House of Commons Hansard #235 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was rail.


The House resumed from June 6 consideration of the motion that Bill C-277, an act to amend the Criminal Code (genital mutilation of female persons), be read the second time and referred to a committee.

Criminal CodePrivate Members' Business

11 a.m.


Val Meredith Reform Surrey—White Rock—South Langley, BC

Mr. Speaker, Bill C-277 is technically an amendment to the Criminal Code of Canada dealing with the subject of female genital mutilation. This issue raises a wide variety of concerns: legal, medical, immigration and multicultural. All of these issues must be addressed when dealing with Bill C-277.

The most important issue the bill raises is that of clashing cultural values. How tolerant is a multicultural country like Canada supposed to be in accepting the cultural values of immigrants? As a general rule, Canada has been one of the most tolerant nations in accepting and encouraging differing value systems.

However, this acceptance has not and cannot be absolute. For example, Canada has not accepted polygamy as an acceptable way of life, even though it is common practice in many nations. Some might argue our refusal to accept polygamy is discriminatory. My response to such criticism is simple. If you do not like the rules we play by in Canada, do not come to our country.

Hundreds of thousands of immigrants and refugees come to our nation every year to start a new and better life, but when they come to our country they agree to play by our rules. Our rules say one cannot have more than one spouse and, more important, that one does not mutilate little girls. Female circumcision is just that, mutilation.

There is no religion in the world that prescribes female circumcision as part of its doctrine. It is rather a cultural tradition in some countries in northern and eastern Africa. Because Canada accepts immigrants from all over the world, it is an issue that now is a concern for Canadian law makers.

During the first hour of debate on this bill, members from all parties provided examples of why this is an issue in Canada. While I will not repeat the examples, suffice it to say there appears to be a body of evidence that female genital mutilation is taking place in Canada today. While there appears to be a fairly substantial body of evidence that female genital mutilation is occurring in Canada, there has never been a prosecution of anyone involved in such a procedure. Why?

The bill presented to the House by my colleague from Quebec would make anyone who commits genital mutilation guilty of an indictable offence. As well, anyone who aids, abets, counsels or procures the performance of female genital mutilation would be similarly guilty of an indictable offence.

The members from the government who spoke on the bill believe more counselling is needed and if criminal charges are necessary they can be covered by existing legislation.

What better way of counselling anyone who comes from a culture that practises female genital mutilation than by having a section in the Criminal Code by which if anyone commits female genital mutilation or even aids, abets, counsels or procures such an act he or she is guilty of a serious crime?

If we are serious about eliminating this practice that is the message we should be sending to these communities. I ask the government members who say current legislation already covers this act why there has never been a prosecution of such an act in Canada. If there ever is a prosecution under the assault causing bodily harm provisions of the Criminal Code, the defence would be arguing there never was any criminal intent to cause bodily harm.

By making this a specific offence, as laid out in Bill C-277, all the crown would have to prove is that those charged knowingly participated in female genital mutilation.

I have to agree with the members for Calgary Southeast and Bellechasse who called for an increased maximum sentence. If, as

Liberal members suggest, charges could be laid under the assault causing bodily harm provisions of the code, the maximum penalty for committing this specific crime of female genital mutilation should be the same as the 10-year maximum that exists for assault causing bodily harm.

Let us not make any bones about it, female genital mutilation is a serious offence committed against young girls in the 10 to 12-year range. It is, in effect, extreme child abuse.

While I am generally reluctant to give the provincial legislatures any advice on how to run their affairs, I will make an exception here. I strongly believe that once Parliament passes Bill C-277 or similar legislation the provinces should make amendments to their child protection acts. These amendments should make the reporting of female genital mutilation mandatory for those employed in health, education and social service professions.

It is important the House send a clear and strong message to everyone in Canada that anyone involved in the practice of female genital mutilation is committing a serious crime. However, I believe that before we get to that stage, Bill C-277 should be given a complete hearing at the committee stage. I would like someone to appear before the justice committee and explain why female genital mutilation should not be criminalized. I would like to be there and hear somebody attempt to defend this practice. I would like to hear someone explain to Canadian parliamentarians why such acts should be allowed to continue in Canada.

However, I have a sneaking suspicion the committee would be unable to find anyone who would publicly justify female genital mutilation. How does one possibly defend the indefensible?

While I believe the issue should be reviewed by the committee, I will not even attempt to give the pretence that my mind can be changed. Female genital mutilation is a violent sexual assault committed against young children under the pretence of a cultural value.

Whether it is a traditional culture value is irrelevant. Can anyone imagine if descendants of the Aztec or Mayan cultures came to Canada and wanted to revive the old cultural tradition of human sacrifice? How about the old tradition of 17th century North Americans of burning women suspected of being witches at the stake? Of course Canadians would never support such things. It is outrageous to even think about it, as is the ritualistic, violent sexual assault of little girls. Some cultural traditions deserve to be extinguished. This is one of them.

