Debates of Nov. 15th, 1994

Supply

[The Acting Speaker (Mr. Kilger)]

For the sake of all of us understanding one another, I will ask once again that, however heated the debate here in the House of Commons, however strong the feelings held and the desire to put one's views across, a member should always be referred to by his or her function or riding. Resuming questions and comments.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

Mr. Speaker, it is regrettable that the Chair had to warn the hon. member eight times already.

I have another question.

[The Acting Speaker (Mr. Kilger)]

Order! Quite frankly, I could not say whether this was the fourth, fifth, sixth or eight time; I did not keep count. At any rate, I am patiently carrying out my duty and asking the hon. members to have a respectful and parliamentary conduct during debates. That is all. I will keep reminding the hon. members to do so, nine or ten times if need be, but I must inform you that patience will win out.

[Michel Guimond, Bloc, Beauport—Montmorency—Orléans, QC]

As far as the way you conduct proceedings is concerned, Mr. Speaker, the past vouches for the future and I thank you for that.

I would like to comment on the hon. member's speech and ask a final question. I would like to know if he himself ever took the HST between Lille and Brussels? That is Lille, in France, and Brussels, in Belgium. I travelled with the transport committee to France and Germany last week, at no cost to the Canadian taxpayers as we were the guests of the two governments. We had the opportunity to take this train and to see for ourselves that, contrary to what the Prime Minister once said in response to a question, the HST does not stop at the Belgian border. The clearance procedure is the same as for air travel. Planes do not land in every European country for clearance purposes before flying over the border. Whether you are travelling by train, plane or ship, you are cleared upon departure and arrival. It would make no sense. Obviously, the hon. member was talking through his hat since he had never taken the Lille-Brussels HST.

I mentioned earlier in my speech plans to build a cement factory in Port-Daniel, which is located in his riding, in the Gaspe Peninsula. Does the hon. member realize the importance of rail service for the establishment of this factory in Port-Daniel, in his riding? I would like to hear his comments on this cement factory project which is conditional upon rail service being maintained in the Gaspe Peninsula.

[Patrick Gagnon, Liberal, Bonaventure—Îles-De-La-Madeleine, QC]

Mr. Speaker, this is an interesting question from the Opposition. No, I did not have the privilege of taking the high-speed train between Paris and Lille because I did not have any money at the time. I was only a backpacking student. I think I hitch-hiked. However, I had the privilege of taking the Shinkansen between Tokyo and Osaka a few years ago. Believe me, the service was very good, except that Japan Rail has been privatized. It is not a profitable operation.

Talking about rail service, I would be the first one in my riding to be interested. As a member of Parliament, I feel that I am the legitimate spokesman for the riding of Bonaventure-Îles-de-la-Madeleine. If the hon. member opposite is interested in that riding, he should run against me in three or four years, if he really wants to become familiar with the issues.

Of course, there is not only the Port-Daniel cement plant but also Stone Consolidated, Abitibi Price and Tembec. Railways are used to the tune of $10 million to $20 million in that region but, again, we are still talking about the cement plant. Like any socio-economic regional development project, this one relies on rail service. To reassure the hon. member opposite, who sounds like he would like to represent the riding of Bonaventure-Îles-de-la-Madeleine, this project requires a great deal of study. Several steps must be taken. There are the environmental standards set by the Quebec government. I met with one of the developers.

I come from that area. My father was born in Port-Daniel; my family comes from there. Believe me, I am following this project with a great deal of interest. True, maintaining commercial rail service is important to any medium- or long-term economic development project in the Gaspé peninsula.

[Gilles Duceppe, Bloc, Laurier—Sainte-Marie, QC]

Mr. Speaker, following discussions among the three parties recognized in this House, it was unanimously agreed that the next two speakers would be from the Bloc Quebecois, after changes were made to today's agenda.

[The Acting Speaker (Mr. Kilger)]

I do not think that unanimous consent is required. However, if you came to an agreement among yourselves, it is always better and I can proceed. Is it agreed?

[Some hon. members]

Agreed.

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

Mr. Speaker, I will try to talk seriously about the national interest, an issue that the member for Bonaventure-Îles-de-la-Madeleine has tried to lose sight of from the beginning of this debate.

We asked for this one-day debate on railways to consider solutions to rail problems and not for partisan questions of what happened in the past or concerning individuals who are not here.

In my statement, I will not provide the solutions which the minister was asking for because before we propose remedies, we must first make a diagnosis, and it appears from the diagnosis that I am to present that the government's inaction and inertia are mainly responsible for the problem with railways. So I shall present this part of the diagnosis and not specific remedies, as far as I am concerned.

The Canadian government's inertia on rail issues is in strange contrast to the dynamism shown by most other developed countries in this field. In Canada, our leaders consider the railways to be things of the past; as development tools, they certainly had their days of glory, but they are doomed to disappear. In other countries, the railways are considered excellent means of transportation which must urgently adapt to current requirements. On this point, I will repeat what the member for Bonaventure-Îles-de-la-Madeleine said about the difference in population density between Belgium and Quebec.

I will tell him right away that it is not the Parti Quebecois's intention to propose railways for the Far North, whose population density is about average for this country, but only in the southern corridor, where the density is quite comparable to many European countries that are now trying to renew and develop their rail system.

Our government's inaction on rail transport is essentially due to lack of vision, as my colleague from Beauport-Montmorency-Orléans showed very well. When you do not see the source of the problem, it is hard to move. That is the trouble which this government, and especially its transport minister, have: they see the railways as basically folklore.

The government does not act. It lets rail lines belonging to one of the greatest railway systems in the world be dismantled on the basis of purely cost-accounting decisions. The socio-economic benefit analysis of a railroad is ignored and replaced instead by a cold and narrow accounting analysis.

This government does not act. It lets thousands of railroad workers lose their jobs. The restructuring of the main providers of employment in the country is done without any follow-up. The government lets CN's head office, in Montreal, become gradually more and more empty, for the benefit of Winnipeg and Moncton, but at the expense of the quality of service. A company in my riding, Transpotech, can attest to that deterioration, since CN moved some of its services from Montreal to Winnipeg.

