SPEAKING NOTES FOR
BRIAN JEAN, M.P.,
PARLIAMENTARY SECRETARY TO THE
MINISTER OF TRANSPORT
TO THE
NORTH AMERICAN TRANSPORTATION FORUM

BANFF, ALBERTA
AUGUST 13, 2007

Thank you for your introduction, and thank you for this opportunity to join the fertilizer industry for the North American Transportation Forum.

Banff is a wonderful place to gather for a discussion on transportation issues. The town of Banff — and this hotel itself — are testaments to what can be achieved with transportation vision. You may have noticed the statue of Sir William van Horne that stands at the hotel entrance. Van Horne built the CPR, and brought the tourism industry to Banff.

Many look back to the age of van Horne as a Golden Age of transportation in Canada. And indeed, he was one of the railway giants who made an impact on Canada's transportation system.

But Canada has gone through several great ages where transportation shaped our destiny. Like our American neighbours, we are a nation built upon transportation systems. Centuries before the CPR, the fur traders established transcontinental networks using the rivers and lakes. That, surely, was another Golden Age.

And in more recent history, we saw a remarkable growth of Canada's transportation infrastructure in the years following the Second World War: the National Highway System, the National Airports System, and the St. Lawrence Seaway — even linking the country through radio signals — all helped to set Canada upon its course as a modern, prosperous nation. A nation whose wealth is rooted in commerce — across the country, across the continent, and around the globe.

Today, commerce has become even more important to our prosperity and our quality of life. In the past five years, the world economy has grown faster than at any other five-year period since the Second World War. Canada is one of the most trade-dependent economies, and we have posted record volumes of imports and exports.

And Canada's New Government has responded by putting more emphasis on transportation than Canada has seen at any time since that Golden Age following the Second World War.

The Budget we introduced this year commits an unprecedented $33 billion in federal infrastructure investments over the next seven years through our Building Canada Plan.

One of the biggest components of our Building Canada Plan is a $2.1 billion national Gateways and Border Crossings Fund. Some of you are no doubt familiar with the first of our gateway and border investments, the Asia-Pacific Gateway and Corridor Initiative.

It will have an impact on your business, even if you do not export to Asia. Why? Because when we create world-class gateways and corridors, we improve the capacity and the quality of the entire transportation system. We enable carriers to use their resources more efficiently and cost-effectively. We attract investment and people and services that raise the level of performance across the system.

When we create a gateway and corridor that evolves into North America's transportation hub, everyone benefits. And our vision is to create an Asia-Pacific Gateway and Corridor that will make transportation services part of Canada's advantage. As I say, Canadians are good at addressing logistics.

And we're continuing to address our challenges. For example, earlier this month, the governments of Canada and British Columbia announced a joint initiative to maintain stable wages and working conditions for independent owner-operator truckers serving Lower Mainland ports.

This ensures that independent owner-operator truckers are compensated at no less than the rates of remuneration set out in the Memorandum of Agreement which was recommended on July 9, 2005 by Mr. Vince Ready, a facilitator appointed by the Government of Canada and the Province of British Columbia.

This agreement will help keep business moving.

Prime Minister Harper officially launched the Asia-Pacific Gateway and Corridor Initiative last October, but those of you who have been watching the developments will know that this has been an idea that has been on the drawing board for more than a decade.

It is built around a simple premise: Canada has certain key advantages that can make our West Coast ports the gateway between Asia and the interior of North America. Not just a gateway to Canada, but to the continent.

Some of those advantages are geographic: Vancouver and Prince Rupert are closer to Shanghai and Hong Kong than the ports further down the West Coast.

Some of the advantages are cultural. We have a long history of close ties to Asian communities.

And some of those advantages are logistical. Canadians have proven to be very smart when it comes to running a transportation system. For example, Prince Rupert may be closer by sailing time to China, but it's the speed and efficiency of the port and the railway that will make it a gateway to Chicago. Vancouver may have enormous opportunities as a major port, but it's the willingness of CN and CP Rail to work together on co-production agreements that helps keep the traffic moving.

And when we get five different municipalities, two railways, a port authority, a terminal, and both the federal and provincial governments working together to improve a rail corridor in the B.C. Lower Mainland, we know that we have both the vision, the determination and the consensus to make our transportation infrastructure part of a Canadian advantage.

We've learned many lessons in creating the Asia-Pacific Gateway and Corridor Initiative. We've learned, for example, about how to build partnerships among the various stakeholders. We've learned how to integrate both physical and policy infrastructure. We've learned how to emphasize an entire transportation system, rather than any single mode.

We have drawn on those lessons to develop a new National Policy Framework for Strategic Gateways and Corridors released last month. The framework will be applied as we build on the experience of the Asia-Pacific Gateway and Corridor in other parts of the country — in central Canada, for example, where Ontario and Quebec represent approximately 60 of Canada's exports and Gross Domestic Product. Or in eastern Canada where three-quarters of the containers delivered to the Port of Halifax are destined for Central Canada or the Midwest United States.

Discussions are already underway. In fact, Minister Cannon signed a Memorandum of Agreement on July 30 with his provincial counterparts for the Ontario-Quebec Continental Gateway and Trade Corridor.

When we look at the transportation opportunities, and we decide where to invest our $2.1 billion for corridors and border crossings, we will take five points into consideration. We have called them the five "policy lenses":

1. Align the transportation systems with our most important opportunities and challenges in global commerce;
2. Target transport infrastructure that carries nationally significant levels of trade;
3. Look to future trends and requirements;
4. Go beyond transportation infrastructure to address interconnected issues that affect how well the system works;
5. Ground federal actions in concrete federal responsibilities, and work with partners in other governments and the private sector.