Bill C-277 is a good step in making sure this practice never gains a foothold in our country. By supporting Bill C-277 we send a message to those communities that still practise this terrible tradition that such acts will not be tolerated in Canada.

I am happy I do not share the guilt members opposite seem to be racked with when dealing with cross-cultural conflicts. I take pride in having this opportunity to denounce the barbaric act of female genital mutilation and I will stand with those members who support this legislation at second and third reading.

Criminal CodePrivate Members' Business

11:10 a.m.


Pauline Picard Bloc Drummond, QC

Mr. Speaker, I would like to begin by congratulating my colleague, the hon. member for Québec, for her courage and tenacity. Courage because she rose to demand new legislation on the practice of genital mutilation. Tenacity, because she continued to push for her bill despite a negative response from the Minister of Justice, since she was convinced that it was both appropriate and necessary.

I am therefore pleased to speak in this debate in support of Bill C-277, since I share the belief of my colleague and the large majority of women and men across Canada and in Quebec that the current legislation must be clarified and reinforced in order to protect women from these barbaric acts.

I share her conviction that the Minister of Justice's great sense of responsibility will lead him to concur that such a modification to the Criminal Code will be beneficial and to revise the decision he reached in April 1994.

The Minister of Justice's decision not to criminalize excision was based on two arguments: charges may be laid against those practicing excision under the present provisions of the legislation, and the intent is to focus on prevention.

I feel that those two arguments are too weak to justify the decision not to make any changes to the Criminal Code. I have nothing against prevention and information, far from it; one cannot be against what is right, but as Machiavelli said many, many years ago, virtue alone has no effect on man unless it is reinforced by a degree of deterrence.

Prevention is fine, but above all specific legislation needs to be passed to prohibit the practice of mutilating the genitals of women and girls. After all, what is there to prevent after the harm has been done?

At present, the Criminal Code prohibits anyone from assaulting, causing bodily harm to or killing another human being. The minister contends that these provisions are enough to prohibit all kinds of genital mutilations. I think not, because this legislation is too vague and does not deal specifically enough with excision. A person who performs or causes this kind of mutilation to be performed could use religious and particularly cultural arguments to justify this practice. Legislation such as the Canadian Multiculturalism Act and the Canadian Charter of Rights and Freedoms require that the various cultures be recognized and promoted.

It so happens that genital mutilation is a standard in many cultures, including Africa and Asia.

I do not think we all have to be lawyers to understand that the existing legislation is not as efficient as the minister would have us believe. Several provisions are likely to discourage a crown prosecutor from preferring charges or a judge from convicting to the full extent of the law in such instances, however few they may be.

Education and prevention are fine, but that is just not enough. Monitoring needs to be instituted to find, denounce and, more importantly, punish offenders for real.

Action is required. Existing provisions do not prevent such acts from being committed. Also, one can seriously question the effectiveness of a prevention policy consisting merely in information. The only choice left is for the legislator to make a special law to unequivocally criminalize the practice of such mutilations.

Bill C-277 is not that complex. It does not call for a complete overhaul of the system. It is just a few lines long. And let me quote the proposed amendment to be added after section 244. It reads as follows:

A person who: a ) excises or otherwise mutilates, in whole or in part, the labia majora, labia minora or clitoris of a female person; or b ) aids, abets, counsels or procures the performance by another person of any of the acts described in paragraph ( a ) is guilty of an indictable offence andliable to imprisonment for a term not exceeding five years.

That is all. Two small paragraphs. That is all we need to settle this matter once and for all. I do not understand why the minister is reluctant to pass a bill that is so short but that would reinforce the current Criminal Code and make it much more of a deterrent.

Allow me to speak of this issue in a little more detail. According to studies published in 1993-94, between 85 million and 114 million of the women alive at that time had undergone genital mutilation.

According to some figures, the number of genital mutilation cases has increased by 2 million a year in nearly 40 countries in Africa, Asia and the Middle East. These procedures are performed on girls aged 4 to 10 on average. That is appalling.

Although impressive, these figures do not say anything about the trauma experienced by these girls, most of whom are quite young. They do not say anything about the pain suffered both during and after these mutilations or on the health problems many of the victims will face for the rest of their lives.

Often performed in unsanitary conditions by people without any real medical knowledge, these mutilations can have many adverse consequences, including haemorrhages, incontinence, abscesses, infections, traumas, shock and infertility.

Those who perform these procedures use improperly sterilized tools, if not plain kitchen knives. According to a document from the Canadian Advisory Council on the Status of Women, sugar, eggs, thorns and palm ribs are also used.

Very painful and often performed without anaesthesia, these irreversible procedures often result in traumas as well as sexual and psychological complications for the victims.

I do not think I need to continue describing this practice to give members a good understanding of what we are dealing with.

