Bill C-26 (Historical)

Transportation Amendment Act

An Act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other Acts

Transportation Amendment Act

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Right, it is “juste à temps”, but they said it in English. Perhaps they thought it demonstrated their superiority in some way, but I was not impressed. However, I wanted to quote them properly.

Therefore, I met with the officials of this railway, a private company that is not, I might add, subject to the Environmental Assessment Act. I would have liked to see Bill C-26 make CN-CP subject to this legislation so that we could look into their actions and network expansions and, naturally, monitor pollution.

That said, there are five trains passing or entering the station and going to the shunting yard. There are maintenance problems; proper braking is a problem; schedules are not adhered to. As a result, there is noise pollution for local residents, who have raised their families in Hochelaga—Maisonneuve and who, for generations, have been living with this major inconvenience.

Obviously, we could ask why the municipality allowed a housing development near a railway facility. Obviously, the question arises. It happened under the Doré administration.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

People back home call it “une traque” in French, but they are not as erudite as the Minister for International Trade. They say “une traque”, but it is true that the proper term in French is “une voie ferrée”.

These people are experiencing a veritable nightmare, a veritable hell. When cities were being planned in the last century, people were not always as concerned about having separate residential and industrial areas. It was believed that people should be able to live near their place of work and be able to get there on foot.

Obviously this type of urban planning no longer has any currency. Nobody today would accept having big, polluting companies in their residential neighbourhood, nor would they accept having a railway line.

The railway is closely linked to the port of Montreal. Economic development is at stake, and this cannot be ignored. I can understand this. East Montreal needs to have some prosperity. It was a manufacturing district from the 19th century until the 1960s and now services, such as Vidéotron, Mediacom and other companies, are setting up there.

However, we must not sacrifice quality of life in the name of economic development.

The advantage of Bill C-26 is that it will allow the Canadian Transportation Agency to hear complaints about railway companies that are guilty of making too much noise.

Allow me to explain the situation of the people I referred to a moment ago. First, there are five trains per day that leave at all hours. That means that there may be a train entering or leaving the rail yard at 3 a.m. Obviously, it is hard not to hear it when a train stops or starts. The average train has three or four engines and any number of railway cars. It affects the quality of life of people, and we need to be concerned with this.

When I met with CN-CP representatives, they were intransigent and told me that one of the factors of economic development—and I believe I have heard the Minister for International Trade say this—is just in time delivery. It means that deliveries have to arrive when requested.

[Réal Ménard, Bloc, Hochelaga—Maisonneuve, QC]

Madam Speaker, when my colleague, the member for Argenteuil—Papineau—Mirabel, the transport critic for the Bloc Quebecois and himself a former mayor, told me that Bill C-26 changed the role and mandate of the Canadian Transportation Agency, I was extremely curious to know whether the bill in question could in any way improve things for my fellow citizens.

I became interested in this bill because in my riding of Hochelaga—Maisonneuve—which I have been representing here since 1993—there is a railroad track near Moreau Street in the east end of Montreal and a shunting yard. For many years I have frequently and periodically received representations from people who live near the track and who obviously find it a nightmare.

I will have an opportunity to explain this later, but I think that CN/CP rail is a very bad corporate citizen. It is truly unbelievable. The management style and corporate behaviour at CN/CP rail should be looked at by us as legislators. It is high time to call them to order.

CN/CP rail acts as though economic development should be the only consideration, quality of life is not important and it does not matter where railroad tracks are located.

When my constituents made representations to me, I suggested to them that they form a citizen's committee. We know how governments react to these sorts of disputes. Sometimes they are blind, but they are never deaf. They go where there is noise. I soon realized that to make any headway in a case like this, it was important to form a citizen's committee.

This was done. There are a dozen or so people who are active members of this committee. I would like to thank them for their involvement. I will mention their names so that if you ever happen to meet them, you will know who they are. They are: Léopol Bourjoi, Gaétane Couture, Maurice Lahaie, Michel Languedoc, Victor Berthelot, Lina Gauthier, Guy Walman, Robert Dalpé and his wife Olga Berseneff, and Martin Mercier.

They live in the east end of Montreal near a railway track and it is sheer hell.

[Judy Sgro, Liberal, Parliamentary Secretary to the Minister of Public Works and Government Services]

Madam Speaker, I am pleased to speak to Bill C-26 and the importance of this legislation for the country.

Moving people and goods efficiently, safely, securely and in an environmentally respectful way is vital to our economy. As Canada's national passenger rail service, VIA Rail has an important role to play: providing safe, high quality, efficient passenger service to Canadians.

Moving people out of their cars and onto trains is one solution to the problem of congestion, which we see each and every day in and around our cities and on our major highways and was an issue frequently mentioned as we did our work on the Prime Minister's task force on urban issues. Not only is congestion a personal frustration, but it also slows down our business.

Passenger rail also gives Canadians a convenient and economical choice, whether they are travelling for business or pleasure. Many Canadians do not have the means to travel by air.

For many Canadians in northern and remote parts of the country, rail provides an invaluable lifeline, especially where no other transportation options are available.

The Government of Canada is dedicated to passenger rail and its revitalization, not only as a viable transportation option that is central to our identity as Canadians but also as one that makes good economic and environmental sense.

A strong passenger rail system also contributes to building stronger communities. Passenger rail provides a vital link for the movement of people, encouraging business development and growth. VIA Rail connects some 450 communities with services that run across the country.

More Canadians are using the train today than ever before. In 2001, VIA Rail carried 70,000 more passengers than the previous year. In fact, passenger revenues have grown steadily over the past decade while VIA Rail has steadily improved the cost effectiveness of its services. VIA Rail now carries over 400,000 more passengers and operates 153 million more passenger miles than a decade ago. It has reduced government funding from 45.6¢ to 17.2¢ per passenger mile. VIA Rail's operating subsidy is now fixed at $170 million per year compared to $410 million in 1990.

With this demonstrated growth and improved cost effectiveness, we are pleased that we are making a commitment to passenger rail in legislation.

Up to now, VIA Rail has been operating as a crown corporation subject to the Financial Administration Act but governed by the Canada Business Corporations Act. But most crown corporations and other enterprises created by government are governed by special acts of Parliament. That is because they were created for specific purposes. Pilotage authorities are governed by the Pilotage Act. The port authorities are governed by the Canada Marine Act. Canada Post is governed by the Canada Post Corporation Act. It is time for VIA Rail to be governed by its own act of Parliament.

Bill C-26 sets VIA Rail's mandate in legislation, a mandate that calls for VIA to manage and provide a safe and efficient passenger rail service in Canada. This mandate is consistent with VIA's mission statement, which is to offer safe, high quality, efficient passenger rail service. This mandate means that VIA Rail will continue to provide its current passenger rail services across Canada.

From the perspective of the travelling public and taxpayers, there will be no changes to VIA Rail as a result of this new legislation. Trains will continue to run on the corridors and across the continent. VIA Rail will continue to receive appropriations from the government and the Minister of Transport will remain accountable for VIA Rail.

There are many who expected the legislation to specifically allow VIA Rail to finance its capital needs from the private sector so as to reduce government funding. Let me make it very clear that VIA Rail already has and will continue to have the legal power to borrow money to finance its capital needs, so we do not need to give the corporation special powers. However, it is subject to the Financial Administration Act, which sets out the control and accountability regime for crown corporations.

For VIA Rail to borrow money from the private sector, two approvals are needed. The governor in council must approve the corporation's five year strategic plan. This plan must set out the operating and capital budgets and any borrowing plan. The Minister of Finance must also approve the terms and conditions of the borrowing. To date, the government has prudently decided that private sector borrowings are not an appropriate source of funds for VIA Rail.

VIA Rail is an appropriation-dependent crown corporation. This means that VIA Rail relies on government funding for its operations as well as its capital needs. Also, the government is liable for VIA Rail's debts. As such, it makes more sense for the government to provide the capital funds as well as the operating funds.

Over the past few years, there have been a number of studies considering the privatization of VIA Rail or other public-private partnerships. There are some who expected that this legislation would allow for more private sector participation in the provision of inner city passenger services currently provided by VIA Rail.

The earlier studies confirmed that the timing was not right for such direction. The results of the last study show that passenger rail needed to be revitalized so that the private sector investment would be more attractive. To this end, the government announced in April 2002 that it would provide VIA Rail with an additional $401 million in capital funding over the next five years to allow the company to address urgent capital requirements and to undertake a modest expansion.

Once the revitalization initiative launched in 2000 has been implemented fully, I expect the government will consider the next steps, but as members might expect, capital improvements to take some time to bear fruit.

VIA has already made improvements as a result of this funding. The company purchased 139 new passenger cars and began operating 21 new high speed locomotives in December 2001. It has also completed the refurbishment of several stations across the country and equipped the corridor fleet with waste retention systems.

However, the government recognizes that major investments are still required to maintain the integrity of Canada's rail passenger network and to ensure its viability in the long run.

VIA has been directed to review its long term capital requirements and to develop a capital investment plan for the government's consideration. This plan is to address the need to replace existing equipment and make additional track upgrades to improve rail services that are key to the corporation's future viability. In this context, it may be some years before the government can consider privatizing VIA Rail.

This legislation does not materially change anything for passengers, taxpayers or the corporation.

So what does this legislation do? It demonstrates the government's commitment to passenger rail in Canada. It sets out the government's objectives by requiring that VIA Rail provide safe and efficient passenger rail services. However, it recognizes that VIA operates in a commercial environment and therefore provides VIA with the flexibility to deal with the demands of the marketplace. It means that VIA can add capacity if there is sufficient demand or reduce capacity if there is insufficient demand.

This legislation would also allow VIA to use its excess capacity for purposes other than its mandate so as to reduce the need for government funding.

In setting the mandate for VIA Rail, the government also makes a commitment to ensure that VIA Rail has the resources to fulfill its mandate. The government made an initial commitment in 2000 by guaranteeing stable, annual operating funding of $170 million and investing $401 million to begin the revitalization of passenger rail.

With this new legislation, we make a commitment to continue improving passenger rail service to meet the needs of Canada across the country.

[James Moore, Canadian Alliance, Port Moody—Coquitlam—Port Coquitlam, BC]

Madam Speaker, I agree. If one were to enumerate the things that are not in the bill but could be in the bill, one would have a very long list indeed: no elimination of the air tax; no mandating of gas taxes to roads; the increasing subsidization of Via Rail, which is not sustainable over a long period of time; no scrapping of the Air Canada Public Participation Act, which is something that makes complete sense; and no commitment to this Windsor-Quebec City corridor. We keep hearing of that corridor as a proposal or a theory from the Minister of Transport, but he never seems to put meat on the bones so that we can actually debate whether or not this theory has any kind of practical usage whatsoever.

As well, there is no mention whatsoever of Kyoto. In fact, as for the new jet train concept, the train that is built by Bombardier that would be on the Windsor to Quebec City corridor, that train uses the same jet engines that are used in the planes it is supposed to replace, so there is a net no benefit at all to the environment in terms of CO

2

emissions.

There is nothing in Bill C-26 in terms of port security. There is nothing in it in terms of airport management.

I am speculating here, of course, but this could very well be the final transport bill from this transport minister and again, after years of being transport minister, he has completely failed to outline with meat, bones and cash a real transportation infrastructure program for Canada. He has failed again.

[James Moore, Canadian Alliance, Port Moody—Coquitlam—Port Coquitlam, BC]

Madam Speaker, the answer is no. The hon. member has raised a lot of issues here, but I do not agree with him on the last thing he mentioned.

It should not come as a surprise that the Canadian Alliance is against big government and unnecessary regulation. In his question, the hon. member pointed out that if airlines were guaranteed profitable routes, then we should expect regulations to ensure that these communities have access to permanent services.

But the philosophical problem is that if any of the routes that is granted to Air Canada or any other airline turns a profit, then, we do not need regulations. We need regulations for the routes where there is no competition.

We believe that the ability to travel throughout our country by car, plane, train, ship or any other means of transportation is not a right. It is not an absolute right to be able to travel throughout our country by whatever means of transportation we choose just because the government can regulate an industry and levy taxes to offer us that option.

It is not up to the government. It is not a right of all Canadians to have all means of transportation guaranteed permanently by legislation. It is really impossible for the government to have such a principle, that is to pass legislation and pay for it today and indefinitely. In my opinion, the hon. member is proposing something that is impossible.

If he does want to do this, however, he needs to be honest. If he wants to do so, he needs to be frank with the people in his riding, and tell them it will cost a lot more to pay for these various services. Government will have to be expanded, new taxes levied. In my opinion, the people in his own riding will not be very thrilled with that.

