That this House condemn the government's lack of action and transparency with respect to the proposed restructuring of Canada's rail system, the gradual abandonment of regional services by CN, CP and VIA, especially in Quebec, and the government's lack of vision with respect to high-speed trains.
Mr. Speaker, I thank you for having read before the House the motion on railway transportation that I have the honour of introducing.
As you have already mentioned, I want the House, in other words the hon. members, to condemn the Liberal governments's lack of action and transparency with respect to the proposed restructuring of Canada's rail system. I also wish to condemn the gradual abandonment of regional services by CN, CP and VIA Rail, especially in Quebec, and I want to stress the government's lack of vision with respect to high-speed trains.
After the last war, people came to believe that mass transportation in rich societies like that of Quebec would eventually be abandoned and replaced by cars and trucks. Railway transportation gradually collapsed while billions of dollars went into building a complex highway network.
During that period, Europe and Asia upgraded their railway transportation networks, which came to play a fundamental role in their economic development. Europe in particular relied heavily on its train network as a public means of transportation.
Railway transportation plays a fundamental role in the Canadian transportation system. The most important contribution of railways to the Canadian transportation network is, without a doubt, in the natural resources sector. In 1993, according to the National Transportation Agency, bulk products like potash, wheat, coal, lumber, newsprint, etc. accounted for about 54 per cent of the traffic on all railway lines, down about 2 per cent from the previous year, 1992. That shows to what extent railway companies are dependent on raw materials.
At the intermodal level, rail-road transportation is the most important, followed by rail-road-water transportation. Intermodal transportation is an important and growing part of traffic for CN and CP. In 1993, this traffic increased by 8 per cent for both companies. It amounted to 6.2 million tonnes for CN and 5.4 million tonnes for CP.
In 1993, it was the third most important area for both CN and CP. This explains why the two companies are investing heavily in this sector. For example, CN built the St. Clair tunnel between Sarnia and Port Huron, and CP upgraded the western tunnels on its line.
In the last few years, CN and CP have entered into large contracts with intermodal or trucking companies. CN in particular signed a deal with CSX, an American firm, for the transportation of truck trailers between Canada and the American midwest and southeast regions. CP did the same with Gilford Transportation. Intermodal transport has the highest growth potential for railway companies.
For Canadian railways, competition comes mainly from two sectors: trucking and railway transportation through the US. Trucking is heavily subsidized by the government since truckers do not have to pay for the building and maintenance of the roadway. As railway companies must develop and maintain their own network, truckers have an important advantage over railway companies.
CN and CP have repeatedly complained about the inequity of the fiscal treatment in Canada and in the United States. It would seem that because of the diesel tax and the various real estate taxes they must pay on lands crossed by the railway, their tax
burden is heavier than that of their American competitors, which causes Canadian carriers to be non-competitive. CP estimated the tax burden on railway companies to be 48 per cent higher in Canada than in the United States.
We know that the financial situation of both CN and CP is far from brilliant. We know that both companies are unable to generate sufficient operating revenues to post net profits. As a matter of fact, since 1988, CN has posted a profit only once, in 1989; in 1992, the company lost around $900 million. It is encouraging to note that since the beginning of 1994, CN has posted a profit of around $200 million. However, it is not enough to produce an acceptable return on investment.
For its part, since 1988, CP has lost money only in 1991 and 1992, but its profits are also quite inadequate to produce an acceptable return on investment.
Moreover, in Canada, since 1987, railway companies have been experiencing a drop in return on investment; it was only 3 per cent in 1992. This situation is of great concern since American carriers have experienced an increase in return on investment from 4.9 per cent, in 1987, to 7.2 per cent, in 1992.
If railway companies are not able to generate sufficient profits, it is obvious that they will be unable to invest enough money to maintain and improve their network.
I will now say a few words about traffic. In 1993, total railway traffic amounted to 238.9 million tonnes, an increase of 1.1 million compared to 1992.
Again according to the National Transportation Agency, CN accounted for 39.6 per cent of domestic rail traffic and CP had a 33.1 per cent share, leaving 27.3 per cent for regional companies.
As for the workforce, we know that in 1985, CN and CP Rail had 77,960 employees. By 1993, this number had fallen to 48,841. The same year, the total payroll of both companies was $2.7 billion or 49 per cent of their $5.5 billion operating costs. Then CN implemented a plan to streamline its workforce. From 32,392 the number of workers went down to 22,395. Some 2,096 people work at company headquarters in Montreal. In all, close to 6,800 people work for CN in Quebec.
Nowhere in the world does the passenger railway service really break even. It is a public service as are the road system, the school bus system, the St. Lawrence Seaway, the coast guard, the armed forces and others. I could go on and on.
Canada had established a respectable railway system that was acclaimed in all European countries. Canada would never have developed like it did if our two coasts on the Atlantic and the Pacific had not been connected by the railroad. Other countries go on operating and developing their passenger service even if it is not cost-effective because it is beneficial in other ways.
Take the way it relieves traffic congestion on highways. Also, in remote areas, for instance in Abitibi, in the Gaspé Peninsula, in Saguenay-Lac-Saint-Jean, passenger rail service is essential in order to compensate for the shortfalls of the education system, the lack of cegeps and universities, and also the lack of specialized health care. We cannot picture someone from the Gaspé paying approximately $600 to fly to Montreal for medical treatment, much less riding in a bus for 22 hours. A train with the new technology could replace these methods of transportation, and do so economically.
It must be borne in mind that the train, using the new technologies as is done in Europe, almost completely eliminates pollution. Even with the existing technology, trains produce far less pollution than do cars or buses.