This practice is clearly unacceptable and should never be condoned. We must also ensure that those who perform these procedures are severely punished. Unfortunately, as I pointed out earlier, current legal provisions do not have enough teeth to be 100 per cent effective. We must ensure that this practice is no longer used in our society. The current legislation does not achieve that goal; prevention alone is not enough. However, Bill C-277 would certainly do it.

We could talk for a long time about the benefits and the merits of such a bill. But what is important is to understand that, in a country that claims to be democratic, these religious, cultural or other traditions are indefensible and reprehensible. As a self respecting society claiming to protect its individual members, it is immoral to condone such shameful atrocities.

Yet, and unfortunately so, this is what the Minister of Justice did by rejecting the suggestion to amend the Criminal Code so as to explicitly prohibit excision.

Bill C-277, which was introduced by the hon. member for Québec, provides an opportunity to correct the situation, once and for all, in a simple and efficient manner. France, Great Britain and Sweden have already outlawed that practice, while Norway and several American states have strengthened their legislation to that effect. The time has come for us to take concrete action. It must be made clear to Canadians and those who come to our country that genital mutilation is not only unacceptable as a matter of principle, but also not accepted and severely punished, since it is in fact a crime.

Criminal CodePrivate Members' Business

11:20 a.m.


Stan Dromisky Liberal Thunder Bay—Atikokan, ON

Mr. Speaker, it is my pleasure to address the House regarding Bill C-277, an act to amend the Criminal Code as it pertains to the genital mutilation of female persons, proposed by the hon. member for Québec.

The bill aims to make persons who perform female genital mutilation or who aid, abet, counsel or procure the performance by another person of female genital mutilation guilty of an indictable offence and liable to imprisonment for a term not exceeding five years.

I state from the outset my personal repulsion of this practice. It is without a doubt a practice which causes great harm. However, we must not allow our disgust with the practice to cloud our reasoning about the member's proposed bill as an effective means of addressing this problem.

As for the cultural practices in other lands it is out of our scope to dictate what should or should not be included in their criminal codes. Societies practising female genital mutilation will change their behaviour only on understanding that the intent behind their action can be achieved by other less harmful means.

Female genital mutilation is a practice which inflicts harm on an estimated 85 million to 115 million girls and women, with about two million girls being subjected to this ritual annually worldwide.

There is no doubt that the practice can prove very harmful to the health of a baby girl and eventually of the woman. There is an indisputable medical link between female genital mutilation and a myriad of short and long term health consequences. Some have already been mentioned such as severe haemorrhaging, shock, infections, infertility, urine retention, sexual dysfunction, difficulties with child birth and even death.

As I mentioned earlier, this well intentioned bill poses certain problems. The Minister of Justice indicated in March he was of the opinion that an amendment to the Criminal Code was not necessary at this time. The minister informed members of the House that there are those who are knowledgeably involved who believe amending the Criminal Code at this time could inadvertently drive the practice even further underground, and the government agrees. Instead the government prefers to engage in a comprehensive educational campaign which outlines the health risk of the procedure and the criminality of the practice.

All hon. members should be made aware the Criminal Code of Canada does have a provision which could cover those who practice female genital mutilation. Presently sections of the code which apply include assault causing bodily harm, section 267, unlawfully causing bodily harm, section 269, and aggravated assault, section 268, all of which are indictable offences with maximum sentences of between 10 and 14 years. Section 268 refers to the situation in which a person wounds, maims, disfigures or endangers the life of the complainant.

There are other sections of the Criminal Code which could be used to prosecute either the person performing the procedure or the parents for their part in arranging for it to be carried out. Also, a recent amendment to the code aims to address situations in which a Canadian resident is taken from the country with the purpose of committing an act against him or her which would ordinarily be an offence if committed in Canada. This section of the code provides for a maximum sentence of five years for an indictable offence.

Over and above existing Criminal Code provisions, the hon. member should know Ontario and Quebec have child protection laws which allow for a child to be taken into the custody of the province should reasonable suspicion exist that she may be subjected to female genital mutilation either in Canada or abroad. It is apparent that the Canadian Criminal Code already provides for the necessary measures to prosecute those persons perpetrating female genital mutilation.

Instead we must concentrate on educating the public but we must also educate the police, crown attorneys and the medical professions by informing them that female genital mutilation constitutes criminal behaviour and as such must be dealt with accordingly. We will work together and we must work together with the above stakeholders in order to ensure existing laws are enforced in this respect.

On the practice of female genital mutilation from a global perspective, I firmly believe we must not lose sight of the fact that denouncing the practice can make some of us feel better and self-righteous but certainly does not solve the problem worldwide.

The director general to the World Health Organization's global commission on women's health indicates that the purpose of the organization should not be to criticize and condemn; however, nor should we remain passive.