There is one more important point, however, on which I agree with my Bloc colleague. Bill C-26 is really nothing at all, and not because it is poorly drafted.

It was introduced by the Minister of Transport a week after the budget. He says he has carried out all his consultations in order to present a major document on transportation. That he has spoken with everybody and obtained all the recommendations relating to all potential avenues for the transportation industry. What he has done, however, is taken all these recommendations, combined them into one fat document, and handed them to us a week after the federal budget.

Had it been a month before, we could have obtained support on its specific recommendations. Then perhaps we might have obtained money in the budget to implement his proposals. There could have been a debate on regulating the airline industry, highways and so on.

But the Minister of Transport has not met his own responsibilities. He has really reneged on what he was supposed to do, which is to offer us new ideas on transportation, and then to obtain support in the budget for the various projects so they could be implemented, as I have said, without any new taxes. This goes for the proposals made by the member from the Bloc Quebecois.

[James Moore, Canadian Alliance, Port Moody—Coquitlam—Port Coquitlam, BC]

Madam Speaker, I rise to speak on Bill C-26, an act to amend the Canada Transportation Act and the Railway Safety Act and to enact the VIA Rail Canada act. It was tabled in the House on February 25 at the same time as the document called, “Straight Ahead--A Vision for Transportation in Canada” was tabled.

The press release that came with the “Straight Ahead” package said:

This document provides the vision, the policy framework and principles that will guide the Government of Canada's decisions in the years ahead in key areas such as marketplace policies, strategic infrastructure investments and initiatives in support of the broader government agenda on competitive cities and healthy communities, climate change and innovation and skills.

Straight Ahead is the culmination of extensive consultations that began in June 2000 with the Minister's Millennium Conference on Transportation and continued with roundtable discussions across the country headed by the Minister of Transport. It includes responses to many of the recommendations of the Canada Transportation Act Review Panel and of the Independent Transition Observer on Airline Restructuring.

In initiating the second reading of Bill C-26 yesterday, the Minister of Transport told the House:

In our policy document, “Straight Ahead”, we talk of the culmination of an initiative that began in 2001 to review the transportation policy for the next 10 years and beyond. “Straight Ahead” proposes a vision to guide the continued development of a sustainable transportation system for the country. It also conveys the government's response to the 2001 report of the Canada Transportation Act review panel.

The amendments to the CTA that are introduced in this bill are an important step in moving the vision forward. “Straight Ahead”...

In the eyes of the minister, Bill C-26 is the implementation in part of the “Straight Ahead” document and that in turn is the government's response to the 2001 report of the Canada Transportation Act review panel. It is therefore helpful to have read the 2001 report of the Canada Transportation Act review panel.

On page 191 of that report, one finds a discussion of fuel taxes, something that is important in the country now, certainly with regard to the ongoing crisis in Iraq and the labour crisis that existed in Venezuela as well.

It is dealt with in the report on page 191 but the government does not deal with it here. The panel states:

Federal fuel taxes stand out as having no evident justification in the eyes of road users.

The Panel's proposal is that federal fuel taxes be recognized as part of the price paid for the use of road infrastructure.

The CTA review panel proposed that federal fuel taxes be recognized as part of the price paid for the use of road infrastructure. It recommended various ways that the federal fuel taxes could be used to fund Canada's highway infrastructure. Yet while the future actions section of the infrastructure chapter in “Straight Ahead” talks of making strategic investments in trade and passenger corridors, such as the national highway system, the talk is truly hollow when one looks at Bill C-26, or the recent federal budget.

It is important to understand the timing. We know the federal budget was tabled on February 18 and that prebudget consultations had been going on for months before that. We are also told that the “Straight Ahead” document is the culmination of extensive consultations that began in June 2000. If we assume that the Ministers of Finance and Transport are in contact with each other, it is a virtual certainty that the idea of dedicating a percentage of the federal fuel tax to building, maintaining and expanding our national highway infrastructure was discussed at some point around the cabinet table and lead up to the current budget.

Nonetheless, when the budget was tabled, it contained only an additional $300 million in annual funding for Canada's infrastructure, including highways and roadways. The $300 million seems like an impressive amount until we actually do the math. Statistics Canada estimates that there were 31,485,623 people living inside Canada in October 2002. This year the generous Liberals will spend a grand total of $9.53 per person next year on infrastructure and about two-thirds of that, or about $6.38 per person, will go into highways and roads.

While the government is spending some $6.38 per person on roads and highways next year, if gas stays around 85¢ per litre for Canadians, the Liberals will collect $4.8 billion in federal fuel taxes plus another $2.2 billion in GST on the gasoline and taxes as well. That is $7 billion this year, or roughly $222 for every man, woman and child in Canada.

Let me repeat those numbers so it sinks in on the Liberal side over there. The Liberals will collect roughly $222 in federal fuel taxes and GST on those taxes on fuel from every man, woman and child in Canada. At the same time, they will strategically invest, as is their code word, roughly $6.38 per person into roads and highways. If we wonder where the $215, the difference between the $222 they collected and the $6.38 they spend on roads, perhaps the statement contained on page 91 of the 2001 report of the Canada Transportation Act review panel will help us out. It states, “Federal fuel taxes stand out as having no evident jurisdiction in the eyes of road users”.

The biggest problem with the “Straight Ahead” document is that it proposes a vision to guide the continued development of a sustainable transportation system for the country without suggesting a funding formula for something as basic as roads. In my mind that is not a vision, it is fog.

To the extent that Bill C-26 is inspired by this “Straight Ahead” document, it is essentially empty rhetoric by the Minister of Transport.

I would like to turn my attention now to the specifics of Bill C-16. I have already dealt with what is absent, the commitment of highway funding, but now I would like to address what is in the bill.

Bill C-26 deals with two main themes: airlines and railways. In each case it is a mishmash of missed opportunities and dangerous initiatives.

On the aviation side, it is philosophically inconsistent. On one hand, we find several clauses arguing for a greater role for competition and market forces. Clause 3 recognizes that competition and market forces are the prime agents in providing viable and effective service in the air industry. That is a good start rhetorically, but then it starts to get confusing for those who read the bill.

In both clauses 18 and 24 we see the concept that under certain circumstances a non-Canadian company might offer domestic air service for “any period of time”. It is as though the minister is recognizing the idea that in certain situations foreign carriers might be seen as a last resort to spur competition. However at the very same time there is nothing in the bill that raises the limit on the number of shares of a Canadian carrier that a foreign airline might acquire. Thus the same type of problems that foiled the Onyx takeover of Air Canada remain and are part of the Liberal vision for the future of Canada's airline industry.

At the same time, Bill C-26 proposes a massive re-regulation of the domestic airline industry. For example, clause 11 gives the Minister of Transport new powers to review mergers even though the competition commissioner is already involved in the process. It also gives the Canadian Transportation Agency the power to ensure that merged corporation is “Canadian”. Right there, instead of one person examining the competitive implications of any proposed merger, we now have two. Bigger bureaucracy and slower service, that is the Liberal vision, and also having someone in the process who perhaps has no expertise whatsoever in the very issue that the minister may be dealing with.

We also see in clause 16 that it requires airlines to revise advertising to include all non-governmental fees and prices and to not advertise one-way tickets where a person needs to buy a round trip to get the exact price that is being advertised. However let us not forget that the Air Transport Association of Canada voluntarily agreed to this before Christmas, and that the sticking point is not the Canadian airlines industry but the need to get both Canadian and U.S. carriers to adopt similar advertising strategies for tickets on transborder routes. Clause 16 is essentially harmless but it is an attempt by the Liberals to take credit for something that the airline industry has already done voluntarily and has already done through the powers of market forces.

Clause 20 of the bill is just downright dangerous. It would give the Canadian Transportation Agency the power to review and even set airline fares in cases where there was not true competition on a route. The concept of having a government agency tell a private for profit company that it has to provide service between two points on terms and conditions that the government decides is simply frightening.

Clause 26 of the bill goes further, mandating that carriers accept domestic interlining code shares and permit access by their competitors to their frequent flyer programs. This type of policy is a real re-regulation and is driven by a genuine anti-competitive spirit on the Liberal side.

The Minister of Transport keeps telling the House about WestJet, Jetsgo, CanJet and Air Transat, but I can tell him that none of them in fact will want to be in Aeroplan, Air Canada's program, and none of them want to be forced to interline with anyone else.

If one looks at Ryanair, an Irish airline similar to WestJet, a low cost service provider, it actually states that it is a point to point airline and, therefore, does not offer and cannot facilitate the transfer of passengers or their baggage to other airlines. That is a management decision by a private sector company called Ryanair, and it makes it on its own.

Under Bill C-26 it could be illegal for Jetsco, CanJet, WestJet, Air Transat and Air Canada to adopt a similar policy.

If the government wants to regulate the airline industry, it should nationalize Air Canada, turn it into a crown corporation and abandon any pretext of private sector competition that it claims exists in Canada. Otherwise, it should truly respect that competition in the market forces is the prime agent of providing a viable and effective transportation service and do what it can to promote it, as a government.

One way it may start doing that is to have the people who book civil service travel make sure that airlines, beyond Air Canada, are considered from time to time as potential service providers. If the government truly wants to stimulate competition, it could start by buying airline tickets on some competitive fare basis rather than just going straight to Air Canada, as it consistently and persistently does.

Speaking of crown corporations, I want to turn my attention now to VIA Rail.

Yesterday in the House, on this very bill, Bill C-26, the Minister of Transport said “Unlike the majority of other crown corporations, VIA Rail did not have its own legislation”.

In order for us to understand the impact of that statement, one has to understand the different legal structures that the government uses to deliver various services.

The first is a line government department, such as Transport Canada, that used to manage airports and provide air traffic services. There was no crown corporation. The government department played a direct role in managing airports and air traffic services.

The second is a crown corporation, such as Canada Post, where the company can borrow with government backing and the government owns all the shares, names the directors and has full control.

The third is a private company, incorporated under the Canada Business Corporations Act, where the shares are traded on the stock exchange and the company follows free market rules, but the government owns a minority of the shares and names some of the directors. Petro-Canada is in this situation today and so is VIA Rail.

What the government wants to do in clause 67 of Bill C-26 is to take the private corporation known as VIA Rail and flip it over into a crown corporation.

It is important for us to understand what is happening here. VIA Rail, like Petro-Canada, is essentially operating as a private company right now. All the government needs to do to privatize it is to begin selling the company's shares on the stock market. Rather than doing this, the Liberals want to make VIA Rail a crown corporation, admitting, in effect, that it cannot compete without massive taxpayer subsidies. Let us not forget that this too is part of the Liberal vision for the future of rail travel in Canada.

Bill C-26 was sold as the implementation of a transportation blueprint, a blueprint that is not clear on competition in the airline sector, that proposes to make VIA Rail a crown corporation, and that is silent on the biggest transportation concern of western farmers who were rhetorically told that it would be in the bill. However, that concern of western farmers with regard to grain transportation, running rights and so on, is not in this whatsoever.

Therefore, rather than providing a real vision for Canada's transportation future, as the rhetoric of the package that was tabled by the finance minister says, the bill, which twins along with that, would not in fact accomplish that whatsoever.

I want to talk very briefly on another issue because of the reality of the situation in Iraq. Yesterday in his speech as well, the Minister of Transport talked about the issue of port security. I want to use an example of where I come from, in my riding of Port Moody—Coquitlam—Port Coquitlam, which is half an hour or 45 minutes east of the city of Vancouver.

Prior to the Liberal government's reckless activities with regard to national security, Canada had the Canada ports police. The ports police in the City of Vancouver did a tremendous job and put tremendous effort forward in terms of securing our borders, helping with cargo freights, helping to stop people who basically sell people into indentured servitude in Canada in exchange for getting them here on rusty cargo ships.

Canada had a ports police that helped the police against those things and the ports police did an effective job. There was some debate on whether they were effective enough, large enough or it was cost effective.

However, the Liberal government, rather than addressing some of those concerns, rather than making some of the difficult decisions of raising the hood on the Canada ports police situation, looking at the engine and making sure that it was running properly, it decided to end the ports police.

Now we have a situation of drugs getting on shore in my riding in the City of Port Moody, which is part of the port of Vancouver that extends all the way from Delta in the south up to Indian Arm and Burrard Inlet in the north. It is a huge area for the port authorities to cover.