These, then, are the perspectives that will guide how we will invest our new $2.1 billion Gateways and Border Crossings Fund. This is an important component of the $33 billion we have committed to infrastructure over the next seven years. I believe that, through bold and forward looking initiatives like this, we are launching Canada towards another golden age of transportation, and your industry will play a big role in that.

Another industry playing a big part in this is the air transportation sector, which also fits into the Asia-Pacific Gateway and Corridor Initiative. As many of you are aware, Canada developed a modernized international air policy and formally announced it in November of 2006. The policy, called Blue Sky, commits Canada to proactively pursue open agreements when in Canada's overall interest.

This approach is bearing fruit. For example, a Blue Sky agreement was recently signed with Ireland and Iceland, and we have begun exploratory discussions with the European Union regarding a comprehensive agreement. These agreements complement the Open Skies agreements that Canada previously signed with both the United States and the United Kingdom.

Blue Sky is a major boost for the Asia-Pacific Gateway and Corridor Initiative, as air transportation will help build fast and efficient linkages between Canada and the growing economies of Asia. With increased competition, more goods, services and people will move through our western airports, as part of the Gateway.

As I mentioned earlier, the infrastructure must be there to support all of these initiatives. Building Canada will help meet a modern Canada's infrastructure needs and do so in a way that also contributes to our economic competitiveness and environmental goals. Whether in urban transit, water and wastewater or green energy, as well as highways, Building Canada provides long-term, predictable funding to tackle the wide sweep of infrastructure needs of the country.

Future generations are going to look back at the infrastructure we are putting in place now and say that this generation did its part to keep Canada competitive at a time of unprecedented challenges and opportunities. But in the business world, often it's not the bold visions for a future transportation system that matter most to you. It's the decisions that are made to help your day-to-day operations.

A world-class transportation system is not simply a matter of infrastructure. It's also the rules, regulations and policies that guide how that infrastructure is used. And over the past few years, there has been considerable debate and analysis on whether shippers have been well-served by the transportation system — particularly by the railways. Shippers of bulk commodities, such as fertilizer, are particularly vulnerable when they do not have transportation alternatives. Shippers need reasonable access to efficient and reliable service at fair rates.

Over the years, the Government of Canada has heard many reports from shippers that the system is out of balance and needs correction. Let me say at the outset that, over the past ten years, Canada's railways have done a remarkable job in meeting the challenges that global competition has created for our transportation system. Through reliance on market forces, they have become the most efficient, most competitive, most cost-effective railways in the world — a tremendous turnaround in a little more than a decade.

Both Canadian Class 1s operate networks into the United States and compete successfully against their U.S. counterparts. They don't require any operating subsidies from the government. Their financial success means they have the capital funds necessary to maintain and expand their infrastructure, acquire new equipment, and invest in traffic control systems. And their financial independence means the government can devote taxpayer dollars to other priorities.

But along the way, many of the issues that are of utmost importance to shippers have been sidelined, and the time has come to restore a regulatory balance between shippers and carriers, and that has been the goal of legislation that was introduced earlier this year: Bill C-58.

Bill C-58 amends the Canada Transportation Act to strengthen the shipper protection provisions that address the potential abuse of market power by the railways. At the same time, it would also provide regulatory stability to the railways to encourage investments required to keep Canadian exporters and importers competitive in international markets.

Once the Bill has been passed, a shipper will no longer need to demonstrate to the Canadian Transportation Agency that it is suffering substantial commercial harm before gaining a remedy. The Agency will be able to investigate a shipper's complaint over the charges and conditions for incidental services. The notice period for increasing freight rates will be increased to 30 days.

Some of the key provisions of the Bill deal with group Final Offer Arbitration — FOA. Once the Bill is passed, your industry will be able to qualify for group FOA if the matter was common to all the shippers. You would make a joint offer, the terms of which apply to all shippers. Before proceeding with a group FOA, the Canadian Transportation Agency would satisfy itself that the group had attempted to mediate the matter with the railway. Parties would also be allowed to suspend the arbitration process by mutual agreement in order to pursue mediation. This would provide both parties with an alternative without jeopardizing the shipper's right to FOA. The FOA process would resume if mediation failed.

And once the Bill has been passed, we will continue to consult with both shippers and carriers through a review of railway service. In fact, we have committed to such a review within 30 days of the Bill receiving Royal Assent. We want to take this opportunity to assess the effectiveness of the level of service provisions of the Canada Transportation Act. We want to find innovative solutions to service issues. We will consult with shippers on the scope and terms of reference for this review. Shippers are generally pleased with the provisions of C-58. The Bill has passed Second Reading and is now before Committee. I expect that the fertilizer industry would support rapid passage of the Bill, and hope that you will cooperate fully during the Committee phase.

But above all, today I hope I have demonstrated how the provisions to balance the interests of your industry with those of the rail carriers are part of a much bigger picture – part of a major government initiative to make transportation a source of Canadian advantage in a global economy. It doesn't matter whether your final market is across the globe, across the border, or in the next province or state — a world class transportation system helps you compete.

And under Prime Minister Harper's leadership, we have put the transportation system at the forefront of the agenda. We are investing in infrastructure at a rate not seen since the last Golden Age of transportation, following the Second World War. And we are putting in place the policies that help you use that infrastructure to your best advantage.

Years from now, they are going to look at this as a Golden Age of transportation — worthy of a nation that has already produced visionaries like William van Horne. Think about that when you pass by his statue at the hotel entrance. And get ready to use Canada's transportation advantage to your best advantage.

I wish you all a very enjoyable and thought-provoking forum.