The government does not act. It is still dragging its feet regarding the high speed train issue, wondering whether that project is too costly or not. Yet, a consortium which includes Bombardier is convinced of the viability of that project and keeps winning major contracts all over the world, except in Canada. Do you not think that these people have given sufficient credentials to be listened to?

The government does not act. There is no precise definition of Canada's transport requirements for the years to come. While foreign governments promote rail service and give it priority, this government chooses to ignore the tax and regulatory problems which our carriers have to face.

The government does not act. It cannot see the environmental and economic benefits which would result from a strengthening of our rail system. If the government cannot see those benefits, the opposition can demonstrate how economic development and environmental protection can both be achieved through a sound rail policy.

This morning, I want to propose new tools and provide data that should prompt the government and the Minister of Transport to wake up. Of all the various modes of transportation, the rail system is obviously the less harmful to the environment. It uses less fuel and releases less pollutants, hence contributing significantly to the air quality.

Statistics released in 1990 show that the percentage of pollutant emissions reaches 4.8 per cent for trains, compared to 18.4 per cent, which is four times more, for trucks. Because of its rate structure, trucking has become the main obstacle to an increase in train services, despite the social and economic benefits of the rail system. This is why I want to compare these two modes of transport which, instead of being competitive, could be used in conjunction, within a dual-mode system, but we will get back to this issue.

Figures concerning the difference in pollutant emissions for both modes of transportation are eloquent. Let me give you just one example: carbon dioxide emissions by trains reach 13.9 per cent, compared to 48.4 per cent for trucks, the relatively low fuel consumption of trains accounts for the difference.

Let us examine the comparisons between both modes of transportation. The advantages of the rail system are significant. However, one of the main benefits of the rail system, compared to trucking, is the fact that trains can carry heavy loads on long distances. For example, a study showed that to move 200 containers across the United States, there would have to be three to five engines on the one hand, and more than 200 trucks on the other.

The intrinsic features of rail transportation thus allow to impede road congestion which adversely affects economic development. Obviously, if all lines were electrified in Canada, train emissions would be markedly reduced. Countries concerned with environment protection consider electrification of their rail system in line with their sustainable development policy. Western Europe has the highest rate of rail lines electrifi-

cation: 99 per cent in Switzerland, 55 per cent in Italy and 26 per cent in the United Kingdon.

Canada ranks behind the United States with less than 1 per cent in spite of its huge hydro capacity. There could be no better example of the inadequacy of our system not only in regards to its needs but also to the resources it uses. Air transportation is by all means the most polluting. It is more polluting and energy-consuming than rail transportation, which brings me to the issue of the high-speed trains, which I will address strictly from the point of view of environment protection, since my colleague for Laval-Centre will later review the whole issue.

As we know, the French high-speed train and also other rapid trains as the German ICE, the German Trans-Rapid, for example, can easily keep up with planes as for the duration of long-distance travel.

Thus, with better rates and lower consumption levels than the air transportation, the high-speed train in particular proves to be an environment friendly alternative while meeting the speed and comfort needs of travellers.

Mr. Speaker, the train is very competitive as far as energy consumption is concerned. At high as well as at low speed, it can, in most cases, use electric power.

Any measure aimed at an increased use of railroads should be supported by an adequate fiscal and regulatory policy. As things stand right now, the railway companies do not get any tax benefits resulting from the fuel tax for example. If the government wants us to believe it is serious about giving a new start to the rail transportation industry, it must first provide for tax arrangements which will promote an increased use of the train.

The railway industry should get the same benefits as its main competitor, the trucking industry. It is urgent that the government brings its tax measures up to date because, at present, they indirectly support the trucking industry while railroad companies have to establish and maintain their networks themselves. Truck operators do not pay for the maintenance and the construction of the roads although they contribute largely to the deterioration of that infrastructure.

Road transportation is very expensive because roads have to be repaired and rebuilt. It is also environmentally very costly because it takes up large spaces. A highway requires six times as much space as a railway. It was also established that you would need sixteen highway lanes to move as many people in one hour as you would on two railroad lines.

One Eastern Quebec group, the Comité de la protection de la santé et de l'environnement, in a brief submitted in 1989, provided figures showing the basic advantages of a railroad-oriented approach. We tend to forget about them. The committee members estimated that the building of one highway mile requires 20 acres of land while the building of one railroad mile requires only 6 acres of land. The issue is not land scarcity but optimum land use.

So I explained why, in terms of transportation, we must do more to support the railroad industry. At this point, it would be useful to consider how this much desired expansion will proceed.

Many stakeholders in the transportation industry are pressing for a national, integrated transportation policy. We need a policy that allows for competition and market forces and deals even-handedly with all modes of transportation in this country. It should also get rid of all the tax inequities that put the railway sector at risk.

We have an extensive railway network that, although not in good shape, could provide some interesting opportunities. From a strictly economic point of view, revitalizing our railway infrastructure should be the first step, before we consider intermodal or multimodal approaches.

Actually, users depend increasingly on the combined use of several transportation modes. Introducing intermodal technologies, including equipment that allows for the quick transfer of goods from trucks or ships to trains, will revitalize the railway freight industry.

Intermodal is the future of the railways. In 1991, revenue generated by intermodal activities for Canadian National and Canadian Pacific totalled $745 million. This amount represented 6 per cent of the total tonnage of railway activity and 13 per cent of the total revenues of CN and CP. In the past few years, both companies have made substantial investments to adjust to new market demands. Taking a comprehensive and integrated approach to transportation will support these companies in their efforts to go beyond the traditional markets of the railways.

The total volume of intermodal traffic at CN and CP in 1991 was 12.2 million tonnes. Of all activity sectors using intermodal transportation, import export is by far the most important one, representing half of the total tonnage.

In the present context of market globalization, one cannot overemphasize the importance of strengthening our import export activities. Without wishing to sound like a science fiction writer, I think it is entirely realistic to say that the intermodal approach is indispensable if Canada and Quebec are to take their place in the vast global market that will develop in the twenty-first century.