Since we have had the scrapping and elimination of the ports police, the City of Port Moody is now responsible for securing the port of Port Moody. It sounds good on paper but the problem is that the City of Port Moody and the Port Moody police do not own a boat. It is awfully hard to have drug interdiction, to stop smuggling into the cities and do an effective job of securing port security when the government turns over port security to the City of Port Moody and the Port Moody police and they do not own a boat in order to get those things done. The government offers nothing, no financing whatsoever, to help the City of Port Moody and other cities like it to combat smuggling.

The government brags about the fact that it is spending $172 million on port security but not a single dime of that federal Liberal money will go into my riding in the City of Port Moody to help it buy a boat in order to ensure security.

If the Liberal government took security seriously, it would re-establish the ports police, reorganize it so it was an effective mechanism to ensure that they could have an impact on drug interdiction and prevent the selling of human beings into indentured servitude, which is what is happening with the people smuggling on the west coast of British Columbia. They could establish a port security system that really works.

The scrapping of the ports police in the City of Vancouver was a tremendous mistake by the government, and there is nothing in Bill C-26 and nothing in the response to the realities of September 11, and nothing in the budget that we have been debating. There is nothing that takes real port security measures seriously.

The Liberals seem to think that the current infrastructure is fine. As long as some new technology is put in place and more money is put in place, this will work out all right. However, it will not be that way.

The City of Port Moody is hurting. It has had the keys to security turned over to it but it does not have a boat to put the keys in and get it started. Those kinds of examples are happening all over Canada, on the east coast, west coast, up and down the St. Lawrence where communities are being forced to take over the security responsibilities.

In closing let us not forget that the first responsibility of the government, above all else, is to secure citizens and make national security its top priority. It is Abraham Maslow's “hierarchy of needs”; the first thing is to protect citizens; second is to ensure their safety into the future with the basic provisions of life, and then build an economy on top of that.

The government's number one responsibility above all is to ensure the security of its citizens and yet it scrapped the ports police. The Liberal government's decision to scrap the ports police was a tremendous mistake and it has put a huge burden on the City of Port Moody, a burden that it should not have to bear. It is a disgrace that the government made that choice.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, I have just a few words on the bill before the House today, Bill C-26, an omnibus bill dealing with a whole series of transportation issues. I want to begin by saying that our critic, the member for Churchill, is not here today. She is travelling with the aboriginal affairs committee and would otherwise be here to make a well fleshed out presentation in terms of our position on the bill.

The bill before the House today is a bill that we call an omnibus bill. It covers a whole series of topics, from air transportation to rail transportation to transportation of naval vessels and the like. It covers deregulation and a whole series of issues in this country that are transportation oriented, so I just want to say a few words that hopefully the government will take to heart.

In terms of the last decade or so, my main concern about transportation has been the tremendous deregulation of transportation in our country. We have seen it that has not been helpful to the ordinary citizens, the ordinary consumers of transportation right across the country.

We have also seen the privatization of some of our transportation industries. Air Canada is a prime example of that. Despite privatization and deregulation, Air Canada is in serious financial trouble today. It has also stopped serving some of the smaller markets that it used to serve in different parts of Canada.

I think these are things that should be looked at in terms of the future. We should be looking at re-regulation in some areas of the transportation industry in Canada.

We support the bill before the House. We think it is a positive step. We are not greatly enthusiastic about a lot of it, but it is a positive step in the right direction. When our critic gets back, she will have a chance to speak on the bill and to look at it in the transport committee as well.

The other issue that concerns me about transportation is that in the recent federal budget there was very little in terms of investment in transportation in Canada and very little in terms of investment in infrastructure in the country. I know my friend in the Liberal Party across the way is interested in urban infrastructure and urban issues. This is something the government has fallen down on in the last decade. With a huge surplus, the last budget in particular was an opportunity to put more money into transportation and infrastructure. That is needed for all kinds of reasons. We have environmental problems, traffic congestion problems and problems of frequent travel from point A to point B right across the country.

About a year or so ago I was supposed to speak in Peterborough. I flew to Pearson airport in Toronto. It is about 150 kilometres between Pearson and Peterborough. I thought that would take about an hour and a half on a huge freeway. I got to the meeting an hour and a half late. It took three hours between Pearson and Peterborough because of all the traffic congestion and big trucks on the road. All the pollution being emitted by those trucks and vehicles really shows us in Technicolor the need for increased investment in transportation to get some of the trucks off the road in the country, to have a better rail system in Canada so that there is more transport of cargo by rail as well as transportation of people by rail. These are things that have to happen. Again, the federal government missed the boat in the last budget by not putting in very much at all in terms of investment in transportation and urban infrastructure in Canada.

When I look at my own part of the world, rural Saskatchewan, I can see what has happened there over the last 20 years as well through greater deregulation of transportation. In particular, I see what has happened to the whole rural elevator system and the rural rail lines and branch lines across the Prairies.

In town after town, elevators are now abandoned because the rail lines have been pulled up. With the rail lines gone, trucking is now a common thing for transportation of grain from the farm to an inland terminal. Many of the prairie roads were built with thin membrane concrete and when the big trucks are put on the road they damage and destroy the roads. There are all kinds of potholes on them. It has been very costly for provincial governments to rebuild the roads with a thicker membrane that can withstand the trucks hauling the grain to market.

That is one of the consequences of Liberal Party and Conservative Party policy over the years in terms of abandoning rail lines. When rail lines across the Prairies are abandoned, there is more trucking. When there is more trucking, there is damage to the roads. When there is more trucking it is harmful to the environment. It is more costly for the farmer. As well, when the farmers truck their grain to a market that is further away, they tend to shop in the bigger centres and then the small towns disappear, as they are disappearing right across rural Canada.

These are some of the issues that are extremely important. We have to put a lot more money into investing in urban and rural transportation infrastructure so that we can get more of the trucks off the roads and get more transportation and people onto the rails.

We could look to Europe or of course Japan, but let us look at Europe. We see a lot more rail transportation there than we have in this country, in both people and goods. That is the kind of direction we should be moving in, particularly when it comes to VIA Rail in the high density corridor between Windsor and Quebec City. Again, these are issues that are extremely important.

I mentioned Air Canada and the airlines. We saw the privatization of Air Canada. We see the problems that Air Canada now has. We have seen the lack of proper servicing to smaller communities. I believe that once again there should be a government equity investment in Air Canada on behalf of the taxpayers of the country.

The other thing I wanted to mention is that the government very recently brought in the airport security tax. That was a $24 tax. The government reduced that tax in the budget of a few weeks ago, but again, that tax was put in to provide more security for airports. That did not occur. For example, a few times in the last year I was at a small airport in Prince Albert, Saskatchewan. They had one person with just a wand who was trying to provide security at the airport in Prince Albert. They collect the $24 fee and people fly in and out of the airport, and they still only have one person with a wand. With all the money they have collected, they could have a better security system.

These are the kinds of things that I believe are important and should be addressed in the bill that is before the House today. We are a large country. We are geographically the second largest country in the world, surpassed only by the Russian federation in geography and pure mileage. It should be our country that leads the world in terms of transportation technology. It should be our country that leads the world in terms of a national transportation policy.

In our country we do not even have a national highways policy. Most countries do have a national highways policy. In Canada, most of the money for building highways comes from the provinces, from provincial revenues. For a small province like Saskatchewan that becomes very expensive. With just one million people, Saskatchewan has more highways on a per capita basis than any other jurisdiction in North America. Without a national highways policy in Canada, it becomes very expensive for a small province with a small budget to maintain a very thorough highway system.

These are the issues that are extremely important. We need a national highways policy. We need a national rail policy. We need a national airline policy. They would help bind this country together.

Grain movement and grain handling issues are also very important. I know we have gone a long way down the road and it is very difficult, most times impossible, to turn back the clock, but there are some things that can be done. There is a group on the Prairies now that is interested in buying some of the short line rail lines. That is dominated by farm groups and supported by provincial governments.

There is another group that is interested in purchasing hopper cars. The federal government purchased 12,000 or 13,000 hopper cars, I believe, primarily in the 1970s, to transport grain in Canada. It did this in order to make sure we met our export commitments to our customers and to make sure that farmers had a way to transport their grain. The federal government now wants out of the hopper car business. There is a group called the Farmer Rail Car Coalition, supported by the provincial governments of the Prairies, which is interested in purchasing those hopper cars on behalf of the farmers to move grain across the country. That should be looked at as well.

These are some of the issues. As I said before, our member for Churchill will be back in the House shortly and will shepherd this bill for our party through the House of Commons and through the committee.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to have this opportunity to speak to Bill C-26. I have been listening to the Minister of Transport. I hope that we will all have sufficient intellectual honesty to acknowledge the strengths and weaknesses of Bill C-26. It pleases me that the minister has spoken to us of his policy document “Straight Ahead”, his national transportation policy. In my opinion, it represents a ministerial wish list. At his press conference on this policy, the reception he got from reporters was as someone with plenty of dreams but not much promise of delivering the goods.

In other words, “Straight Ahead” is a document that is a patchwork of Liberal Party ideologies on transportation, but has absolutely no connection to the announcements made by the Minister of Finance in the latest budget, on which we will vote in part this evening.

Once again, the contents of this document bear little resemblance to those of Bill C-26. It seems like a rather impressive bill, but when we go through it, I will point out the blank pages that pop up every two or three pages. There are 24 empty pages in all in the bill. That is the reality.

I would love to hear the minister deliver a learned discourse on the future of all kinds of transportation everywhere in Canada, but the problem is that today we are debating Bill C-26, and there is absolutely nothing in it to support the minister's words.

In this connection, I always am thunderstruck when spokespersons for the party in power, including the Minister of Transport, come and deliver some fine speech to us—and this minister is no newcomer, as he is third-ranking in this government. He has just given those listening to us in Quebec and in Canada a fine speech on the future of transportation in Canada.

The problem is that there is nothing in this bill. There was nothing about it in the budget brought down a few weeks ago, on which we will be voting in a few hours, either. The people of Quebec, the people of Canada, the members of this House, are not stupid.

I will provide some examples. It is all very well to describe the situation, but I will provide some examples.

The minister told us at the end of his speech that we need good ports, good airports, good highways and good border crossings. In the same vein, I would add a good railway system and a good public transportation system.

But once again, there is nothing in Bill C-26 to back what the minister is saying. And we will examine each of the categories. I am especially pleased as the transportation critic for the Bloc Quebecois to be touring Quebec in order to identify Quebeckers' transportation needs. This is quite unique. I have met with agencies involved in all categories of transportation throughout the regions of Quebec. The Bloc Quebecois is the first party to conduct such a tour in Quebec. We will be the first to set out in a book—that I am calling “the transportation blue book”, which I will submit by the end of this session—the needs of Quebeckers in this area.

I will try—because I visited six of the 16 or 17 regions in Quebec—to summarize both the minister's speech and the bill. We will see how people compare the needs of Quebeckers—the needs in Quebec being substantially the same as the needs elsewhere in Canada—and how the minister responds today with Bill C-26 to the needs of Quebeckers and Canadians.

I will begin with marine transportation, because it really takes the cake. First, as the minister candidly admitted, Bill C-26 is totally silent on marine transportation. However, the minister's red and white book called “Straight Ahead” does touch on it.

There is, among other things, a statement, a news release that followed the policy, and the text of the document, which indicates that a policy was put in place by the Liberal government in 1996. This policy is the Port Divestiture Program for regional, local and remote ports, and it affects over 530 ports and wharves that used to belong to the federal government. The policy was aimed at transferring ports and wharves to local authorities, with a budget of $125 million.

I am just presenting and summarizing the policy. It is very well spelled out in the news release. As of February 2003, when the minister introduced his policy, the government had saved $122 million annually because of this port divestiture policy. So, the government gave ports back to local authorities and has since made annual savings of $122 million.

This is a harsh reality for those who took over the facilities. If the federal government is saving $122 million, this means that somewhere there are communities across Canada who must face costs of $122 million.

Moreover, when the policy came into effect, 13% of the 537 ports and wharves were located in Quebec. In his document entitled “Straight Ahead”, the minister announces that the divestiture policy will be completed by March 31, 2003. So, when the policy was first implemented, 13% of the wharves and ports in Quebec were to be divested. Now, as we are speaking, 32% of the 116 or 117 ports and wharves that have yet to be divested are located in Quebec.

This means that, as regards this port divestiture policy, the government acted more diligently in the rest of Canada than it did in Quebec.

Why I am mentioning this? Because in Quebec, the provincial government had decided, in the context of this policy, to see if it might be profitable to restore some facilities. Ten wharves and ports were selected for that purpose, including those of Gaspé, Matane, Rimouski-Est and Gros-Cacouna. I am pointing this out because these ports are located in the Gaspé and in the Lower St. Lawrence.