We know female genital mutilation is painful and can have dire health consequences. However, we must also take into account that human behaviours and cultural values, no matter how senseless or harmful they appear in light of our personal and cultural perspectives, do have a meaning for those who practice them.

The key is to convince people they can give up a certain practice without compromising the important ideals cherished by their cultures. Also instrumental is the need to impart on adherence of the practice the great health risk that can result from this diabolical practice.

Parents across the globe are similar in that ultimately they want what is in the best interests of their children. If they are presented with credible options, an alternative to female genital mutilation in a way that takes into account their own social, cultural and economic environments, we will then be able to find a global solution.

I thank the member for Quebec for bringing this crucial issue to the attention of the House.

Criminal CodePrivate Members' Business

11:25 a.m.


Pierrette Venne Bloc Saint-Hubert, QC

Mr. Speaker, let me ask you this question: If the justice minister were a woman, do you not think that we would already have a bill amending the Criminal Code and explicitly prohibiting the genital mutilation of female persons?

Were it not for the initiative of the hon. member for Québec, women would still be waiting for a bill to protect the victims of such a barbaric and cruel practice. Genital mutilation of female persons is one of the most harmful forms of violence against young girls and it is a terrible violation of their fundamental right to physical integrity.

Just thinking of such an atrocity totally overwhelms me with horror and disgust and I must warn the Minister of Justice that he is likely to find the description I am about to give extremely disturbing. Perhaps after hearing it he will better understand the kind of butchery being practiced throughout the world, including Canada and Quebec.

There are three forms of mutilation carried out. I will present them in order of degree. The first, removal of the prepuce of the clitoris; the second, excision, which involves removing the entire clitoris and often the adjacent portions of the labia minora; the third, infibulation, which involves excising the entire clitoris, the labia minora and a portion of the labia majora.

When infibulation is performed, both sides of the vulva are closed over the vagina, leaving a small opening for the passage of urine and menstrual blood. In infibulation, the vaginal orifice is closed either with thorns or catgut sutures. The gaping raw edges of the labia majora are held together until scar tissue forms, thus closing up the vagina except for a narrow orifice which is kept open with a small piece of wood or reed.

The child's legs are then bound together. The little girl is immobilized for several weeks or until the tissues have healed. To enable infibulated women to have sexual relations, it is necessary to open the orifice with an incision which is further enlarged when they give birth. Often they are sewn up again afterwards, at the husband's request.

There is none so deaf as those who will not hear. The Minister of Justice was definitely not listening when in December 1994, on the tragic anniversary of the massacre at the École Polytechnique, I and several of my colleagues emphatically condemned this odious practice.

This barbaric procedure has now been imported to Canada and Quebec. Our doctors are seeing an increasing number of young girls with health problems related to genital mutilation. It will soon be one year since we last discussed this in the House, and so far the Minister of Justice has done nothing to stop this practice. I hope that he will at least support the representations of my colleague, the hon. member for Québec, who has taken the trouble to table a bill prohibiting genital mutilation.

The Minister of Justice lately mentioned a series of bills tabled by his government to help victims, and the list goes: C-37, C-41, C-42 and C-45, and so forth. An impressive body of legislation, whose effectiveness remains to be seen.

The agenda of the Department of Justice is quite full. But I warn the minister that: "Grasp all, lose all". Some of the legislative measures are so far off the goal set by the government that we might be led to believe that the Minister of Justice has undertaken a Sisyphean task.

In November 1994, the Quebec Minister of Justice, Paul Bégin, demanded that his federal counterpart prohibit genital mutilation and amend the Criminal Code accordingly. Sweden, Belgium, Norway, the United Kingdom and some American States have already passed legislation prohibiting genital mutilation.

The Minister of Justice had the gall to answer that the sections of the Criminal Code dealing with assault were sufficient to condemn a person guilty of practising excision. Genital mutilation is much more than just assault, it is torture, butchery and an unqualifiable violation of a human person.

The House managed to pass on the double a bill to protect victims and facilitate the arrest of the guilty parties. Thanks to the support of the official opposition, Bill C-104 on DNA passed through all stages on the same day, June 22 of this year. The Minister of Justice is always willing to play Lancelot when he knows that a bill will get unanimous support. It is easy to preach for virtue. It is something else to make political hay out of it.

Where is the fearless Lancelot in today's debate? He is dragging his feet, he is consulting. Last summer our Don Quixote of public security thought that it would be useful to organize an information session on mutilation of women's genital organs for interested members. Guests of the Minister of Justice were Eunadie Johnson and Fadumo Dirie, cochairpersons of the Ontario task force on the prevention of genital mutilation of female persons.

The minister expected that Mrs. Johnson and Mrs. Dirie would concur with his views on the risk of unilateral legislation dealing specifically with genital mutilation. He was reluctant to introduce a bill because he thought such an action would push that practice further underground.