To do so, however, we need the railways. This government is doing the exact opposite of what is now being done by the Europeans. In Europe, decision-makers have understood the pride of place the railways should have in economic development. Canada uses its railway infrastructures for freight and passenger transportation ten times less frequently than do most

European countries. Trade within the European common market is efficient and effective as a result of a policy that integrates all transportation modes, while considering the merits of each one, to make them function as a powerful development tool that is able to satisfy both economic interests and environmental concerns.

The European Commission estimates that between 1990 and 2010, the volume of freight hauled by trucks will increase by 42 per cent. Alarmed by road traffic which will eventually be totally out of control, leaders of the European Community are proposing to transfer, as much as possible, the transportation of goods from road to rail and water.

Railway transportation of goods is being encouraged by European governments concerned by the worsening of environmental damage caused by an excessive reliance on road transportation. When you consider that in France, in Italy or in Spain the volume of road traffic is about 6.5 times that of rail traffic, while in Canada the ratio is 1 to 76, you realize that it is high time that we should do the same.

An integrated transport policy requires the establishment of a basic railway network. Such a network, essential and specialized, would have to be set up in co-operation with the provinces, since they would have major economic interests in it.

To be effective, the federal government intervention would have to recognize the jurisdiction of its provincial partners in an integrated transportation system. Government action must balance federal responsibilities in rail transportation and provincial jurisdiction in road transportation. Integration does not necessarily mean uniformity.

In the meantime, while we wait for an all-Canada network, we should impose a moratorium on railways to avoid the senseless and premature destruction of valuable rail infrastructures. We have to stop the haemorrhage of rail line abandonment in Canada, and in Quebec in particular. At the rate we are going, by the time the transport minister finally realizes that this country needs a basic railway network that harmoniously integrates all means of transportation, it will be too late.

That is why a moratorium is so important. It will allow us to analyze the planned abandonment of lines, on an individual basis, and mainly to evaluate the potential role these lines could play in the future basic railway network we must put in place.

The railway industry must be put back on track. There is no better way to say it. When the whole world, including our southern neighbours, is increasingly relying on railway transportation, in Canada, we are increasingly relegating it to a bygone era, a nostalgic past.

Instead of paying tribute to the memory of the Fathers of Confederation, we should do Canadian taxpayers a huge favour by stimulating trade through the railway industry. Railway transportation is undeniably an essential service.

It is high time to take advantage of the economic, social and environmental benefits of railway use. We need public commitment. Sweden and a unified Germany are already planning to invest as much in their railway system as in their road network. Of course, an eventual public commitment will have to be accompanied by measures to eliminate such irritants as unfair transportation subsidies and tax exemptions on fuel which are not generalized.

Most of all, it is high time to put in place a basic network integrating all means of transportation, in a co-operative, non-confrontational manner. As long as an integrated transportation policy has not been given serious consideration, the under-utilization of Canadian rail lines cannot be used as an argument to justify their abandonment.

The status of Quebec in the next century should not interfere with this super network project. Europeans have such a network, although Europe is made up of numerous sovereign states which are all participating in the economic development of the continent. With NAFTA around the corner, we must draw our inspiration from the accomplishments of the world communities.

We hope that, in the 21st century, all of North America will be connected to a huge modern, efficient, viable, reliable, and affordable transportation network that will make it easier to move goods and people while respecting the environment. Such is the challenge ahead of us. If we do not want to miss the boat, now is the time to take action.

[Patrick Gagnon, Liberal, Parliamentary Secretary to Solicitor General of Canada]

Mr. Speaker, I listened with great interest to the presentation made by the hon. member opposite and I think that he made very important points on some issues, particularly the importance of the environmental impact of emissions, a common problem related to heavy trucking in Quebec and all of Canada of course. He also touched on sustainable development. His transportation costs analysis was very interesting and I wish to take this opportunity to commend his work on this.

This leads me to the following question. The hon. member claims to be extremely sensitive to all these issues and talks about a corporate national transportation policy. The problem I have with this is that a national policy would, of course, be applied across Canada. So, I wonder how he would make such a plan work if Quebec were to become independent and separate from the rest of Canada. Also, in the present context, what role

would he see Quebec and the other provinces play with regard to road taxes? Could they possibly be reduced?

He must have more frequent dealings with his Quebec counterparts than I do. What is Quebec's position on this issue? How can road taxes be reduced? How could Quebec be made a part of the Canadian family in relation to a national transportation policy? I would like to hear what the hon. member has to say on this issue.

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

Mr. Speaker, although I am certainly closer to my colleagues in Quebec City than the hon. member for Bonaventure-Îles-de-la-Madeleine, I would not presume to speak on their behalf about their proposed fiscal policy on fuel taxes.

I see that my hon. colleague is very concerned about the lack of accountability, in his opinion, of several states in establishing a rail network. My colleague has just pointed out to him that the train between Brussels and Lille crosses the border without stopping. Since I come from that region, I can assure him that this did not start with the high-speed trains but decades ago. The networks are generally international, except perhaps in Japan and Madagascar, which is another island. I did not check.

Generally speaking, however, every country that is part of an international network is concerned about the quality of rail service in the other countries, because the quality of the whole network depends on the quality of rail service in each of its components.

If we are interested in the quality of the federal network, it is because we think, despite our sovereignist views, that the quality of Quebec rail service depends on the quality of the North American network in a very general way. Canada and Quebec, which is now a province, must of course work together to build this great North American network which, in the national interest, must be as good here as in the other countries.

[Patrick Gagnon, Liberal, Parliamentary Secretary to Solicitor General of Canada]

Mr. Speaker, it is true that the hon. member comes from Europe. There is no doubt that when we are talking about the EEC, the historical context is very different in the case of this association of European countries. Let us not forget that a war had just ended in Europe; in spite of that, there was a common desire to regroup.