This is all the more important since Quebec decided as early as 1999-2000, following a policy review, to inform the federal government of its intention to buy 10 of the facilities that the federal government was supposed to transfer to the province. It did not wish to do this for the mere pleasure of regaining control over some of these facilities. It submitted a shipping policy to the people of Quebec, but especially the residents of the Gaspé area, Matane, Rimouski and Gros-Cacouna, for their consideration.

The policy was aimed at developing the ports. The Government of Quebec had realized that the St. Lawrence River had great potential for economic development and decided to invest $20 million. Some would argue that this is not enough, that more money is needed, but it is still $20 million more than what the federal government was offering, which was nothing.

Under its port divestiture policy, the government would transfer the facilities to the local population and provide financial assistance for their upgrade. Then, the communities would have to decide what to do with the facilities and how to develop them. Some were not as eager as others to get their hands on these facilities.

But still, Quebec was the only government to hand money to the communities and to tell them “Look, we will invest $20 million to be able to incorporate these 10 seaports into an economic development project.”

Believe it or not, at this time, these 10 ports have yet to be transferred to Quebec.

Worse still, since 1996, the economic development of these regions has not been promoted. The federal government has simply decided to do nothing. Last year, the government even had the preposterous idea of extending by one year the program that should have ended March 31, 2002. There were zero consultations in the last year because the federal government figured that if the Government of Quebec took over control of these facilities, the Quebec flag would replace the Canadian flag.

It is unbelievable. That is the reality of the federal system. The government has taken hostage entire regions and facilities, which are the tools for economic development, because it realized, seven years later, that if it transfers them to Quebec, it will no longer be able to hoist its little flag.

For a year now, the federal government has not even had the nerve to write a letter to Quebec's transport minister to ask if there is some way the Canadian flag could still be flown if the ports are transferred. No, the government could not even bring itself to do that, for fear of being criticized, I suppose.

Meanwhile, economic development in the Gaspé, Matane, Rimouski, Cacouna and Rivière-du-Loup has been threatened. The federal government could not give two hoots about what is going on in the regions. All that counts is its visibility.

My second point: given that the program is coming to its end, it is running out of money. There is only $17 million left in the program. For just the ten ports that the Government of Quebec had targeted, we are talking about $60 million. That does not include the 26 others, because there are still 36 facilities that need to be transferred to Quebec.

As for the shortfall, local organizations estimate that approximately $80 million is needed to be able to transfer these ports to the Government of Quebec or local entities and bring them up to standard and into line with the policy that is used across the rest of Canada.

Again, Quebec is being penalized. Even though the minister has told us that he was very concerned with marine transportation and that he wanted good ports across the country—that is what he said earlier—Bill C-26, which was tabled today, contains nothing to that end.

I am not trying to scare those who are listening to us. The minister admitted that there was nothing in Bill C-26. Policies with regard to shipping will probably be tabled at a later date.

Now let me turn to the second major part of the minister's speech. I always refer to the minister's speech because, I will say it again, the minister took the policy entitled “Straight Ahead” that he tabled some time ago and decided today to turn it into a speech.

Incidentally, when he gave his press conference, journalists did not pay much attention to it simply because there was no funding announced. Politicians can say all they want, but they cannot fool journalists, who hear speeches in this House and press conferences every day. They are not taken in by the rhetoric they get from MPs and other politicians.

Of course, this policy entitled “Straight Ahead: A Vision for Transportation in Canada” made absolutely no impact. It went practically unnoticed simply because journalists, like members of this House—at least members of the Bloc Quebecois—saw it for what it was, that is a nice speech by the transport minister without any funding to back it up.

I will now deal with the issue of air transport. Yes, I must say that there are changes in this area, including increased competition. On that subject, the minister did not miss the opportunity to tell us that Air Canada's market share, which had gone up to 78% after the September 11 crisis, was now down to 60% or 65%, or at least that is what he says.

The bill before us today will enable national carriers such as Air Canada to grant other carriers access to their interline programs, their incentive fares and their loyalty marketing programs, should they request such access.

This means that, theoretically, the smallest companies could benefit from the Air Canada point programs. This would all be governed by the Competition Act and made available to companies that did not engage in unfair competition.

This is good to the extent that there are small air carriers operating in the regions. I have travelled to Mont-Joli and Gaspé, where there is no plane service. I would very much like to hear the Minister of Transport tell us today that he wants to encourage freer competition and allow small companies to benefit from all the Air Canada customer loyalty programs, but there has to be service available in the regions.

The problem is that the regions are losing their service. How long has this been going on? It is simple. The bill passed in this House that merged Air Canada and Canadian required regional service to be maintained until September 30, 2002. It is not that the opposition did not try to get that date deferred and regional service maintained, given the very special circumstances facing the airline industry after September 11, 2001. We were met with a refusal.

Air Canada was allowed to pull out of the regions. Free enterprise was allowed to work. Today the minister is telling us that Air Canada will have to solve its own problems. It has only 60% to 65% of the market, but Bill C-26 is going to increase the competition it faces. Yet there is no assistance for Air Canada.

We are told Air Canada needs to solve its own problems. It has labour problems, problems which, believe it or not, were created by the legislation that merged the two carriers, Air Canada and Canadian. The problems were created by this government. Today he comes to tell us with great candour, once again, that Air Canada will have to solve its own problems by negotiating with its unions. Once again, it is Air Canada's employees who will have to pay for getting the company back on its feet, for making it profitable.

The federal government's solution is not to provide Air Canada with assistance. It is to encourage competition, which will be harmful to Air Canada, so that Air Canada employees will have to accept salary cuts in order to keep the company alive.

With the Liberal federal government, nothing ever makes sense. With regard to free competition, especially in the air transport industry, the government has no policy to support regional development. Let us take as an example the Quebec government, which decided to create a ticket bank and do business with Air Canada. With its purchasing power, it was able to ensure that service was maintained in certain regions, but not everywhere. Why? Because the purchasing power of the Quebec government is limited.

I wish the Liberal government had done the same thing and offered to help airlines by saying: “Look, you are in trouble. With all our public servants who have to travel across Canada, we certainly can have ticket banks to help airlines in the regions”. The Government of Canada never thought of that, or at least there is nothing about it in Bill C-26.

Of course, on this subject, we have to put the question to the minister, whatever the member for Chicoutimi—Le Fjord, who is a former Parliamentary Secretary to the Minister of Transport, may think. He was pretty harsh in criticizing the Government of Quebec. Without that policy and the purchasing power of the Quebec government, many more regions would have lost air service.

That is the reality of this market. If we let the carriers do whatever they want, if we let Air Canada operate in isolation, the employees will surely pay the price. The president of Air Canada has only one responsibility: to provide his shareholders with a dividend at the end of each quarter. That is his responsibility. Otherwise, he would no longer be the president of Air Canada. This is where the problem lies. Private carriers cannot be left to their own devices. Otherwise, only the profitable routes will be serviced. Every region in Quebec and the rest of Canada will suffer the consequences.

That is the harsh reality. With Bill C-26, we are helping small carriers to remain in business and to be included in the customer loyalty programs of the big air carriers. There are not many big airlines. In Quebec, there is Air Canada. There is one airline. Of course, the smallest carriers could use their Air Canada points to their advantage and create more competition for Air Canada.

But is this a good time to give Air Canada even more competition and tell Air Canada employees, at the same time, that they must accept a pay cut to keep the company going? Once again, I think that this is a bad political decision.

In terms of rail transport, Bill C-26 does contain some measures, but they are far from what the minister promised in his speech.

The minister finally wants a good rail system. In fact, everyone was expecting rapid rail service along the Quebec City-Montreal-Windsor corridor because the minister himself made the announcement. But, there is nothing on this in Bill C-26.

It is creating VIA Rail. This legislation is now creating VIA Rail. This is what is in the bill. The minister is telling us that he was going to develop rail transport, passenger services, because demand is high. But it is not true, none of this is in the bill.

Shortly before the Minister of Finance brought down his budget, the Minister of Transport said that there would be rapid rail service between Montreal and Toronto. There was an uproar in Quebec City. People there said, “Once again, you made us a promise and you forgot about us”.

We know it takes substantial public investments, but there is nothing in Bill C-26 to give effect to the minister's promises. Since there is nothing in the finance minister's budget or in Bill C-26, we will have to forget about the rapid rail idea for another year.

The railway system will in fact be improved. The Canadian Transportation Agency has been granted more power, as requested, over noise pollution among other things. We must admit that the government has made a bit of progress. I give it that, since this allows the Transportation Agency to examine complaints about noise and require the railways to take measures to reduce the harmful effects of noise as much as possible.

Obviously this is not a legal requirement, but a policy. In the past, even if the Transportation Agency acted as a mediator, it had no authority to follow up and ensure that the company respected the policies that had been mutually agreed upon. At least now, when there is an agreement between the parties, the Canadian Transportation Agency will have the authority to ensure that commitments are met.

Deregulation of rail transportation has resulted in cut-throat competition and downsizing at the railroad yards. When railway cars are coupled together for repairs and so forth, they are unmanned. This means some major jolts. Everything is rushed and hurried and there is a lot of noise. It was no longer tolerable, and that is a fact. It is not because new people are involved. It was the same people who lived near the same railroad yards. This began in the early 1990s, in 1992 when the entire railway system was deregulated and turned upside down across Canada. Private industry came in and the companies were listed on the stock exchange.

The same problem still exists. Profitability comes at the expense of neighbours and noise pollution. There were so many complaints that the government was receptive to the problems faced by communities bordering on railroad yards.

But that does not solve the problem with the minister's promises. For months—and I could even say since the last election—the minister has been travelling across the country promising a rapid rail service in the Montreal-Toronto corridor. Because of pressure, he finally extended this service to Quebec City. Everyone who had hopes in this respect will have to be patient, however, because the whole plan has been put off for at least one year. That is clear, because the investments would have had to be announced in the budget and there was no such announcement in the finance minister's latest budget.

Let us turn to the issue of public transportation or transit. It is so wonderful to hear the minister boast about what the federal government will do in terms of mass transit, public transportation and the environment.

Public transportation needs are known. Transportation companies across the country have made very specific requests. They have outlined their needs. Believe it or not, excluding the minister's great speech, there is absolutely nothing in Bill C-26 to address these needs.

That is why I said at the very beginning of my remarks that intellectual honesty was required. The minister could have admitted that he missed the boat at the press conference on his “Straight Ahead” policy and was making up for it today with a speech on that policy. Instead, he prefaced his speech by saying it was a speech on Bill C-26. There is absolutely nothing in there.

While the minister just told us about his great concerns about public transportation and the need to invest, especially since the ratification of Kyoto, there is absolutely nothing to that effect in Bill C-26. There is nothing in there, less than nothing in fact.

Naturally, there were needs and requests were made. It is not that the needs were not identified. As I said, transportation companies all had sent requests to the federal government. It is likely that all members of this House, at least those representing ridings where these companies operate, were approached. The companies came to tell us, “Look, we know what our needs are and what we want. We want a long-term program. We want to be able to develop”.

The Bloc Quebecois knew where the money could come from. Since 1996, the federal government has been collecting 1.5 cents per litre for the elimination of the deficit. That goal was achieved in 1998 but, every time you fill up at the gas station, the government still collects 1.5 cents per litre.

The 1.5 cents were for the elimination of the deficit. What has the federal government been doing since 1998? It has taken that money, put it in the consolidated fund and invested it elsewhere. Some would say maliciously that the government has been very generous to its friends since 1998. Of course, this may have stopped because of some pretty serious investigations. In any case, in 2002, changes were made to the sponsorship program.

However, a lot of money has been collected since that time. The 1.5 cents per litre, which represent over $700 million, could very well have been used for public transportation. For the government, it would have been a good opportunity to do such a thing. And we certainly made the suggestion. We had found a way, and the proposal had even been very well received by stakeholders. I remember that, in the Quebec City area, people had even made calculations. For the new city of Quebec, the 1.5 cents per litre would have gone a long way toward meeting that city's public transit needs.

However, even after the finance minister's last budget that will be voted on tonight, the 1.5 cents per litre still belong to the federal government. Each time you fill up, once a week or once every two weeks, the federal government still collects the 1.5 cents per litre.

The transport minister is always making fine speeches in the House to remind us that the focus will now be on public transportation and that the government will start investing in public transportation because of the Kyoto protocol. But there is no mention of that in here and the government keeps collecting 1.5 cents a litre to wipe out its deficit, a deficit it wiped out 1998. That is how public affairs are being managed by the Liberal Party.

