Pursuant to the order adopted earlier today the division on the question now before the House stands deferred until later this day at 10 p.m. at which time the bells to call in the members will be sounded for not more than 15 minutes.

Message From The SenateGovernment Orders

9:40 p.m.

The Acting Speaker (Mr. Kilger)

I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-5, an act to incorporate the Canadian Association of Lutheran Congregations, to which the concurrence of this House is desired.

Pursuant to Standing Order 135(2) the bill is deemed to have been read the first time and ordered for second reading at the next sitting of the House.

SupplyGovernment Orders

9:40 p.m.

York Centre Ontario

Liberal

Art Eggleton LiberalPresident of the Treasury Board and Minister responsible for Infrastructure

moved:

That Vote 30, in the amount of $330,938,000 under the heading Transport-Payments to Via Rail Canada Inc., in the main estimates for the fiscal year ending March 31, 1995 (less the amount voted in interim supply), be concurred in.

SupplyGovernment Orders

9:40 p.m.

London East Ontario

Liberal

Joe Fontana LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, I am glad the opposition has raised this matter for debate. As all members know there are many pressing issues facing the railway industry and Canada is at a crossroads with respect to the industry's future.

Before dealing specifically with VIA I would like to put the rail passenger services into the larger context of the national transportation system. The hon. Minister of Transport set out a clear vision for the government's national transportation policy on June 3 in Thunder Bay.

Obviously transportation is as important now as it was in the past. We need a realistic achievable vision, and new partnerships to move the Canadian transportation system into the 21st century. We should respect the past but by doing so we must meet the challenges of the future.

We believe that the role and structure of crown corporations such as VIA Rail and CN must be reviewed. Because of the current uncertainty in the rail sector and concerns over its long term viability, the Minister of Transport intends to convene a meeting of industry leaders to discuss the problems railroads are facing and to search for solutions.

We must be pragmatic and focus on what will work. We must ensure that the common sense realistic needs and affordability are among the criteria driving Canadian transportation policy of the future. Passengers must have a multimodal transportation system that is safe, reliable and affordable. VIA has a role to play as we put the system in place.

Because of the need to reduce the government expenditures VIA has been required to operate within lower funding levels. Notwithstanding the fact that the funding to VIA has been reduced and its network restructured in 1990 we now have a streamlined and more efficient rail passenger carrier. The corporation has been able to complete cost studies of its operations that show where opportunities exist to make cost effective changes. Identification of such opportunities prompted VIA for example to introduce new service frequencies in the Montreal-Ottawa triangle while reducing further its requirements for government subsidies.

The government is pleased with what the corporation has been able to accomplish with the introduction of its silver and blue service on the western transcontinental trains. Public response has been outstanding. With both revenue and traffic increasing, on time performance is now at 90 per cent.

VIA has demonstrated that it is capable of meeting the challenge of subsidy reductions. That has been accomplished with the use of better equipment, improved productivity and a quality of on board services.

Recent years have seen VIA management exercising greater flexibility and control over the planning, development and operation of rail passenger services. With our government that trend will continue.

The 1993 budget reduced VIA funding over a three year period beginning in 1994-95 from $343.4 million to $235 million in 1996-97. The recent budget exercise further reduced annual funding over the next five years by a total of $9.6 million.

As my colleague, the Minister of Finance, has already told the House, Canada has been building up a mountain of debt. We simply cannot allow this trend to continue. This was the reason behind our decision to confirm the VIA funding levels announced in the 1993 budget. VIA has met its challenges in moving to a more efficient customer oriented company.

This government is now asking the corporation to assist the government in reducing our national deficit. VIA's ability to meet this challenge is fundamental to its long term viability. The government's decision to confirm VIA's reduced funding was a necessary one and the right one for Canada. We cannot put the decision aside and look to the past. In my opinion that would be the wrong course. Rather we must now look to the future and forward building on VIA's successes.

There has been much discussion concerning the level of government subsidy to passenger rail service. In particular comparisons have been made with other modes of public transportation in Canada: buses, aeroplanes and the automobile. While the automobile and air modes have received more funding overall, each passenger on the rail mode receives a far greater subsidy than any other mode of transport.

Since its creation in 1977 the government has spent more than $7 billion on VIA's operating and capital expenditures. Despite these government subsidies rail passenger service retains only 1 per cent of the total Canadian intercity passenger traffic. In comparison the air mode has a market share of 6 per cent. The automobile enjoys the lion's share of the market at 89 per cent. Even the bus mode enjoys a greater share of the market at 4 per cent.

These figures reveal that Canadians have a definite preference for passenger modes other than rail and they have sent a clear signal of that preference.

Like all Canadians we must ask ourselves what is it that we can afford. We must make choices based upon utility and value. We cannot say to Canadians: "You must continue to pay more and more for something you rarely use".