I should mention for the benefit of those who are listening to us that the EEC started with the Group of Six, followed later by the Group of Twelve, before eventually becoming a larger body with more member countries. Canada does have an advantage however in that it already has national policies which are almost the envy of Europe, with respect to the way we treat our provinces and communities.

Once again, I would really like to know how Quebec's transportation industry could benefit from separation. Everything would have to be renegotiated and I think the member opposite will admit that there might be some hesitation on the part of the other provinces, and even the United States, to negotiate with an independent country.

The member should tell us how Quebec could renegotiate a national transportation policy in the event of a break-up of the country and a tougher stand by Quebec itself or by the other provinces.

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

Mr. Speaker, of course, if Quebec becomes independent, there will be several technical questions to settle, and the issue of rail transportation will just be one of them. However, the hon. member must understand that, even though this issue will come up, it will not be impossible to resolve. It will only be one more issue to settle.

Among other things, separation will enable Quebec to electrify its rail lines, which would increase consumption of its national source of energy instead of what it considers imported energy, with all the environmental benefits this implies.

Also, we could elaborate a policy according to our own national interests, instead of watering them down with other interests, and not only where rail transportation is concerned, but in other areas as well. Everyone knows that, in the rail transportation area, Western Canada has always been in favour with the government and has received very generous gifts paid for by every Canadian taxpayer.

Once Quebec becomes independent, it will not have to pay for gifts that do not benefit Quebecers and it will look after its own national interests, but always in a spirit of co-operation and continuity with Canada and North America.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, it is with great pleasure that I rise to take part in this debate. I have been asking for weeks that an opposition day be devoted to railways. That is why I am pleased to enter this debate.

Before dealing with my main topic, I would like to respond briefly to comments the transport minister made in the House today.

First of all, the minister accused the official opposition of standing for the status quo as far as rail transport is concerned. In other words, the Bloc Quebecois would be in favour of the status quo in transportation, and more particularly in railways.

Let me emphasize that such is not the position of the Bloc Quebecois, and the minister knows it. His comments are sheer grand standing for the benefit of his constituency, and they do not relate in any way to the subject matter. Those comments demonstrate that this Liberal government does not take rail

transportation seriously. One clue to that is the comments by the Minister of Transport; another is that the government seems to rely only on the hon. member for Bonaventure-Îles-de-la-Madeleine to respond to remarks by Bloc Quebecois members. He often seems to lead us off into debates that have nothing to do with the debate at hand. Clearly, the government does not take rail transportation seriously.

As my colleague, the hon. member for Beauport-Montmorency-Orléans pointed out this morning, the Bloc Quebecois has been asking for almost a year that the Standing Committee on Transport examine the whole issue of rail transportation. This has been denied us for all kinds of reasons, each one shakier than the other, and this means that after a year of Liberal government we are in a worse situation than before.

I can tell the Minister of Transport right off the bat that what the Bloc Quebecois wants is to know where the government is going in the area of rail transportation. His responsibility is to tell us what direction he is taking, what he intends to do after a year in his portfolio. We want the government to protect the interests of all Canadians, but more precisely, as far as I am concerned, the interests of Quebecers and particularly the interests of my constituents, severely affected by the decisions the government is taking in the area of rail transportation. I will come back to that.

We want a real public debate on the future of rail transportation. We want real solutions. We, in the Bloc Quebecois, refuse to identify as the only scapegoats employees of CN and CP and their so-called golden collective agreements. When you consider the perks given to the president of CN, which were mentioned by my colleague from Beauport-Montmorency-Orléans, and the outrageous benefit that a house represents, I think it is rather foolish on the part of the government to single out unionized workers for the lack of profitability of rail transportation in Canada, especially east of Winnipeg.

The reasons why I insisted for so long for a debate on this subject led me to wonder about the future of a rail network in Quebec.

And I will say right away for the benefit of the hon. member for Bonaventure-Îles-de-la-Madeleine that my comments arise primarily from a concern about the future of the rail system in Quebec, linked of course, with North America as a whole.

I have been looking at the rail question for several months now, and have seen the threat of the slow but systematic destruction of its rail network looming over Quebec.

My riding, Mégantic-Compton-Stanstead, provides the perfect example of the sort of hypocritical manoeuvre the federal government is planning to carry out in Quebec. The abandonment of the line linking Sherbrooke, in the Eastern Townships, and Saint John in New Brunswick, is being threatened for January 1, 1995. This abandonment was ordered by the National Transportation Agency under the former government. I mention this again so that the hon. member for Bonaventure-Îles-de-la-Madeleine will not have to rise in the House and blame the leader of the opposition for all the decisions taken since the beginning of Confederation.

This abandonment would be a real economic disaster for the Eastern Townships, with potentially devastating consequences for the entire area, and I would go so far as to say for the whole of the Eastern Townships.

And yet, while we are experiencing a crisis of major changes and drastic cuts in the rail industry in Quebec and in Canada, the Standing Committee on Transport-and I point this out again-has always systematically refused to look at the rail question, despite the repeated requests of the official opposition representative.

We are told that the committee must focus on the future of the aviation industry, the future of airports, and that there is therefore no time for the future of rail, an industry that in 1993 employed close to 50,000 people across the country. No time! The committee has no time! Realizing the ridiculousness of the situation, the Minister of Transport announced, last September 29, the creation of a task force to examine the possible privatization of CN.

But to make sure it would not interfere with schemes to dismantle the Quebec railway system, the minister took the trouble of appointing an all Liberal task force, with only one member from Quebec sitting on it. The minister need not worry; this task force is not likely to make much noise.

The question we must ask ourselves at this point is: why is the government so afraid of having Bloc members on this task force? Why have such a suspicious behaviour that resembles a conspiracy? Upon analyzing the whole issue, the federal government's sinister intentions in the railway system become clear.

I would now like to review briefly the events of the past year regarding the rail issue. The minister referred to it this morning.

First, there was the statement made by the CN chairman, Mr. Paul Tellier, in December 1992, who apparently wanted to merge the CN and CP railway systems. This period of a few months was referred to as the CN-CP operations consolidation period. For reasons unknown to us, since all was done in secret, this plan fell through sometime around June 1994.