But, lo and behold, both guests answered yes to the question of whether a specific piece of legislation would send a clear message to communities which practice mutilation. A criminal code amendment would demonstrate that our society considers that practice unacceptable and that if it is deemed acceptable in other countries, it is not so in Canada or in Quebec.

After the meeting, the Minister of Justice admitted he was not so sure any more about his position. Today, the bill before the House is not a government bill, but a bill introduced by one of my Bloc Quebecois colleagues. That speaks for itself. On this side of the House, we dare to act according to our beliefs. I urged the Minister of Justice to at least support the bill presented by the hon. member

for Québec, if he did not have the courage to introduce an amendment to the Criminal Code.

I request the same thing from all members. We should rise above partisanship and indeed do as we say, as we began to do some time ago with private members' bills.

Criminal CodePrivate Members' Business

11:30 a.m.

The Acting Speaker (Mr. Kilger)

Is it the House ready for the question?

Criminal CodePrivate Members' Business

11:30 a.m.

Some hon. members


Criminal CodePrivate Members' Business

11:30 a.m.

The Acting Speaker (Mr. Kilger)

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

Criminal CodePrivate Members' Business

11:30 a.m.

Some hon. members


Criminal CodePrivate Members' Business

11:30 a.m.

The Acting Speaker (Mr. Kilger)

Accordingly, this bill is referred to the standing committee on justice and legal affairs.

(Motion agreed to, bill read the second time and referred to a committee.)

Criminal CodePrivate Members' Business

11:30 a.m.


Peter Milliken Liberal Kingston and the Islands, ON

Mr. Speaker, on a point of order, I think you would find unanimous consent to suspend the sitting until twelve o'clock.

Criminal CodePrivate Members' Business

11:30 a.m.

The Acting Speaker (Mr. Kilger)

Is there unanimous consent to suspend the House until twelve o'clock?

Criminal CodePrivate Members' Business

11:30 a.m.

Some hon. members


(The sitting of the House was suspended at 11.37 a.m.)

The House resumed at noon.

On the Order:

June 20, 1995-The Minister of Transport-Second reading and reference to the Standing Committee on Transport of Bill C-101, An Act to continue the National Transportation Agency as the Canadian Transportation Agency, to consolidate and revise the National Transportation Act, 1987 and the Railway Act and to amend or repeal other Acts as a consequence.

Canada Transportation ActGovernment Orders

11:30 a.m.

Acadie—Bathurst New Brunswick


Douglas Young LiberalMinister of Transport

Mr. Speaker, I move:

That Bill C-101, An Act to continue the National Transportation Agency as the Canadian Transportation Agency, to consolidate and revise the National Transportation Act, 1987 and the Railway Act and to amend or repeal other Acts as a consequence, be referred forthwith to the Standing Committee on Transport.

Canada Transportation ActGovernment Orders

11:30 a.m.

The Acting Speaker (Mr. Kilger)

Before I recognize the hon. Minister of Transport to begin this debate I remind the House that under this standing order, members, including the minister, will have 10 minutes to make their interventions without questions or comments.

Canada Transportation ActGovernment Orders

11:30 a.m.


Douglas Young Liberal Acadie—Bathurst, NB

Mr. Speaker, the government's vision for the future of transportation is clear and attainable. Our commitment is to take Canadian transportation into the 21st century on a more viable, integrated and competitive footing.

We are commercializing federal airports, the air navigation system, Canadian National Railways, Marine Atlantic and the department's Motor Vehicle Test Centre.

We have introduced a new international air transportation policy and concluded a landmark Canada/U.S. bilateral air services agreement opening up the skies with our biggest trading partner.

The government will unveil this fall details of the new national marine and ports policy. This policy will set the stage for a more efficient, competitive and fiscally prudent marine transportation and port system and eliminate subsidies except where constitutional obligations require us to continues to pay for services.

We have already eliminated most transportation subsidies and greatly reduced the financial burden of Canadian taxpayers.

On June 20, we introduced Bill C-101, to enact a new Canada Transportation Act. The reason for introducing this legislation last spring was to encourage meaningful dialogue between industry and the government. We have had extensive consultation with CN and CP, other railway companies, shippers, and representatives of other transportation modes.

We have considered reports by the Standing Committee on Transport and, most recently, the recommandations of Task Force on Commercialization led by Mr. Nault, the member for Kenora-Rainy River, now the Parliamentary Secretary for the Minister of Labour.

The rail elements of the legislative package complement our strategy to commercialize CN, but they are far broader than that initiative. They are about enhancing the long term viability of the

entire Canadian rail industry. This bill will affect the operations of CN, CP and some 30 other railways that currently operate in Canada, and it will also benefit shippers.

Some shippers expect levels of rail service to be dictated by law rather than by the significant negotiating leverage they have in the market. They talk about competition but they insist on regulatory protection.