Again, Bill C-26 makes no mention of road transportation. The minister told us he wanted top quality roads. And when I say there is nothing in this bill, it includes the 24 blank pages I showed the House earlier. Road transportation is not mentioned anywhere in the bill. The minister said that it is included in the major infrastructure programs brought forward since the 2001 budget.

Yes, there is $6 billion out there, but it is not only for road transportation. The program is called the strategic infrastructure fund. That is how things stand. The minister can well talk about the $6 billion. The first $2 billion is for a 5 year period. The last $2 billion is spread out over a 10 year period.

Again, we are talking about $6 billion for the whole country. In Quebec, the money could be used for municipal infrastructure, for instance, like water systems and other such things. Projects have to cost over $75 million to be eligible. If we can get our act together and exert a lot of pressure, we estimate that about 50% of the strategic infrastructure fund could be spent on the Canadian road and highway system.

As for the $6 billion the minister referred to just now, half of that has been taken away. There is $3 billion left.

When we calculate that $1 billion is spread over 5 years, and the last $2 billion over 10, we are forced to conclude that there is not a single cent available before 2004-05, and only $50 million for 2004-05. There is nothing in 2003-04 for the last $2 billion. That does not make a lot of money, considering the $3 billion promised by the Liberal government in the province of Quebec. These were promises made by the federal Liberal Party during the last election campaign: for Quebec alone, more than $3 billion.

There will be some celebrating because the highway 30 project has been announced, and highway 175 also. Agreements have yet to be reached on highways 185, 35 and 50. I see the smile on the face of my colleague from Hull—Aylmer, who is very much aware that an agreement has yet to be reached on highway 50.

In some ways, there are still some very important projects left, and there are surely others in other parts of Canada. I have just mentioned the needs in the province of Quebec. We are well aware that the federal government is not going to give it all to Quebec.

I have just demonstrated this. In maritime transport and ports, we are behind the rest of Canada. This is the situation in a number of areas. However, in some ways, there is absolutely nothing for us in Bill C-26. As far as highways are concerned, there is nothing but the minister's speech, and that commits only him. The Minister of Transport is not the Minister of Finance. So when questions are asked of him—and I find this just lovely—he replies, “I will be pleased to come to the committee. You can ask us anything at all”.

I have been on that committee for as long as I have been in this House. I can indeed ask the minister anything I want, but the problem is he is not the one with the money. The Minister of Finance is. And for the strategic infrastructure program, it is the Minister of Industry. Obviously, he can afford to make all sorts of announcements and promises, but the problem is that he is not the one who manages the money. That is the reality of the Liberal government.

It decided to create a lot of programs spread over several departments so that every time a minister speaks to the people, they always have the impression that they have to believe him. The Minister of Transport said that he was going to use money from the Canada strategic infrastructure fund for a certain project. The problem is that he is not the one who is managing that fund; that responsibility belongs to the Minister of Industry.

That is the way it is and this is why I am raising this issue today with regard to Bill C-26. It is just another example. The speech delivered by the minister on his “Straight Ahead” policy has nothing to do with Bill C-26 that is before the House, which does not deal at all with road transportation.

The minister even talked about municipal infrastructure. Indeed, problems and agreements concerning municipal infrastructure are mentioned in his press release and in “Straight Ahead”.

What the Liberal government is offering in the budget that will be adopted tonight is $1 billion over 10 years. This means $100 million a year to help municipalities. The minister even suggested earlier that unions of municipalities did not have a good understanding of the budget. But they do have a very good understanding of the budget.

In Quebec, the Coalition sur les infrastructures municipales probably sent to every member from that province its document saying that the needs in terms of municipal infrastructure are $1.185 billion a year over a period of 10 years. It was $1 billion a year when it made its first submission to the federal government two years ago.

The amount has increased by $185 million because there has been no investment in this strategic program to support municipal infrastructure.

The federal government has announced $1 billion divided equally over a period of 10 years, that is $100 million a year for the whole country, while Quebec alone needs $1.185 billion a year.

On the issue of infrastructure, I want to point out to all my hon. colleagues in the House that the oldest cities in Canada are located in Quebec. Why? Because the development of Canada started in Quebec. It is only normal that the infrastructure in Quebec is older than anywhere else in Canada. It is normal that the needs are also greater in Quebec than elsewhere in Canada. This is something my colleagues in the House have to understand.

I am not ashamed to say so. I was president of the Union des municipalités du Québec for three years. It is a well known fact that part of the water system in some cities, like Quebec City and Montreal, are still made of wood.

Why? Because it is normal for the oldest cities in Canada. What is not normal is that 40% of the drinking water passing through these water systems is being lost. We need a major program to protect our drinking water, which contributes to our quality of life.

Of course, the money set out for this is still $100 million more than what we had before, which was nothing. The problem is that it will only meet 10% of the needs of Quebec municipalities. Communities throughout the rest of Canada are faced with the same problem.

Some would argue that municipalities simply misunderstood, which is not true. They understand quite well. They understand that the federal government decided not to give more money. So, the government should have the intellectual honesty to tell the cities they it did everything it could by giving them $100 million and it knows that it is not enough.

Some day, hopefully, the government will understand that the quality of life of its citizens is linked to the quality of the drinking water and it will invest the money needed to ensure that our municipal underground infrastructure is up to the international reputation Canada wants to be able to maintain.

Again, even though the minister referred to infrastructure in his speech earlier, Bill C-26 contains nothing. Even though the minister shared with us his thoughts, and fleshed them out a great deal, as far as I am concerned, the problem is that Bill C-26 does not solve anything because it contains absolutely nothing about infrastructure.

As for transparency and airport authorities, the minister said that he would be introducing a bill in the near future dealing with airports. He said at the beginning of his comments today that Bill C-26 does not cover airport authorities. These are supragovernmental administrations whose representatives are appointed and recommended by the federal government. We would have liked to have seen more democratically elected and appointed representatives for these airport authorities. Quebeckers who are listening will be familiar with the ADM or Aéroports de Montréal, one of these authorities in Quebec.

In committee, I even told the minister, who was singing the praises of the airport authorities, that I would have liked him to do a survey of what Quebeckers thought of ADM's performance. I already know what the results would be; I would not need to wait to see them. I know what Quebeckers think of ADM.

ADM completely dropped the ball on one of the finest airport facilities in Canada, and the largest federal property in Quebec, the Aéroport de Mirabel. They prefer doing business with the Toronto airport rather than Mirabel. That is the truth about ADM, which decided to develop Dorval at all costs, to the detriment of Montreal's north shore and Mirabel.

We are being promised new legislation that will bring more transparency to airport authorities. I look forward to it. Quebeckers are waiting for transparency legislation that will, I hope, force ADM to answer questions from reporters for a change.

Believe it or not, ADM manages money and property that belong to the federal government through a lease. These include a hotel at Mirabel, an airport and a terminal, and ADM does not answer questions from reporters. If they do not answer reporters, I do not think they will answer questions from a member of Parliament. I am not even sure they answer questions from the minister. That is the fact of the matter.

This is how things are being managed. This was a choice made by the Liberal government. It clearly said in the policy, in 1994, that management was being handed over to an independent organization. This suited the government's purposes because it did not need to take a political stand with regard, among other issues, to Dorval and Mirabel.

This allowed the government to reach its objective of closing Mirabel and transferring the flights. Now, that did not happen, although there are fewer flights. It says here that ADM had a $27.2 million surplus. However, traffic decreased by 7.7%. That is the truth. Where did the traffic from Dorval go? Not to Mirabel, no, they closed Mirabel. It went to Toronto and Montreal. The government just invested $300 million in Ottawa. Probably because it benefits Ontario.

This is how the federal government is letting its equipment and property be managed, by not getting politically involved, but still succeeding in taking from Quebec to give to Ontario.

[Jim Gouk, Canadian Alliance, Kootenay—Boundary—Okanagan, BC]

Mr. Speaker, I am pleased to rise and speak to Bill C-26. I have been waiting for it for awhile. We knew it was coming. It is always hard when the government controls the exact timing and we do not know it until it occurs so we have to spend quite a bit of preparation time putting other things aside.

Bill C-26 is in essence two bills. One deals with a variety of amendments to the Canada Transportation Act and the Railway Safety Act, and the other deals with the creation of a new act, the VIA Rail Canada act.

I will briefly touch on issues contained in the first section of the amendments. This area will be dealt with in more detail by my colleague from Port Moody—Coquitlam—Port Coquitlam, who is the Canadian Alliance chief opposition critic for transport. He graciously yielded the lead speaking position to me as the Alliance spokesman for VIA Rail, so that I might speak at length about the second part, the VIA Rail Canada act.

The portion of the bill that deals with amendments, and presumably improvements to the Canada Transportation Act, needs to look at many issues.

The minister said that this is part one, there will be a part two and a part three, and maybe some other parts thrown in there as well. I would suggest to him that there are things that must be looked at that this bill certainly does not address.

Today the federal government spends approximately $300 million annually on the national highways system. It takes approximately $5 billion from fuel taxes, $1 billion from British Columbia alone.

There is the new airlines security tax. There are a lot of alternatives to it. There are alternatives that I have touched on with the minister in committee and I hope he will continue to look at them. Small airports in my immediate region of Cranbrook, Castlegar and Penticton, at this point in time, still do not have basic x-ray and yet the people who get on board the aircraft there fly around all the security the minister claims to be spending millions upon millions of dollars on at the major airports. This flies them around that.

The minister might wish to suggest to the contrary but never has he suggested, I would hope, that he would put in CAT scans and incredible lengths of security at tiny airports. A chain is only as good as its weakest link so the minister should consider some significant alternatives to the security system. If he does not recall what I suggested before, I would be more than happy to give him a new outline.

The government must take a lot of the responsibility for the problems in our airline industry now, particularly with the national carrier, Air Canada. Air Canada, as it sits now, is the result of Air Canada taking over Canadian Airlines. There was an alternative. The alternative was for an outside company, the Onex Corporation, to take over both and put them together. That would have been highly preferable.

Let me tell the minister why it would have been preferable and the fundamental difference between what happened and what would have happened. The Onex Corporation brought in new market capital. Air Canada financed out of its existing debt structure, one that it is now reeling under. What prevented the Onex deal? It was federal government legislation that prevented Onex from owning more than 10% of the shares, a thing that the government with a mere wave of a hand could have extinguished but chose not to do it.

There are major airport fees. Up until the time the government went through the creation of national airports and the authorities to look after them, it lost hundreds of millions of dollars a year running airports. Now it is charging so many fees that it is a profit making venture for it. That is another form of taxation. It is just another way for the Liberals to sneak money from the taxpayer. We can be assured that if an airport operation has to pay excessive taxes to the government, so the government can reap a big profit, that cost has to be passed on to the public.

I have heard the minister mention that he is concerned about the financial viability of community airports. There are a couple of things he could do. He could increase the capital assistance allowance for those airports to ensure that they remain viable in terms of dealing with necessary capital projects, but there is another thing he could do.

At the time all the community airports were turned over to these communities, they were told that they have to provide a plan in terms of their fire response times.They were allowed, where the times were sufficient, to take the airport firefighting off the airport and handle it from their own firefighting resources. Then after that was all signed and turned over and the commitment was made by these communities, the government came up with CARS308, which now threatens to force these same municipalities to put dedicated firefighters on the airport itself, a cost that very few of these airports can sustain.

The minister can take care of that by simply saying one of two things: that he will do away with that, or; if he requires authorities to put in something that he told them they did not have to do at the time they took these airports over, that he will pay for it. If the minister is really worried about the financial viability for small airports, those are the two choices.

The minister mentioned the ports. Recently the minister announced how proud he was and what a great thing it was for the mighty Liberal government to put $172 million into port security over five years. I always get a chuckle when the government does things like this because this is the government that took away the ports police in the first place. It has taken away the entire mechanism that created port security and then says “Please give us a big round applause for putting just a tiny bit of it back in”.

Regarding freight rail, the government needs to do something to ensure that we have all aspects of good free movement of grain for prairie farmers so that we can ensure that grain does get moved to the ports, that farmers are not being penalized with the inability to sell their grain with back charges on demurrage and so on. Also we need to have a real plan to ensure that we move heavy freight onto rails and off of our highways.

These are but a few of the transportation concerns of the public and this bill does not meaningfully address these in any way.