Then, and it is still on the table, CP Rail presented a bid to purchase CN assets for $1.4 billion.

A few weeks ago, Bloc Quebecois members have met with senior CP executives to clarify the contents of the proposal put before CN management and government authorities. We came out from this meeting with more questions than answers.

As I said earlier, we are particularly concerned about the fact that the federal government seems to want to divest itself of assets that belong to the people of Quebec and Canada as a whole. Regarding the CN railway system, we must bear in mind that this is a public company. Therefore, CN facilities across the country belong to the taxpayers of Quebec and Canada.

We are very concerned that a private company like CP could buy this system and then do whatever it feels like with it. This is the main criticism we, the Official Opposition, are directing at the government.

As we said in our motion, which refers to the government's lack of transparency on this issue, we find it unconscionable that the government is making decisions on the future of the public rail system, at least the part belonging to CN, without the people-or at least the socio-economic stakeholders-, the Official Opposition and the Reform Party being consulted on and participating in the upcoming decision on the future of the rail system.

Regarding the sale of facilities to CP, we will need much more information and many more assurances from the government if it wants us to approve this deal.

Most of the Quebec portion of the CP line from Saint John, New Brunswick, to Sherbrooke goes through my riding of Mégantic-Compton-Stanstead. This line belongs to CP. For several years now, we have witnessed CP's "demarketing effort" to discourage potential industrial clients from using their services, as well as the difficulties experienced by local people. Their attitude seems slightly different today since CP needs people's support to buy CN-But when we see how difficult it was in the past to obtain information from CP, we are entitled to ask ourselves what will happen when this company takes over the whole network in Eastern Canada, and especially in Quebec. It would take compelling arguments to convince me that this is a good deal.

I would like to say a word about the federal government's criteria for assessing the networks to be abandoned or sold off.

Everyone agrees that the two main criteria are profitability and the public interest. Everyone also agrees that east of Winnipeg-and this is not partisan separatist talk, because it affects Ontario and the Maritimes as well as Quebec-profitability is the criterion used by the National Transportation Agency to decide on the future of a railway or branch line.

How can local people show that a rail line is profitable? I would say that they almost have to prove it foot by foot and not for the whole line. I will just give an example to illustrate what I am saying. The rail line which concerns me, the one from Saint John to Sherbrooke, has a client about 10 km west of Sherbrooke called Eka Nobel. This company alone does over $3.5 million of business with CP every year to move its merchandise.

When the time came to consider the profitability of the railway east of Sherbrooke, this customer located 15 km west of Sherbrooke was not taken into account. This shows the ridiculousness of such a situation where figures are made to say what one wants them to say.

For the future of railways in western Canada, public interest is the criterion used. To prove this point, and no one can challenge this, I take the subsidies for shipping western wheat; for the current year, about $600 million of our tax money will be used to pay for the transportation of wheat in the West. There is no equivalent in eastern Canada. This policy is a double standard which obviously puts rail service in eastern Canada at a disadvantage.

To conclude, I would like to say a word about the future of rail transport, since this morning, the minister-as I said and repeated earlier-accused the Official Opposition of wanting to maintain the status quo. When my colleague who spoke just before me talked about a moratorium on abandoning rail lines throughout Canada, and especially in Quebec, the reason we are asking for a moratorium is not to maintain the status quo but to let the local and regional stakeholders and the Government of Quebec meet with representatives of the federal government to discuss alternatives. Alternatives exist. Later today, some of my other colleagues will talk about short lines, which Quebec law encourages and permits. To establish a short line, the local community must take charge.

One of the problems the railway system has to face is the loss of interest of the population these last few years. There are several reasons for this change of attitude, including the fact that the railway companies, the CN and the CP, have chosen to keep their operations secret. Because of the way the CP handled things in my area, potential users no longer want to do business with this railway company, and our people lost interest.

So, we need to hold a real debate. This is why I hope the speeches made today in this House will not close the debate on the railway system, but rather launch a truly public debate on the issue, a debate in which the government and the opposition should take part and make their position known, to reassure the population that the railway system will be maintained and expanded throughout Canada.

On a more specific note, I want to say that in Quebec and in my riding, there can be no economic future without a profitable railway system, and such a railway system can obviously ensure economic development and also be financially viable. To do so, we need the co-operation of all the people involved. This is what we, in the Bloc, are trying to do and we can only hope that the government join us in our efforts.

[Patrick Gagnon, Liberal, Parliamentary Secretary to Solicitor General of Canada]

Mr. Speaker, I listened with great interest to the hon. member's comments. We are discussing a national policy, but the previous speaker talked about converting Quebec's railway system to electric power.

I find it hard to see how we could ensure national co-ordination if electricity is used in Quebec but not in the rest of Canada. I would really like to know what would be the costs of an independent service in Quebec, as proposed by the opposition, and I wonder if the hon. member can provide an answer to this very legitimate question.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, with all due respect for the hon. member representing Bonaventure-Îles-de-la-Madeleine, I realize that he does not know anything about the railroad issue and I would hope that, in the few hours of debate left, the government will be represented by people who have some basic knowledge of the issue.

When Bloc Quebecois members, and certainly myself, talk about the future of the railway system in Quebec, it is of course in the context of a larger network which would include surrounding provincial or federal states, including the United States. I remind the hon. member for Bonaventure-Îles-de-la-Madeleine that, during the debate on free trade, sovereignists were the strongest and most vocal supporters of that option. In fact, Conservative Prime Minister Brian Mulroney paid tribute to the current deputy premier of Quebec, Mr. Bernard Landry, who travelled across Quebec, and even Canada, in support of the free trade accord with the United States, back in 1988.

Sovereignists are not afraid of economic challenges. We have no problem whatsoever with competing. We are well aware that we live in North America and we want to develop economic, cultural and social links as much with Canada as with the United States. In that respect, the railway system is a tool among others. My colleague, who has experienced railway systems in Europe, made it very clear a few minutes ago. In Europe, railways cross borders almost every 600 or 700 kilometres and there is no problem. Nobody ever said: "We will have a network in France, but no connection with Belgium, Italy or Spain".