The extraordinary rights shippers had won through the National Transportation Act of 1987, the so-called competitive access rights, are retained. The NTA 1987 included the right to have rail rates regulated under certain conditions. It also included the right to final offer arbitration for a wide variety of disputes between shippers and the railways. This protectionism has benefited Canadian shippers and there has been a reduction in rail freight prices but there has also been a substantial erosion of CN and CP revenues.

Bill C-101 takes aim at regulatory red tape by shortening the length of the arbitration process by one-third, from 90 to 60 days. The bill extends competitive access rights to shippers located on any federally regulated rail line sold to a provincially based rail operator. U.S. shippers in the United States do not enjoy similar provisions.

While we have protected shipper rights we have made amendments to give more precise direction to the regulatory agency in its decision making process. The government's view is that regulated solutions should only be a last resort.

A shipper demand with which we did not agree was for the provision of mandatory running rights for provincially regulated railways. Unlimited running rights would undermine a major objective of the bill which is to foster the growth of a vigorous short line industry across Canada.

Every short line operator in Canada stated that unrestricted running rights were undesirable with the exception of one operator. In the United States, where unrestricted running rights are not available, a thriving short line industry has developed based solely on commercial agreements. There are hundreds of voluntary running right agreements now in effect in Canada, letting the marketplace decide.

The Canadian Pulp and Paper Association, the Western Canadian Shippers Coalition, the Canadian Industrial Transportation League and the Canadian Manufacturers Association have all been lobbying hard against certain elements of Bill C-101. Apparently they believe in competition based on protectionism, an interesting approach for the CMA which in the past aggressively supported open, competitive free markets.

Bill C-101 will modernize and streamline rail regulation to enhance the viability of our major carriers and thereby attempt to ensure rail freight service from coast to coast. Both CN and CP will benefit from a new, transparent, well-defined rationalization process that focuses on the sale of underused lines to other operators. The process will be free of archaic, adversarial and lengthy regulatory proceedings and government interference.

Shippers should benefit from more efficient, lower cost rail service and the entry of new participants in the railroad industry. The legislative package will clean up outdated regulations. It will reduce the number of matters which need to be brought to the agency by the railways by about 200 to some 40. For example, 10,000 confidential contracts per year will no longer need to be filed with the agency. This should reduce railways' administrative costs. It will help attract capital back to an industry that has suffered during the economic downturn by shippers to other transportation modes, particularly trucks.

Some provincial legislatures, B.C. and Nova Scotia among others, have recently passed legislation which significantly reduces provincial taxation on railways. The New Brunswick government has put in place a very simple mechanism for the establishment of a provincial short line requiring only an agreement between the transportation minister and the perspective railway.

The Ontario government has indicated its willingness to encourage the creation of short lines by repealing current statutory provisions that have so far discouraged short line operators setting up in that province.

Bill C-101 also removes unnecessary regulation of other transport modes. In future applicants to operate Canadian air services will have to meet minimum financial requirements as well as our stringent safety requirements before they can obtain a licence.

In the wake of deregulation of other modes, access to final offer arbitration has been extended to our northern marine shippers and operators of rail passenger and commuter rail services who must negotiate with mainline carriers for track usage and other services.

The new legislation will put in place a policy that is consistent, transparent and fair and will enhance competition. Canada's transportation system must be modern, dynamic and as unrestricted as possible while maintaining the world class safety record we have earned over the years.

I ask members of all parties to join with me and support the motion to refer Bill C-101 to the Standing Committee on Transport before second reading. This will give the committee an early opportunity to study the bill with its usual care and diligence.

The proposed Canada Transportation Act is one more step this government is taking towards modernizing this Canada's trans-

portation sector. It will enable Canada and Canadian businesses to compete worldwide in the 21st century.

Canada Transportation ActGovernment Orders

12:05 p.m.


Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Mr. Speaker, I am pleased to speak on Bill C-101, whose primary objective is to modernize rail transportation legislation, redefine the mandate of the National Transportation Agency and further deregulate air transportation.

As we estimate that nearly 75 per cent of this bill concerns rail transportation, you will understand this important subject will be the focus of our intervention.

For that reason, as far as the Bloc Quebecois is concerned, Bill C-101 will need definite improvements. I can assure the minister that it will be possible to work much more effectively if there is some kind of openness on the part of his colleagues on the Standing Committee on Transport-and I am talking here about his colleagues representing the Liberal majority.

One of the first points that has to be criticized is clause 89, which says that the bill applies to any railway, whether or not constructed under the authority of an Act of Parliament, that is "owned, controlled, leased or operated by a company wholly or partly within legislative authority of Parliament".

This means that Bill C-101 applies to any SLR, which stands for short line railway, owned or controlled by a national railway, whether it be CN or CP. We recently saw an example of a short line controlled by CN in the La Tuque, Abitibi and Saguenay-Lac-Saint-Jean area.

Moreover, these railways are declared to be works for the general advantage of Canada. You will understand that, in the current referendum debate, our party will want to change that all-encompassing approach which includes everything that can be for the general advantage of Canada.