I would encourage the opposition to recognize that we must face the reality of our economy, of our modes of travel, in particular the cost and benefits of rail passenger service.

If I may, I would like now to address the issue of where VIA is today. At the outset it would be helpful to briefly review some of the facts on VIA's performances in 1992. For the system as a whole the operating subsidy was $332 million. This translates into an average total subsidy of $92 per passenger. For the corridor, the most heavily travelled segment of the network, the operating subsidy was $171.8 million for an average subsidy of $56 per passenger.

As we move to the other categories of service we see that the level of subsidy rises dramatically. For example, it rises from an average of $254 per passenger for Trent Continental service to $454 per passenger for services to the remote communities.

It is also interesting to look at the level of cost recovery. It ranges from a high of 38 per cent on the corridor to a low of only 8 per cent on the remote routes. Nevertheless, VIA has not stood still since the 1993 budget announcement. To help meet the funding targets it embarked on a major restructuring of its corporate and management expenses last November. We as a government must respect the taxpayers' ability to pay. That is an important first step.

Unfortunately, with even bigger streamlining and a pared down corporate structure VIA cannot achieve viability unless at the same time it addresses its cost base. For example, labour costs represent approximately 46 per cent of the corporation's operating costs. These are in fact the largest single cost items in VIA's budget.

The decisions facing both VIA and its labour unions in the current contract negotiations will be difficult. At the same time it will be necessary for them to work together to find a resolution of their differences which is within the final financial constraints.

VIA is currently evaluating the effect on its operations of the budget funding cuts. As well, the negotiations between VIA and its employees will have a significant impact on future levels of service.

In addition, the corporation is reviewing every aspect of its operations to maximize all expenditures which do not impact directly on services to the travelling public.

In conclusion, I believe it is important to tell this House and Canadian taxpayers, who are in fact funding VIA to the tune of $323 million this year, that a resolution and a solution can be found. It lies within VIA itself coming up with some additional efficiency gains and the workers and labour components of VIA working co-operatively with the company to ensure greater efficiencies. Passengers and the travelling public who have a great desire for using passenger rail service-at least that is what they tell us-at the same time jump in their cars and drive down the 401. Ninety per cent of passengers do that.

I think the solution for passenger rail service, and there is no doubt that there is one in this country, lies with the passengers utilizing VIA more, the labour component part helping, and VIA looking for greater efficiencies. We believe that we can have a viable affordable passenger rail service in this country.

SupplyGovernment Orders

9:50 p.m.

NDP

Audrey McLaughlin NDP Yukon, YT

Mr. Speaker, I listened with interest to the member and his comments on the importance of rail and the decreased utilization of rail in this country.

I think we should put this into perspective. Following the changes to the rail system, to VIA Rail, we cannot on the one hand chastise people for not using rail when in fact the service and the funding to that service have been radically decreased and the quality of the service not upgraded. Certainly the proposals that have been around for quite some time on a high-speed train in the Toronto-Ottawa-Montreal corridor clearly would serve a very important transportation service both for passengers and produce.

I was recently in Japan. While I realize there is a much larger population there, their high speed trains are utilized fully because it is a good service.

Certainly the whole question of transportation is a major one. One of the debates during the Canada-U.S. and NAFTA free trade agreements was the impact on transportation, a further north-south investment into transportation routes of all kinds as opposed to the east-west links which had provided to the regions of this country, our farming communities and communities in the maritimes and Newfoundland, a substantial part of the development of this country.

I appreciate the member's comments specific to VIA Rail as it is now, but would it not make more sense from the environmental and utilization of best technology points of view to look seriously at a high speed-train in large quarters with large population?

SupplyGovernment Orders

9:55 p.m.

Liberal

Joe Fontana Liberal London East, ON

Mr. Speaker, the question is very appropriate. The member will know that the three governments, the federal government, the province of Ontario and the province of Quebec, have spent $6 million on a further study of the high-speed proposal. That high speed proposal will come before the House and before the government some time this summer, at which point the House and the government will have an opportunity to

look at the viability of high-speed trains through the corridor from Windsor to Quebec and Montreal.

We believe there could be a future for high-speed trains in the country provided there is a willingness for the partners to work toward that resolution, the partners being the provinces, communities, other modes of travel and the private sector investing greatly in infrastructure which may cost somewhere between $8 billion and $10 billion.

The member is right that the European communities and Japan have decided to go the route of high-speed trains. We believe this country should look at those opportunities, but we will have to await the report for that to happen.