Obviously, when my colleagues and I think about railway development, what we have in mind is a network linked to all of Canada, as well as the United States. In fact, the railroad in my riding is an international line, since it goes across Quebec and Maine, on to New Brunswick. It goes without saying that we must think in terms of the whole continent when we look at the railway system. We hope to save our domestic network so as to be able to connect with American networks as well as Canada.

As regards the use of electricity, it is one of many options, and as good as many others. My colleague was simply trying to show that, with a bit of imagination, there are solutions which could ensure a promising future for the railways.

[Paul Mercier, Bloc, Blainville—Deux-Montagnes, QC]

Mr. Speaker, the hon. member for Bonaventure-Îles-de-la-Madeleine made a reference to what I said about electrification, so I would like to add that electrification is an option that offers tremendous economic as well as environmental benefits, for Quebec and Ontario, two provinces that produce large amounts of electric power.

What I meant is that if Quebec were a sovereign State, it could look at the option of electrification more independently and with greater emphasis on national interests, I would say, than would be the case today, when we have people lobbying to maintain the use of oil. I may add that some railway lines, and I have travelled on these, use oil on one section and electricity on another section. It is not a major problem.

[The Acting Speaker (Mr. Kilger)]

Does the hon. member for Mégantic-Compton-Stanstead wish to comment?

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Do I have any time left?

[The Acting Speaker (Mr. Kilger)]

Yes, of course.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Yes, Mr. Speaker, I would like to elaborate on what the hon. member just said. Basically, his point was, and I mentioned this earlier, that we should look at all the options or at least keep all our options open in the railway transportation sector as in all other sectors.

The hon. member for Bonaventure-Îles-de-la-Madeleine asked some of my colleagues what position the Government of Quebec would take on this matter and what the position of the municipalities would be on taxation. He was referring to the fuel tax.

I would like to comment briefly in this respect, since during the past year, I was very involved in working with people in my community to raise public awareness of the future of railway transportation. I think that important progress was made during the past few weeks, and I am delighted to see that.

I also had an opportunity to talk to municipal authorities, who told me they had no objection to reviewing their right to raise property taxes and to business people who expressed an interest in investing in short-line railway companies. In fact, the only ingredient still lacking is a clear-cut decision by the government and the Minister of Transport to include the public or its representatives in this debate.

So far, and we see this in the so-called task force set up by the Minister of Transport, there is no room for the opposition, not for the Official Opposition and not for the Reform Party. As far as consultations with the industry are concerned, there are a monumental farce, and that is why we are telling our stakeholders to boycott these consultations, since their only purpose is to let the government hear what it wants to hear. What we need is genuine consultations across Canada, and I am prepared to co-operate with the government and let our intervenors come and say what they think of railway transportation and what they are prepared to do to ensure its future.

[Pierrette Ringuette-Maltais, Liberal, Madawaska—Victoria, NB]

First of all, Mr. Speaker, I wish to commend the open-mindedness the hon. member for Mégantic-Compton-Stanstead has shown in advocating a national railway system from coast to coast, that is to say from the Atlantic to the Pacific and, of course, going across Quebec.

It is with pleasure that I will be talking today about a critical element of Canada's infrastructure, CN North America. CN is the largest rail carrier in Canada as well as the largest federal crown corporation with assets over $5 billion and revenues in 1994 forecasted at over $4 billion. CN North America operates an extensive network of 18,000 miles and provides about 30,000 jobs across the country. It serves shippers in 8 provinces giving them access to all major canadian ports and to markets in the U.S.

CN North America has faced several difficult challenges over its existence and, more particularly, over the last few years. Let me explain, the market for rail has changed dramatically and motor carriers now compete vigorously against rail carriers. The commodities best served by rail are under growing world price pressure and are demanding lower transportation rates. Shippers from the manufacturing sector are demanding better services in terms of reliability and rapidity.

All these factors have affected the financial performance of CN North America and resulted in continued losses over the past few years. However Mr. Speaker I believe that CN North America has begun to take the necessary steps to improve its future performance. The company is rationalizing its network. It is abondoning the few remaining lines where there is simply no traffic and selling to local entrepreneurs the lines that serve local markets and can be operated profitably by a small-scale railway company.

These regional railways or shortlines are usually more responsive to local shipper's needs and consequently provide services of equal or higher quality than class 1 carriers. In addition, their more flexible work rules allow them to adapt quickly to market demands and make them a lower cost solution than the traditional class 1 carriers.

In addition to rationalizing its network, CN North America is currently implementing a major labour reduction initiative. The company announced in 1992 that 11,000 jobs would be eliminated over three years. That announcement resulted in a significant write-down and a loss over $1 billion in that year. But it also signalled to the financial market, the company's firm intention to control its costs.

CN North America is now in the second year of this initiative. It recently confirmed that 70 per cent of the cuts have been made. This iniative represents an important change in the organization that needed to be made if CN North America is to become a viable operation.

CN North America has also increased its marketing effort and is investing to offer shippers the best service available. The expansion of the Sarnia tunnel is perfect example of an investment that will give the company a competitive edge over it competitors in the intermodal market. By investing over $200 million to expand the Sarnia tunnel, CN North America will soon be able to move double-stack containers between Montreal, Toronto and Chicago. This could represent savings of 12 hours for shipments going to Chicago.

Another good example of CN North America's strive for improved service is the recent purchase by the company of a leading-edge information system that will track individual shipments from pick-up to delivery. It will now be possible for CN North America and its shippers to know exactly where a shipment is and when it will get to its final destination.

I am glad to inform the House that CN North America is starting to reap the benefits of its ongoing efforts. The company earned $186 million for the nine months ended september 30, compared with a loss of $41 million in the comparable period in 1993. The company could earn as much as $225 million profit this year, which would break the long series of losses experienced over the last few years.

