway train disaster several years ago in 2014, I think. She said we will never know exactly what happened because we didn’t have video.

As for us being the only place in the world, first of all, the International Air Transport Association is working on that right now.

Second, LVVR is in use in the States where unions do agree with it. It’s also in place right now in Metrolinx in Ontario.

The Chair: All in favour?

Some Hon. Senators: No.

The Chair: I am going to ask for a show of hands. All in favour? Opposed?

It falls.

Ms. Anwar: Senators, I apologize. I want to make sure that we’re clear on the results that you wanted with respect to Senator MacDonald’s first two amendments, MM-3 and MM-2.

The committee carried one of them and defeated the other. Those amendments are consequential to each other. I want to make sure that the result the committee wants for that particular amendment is that it’s defeated or not.

The Chair: It is defeated.

Senator Mitchell: Carried destruction and defeated U.S.

Ms. Anwar: Is that the intention of the committee?

Senator Mitchell: Add destruction and delete destruction in the U.S.

The Chair: Yes.

Ms. Anwar: Okay.

The Chair: Where are we now? We’re almost done.

Shall clause 61, as amended, carry?

Hon. Senators: Carried.

The Chair: Shall clause 62, as amended, carry?

Hon. Senators: Carried.

The Chair: Shall clauses 63 to 98 carry?

Hon. Senators: Agreed.

The Chair: Shall clause 1, which contains the short title, carry?

Senator Plett: Chair, TM-5.

Senator Mitchell: It’s redundant, I think.

The Chair: Yes, that’s the only one.

Senator Plett: Sorry.

The Chair: So clauses 91 and 98 are carried. I think we have that done, right?

Shall clause 1, which contains the short title, carry?

Hon. Senators: Agreed.

The Chair: Shall the title carry?

Hon. Senators: Agreed.

The Chair: Shall the bill, as amended, carry?

Hon. Senators: Agreed.

The Chair: Does the committee wish to add any observations to the report?

Some Hon. Senators: No.

The Chair: We don’t want to add any observations on the disability group that came before us.

I thought that we might want to add an observation on that. I think it was the feeling of the committee that, when the commission is doing the passenger rights information, their concerns be a priority.

I think that’s what we all wanted. Is that what we all wanted? Maybe we could put that in as an observation and we’ll have steering approve the final, so that we don’t have to come back to the bill.

Is that agreed with everybody?

Hon. Senators: Agreed.

The Chair: All right.

Senator Mitchell: Thank you very much for your effort in all of this, and to all colleagues. When do you expect the report would be available? If it is today or tomorrow, could we do unanimous consent?

The Chair: It will not be available today. I've asked them, but we can’t get it ready today. It will be delivered tomorrow.

Senator Mitchell: If it were delivered tomorrow and we had unanimous consent, we could deal with it tomorrow. Then on Thursday we could deal with it, with unanimous consent, because this has had a great deal of debate and so on.

The Chair: I don’t think that our caucus has a problem. I’ll check again once more today; we have caucus meetings. We’ve talked about this before in our caucus, to move it along once it’s in the chamber.

Senator Mitchell: If we could get it done by Thursday, the government can deal with it over the two-week break, and then we could deal with it when we come back.

Senator Plett: You are quite correct, chair. We will deal with it at our caucus. I find it strange that we would go through third reading of a bill of this magnitude in one day, but let’s see where it takes us.

The Chair: We talked about this before. Is it agreed that I report this bill, as amended, with observations, to the Senate?

Hon. Senators: Agreed.

(The committee adjourned.)