Let me say another thing about VIA. The member is right that the Conservative government slashed services some three years ago but the ridership has come back. I can only say that it is not a question of whether we will have VIA in the future but what it is we can afford. I will give one example. A person can purchase a ticket from VIA for $78 to go between Jasper and Prince Rupert. The subsidy for that one passenger for that one trip is $701 to the Canadian taxpayer.

We believe we can have a viable passenger rail service, but we need to look to the communities, to passengers, to the labour and to VIA to come up with a viable and affordable system.

SupplyGovernment Orders

9:55 p.m.

Lethbridge Alberta

Reform

Ray Speaker ReformLethbridge

Mr. Speaker, this is a very historic evening. Twenty years ago the House decided that it would change an estimate, and it changed two estimates. One was with regard to the Department of Labour wherein it cut $19,000. The other was a $1,000 cut to the president of the CBC. Those two cuts were accepted by the House at that time.

Based on that I should like to move an amendment before the House based on the same principle. If we can repeat history tonight I think we will have achieved success. I move:

That the motion be amended by deleting the amount $330,938,000 and substituting $330,918,000.

SupplyGovernment Orders

9:55 p.m.

London East Ontario

Liberal

Joe Fontana LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, I have a question for the proposer of the amendment. We acknowledge that VIA has done its part, but I am not sure how the member came up with this magic $20,000.

Is he suggesting that we cut service to his riding or any particular riding? Is that the contribution the Reform Party wishes to make to the subsidy? If that is what the Reform Party stands for, less passenger rail service in this country, perhaps the member can explain that.

SupplyGovernment Orders

9:55 p.m.

Lethbridge Alberta

Reform

Ray Speaker ReformLethbridge

Mr. Speaker, in response to the hon. member, I think he understands. He has been long enough in this Parliament to understand that is not the kind of rationale, the reason put in place by people who are responsible members of Parliament. That kind of argument is for people who want to argue in the gutter, who want to debate the issue outside the House in an arena that does not earn the respect of this Parliament.

It is very unfortunate what the hon. member has just done. If it takes a reduction in some expenditure in the constituency of Lethbridge of $20,000 to symbolize a very important change where we are going to reduce the budget, then the people of Lethbridge would be willing to accept that responsibility.

I know this member will not be making that decision. I know the members of this government, the Prime Minister, the Deputy Prime Minister, would make a rational, reasonable, priority, responsible decision on a matter such as that and it would not be done in a crass manner. That is why I can accept that responsibility on behalf of my constituents.

SupplyGovernment Orders

9:55 p.m.

The Acting Speaker (Mr. Kilger)

It being 10 p.m. it is my duty, pursuant to Standing Order 81(18), to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.

The House will now proceed to the division on Motion No. 1. Call in the members.

(The House divided on Motion No. 1, which was agreed to on the following division:)

SupplyGovernment Orders

10:40 p.m.

The Speaker

I declare the motion carried.

The next question is on the amendment to Motion No. 2.

(The House divided on the amendment, which was negatived on the following division:)

SupplyGovernment Orders

10:50 p.m.

The Acting Speaker (Mr. Kilger)

I declare the amendment negatived. The next question is on the main motion.

Is it the pleasure of the House to adopt the motion?

SupplyGovernment Orders

10:50 p.m.

Some hon. members

Agreed.

SupplyGovernment Orders

10:50 p.m.

Some hon. members

On division.

(Motion agreed to.)

SupplyGovernment Orders

10:50 p.m.

The Acting Speaker (Mr. Kilger)

The next question is on the amendment to Motion No. 3.

Is it the pleasure of the House to adopt the amendment?

SupplyGovernment Orders

10:50 p.m.

Liberal

Alfonso Gagliano Liberal Saint-Léonard, QC

Mr. Speaker, I believe you will find unanimous consent to apply the results of the last vote on this motion in reverse.

SupplyGovernment Orders

10:50 p.m.

The Acting Speaker (Mr. Kilger)

The House has heard the terms. Is it agreed?

SupplyGovernment Orders

10:50 p.m.

Some hon. members

Agreed.

SupplyGovernment Orders

10:50 p.m.

NDP

Bill Blaikie NDP Winnipeg—Transcona, MB

Mr. Speaker, I would like to clarify with the government whip. Is he sure he means in reverse? It is the motion of the hon. member for Fraser Valley West with respect to Parliament. Now it is the motion of the hon. member for Lethbridge with respect to VIA Rail. My understanding is that we would want the same vote. Am I mistaken? It is not in reverse.

SupplyGovernment Orders

10:50 p.m.

Liberal

Alfonso Gagliano Liberal Saint-Léonard, QC

Mr. Speaker, I understand from the negotiations we had that the vote we were to take is on the amendment to the motion. Therefore the government side is voting against the amendment. That is why I said in reverse of the vote that we took before. If I made a mistake at this hour, maybe there is confusion. Maybe we should take the vote.