We will also ask clarifications about clause 90, which authorizes Parliament to pass legislation declaring any railway owned by a company registered under a federal or provincial statute to be a work for the general advantage of Canada. In these circumstances, provincial railway acts, like the one we have in Quebec, no longer apply and the company is regulated by the federal government. I am sure you realize this is totally unacceptable to us.

Moreover, in clause 99, the agency is not required to conduct an environmental study before authorizing the construction of a railway line. Again, Quebec is on the leading edge as far as the environment is concerned. Therefore, we will have to obtain amendments to clause 99.

Clause 104 of the bill says that if an owner's land is divided as a result of the construction of a railway line, the owner must pay for the construction and maintenance of a crossing. We think this is ridiculous. Why would the owner of the land have to pay when it is the railway company that is using the land? The railway company should pay.

Clause 113 provides that rates and conditions of service established by the agency must be commercially fair and reasonable. We think that this provision is there to please railway companies which often have had to buy equipment to service a client without benefitting from a contract that was long enough to allow the company to write off the cost of such equipment.

The list could go on but, since this is only a ten-minute speech, I would not have enough time to say all I want to say in this, my first speech since the House reconvened in September.

Bill C-101 will have an effect on Quebec with regard to the new process for transferring or discontinuing the operation of a railway line. I have had the opportunity before to say in this House that the abandonment of railway lines used to be almost automatically approved by the National Transportation Agency. Now, the company will have to demonstrate that it took all the necessary measures to offer the railway line on the market and if nobody is interested-We see the beginning of a solution, but it will have to be improved on.

Of course, we received from many shippers requests for clarification of this legislation or for changes to it, specially in relation with the introduction of running rights for short line railways, provided that reciprocity not be given to main railway carriers.

I therefore open the door to shippers for an alliance with our party, the Bloc Quebecois. They will have an opportunity to defend their views in the Standing Committee on Transport.

I would like, of course, to conclude my remarks by referring to the referendum. It goes without saying that when Quebec has full power, it will not have to rely on a national transportation agency filled with friends of the party in power. Even though the composition of the National Transportation Agency has been reduced from nine members to three, we are still caught in the same vicious circle of having to deal with friends of the government.

I do not want to be disrespectful to Mr. Rivard, a very competent lawyer from Quebec City who was appointed by the Conservatives, but I can predict today, October 2, that Mr. Rivard's mandate on the National Transportation Agency will probably not be renewed and that we will see, as was the case with the members of the Port of Quebec's board of directors, some good friends of the government, some Liberals of good standing, appointed to head the National Transportation Agency.

So this is just shifting the problem. Our party will of course keep on denouncing such partisan appointments.

Canada Transportation ActGovernment Orders

12:15 p.m.


Osvaldo Nunez Bloc Bourassa, QC


Canada Transportation ActGovernment Orders

12:15 p.m.


Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Such patronage. I thank my hon. colleague for Bourassa for suggesting the word patronage. So, the only way out is sovereignty, otherwise Quebec will remain a rebellious minority within the Canadian federation, constantly waiting with the no side for a no which would mean a yes, and vice versa. I do not know what, nor when nor where. If not Quebec, finally in touch with its identity and its potential, will become a country.

There are in fact two countries: yours, Canada, and ours, Quebec. There really are two countries north of the 45th parallel: one which is frantically searching for its identity-Canada-and the other, which can and should no longer deny itself-Quebec. Yes, in order to reach its full potential, Quebec must be sovereign. Quebec deserves to be sovereign because it is made up of a people that must not only survive, but grow.

Saying no means denying us the means to develop in the way we want to. It means continuing to mortgage what we have, and continuing to complain. By saying yes, we will make others respect us and we will stop being crushed. Just like so many other Quebec ridings, Beauport-Montmorency-Orléans will say: "Yes, we are ready and we will win".

Canada Transportation ActGovernment Orders

12:15 p.m.


Jim Gouk Reform Kootenay West—Revelstoke, BC

Mr. Speaker, when Bill C-89 was in committee I was told by the government's underwriters, Nesbitt Burns, Scotia McLeod and Goldman Sachs, that CN Rail had an accumulated debt of approximately $2.5 billion and that in order for CN to achieve an investment grade bond rating of BBB it would have to reduce its debt load to $1.5 billion.

They then went on to explain that CN had excess cash reserves of $300 million to $400 million as a result of recent subsidiary company sales and actual cash reserves, plus $400 million to $600 million in non-rail real estate assets. At the upper end of these figures was the amount by which the underwriters were telling us the debt had to be reduced. The lower value of these figures indicated that the government might be faced with a cost of up to $300 million in order to reach the debt reduction target that was stable.