What is the real reason for the VIA Rail Canada act? According to the Minister of Transport in his appearance before the Standing Committee on Transport on May 22, 2002, the minister said,

--I think that by establishing VIA under a statutory base, it will make it very much more difficult for governments in subsequent times to be somewhat arbitrary and capricious with the passenger rail system.

In essence what the minister is saying is that he is a rail buff and that he will not be around in this position forever. He wants to use his position as the minister to entrench VIA as a government operation to make it easier to shovel the taxpayer money to VIA and make it harder for any future minister or party to consider alternatives such as private sector operation of VIA Rail.

In truth Bill C-26 is really about taking steps to prevent VIA from ever being taken out of the minister's hands. Normally, when a government takes on a public operation, it starts out as a government department. The next step to make the operation more stand alone, is to make it a crown corporation. Then, if the government wants to make it truly independent of government, it sets it up under the Canada Business Corporations Act. This would make it virtually identical to any private sector corporation but with the government owning all the shares. That is the stage that VIA Rail is actually at now. What the minister wants to do is go to the trouble and expense of moving backwards. Is there a precedent for this? Not that I know of.

Also, one of the things the government is doing with this is under the concept of running rights and VIA Rail's access to go to the big freight companies and tell them when it wants to run, how often it wants to run and how much it wants to pay. If the big freight companies do not like that, what can they do? If the freight companies do not give VIA what it wants, as a government operation, it can go to the Canada Transportation Agency, another government operation, and tell it to decide what is fair. No conflict there at all.

What are the choices for VIA? One is the status quo but that is a poor alternative at best. It would mean the ongoing subsidy of half a million dollars a day to VIA Rail. It would mean that VIA continues to compete against the unsubsidized private sector transportation companies. Since the Liberal Party took office in 1993, it has given VIA $2,966,905,000. Basically to round it off, and it does not take very much added to it to that, $3 billion. We talk about the boondoggle of the firearms registry now approaching $1 billion. This is $3 billion of taxpayer money to help subsidize VIA Rail. I wonder how many of those taxpayers actually have ridden on VIA Rail.

Let me put that into perspective for individual ridings, the minister's riding, my riding and your riding, Mr. Speaker. In each riding in this country, on average, the taxpayers have sent to Ottawa $10 million of their money to the minister to hand over to VIA Rail. It costs VIA Rail almost $400 million to make a gross revenue of $250 million. It is amazing. The ongoing subsidy is about a half a million dollars a day, and we should keep that figure in mind. Ten million dollars to each riding and $3 billion nationally.

Canada's health care system is greatly underfunded and is in trouble. There is a lack of funding for post-secondary education. Our national highway system is deteriorating. Farmers are suffering and in need of a continuation of farm aid. There are many local funding problems in all our ridings. Just think what each riding could have done with that $10 million dollars of taxpayer money which the minister has given to VIA Rail since his party took office and what we could have done nationally with the $3 billion VIA Rail has spent.

The alternative is to sell off all VIA Rail, in essence a continuation of what was so successfully done when VIA Rail sold off its western rail excursion business. It would mean then that rail travel would be given the opportunity to reach its full potential, the way the Rocky Mountaineer Railtours company has done. It would mean an end to the immense and ongoing subsidization of those who travel by rail. It would mean that the innovation of private enterprise could be brought into to play to find new ways to enhance the viability of rail travel.

One question that must be asked on the concept of selling off VIA Rail is: Is there anyone out there who would take it?

When the current Minister of Transport took over his portfolio, he publicly stated he was interested in either privatizing or commercializing VIA Rail. Frankly, given the minister's background, I was a little surprised to hear him take this enlightened attitude. Of course it was too good to be true. Not too long after, the minister stated that such options were off the table because VIA Rail could never make money and, therefore, the private sector had no interest in it.

This flies in the face of later testimony the minister gave before the Standing Committee on Transport. On May 22, 2002, the minister, in response to my questioning, stated:

--there's no question that the private sector had interest. We sent out solicitations of interest and 40 companies were interested...it would have been possible to do something.

As to why he changed his mind, he stated:

--when I became minister, it was in an environment after program review where I never thought in my wildest dreams that I could get $400 million out of finance for VIA Rail.

Now we know what the latest plans of VIA Rail really are. They are the minister's wildest dreams.

Since that meeting, I have been trying to obtain a list of those 40 names so I could contact them and see what kind of ideas they had for operating VIA Rail.

First, I tried access to information. I was not hopeful because I had used this to try to obtain a variety of different information about VIA Rail and had always been refused by the government. Sure enough, this attempt proved futile as well.

Then, when I brought it up at a transport committee meeting, on November 7, 2002, asking that the clerk obtain a list from the minister's office and the committee contact these individuals and ask about their ideas for operating VIA Rail, the committee agreed. However over four months later, there was nothing from the minister's office.

In a past presentation to the Standing Committee on Transport, former VIA Rail CEO Terry Ivany also made clear VIA's intentions and new targets for competition. For western Canada, he stated:

In the west, we will continue to provide basic transportation service. But we will also establish new services. Western Canada represents the greatest tourism potential in Canada.

There is an enormous potential for passenger rail to take full advantage, and to contribute to the development of tourism. We will invest and expand services to focus on the fastest growing tourism market today.

In response to a letter from me, where I addressed a concern that VIA was trying to re-establish itself on the Calgary-Vancouver route, in competition with the very company they sold that route to, the minister implied that VIA was needed on the southern route. Specifically, his letter states:

As you may be aware, I asked VIA Rail to assess the feasibility of restoring certain discontinued passenger rail services in order to expand VIA's service across Canada. As part of its proposed initiatives for western Canada, VIA has submitted a proposal for the reinstatement of year-round service between Calgary and Vancouver.

What would be the purpose for VIA to expand its service in the west? There are only two possibilities: the minister's contention that it is necessary to provide passenger service to the travelling public or, the alternative, to go into competition with the existing tourism operator, Rocky Mountaineer Railtours.

The argument that VIA is needed to provide passenger service to the travelling public is absolutely absurd. Currently a round trip from Edmonton to Vancouver by aircraft costs $287.22, which includes $41.22 in federal government taxes and surcharges of $55. It takes about an hour and a half each way. The minister is telling me that the airlines should be more visible in what they do. That is the full price. The VIA Rail fare is $393.76, and these are the lowest fares, which is net after a subsidy of nearly half a million dollars a day that VIA receives, and it takes in a full day in each direction. The Canadian taxpayers shell out half a million dollars a day so that VIA can operate a service that takes 16 times as long and costs 37% more. Yet the minister would have us believe that we need more of this kind of service. We do not.

Also, the minister talked briefly at the end of his speech today about the environment. Unlike the environmental benefit of moving heavy freight by rail, passenger rail service is the least environmentally friendly form of transportation. It uses considerably more fuel per passenger on the Edmonton to Vancouver trip than an aircraft. What is the justification of expanding this slow, expensive and environmentally unfriendly operation as a passenger service? There is not one.

That leaves VIA looking at going into competition with the existing tourism operator, the Rocky Mountaineer Railtours. The Rocky Mountaineer was a rail excursion service initiated by VIA in the 1980s. Like most of what VIA does, it lost money. When the Conservative government ordered VIA to dispose of this service and concentrate on their core responsibility, it carried less than 5,000 passengers annually.

The private sector investors who purchased the business from VIA paid millions of dollars to buy the business rights and rolling stock from VIA, to buy new cars and refurbish them, to hire and train their staff to the high standard, which I think the public expects on that kind of service, and to develop an international advertising strategy that would bring large amounts of foreign tourism into Canada every year. Business has grown tremendously. This is a private sector success story.

In essence, the government went to the private sector and said, “We want you to take over this operation, invest large amounts of private capital, end the drain of taxpayer funding, create jobs, boost the economy and pay taxes”.

The Rocky Mountaineer did all those things and now the minister, who as a self-confessed rail buff, should be heaping rewards on this company. Instead he is looking at letting the taxpayer funded government railway go back into competition with the business it could not run and sold. I guess he feels now that Peter Armstrong and the hard working people at the Rocky Mountaineer have built the industry up, his personal government rail line should be in a position to reap the benefits and the profits from all the work that those people have done. Anyone with a conscience or sense of what is right will see that this is a travesty, no matter what his or her political party.

We frequently talk about the need to involve the private sector in more investments in this country. We look to it to boost the economy and participate in public-private partnerships. Rocky Mountaineer Railtours has done what was asked of it in spades, and its reward is to have the government talk about going into competition with it using the taxpayer money to give the government the advantage. The whole private sector should watch this bill very closely. If VIA is allowed to further compete with the private sector, it is a warning to the private sector never to trust or co-operate with government again.

The minister says that there have been all kinds of consultations in the drafting of this bill. I would like to know who he talked to in western Canada on this issue. It certainly was not the chambers throughout the rail route in British Columbia, from Vancouver all the way to Calgary. It was not the boards of trade. It was not the councils along the route. It was not the provincial government in both B.C. and Alberta, all which oppose VIA Rail going back into competition with the Rocky Mountaineer.

Again referring to the testimony of former VIA CEO Terry Ivany, for eastern Canada, he stated:

In the (Quebec-Windsor) corridor, we will provide vastly expanded services--new express trains, more frequencies, shorter trip times, convenient schedules--all designed to fully capitalize on the business travel, cross border travel and tourism markets.

Given VIA's projected debt free startup status and its likely ongoing subsidization from the federal government, VIA would be able to further erode the customer base of the private transportation sector.

In a recent Maclean's interview, the Minister of Transport stated:

...congestion on the roads and security delays at airports make train travel more attractive.

This is the minister who takes $5 billion in fuel excise taxes and gives back only $300 million. Congestion on the roads indeed. No wonder. He could probably congest them a little more if he only gave us $200 million of that $5 billion.

With regard to security delays at airports, who put those in place? Who is collecting the airport security fee with no accountability for it and creating chaos at the airports? He is the very person who put that into place. He could have done something much more streamlined than what we have. We do not see it happening. The minister then says that we have to turn to rail, which I happen to be a buff of, because there is congestion on the roads and delays at the airports. What an interesting statement to make when he is the very person responsible for that congestion and those delays.

As I said, Ottawa collects about $5 billion a year in fuel taxes and spends only 6% on highway programs. At airports, the government has had over a year and a half to organize efficient security measures. All the flying public has received is yet another tax.

In 1995, VIA Rail employees went on strike. When the strike ended, VIA decided that it needed to take business away from the bus lines so it cut its already hugely subsidized fares by another 40%. VIA offered a round trip fare on VIA 1, its first class service, between Toronto and Kingston for under $100. That fare included before dinner drinks, a deluxe menu to choose dinner from, wine with dinner and drinks after dinner in both directions. It is questionable if the fare even covered the cost of the food and drinks for many people. How is an unsubsidized, taxpaying company supposed to compete with that?

The Ontario Motor Coach Association points out that Toronto desperately needs a new $20 million bus terminal but the industry cannot make that kind of investment if it thinks the government is about to expand a highly subsidized passenger rail system through that same market.

Many companies feeling the current financial squeeze have cut back on their discretionary spending but not VIA. Given that VIA is subsidized by almost $500,000 a day, how can it justify funding a private film production in the amount of $1 million? You remember that one, Mr. Speaker. It was the one where the government had to come up with an extra $1 million for VIA Rail and paid Lafleur Communications Marketing a commission of $120,000 to deliver the cheque to VIA. Of course Lafleur Communications Marketing also delivered a pretty hefty cheque back to the Liberal Party as a contribution.

The concept of privatizing VIA Rail does leave a question of service provision to communities where VIA Rail operations provide the only reasonable transportation service. Although these situations are limited, they are a concern that must be addressed. Continuation of service in these areas can be ensured through a variety of measures, and the Canadian Alliance is fully prepared to work to find the most viable solution to ensure continued service in the most cost effective manner. Continuing the government operation of VIA nationally is not the most cost effective manner. It is the least cost effective, along with all the other problems that I have already outlined.

As I mentioned earlier, I have been working through the Standing Committee on Transport to try and obtain a list of names the minister advised were interested in operating VIA. The committee had indicated a will to investigate the feasibility of having the private sector take over the operation of VIA. This was underway before the minister tabled Bill C-26 in the House. If the minister is really interested in the financial and transportation interests of the Canadian taxpayer, he will agree to allow the transport committee to complete a feasibility study of having the private sector take over the operation of VIA. I believe that a good case has already been made for this.

At the beginning of the minister's earlier on he talked in glowing terms about what an incredible job his government had done on privatization. Airports, ports, CN Rail, the air navigation system, all of which he said were good moves, good for the country and good for the taxpayer, and that these things were thriving. Why then does he not take one more step and look at it with VIA Rail as well?