However, this year's profit is not yet the happy ending we are all hoping for CN North America. The company's debt remains at $2,2 billion, a very high level. And the profit in 1994 will not be sufficient to reduce the debt significantly because of important requirements for capital investment.

CN North America must continue to invest in its infrastructure to respond to growing demand and to reduce its costs. Higher profit over several years will be necessary to start reducing CN North America's debt. Fortunately, the recent cost-cutting and revenue-enhancing intiatives undertaken by CN North America put the company in a position to reap the benefits of the current strong economic growth and establish the base for a viable rail operation.

We are all aware that on september 22, Canadian Pacific Ltd. presented to government an unsolicited proposal to purchase CN North America's eastern assets. The offer came a few months after the failure of merger discussions between CN North America and Canadian Pacific Ltd.

You will recall that Canadian Pacific Ltd. and CN North America initiated these merger discussions more than a year ago in an attempt to consolidate their money-losing operations in eastern Canada. The discussions failed when the companies could not agree on the value of the assets they were each contributing to the deal.

The governement is now reviewing CP's bid to assess the many implications for the rail industry, shippers, rail employees and taxpayers. In particular, government is reviewing the competitive implications of the proposed bid for shippers located in eastern Canada as well as the likely impacts on transcontinental traffic and western shippers.

The review will also include an assessment of employment impacts of the take over. And government has retained the professional service of wood gundy, and investment banking firm, to provide advice on the financial aspects of the proposed transaction.

The overall review is proceeding quickly but the government made it clear that it would take all the time required to conduct a proper assessment of the offer.

This unsolicited bid prompted the Minister of Transport to announce on september 29 the creation of a task force on the commercialization of CN North America. The task force, chaired by my colleague from Kenora-Rainy River, Robert Nault, will focus on commercialization of the company, including potential employee participation.

The task force will seek input from a variety of stakeholders in the rail industry, including railway employees, shippers, provinces, communities and the railways.

To date, the task force has been briefed by senior executives from CN North America and other rail industry experts, by the Canadian Railway Labour Association and by the National Transportation Agency.

Public consultations will start next week on november 22 in Ottawa and will be held in a dozen of other cities across the country over the next month. The task force is expected to report to the minister of transport by the end of the year.

I want to emphasize that the task force review is only one element of government initiatives to streamline its operations and review its role to define what must be done by government and what could be accomplished by the private sector. Accordingly, Transport Canada is currently reviewing all its operations to determine what activities could be better accomplished by the private sector or in partnership with the private sector.

In the rail sector, Transport Canada has undertaken a review of the industry to determine the key elements impeding railway's performance. The objective is to define a strategy dealing with these issues that will improve the railways' ability to compete and provide efficient and affordable service to canadian shippers.

Transport Canada has concluded a series of regional consultations on the rail industry where shippers, the railways and unions were asked for recommendations to improve the railways' performance and ability to compete. The discussions covered several issues from railway management, labour practices to rail regulations.

In parallel to the consultations, Transport Canada is taking a close look at its regulations to ensure that our transportation companies, including the railways, operate in an environment that favour efficient use of resources and high-quality service for shippers.

Obviously, the future of CN North America will be affected by all these initiatives. Changes in the rail industry as well as changes in the perception of government's role vis-a-vis crown corporations would have a direct impact on CN North America. It is too early to speculate on what the future of CN North America will be. The government has undertaken a series of reviews that will all affect the corporation: a review of the environment in which the corporation operates; an assessment of CP's unsolicited bid, and a review of the potential merits of commercializing CN North America.

The company has begun to take the necessary steps to become an efficient rail operation. The conclusions of these reviews will be instrumental in maximising the benefits of CN North America's initiatives. The government will ensure that railways operate in an environment that allows them to freely compete and gives them the opportunity to adapt to shipper's demands in an efficient and affordable manner.

In this context, the future of CN North America will be determined by what is best for the rail industry but also for canadian shippers and the canadian people.

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, it is a pleasure to participate in debate on the opposition day motion concerning the inaction and lack of transparency of the government with respect to the potential restructuring of Canada's railways.

I look upon this as an opportunity to speak about the vision, history, and fabric of this great nation. It is difficult not to be nostalgic and perhaps a bit sentimental when one speaks of a symbol of our heritage, a simple yet binding line of steel that forged the country and tied a fledgling nation together over 125 years ago.

What child of our generation can forget running to a window to watch the train or the haunting late night blast of its steam whistle belching clouds of smoke? The steam, coal and smoke may be gone, replaced by diesel turbines and electric motors, but the memory lives on. Or, does it? And if it does, for how long?

In preparing for this speech I could not help but recall two formative pieces of Canadian literary work, The National Dream and The Last Spike . Pierre Berton's comprehensive works on CP Rail and the line of steel that brought my home province of British Columbia into Confederation are enduring. It is hard to forget the concluding paragraphs of Berton's work as the last spike is driven at Craigellachie and the tiny engine rolls through the mountains, down the escarpment to the Fraser Valley meadows, off to the blue Pacific and on into history. This is the legend, the lore, and what brought the country together.

Nothing is static. While one can reminisce about the past, its simplicity and fragile beauty, a country marches on and not always as it should. Change is not always improvement. Motion is not always progress. Simple men sometimes lack the vision of our forefathers and choices are not always the right ones.

We are here today to question and debate where we are going as a country not in all dimensions but in one fundamental basic dimension: rail travel, be it CN, CP or VIA Rail. We are here to question our vision, our progress and our choices.

Despite what the current administration thinks sometimes money cannot buy vision. It cannot, as in this instance, buy decisiveness in our rail policy for the country. The fact remains that the government has shown complete disregard for a rail policy for Canada.

As in the 1860s times have changed. The solutions we used to forge rail policy in the 1960s and 1970s are not compatible with today's problems, including the movement of freight and people. While an enlightened rail policy could forge new dynamics in transportation in Canada, the current government holds any mention of vision or change in contempt. Worn out political hacks at CN headquarters in Montreal work in secret. Their vision parallels that of the Bloc's motion of unrealistic $7 billion to $10 billion rail corridors bordering the St. Lawrence River. These are monuments to the greed and largesse of better days, not sensible alternatives to the inertia that really grips these people.