As you know, Mr. Speaker, cutting passenger rail links in the suburbs of major cites and outlying regions will just send the traffic back to the roads and shift the expenditures from the federal government to the provinces. The Canadian industry is obviously interested in maintaining passenger transportation at home, given that it has developed technology that it is exporting abroad.
The saying "No man is a prophet in his own country" certainly applies to Bombardier, which exports its technology. The success of TGV in France is a case in point.
The abandonment of passenger lines seems imminent on certain Quebec lines, such as Jonquière-Montréal, the Chaleur line, Gaspé-Montréal, Montréal-Senneterre, Senneterre-Cochrane, in Ontario and Montréal-Saint John, in New Brunswick, and Halifax.
As this House knows, the abandonment of passenger services is not subject to the National Transportation Act. In any event, some of my colleagues will have an opportunity to come back to this.
Finally, a number of jobs at CN and VIA headquarters in Montreal have been transferred to Campbellton, which just happens to be in the Minister of Transport's riding. I am sure this is no accident. Several jobs have also been transferred from Montreal to Winnipeg. In addition, the riding is represented in this House by the Minister of Human Resources Development. I am sure this is also pure coincidence, unless the intention was to thank the minister for trying to sell us the social security reform. But then again, as you know, this is only speculation going round in the halls of the House of Commons and such rumour is entirely without foundation. The government is much too transparent to contemplate such things, is it not?
As you know, several applications to abandon rail lines are presently before the National Transportation Agency. Applications to the agency are almost automatically approved and, in most cases, without public hearings. Take the Murray Bay line
that runs through my beautiful riding of Beauport-Montmorency-Orléans, for instance. In that case, the constituency asked to be heard by the National Transportation Agency. Their request was also denied and the Murray Bay line was sold without the people most directly concerned having been heard.
My colleagues will have the opportunity to come back to the issue of rail abandonment in their remarks. We know that railways are an economic development tool. Let me give you an example of economic development for the small municipality of Port-Daniel, in the Gaspe Peninsula, which borders on two ridings: Bonaventure-Îles-de-la-Madeleine and Gaspé. There is a chance that the municipality could land a contract with Arab countries interested in establishing a cement factory.
While 18 per cent of the population is unemployed in the Gaspe Peninsula and 39,4 per cent in Port-Daniel, here is a chance to create 400 new jobs. However, the municipality must meet two preconditions set by the Arab promoters: it must have a seaport and a railroad. What would happen if the railroad between Gaspé and Montreal were to disappear? Well, the cement factory project would fall through and the unemployment rate would remain high in the municipality. The 400 people who would have found work in the factory would remain on UI or welfare and the taxpayers would have to foot the bill. That is the kind of horror story caused by decision makers with no medium or long-term vision.
It is easy to make the case that a service is unprofitable based on figures alone. But before drawing hasty conclusions, we must be sure we have all the facts. Moreover, it is a well-established fact that when the times are hard, every job category, from the company president all the way down to the workers, must do its share. Mr. Speaker, do you think that CN employees are happy to have accepted cutbacks in their working conditions when they leaf through certain magazines and read things such as what I will now mention?
Canadian National allegedly gave its president, Paul Tellier, a $432,000 no-interest loan to buy a house, of which $300,000 came from CN Rail and $132,000 from SRS or Supplemental Retirement Security. This loan was not guaranteed by a mortgage so that this deal would not be made public. In return, the president signed an interim note and increased his individual life insurance by $300,000 payable to CN Rail to guarantee his loan. Worse yet, while a $432,000 loan was allegedly made, the house, according to our information, was assessed at $283,000.
This same president made Canadian National pay for the part of the retirement plan payable by him, which amounts to $14,000 a year. Yet, CN pays its president, Paul Tellier, an annual salary of $345,000 plus expenses. After pointing out these horrors, I would like to get back to other issues of capital importance to Quebecers and Canadians, whenever decisions concerning railways have to be made.
My colleagues will have the opportunity to revisit the issue of the environment, of energy consumption by trains. They will have an opportunity to speak to you about high-speed trains, a project which would put Canada on the map of high-speed rail transportation in North America, a market estimated at $200 billion. Nonetheless, the current Liberal government prefers to sink billions of dollars into projects like Hibernia, whose profitability is doubtful.
Mr. Speaker, my time is running out. My colleagues will have the opportunity to get back to the whole approach on short-line railways. The rationalization of railways must continue, but the government must allow these short-line railways to operate the secondary network. Canadians and Quebecers must also be informed of an issue of national interest, namely the cavalier attitude of the government, which excluded the Official Opposition and the third party from the commercialization review of the largest Crown corporation, CN. That is totally unacceptable.
It is inconceivable that the government would consider major decisions affecting railways without first consulting Canadians and allowing elected parliamentarians to participate in decision-making. We must condemn the government's carelessness and lack of vision in the area of rail transportation. All Quebecers and Canadians must be asked to boycott the task force on CN commercialization since it is composed of eight Liberal MPs and one Liberal senator and excludes members from the Bloc Quebecois and the Reform Party.
With this membership, the committee will have total control over calling the witnesses it wants and being told what it wants to hear.
Furthermore, all Quebecers and Canadians must be asked to boycott the task force on CN commercialization since it is composed of eight Liberal MPs and one Liberal senator and excludes members from the Bloc Quebecois and Reform Party. With this composition the committee will have total control over calling the witnesses it wants and being told what it wants to hear.
In closing, I wish to inform the House of Commons that the government's current actions and policies regarding railways only gives ammunition to the Bloc Quebecois and the Parti Quebecois for the upcoming referendum. The more the federal government cuts services to the population, the more Quebecers will ask themselves what they are getting in return for the $28 billion in taxes they pay Ottawa every year.