The minister is a self-professed rail buff. If this is his only reason for keeping VIA under his control and he will agree to relinquish that control, I will personally offer to purchase for him the best model rail set imaginable. I realize that it is not the same as playing with a full size train but the taxpayers of this country will be forever grateful to him.

[David Collenette, Liberal, Minister of Transport]

moved that Bill C-26, an act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

Mr. Speaker, it is a great pleasure to be here today to speak on Bill C-26, amendments to the Canada Transportation Act and the establishment of the VIA Rail Canada act.

I rise in this House today to discuss a document entitled “Straight Ahead: A Vision for Transportation in Canada”, which I tabled in the House on February 25.

Throughout our history, governments have embraced a succession of bold transportation visions - national railways spanning the continent, an international seaway, the Trans-Canada Highway, and transcontinental air services.

Our national transportation system, linking every corner of this country, opened our doors to the rest of the world and to the commercial markets beyond our borders. As our nation has evolved, we have built a world-class transportation system.

Transportation practices in Canada have evolved over time, as required by the times and circumstances. Where required, we have brought in reforms and taken aggressive and innovative steps to improve the system and increase its efficiency.

Changes in the way airports and ports are managed, the commercialization of the air navigation system, the privatization of other infrastructure have all contributed to making the transportation system stronger and more dynamic. The results speak for themselves. The productivity growth in transportation over the past 10 years has been truly phenomenal. In fact, it has doubled in that period of time.

Canadian ports are forecasting $700 million of capital investment over the next five years. More than $5 billion of private money has been invested in airport capital projects since 1997. Also, price and cost trends in the transportation sector have consistently been lower than the rate of inflation, and we have also succeed in eliminating most transportation subsidies.

What this has meant for Canadians is better quality and greater choice in transportation services. Safety and security, accessibility, economic efficiency and environmentally sound performance have all become cornerstones of our transportation system, but we cannot become complacent with these very impressive results. We have to ensure that our policies continue to adapt in the face of new trends and new challenges.

In our policy document, “Straight Ahead”, we talk of the culmination of an initiative that began in 2001 to review the transportation policy for the next 10 years and beyond. “Straight Ahead” proposes a vision to guide the continued development of a sustainable transportation system for the country. It also conveys the government's response to the 2001 report of the Canada Transportation Act review panel.

The amendments to the CTA that are introduced in this bill are an important step in moving the vision forward. “Straight Ahead” reflects a careful consultation with the industry, users, provincial and territorial governments and of course, parliamentarians through the various committee appearances that I have had with members of the House and Senate Standing Committees on Transport.

It also reflects the results from earlier consultation efforts on the transportation table on climate change, Transport Canada's second sustainable development strategy and the millennium transportation conference, which I hosted in Toronto in the year 2000.

During these consultations, participants agreed that Canada's transportation policy is basically sound and headed in the right direction.

While it may not be necessary to overhaul the policy extensively, new challenges arise and our policy must adapt. Among these challenges are growing concerns about the impact of congestion on our quality of life.

The need for infrastructure in good condition to continue to support trade and the realization that our world-class transportation system is facing new challenges in a world where safety and security considerations force us to be more vigilant and to use new technologies.

The main sources consulted, which account for the proposed changes to the Canada Transportation Act, were general public information and research programs of the Canada Transportation Act Review Panel.

The panel received more than 200 submissions and held townhall meetings in every province and territory. Meanwhile, the research program called on experts to examine policy issues and options. The result was a series of well thought-out opinions on the state of the transportation policy, future challenges and options for efficient intervention.

All this activity shaped the deliberations and recommendations of the panel. In addition to this, I convened a number of round tables across the country where I met with key members of the transportation industry, both the big companies and organizations, and representatives of the smaller transportation companies. I met with shippers, professors and academics who were concerned about transportation policy. My officials have been engaged in dialogue as well, not only with stakeholders but also with the provinces and territories.

Policy directions were also discussed at the annual meetings of the Canadian transportation ministers in September 2001 and September 2002. By and large, I am very happy to note that provinces and territories have been supportive of the many changes proposed in “Straight Ahead”. Certainly they will reflect some of these changes within their own jurisdiction in their legislative and policy changes.

“Straight Ahead” lays out the basic principles that will guide transportation policy development and for future planning and activities affecting the sector. They include the highest practical safety and security of life and property, guided by performance based standards and regulations when necessary; the efficient movement of people and goods to support economic prosperity and a sustainable quality of life based on competitive markets and the targeted use of regulatory and spending interventions; a clear focus on environmental issues with specific measures, such as promoting vehicles and fuels that produce few emissions, increased use of alternative modes of transportation for passenger travel and more efficient transportation of goods to support the government's climate change plan; user pricing that better reflects the full costs of transportation activity and transportation infrastructure decisions that meet user needs based on governance models that provide for stakeholder involvement and transparency; reasonable access to the national transportation system by Canada's remote regions; accessibility in the national transportation network without undue obstacles for persons with disabilities; and finally, partnerships and integration among the jurisdictions and with the private sector.

These principles will guide our action in five broad areas: safety and security; marketplace frameworks; infrastructure; the environment; and innovation and skills.

Let me now turn to some of the specifics.

Having a safe and secure transportation system has long been a central objective of our transportation policy and the number one priority for Transport Canada. By virtue of the co-operation of transportation stakeholders, Canada has one of the safest and most secure transportation systems in the world. That is particularly germane at this point in time given the difficulties that we have faced since September 11, 2001, and the ongoing unsettling atmosphere that we have because of pending hostilities in the Middle East.

However I can assure Canadians that not only have we taken exceptional safety and security measures in the system in the last 18 months, but we have adopted new measures that will be and are being put in place as the current situation evolves.

I would like to turn to some of the specifics on the issue of marketplace frameworks. With regard to rail freight, we will make remedies more easily accessible for shippers by removing the requirement that the Canada Transportation Agency must be convinced that shippers would suffer “substantial commercial harm” before relief can be granted. We will expand the availability of final offer arbitration and we will improve the conditions under which a shipper can ask for traffic to be transferred to another railway. At the same time we will maintain all other existing remedies.

I should say that we did not accept the view of some to enhance the current running rights provisions within the Canada Transportation Act because we felt that it would place an undue burden on the system, that it would be unworkable and, certainly, that it would have the obverse reaction to the one that would be desired.

A series of legislative amendments will be proposed in the legislation that will strengthen publicly funded passenger and commuter rail services, including giving publicly funded passenger rail operators, such as VIA, Go Transit, West Coast Express and others across the country, recourse to the Canadian Transportation Agency when commercial negotiations are unsuccessful with respect to the terms and conditions of operation on federal rail lines.

You may remember, Mr. Speaker, the controversy over the last couple of years with West Coast Express, which was subsequently resolved, between the operator and Canadian Pacific Rail, but at that time no remedy was available for West Coast Express. This now says that publicly funded passenger rail systems will be able to seek adjudication from the Canada Transportation Agency.

Another measure is to make contracts of publicly funded passenger rail services public to improve transparency and to maintain the integrity of rail corridors for possible public transit needs by improving the rail line discontinuance process in urban areas.

We think these legislative amendments support rail as a viable choice for passengers, thereby contributing to both the government's climate change and the cities' agenda.

In support of passenger services, VIA Rail's existing mandate and powers will also be confirmed in new legislation. Unlike the majority of other crown corporations, VIA Rail did not have its own legislation. I feel particularly badly about that because in 1977 I was vice-chairman of the House of Commons standing committee on transportation and communications, as it then was, and was one of the proponents for the government to take the CP and CN passenger operations, the losses for which were 80% funded by the federal government, and put it in a dedicated company. The minister of transport at the time and the government did that. Unfortunately they did not go the extra step. They did not give VIA its statutory base. I believe VIA has suffered as a result over the last number of years.

Therefore we want to make sure that the statutory base will ensure that if there are any substantial changes to VIA's service in the future they will be the subject of public debate in the House. I think all members should applaud that. In fact, this was one of the recommendations that came from the Standing Committee on Transport a few years ago in its landmark report “The Renaissance of Passenger Rail in Canada”.

We think the new VIA Rail act accomplishes all of the goals that the committee members set out and, combined with other initiatives, will demonstrate the government's continued support for inner city passenger rail services across the country.

I should state that we are also working on some other initiatives, which have been commented on frequently in the news, with respect to making VIA services in the Quebec City-Windsor corridor faster. I would hope to be able to say something more substantial on that at a later time. However the fact is that we are committed to enhancing passenger rail and providing that option for Canadians.

We are also introducing two initiatives that are multi-modal in nature. We are proposing to adapt and expand to all modes the mergers and acquisitions process that currently applies for the air industry.

The House will remember that in 2000, after the merger of Canadian Airlines and Air Canada in the then Bill C-26, we brought forward a merger and acquisition strategy that covered the merger of Canadian Airlines and Air Canada.

We propose to adopt that particularly ethos and apply it to other transportation industries. Frankly, this really came about because we realized a few years ago, when Canadian National entered into a partnership merger, as it was called, with Burlington Northern Santa Fe Railway, that there was no statutory base upon which to review that merger outside of the Competition Act.

While the Competition Act is important for obvious reasons, there are other public interest issues that need to be addressed when we have mergers of such magnitude, including the impact on communities and the impact on workers. We found the odd situation of Canadian shippers having to go to Washington to make submissions to the surface transportation board, which was then reviewing the proposed merger under U.S. law. What kind of a ridiculous situation was that when the sovereign country of Canada was not able to have its own process and its shippers had to go to a foreign country to make their case?

Once we pass this bill that will not happen if we see in the future, as I think we will, further mergers in the rail industry within North America. The Canadian national interests will be addressed by virtue of the statutory changes that we have brought forward.

One of the most interesting files I have had over the last number of years is the evolving one with respect to air policy. I remind members of the House that in an earlier version of Bill C-26 in the year 2000 there was support from all parties in the House for the concept of a made in Canada solution to develop competition to Air Canada.

That policy, supported by all members on both sides of the House, was working on September 11, 2001. We had Canada 3000 at the time with its largest booking day in its history the day before. Of course we know that with the tragic events, the entire society was impacted, but nowhere was it more impacted than in the transportation sector and particularly the aviation sector. As a result, Canada 3000 went bankrupt. Air Canada's market share went from 82% at the time of the merger to around 65% on September 11, 2001 and then bounced back up to 78%. Since that period in time, Air Canada's domestic market share has declined. Some will say it is in the low 60% range and at some point it will bottom out.

Of course there are issues facing Air Canada which have to be settled by the unions, the workers and management. There are issues the government can be helpful with and we are prepared to play our part. We emphasize that at the moment there is a process going on with respect to the airline getting its costs under control.

Certainly with the restructuring that is going on, I would hope that we will be in a better position to have a more viable national carrier, Air Canada. Of course it is one of the world's great carriers and has been faced with the same problems as other great carriers in the world. I think Air Canada has done a much better job in handling the challenges than many of the other carriers, including the ones in the United States.

We are proposing some amendments to the CTA that would facilitate market entry for carriers. Through these measures a dominant carrier would be required to interline and agree to joint through fares with other carriers on domestic services and permit ongoing access to its frequent flyer program on reasonable commercial terms. This is not just targeted at Air Canada; it is targeted at any dominant carrier that reaches that position. Certainly with the fluidity we have seen in the industry, we will see other entrants come forward and have the critical mass that will provide viable competition to Air Canada.

We are proposing amendments that would ensure that the advertising of air fares is transparent and accurate. That is something that has really frustrated a lot of travellers. People in the House are much more knowledgeable about the air industry than are ordinary Canadians and therefore we are perhaps more circumspect when we look at the advertising. Ordinary people just open the newspapers or look at television and the price they see is the price they think they have to pay, but of course it is not. That is why we are proposing amendments to deal with that in this legislation.

Current ownership rules are not going to change. The raising of the limit from 25% foreign ownership is not an answer. It is not really required. In fact I am told that Air Canada's largest foreign stakeholder owns less than 10%, so where is the thrust?

I know there are some who will say, “Who cares whether we have an airline with a flag on it and it is called Air Canada?” They are entitled to their view, but I beg to differ. I believe Air Canada is one of the great symbols of this country. It is our flag carrier around the world. It brings us pride. It takes Canadians around the world.

The government is committed to keeping the Canadian air industry owned and operated by Canadians, so current ownership rules will not change. Perhaps something will occur in the future to change our minds, but we do not think it is a solution that is required right now.