This is not 1860. Government and the public sector are not masters of all. There is no bottomless pit of inflated dollars for high speed rail corridors. The torch has been passed and the notion that the government or the public sector can do it better does not pass the litmus test of the 1990s. So-called privateers like the Bombardiers who like to innovate as long as government dollars are there are not solutions but drains, and no more so than in rail policy.

The Reform Party promotes a vision that promotes privatization and spinoff of federal transport operations into private hands. The Reform Party supports the Bloc's motion condemning the government's shoddy if not non-existent rail policies. Who knows what the future holds for CN or CP Rail?

The Reform Party supports CP's recent offer to purchase CN's eastern operations. How has the transport minister reacted? It has been with scorn, hesitation and indecisiveness. Is this a rail policy? What is he waiting for, a better offer? No, he is content with the status quo. In many ways this attitude is as dispensable as the steam whistle and the clouds of smoke. If the minister is devoid of solutions or visions why not open the process to public review and scrutiny?

A ribbon of steel from east to west has become an ever decreasing concentric circle where we end up meeting ourselves. We are going nowhere. Let us look at VIA Rail, the sinkhole of inefficiency. It is one of the biggest money losing, overbureaucratised entities in Canadian transportation. This is not because of rank and file VIA Rail employees. No, it takes a special public service background and mentality to run a railroad into the ground and make six-figure salaries while doing it.

Without question putting VIA Rail in private hands would cut costs, revitalize the corporation and its people, and allow it to return many passenger routes that have been abandoned or are in danger of being cut. It does not take any vision to keep cutting and make a few dollars, but in the case of VIA it does take a special touch to cut and still lose money.

If VIA were to be turned over to private entrepreneurs marginal routes could once again be viable, but not as long as VIA is publicly owned. Complacency and debt endure forever. VIA Rail has exhibited no marketing strategy, business plan or a scintilla of vision in its current operation.

Talking about government funded, billion dollar, high speed, government run rail corridors ensures more of the same. Why are the Bloc and the government afraid to pass it on to those better suited and able to run a railroad?

If private investors were given annual funding to the tune of $330 million, as VIA will receive this year, do we really think they would squander it on high salaries for their executives? Why is VIA receiving these kinds of grants and still losing money while cutting routes and service?

Speaking of management, in 1992 CN cut 10,000 jobs and lost $1 billion. That same year CP applied for abandonment of all lines east of Sherbrooke. Just where are we going? Do we know? Eventually the Reform Party could see the government abandoning its stake in CN Rail by turning it over to private investors. Governments should no longer be in the business of directly subsidizing our national transport system.

The government is unwilling to admit its policy flaws and clings to the good old days of decades ago where throwing money at a problem was solving it. In reality we have no rail policy and a debt ridden CN Rail still at the trough.

However the Reform Party feels that government cannot simply abandon its financial stake in the transport industry without having the sense to recognize how much revision needs to be enacted to bring transport legislation into the 1990s. Present legislation harshly though unofficially penalizes the rail industry through the present federal tax structure. It behoves the government, particularly the Minister of Transport, to rewrite rail policy, clear up the anomalies, and set a strategy in place to allow investors to enter the arena with clear parameters.

To encourage and support this new policy regime, the Reform Party suggests the following measures. First, we would encourage through tax reforms and low interest loans the development of short line rail operators in regions of the country where major rail companies are no longer viable or willing to provide the amount of capital needed to recreate a viable rail transportation industry.

Second, we would negotiate the reform of the provincial component of the property and fuel tax structure for both main and secondary rail operators to bring these costs more into line with their U.S. counterparts.

Third, we would formally recognize through federal tax reform the environmental safety and infrastructure benefits provided by rail transport as opposed to modes such as long haul trucking.

Finally, in relation to the last point, we need a thorough and fair revision in the overall taxation structure for the nation's trucking industry to bring it more fairly into line with the costs now being incurred by rail companies.

Currently the government gives with one hand and takes with the other. Since taking power last year the government has done an inadequate job of protecting Canada's rail industry. It is mired in the past with no clear vision or policy direction. Unlike the Bloc, we feel there should be less and not more public participation. Governments should set guidelines and step out of the way. Right now no one is pleased with the situation and the rail industry is suffering as a consequence.

In the 1860s we completed our rail link to the Pacific. In the late 1930s and 1940s we tied the country together in transcontinental air flight. In the 1960s we completed the trans-Canada highway system. Let not these statements of vision, courage and capacity be diminished by a lack of coherent rail policy in the 1990s.

[The Acting Speaker (Mr. Kilger)]

I failed to ask the member for clarification at the beginning of his intervention. Is he going to be splitting his time with his colleague? He used 10 minutes and I do not know if he is subject to five minutes of questions or comments or 10.

If it is the wish of the Reform Party I will recognize the member for Lisgar-Marquette for the remaining 10 minutes. Before I recognize him there will be five minutes of questions and comments.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, I have one question for the hon. member.

Some time ago a company called the Great Canadian Railtour Company in British Columbia purchased from VIA Rail, an operation known as the Rocky Mountaineer. After it was purchased, VIA Rail, a government crown corporation, then tried to go back on the deal in a number of ways: by manipulating the contract, by reinterpreting the contract and then later, trying to introduce a competitive service on an adjacent line. All of this was against the spirit if not the letter of the contract.

This would be a concern for people who may be looking at purchasing a privatized CN Rail or a portion of it. We would have to look at actions of the minister under such things as the Pearson contract.

In this situation Canadian businesses put together and signed a contract with the government which the government cancelled, as is its right. We are not questioning that right but rather the entire mechanism where the government tried to introduce legislation that would ban it from going to court seeking redress, whatever proper redress might be.

Does the hon. member think that the actions taken by the Minister of Transport with regard to the Pearson contract might impact on private companies looking to buy a portion of CN Rail or the entire operation?