On the international front, we will continue to work with other countries to gradually liberalize Canada's bilateral air agreements using as a model the successful open skies agreement that we had in 1995 with the United States. A lot of people say that we are not prepared to broaden the agreement with the U.S. Of course we are. I have told this to my counterpart, Mr. Mineta in Washington. I have told Ambassador Cellucci that we are prepared to sit down with the U.S. any time to talk about the broadening of the current open skies treaty. People often confuse that with the issue of cabotage, the ability of a foreign carrier to take passengers from point to point within a foreign country; Air Canada could take passengers from New York to Los Angeles, or American Airlines could take passengers from Toronto to Vancouver.

This is an issue that has cropped up in the last few years. Everybody thinks it will be the panacea for competition and that it will better the Canadian flying environment. The fact is the large foreign carriers, especially the Americans, once they get reorganized, will only be interested in the major core routes. They will not be interested in serving smaller communities, unlike a company like CanJet that goes into Deer Lake, or Jetsgo that is now going into Charlottetown and Timmins. They would not be interested in those smaller communities, so where is the advantage?

We already have significant competition in the major markets. The biggest and most profitable one is Toronto-Vancouver and then Toronto-Calgary, so why do we have to do it? In any event, it is a moot point. I raised it with Rodney Slater, the Democrat secretary of transportation in the Clinton administration. I raised it two or three times with Norman Mineta, who is the current secretary of transportation. Mr. Mineta, who has served 20 years in Congress, said, “Look, just do not bother talking about this because there will be no appetite in the U.S. Congress to allow cabotage”. I will tell you why, Mr. Speaker, because in the U.S., the U.S. unions view Air Canada as a high quality, low cost operator that will be a significant challenge to them.

Also, if they did it, they would have to extend that same kind of privilege to airlines in other countries, for example, British Airways, Air France, KLM and Lufthansa, so it is just not on. I am prepared to discuss anything, including that, but when the other side does not even want to discuss it, there is not much I can do about it. People just do not seem to get that message.

With respect to infrastructure, this has been the subject of some debate, certainly since the budget. This country now has a transportation infrastructure second to none. That does not mean to say it cannot improve, but we see the new airports being built. We see the ports improvements. We see the fact that the federal government is recommitting money to major highway projects across the country. We see the infrastructure programs that we have had with provincial and municipal governments since 1993. Some $800 billion has gone in there.

In the budget announced a few weeks ago there is $3 billion that my colleague, the Minister of Industry, will oversee. There is another $3 billion in the Kyoto envelope for the Minister of the Environment. Much of this money can be applied to transportation initiatives and transportation infrastructure in the country.

I know there are some who wanted more money, particularly the municipalities. I have to say quite frankly that when the municipalities reacted to the budget, they did not read the document. They did not read the fact that there is $6 billion for infrastructure in that budget. They did not realize all the other initiatives, whether it is housing, for which I have responsibility, or the homeless, for which the Minister of Labour has responsibility. There is an increase in moneys for affordable housing for the SCPI program and for the RRAP home renovation program. All of this helps Canadian cities.

On the transportation front there are moneys available. In fact a couple of weeks ago the Minister of Industry and I, along with the Minister of Justice, announced in Montreal the A-30 autoroute. The A-30 autoroute has often been raised in the House, particularly by my friends from the Bloc. This is a major piece of infrastructure that is national in significance, because it will allow trucks and cars to bypass the downtown streets of Montreal. That was done under the auspices of the infrastructure program.

Let us not buy this phony argument that somehow the federal government is not involved in providing for federal infrastructure improvements. We are doing it through policy changes that allow local authorities, whether it is the ports or the airports, to borrow on the open market. We do it directly, like the subsidy to VIA Rail of an extra $402 million, or we do it through infrastructure programs as I have just described. As more money becomes available, it will be applied to transportation. I think that 60% or 70% of the money that came out of the 2001 budget that we are working on with officials at Industry Canada is applied to transportation projects.

I am not going to say anything about airports today because I am about to introduce another bill very soon that will deal with providing a statutory base for Canada airport authorities across the country. In the 1994 national airports policy, this was done under existing statutes and the Financial Administration Act and another statute, but there was no statutory base for these airports. We are taking the 29 largest airports and making them come under a new statute that will have as its goal improved accountability, improved transparency and improved governance. When people see the bill, in a matter of days hopefully, they will see that we are trying to put our airport authorities on a very sound footing.

As an accompaniment to that, we have been reviewing the issue of airport rents. We hope to have that review completed very shortly. We are also reviewing our policy on remote airports which will include the viability of regional airports. We want to make sure that smaller airports do not get left out in the cold. We did it right in broad terms in 1994 with the national airports policy, but there are a lot of loose ends. The loose ends require a statutory base for the big airports. For the smaller airports it requires further reflection and study and perhaps assistance.

There are other issues that will come up in committee and will be raised in debate here about user charges and how they affect the airline industry and the airport charge and all the rest. I will be pleased to answer those questions when we get to committee.

We are also having a review of the Canada Marine Act. Members may remember that in 1998 we passed the Canada Marine Act. It was somewhat controversial but has been a great success. It has enabled the creation of 19 Canada port authorities across the country. It allows them to borrow money. It allows them to manage their own affairs and to dictate their own marketing strategies. The results are incredible for big ports and for small ports.

For the big ports it has been truly remarkable. The three great ports of this country in terms of volume, Vancouver, Montreal and Halifax, have done incredibly well. Business has increased. Efficiencies have been made. Money has been made and ploughed back because facilities like airports are still owned by the people of Canada.

Vancouver, for example, is the single most successful port on the west coast of the Americas. My friend over there from British Columbia, who I know is going to speak after me, should be happy about that. It beats all the American ports on the west coast and any other ports south of the United States. Halifax and Montreal have similar competitive advantages to many ports on the east coast of the United States.

We will have the marine act review completed shortly. Then we will probably begin statutory changes to the Canada Marine Act. The bill we are introducing today is the precursor to the airports act and amendments to the Canada Marine Act.

We are not only interested in our ports, airports, and putting more money into highways. We have announced highway extensions in New Brunswick, Quebec, Saskatchewan, British Columbia, and I am sure there will be many more across the country under the infrastructure programs and the program that we administer at Transport Canada.

However, we are also concerned about the need for new bridges or tunnels to the United States. That is one of the reasons why we have amendments in this bill to establish a clear approval process for the construction of new international bridges and tunnels to ensure they meet the trade and transportation needs of the Canada of the future.

I want to make a few more points with respect to our overall policy.

Future strategic investments in the transportation sector will focus on reducing urban congestion and bottlenecks along trade corridors. At the same time, these investments will ensure we reach our climate change and clean air objectives.

We also intend to work hard to find alternative delivery models for public transportation infrastructure in the areas of marine navigation, highways and public transportation.

Our infrastructure must also service Canada's remote regions. An important part of the national transportation policy has always been and will continue to be guaranteeing that remote regions have reasonable access to the national transportation system, with respect to their circumstances, size and particular location.

I am fully aware, Mr. Speaker, that you have an opinion on this policy because you represent a large remote riding. It is very important for us to ensure that our policy addresses the problems faced by remote regions throughout the country.

Another area of concern of course is the environment. I would be very remiss if I sat down and did not say anything about the environmental impacts that come from transportation. We must keep this issue at the top of mind. In fact, we debated this in the House for many months and the work still has not been concluded.

We have now adopted the Kyoto protocol and made a commitment to Kyoto, but now the tough work has begun with respect to ensuring that we meet those objectives. Clean air, clean water, improved fuel efficiency standards and increasing the awareness of Canadians are among the many elements of our strategy to contribute to the government-wide environmental agenda.

Transportation, as members know, is the single largest producer of greenhouse gas emissions in the country. It is about 28% versus about 33% or 34% in the United States, so progress on Kyoto will require real gains in transportation. Transport Canada will provide leadership in the sector and encourage the development of innovative solutions.

We will work with industry to better understand the social costs of transportation because understanding these costs is the first step in reflecting them more accurately in the prices paid by users. As a clear signal of our commitment to the environment, we will enshrine the principle of respect for the environment in the national policy declaration section of the Canada Transportation Act.

Another area that is very important, and I cannot underscore this enough, is the need to deal with innovation and skills requirements of our transportation industry. Success in the areas of marketplace frameworks, infrastructure, environment, and safety and security will depend upon the sector's ability to innovate and develop the skills of its workers.

After all, transportation moves $1 trillion worth of goods a year in Canada and is a key enabler in many sectors. Innovation in transportation will enhance Canada's competitiveness and contribute to meeting broader social and economic goals, such as reducing congestion and limiting environmental degradation.

Our efforts will focus on fostering innovation and intelligent transportation systems and logistical systems that support the efficient and seamless movement of people and freight. We will also work with the sector to increase the awareness of high skilled requirements of the transportation system of the future.

We have gone through a period of time in the last 30 or 40 years, certainly in the period when I was growing up in the late fifties and early sixties, where people assumed that a better job was always an administrative job, a white collar job, a desk job, and that somehow those people that serviced planes and trains, that laid the ballast or the track for the rail or worked on the ships, or worked below deck in the boiler rooms, that these people somehow were doing work that was less acceptable and less relevant to society.

I come from the school where every job in society is of equal value. Not everyone can be the Prime Minister of Canada. Not everyone can be the president of Canadian National or Air Canada. People have to do what they are comfortable in doing. Whether it is sweeping the streets in our cities, driving a bus or working computers in the control centres of Canadian National or the airlines, all of these jobs are very important.

An interesting thing has happened in the last few years. Transportation has become high tech in its own way. Has anyone sat in the cab of a modern truck to see the instrumentation that is available? It is not as complex as a cockpit of a plane, but that instrumentation is much more sophisticated than it ever was before.

Global positioning systems are now in operation by big trucking companies. Technology has permeated the industry. We invested a lot in high technology, in the innovation and technology agenda in the last number of years. There was always a view that if we did that it was enough. It is not enough.

We can invest in all the telecommunications, all the technological systems that we want, computerization, and we can be on-line nine ways to Sunday, but unless we can get goods from point to point and unless we can get people from place to place it does not matter what kind of technology there is in the planning of the transportation system.

We need roads, rail and the seaway. We need good ports, airports and rail yards. We need good crossings at the border with the United States. We need all of the physical attributes required to make a transportation system truly competitive.

The policy document I have brought forward enunciates the government's intention to continue to build on the many successes already evident in our transportation system. It embraces our objectives that show the true course for the future.

The amendments that we have today are the first part of the menu, the first course. The second course will be the airports bill and the third will be amendments to the Canada Transportation Act some months down the road.

Certainly, I would hope that members, although they may differ in some degree with the philosophical directions, would at least say that the government has come forward with a concerted, comprehensive transportation framework that addresses the transportation needs of Canadians in the years ahead.

I look forward to answering questions in committee. My officials look forward and I know stakeholders will come to the committee. I believe this is a major piece of legislation for the government. The policy document was a major policy document of the government that was outlined in the throne speech last fall. We are living up to the commitments of continuing to build the best, safest, most secure, and most efficient transportation system in the world.

[David Collenette, Liberal, Minister of Transport]

moved for leave to introduce Bill C-26, an act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other acts.

(Motions deemed adopted, bill read the first time and printed)

Airline Industry

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, the airline industry around the world has faced turbulence since September 11, 2001. It is being exacerbated by the current tensions in the Middle East and the spiral of fuel prices.

When the hon. member talks about airline policy, I might remind him that it was his party, the Reform Party in 2000, that supported the government and Bill C-26. As the Alliance, it supported us on Bill C-23.

I thought the opposition was supporting the government, so we spoke with one voice on airline policy. I think the Alliance members should recognize the truth.

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, the hon. member is correct. Under Bill C-26, Air Canada was obliged to serve those communities served by Canadian Airlines and Air Canada on December 21, 1999. That expires January 4, 2003, and it has given notice to terminate service to some communities.

Our experience has been that when an airline leaves a community with the sufficient notice as provided for in Bill C-26, other carriers come in. In his own province, Provincial Airlines and Air Labrador have immediately announced that they will fill the vacuum. That shows the airline policy is working.

Regional Air Transportation

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, the hon. member is well aware that after the merging of Canadian Airlines and Air Canada, we set up a system, under Bill C-26, to protect services to small communities across the country, for a period of three years.

Air Canada now has the right to leave any city. In our opinion, if Air Canada stops serving a small community, it will be replaced by another carrier in that community.

We saw it happen in Newfoundland, for example, and in other communities across the country.