It was the stated plan of the government to purchase CN's non-rail real estate assets. In response to my question on how the value would be set, government officials who also appeared before the committee testified that a full appraisal would be completed and that would set the price the taxpayers had to pay to purchase the assets from the company which they already owned.

The wording of the debt reduction clause in Bill C-89 concerned me in that it allowed the Minister of Transport to reduce CN's debt by any amount he chose. I attempted to have the legislation amended to tighten this arbitrary power of the minister but the amendment was defeated.

On May 17, 1995 I wrote to the minister requesting answers to a number of questions which were not clearly answered by the minister in committee. One of the most important questions was the amount of money the minister was going to give to CN to reduce its debt. In his response the minister stated: "The government will undertake only the minimum, if any, debt reduction necessary to facilitate an investment grade rating of CN's debt".

My concerns about the minister's real debt reduction plans were well founded. On August 28, 1995 the government announced that it would be injecting $1.4 billion into CN Rail to reduce its debt. This amount includes a $500 million payment for real estate assets with a book value of $235 million and no appraisals to the contrary forthcoming.

The government pushed Bill C-89 through the House and into committee after first reading. I supported this with the understanding this was meant to make it easier to examine and amend the bill in committee where it is theoretically less partisan. This turned out not to be the case.

I presented many amendments, none of which were accepted in spite of little argument against them. One of my amendments dealing with Atlantic Canada did have the support of one Liberal on the committee but was defeated by a tie breaking vote by the committee chairman.

Given the lack of co-operation that we were led to believe this procedure of sending legislation to committee after first reading would provide, coupled with the deception that took place on the debt reduction, I would be very reluctant to trust Liberal intentions on transport issues in the future.

When Bill C-101 was first proposed I was approached by the parliamentary secretary to the minister seeking my co-operation in not only sending it to committee after first reading, but reducing the first reading debate time to one hour. At that point I had not yet received a copy of the bill nor was I aware of its contents. He informed me that it was not available yet but it was fairly straightforward and simple, essentially nothing more than enabling legislation allowing necessary changes to occur on an as needed basis. We now all know that Bill C-101 is a massive piece of legislation with major ramifications for both the rail and shipping industries.

It seems that this deception also continued into the summer. In a telephone conversation with the chair of the Standing Committee on Transport, I agreed to request submissions from interested

parties over the summer as long as it did not restrict anyone's access to testifying before the committee in the fall. I was assured it would not and that the intent was only to allow us to obtain some of the material during the summer instead of having it all bunched together when we returned in September.

Subsequent to this, several affected groups complained to me about the tight timetable for getting their submissions to the committee. I obtained a copy of the notice sent out from the transport committee under the signature of the chair advising that if they wished to appear before the standing committee regarding Bill C-101 they must send in 25 copies of their submissions to the committee not later than August 31.

At the end of August I sent the following fax to the committee chair:

It has recently been brought to my attention that the notice sent out to interested parties regarding Bill C-101 is written in such a way that has caused many of them to believe that August 31 is a cut off after which we will not accept any submissions. It also implies that if they do not submit a written submission within that time frame, they will not be allowed to appear before the standing committee on this issue.

Neither of these positions were agreed to by myself either as a regular committee member representing the Reform Party or as a member of the transport steering committee. You and I discussed early submissions by telephone and I agreed that it was not a bad idea to request early submissions to be made so that we might be able to review some of them during the summer. As it has turned out, if any such submissions were made, I have not received a copy of them. When I gave my agreement to this early start, it was with the clear understanding that this early submission request would not impede any party's right to appear before the committee.

I trust that this is a misunderstanding on the part of concerned parties and anyone wishing to appear before the committee and/or provide written submission may still do so. After all, we are attempting to determine all the facts and concerns available. Surely, we will not do anything to impede this information gathering process.

The reaction I received from the chair's office is interesting. Through follow up inquiries my office was informed by an assistant in the chair's office that they were preparing a response to my letter which I finally received on September 26.

Verbally and later in writing we have been informed that there has been a tremendous response which makes me curious why these were not forwarded to me as a committee member. I did receive a huge stack of submissions when Parliament reconvened, the very situation summer submissions were meant to avoid.

We have also been told that all stakeholders interested in appearing before the committee are welcome and not subject to a deadline. They advised that 800 letters were sent out, too many for a second letter to retract the false message that had been received and it was up to us to notify any parties concerned with the previously stated deadline and tell them it was not in effect.

As far as the bill is concerned it is long past the time that Canada's archaic rail legislation was revisited. To continue with the existing legislation is simply to ensure economic failure which will affect rail companies and shippers alike. We must move quickly to a market driven competitive system able to compete with the U.S. companies unencumbered by restrictive and uneconomical government regulations.

In the late 1970s the American rail industry was suffering from many of the same problems currently faced by the Canadian rail companies. In 1980 the U.S. Congress passed the Staggers act which deregulated the industry. Since that time the American rail industry has prospered.

Bill C-101 is a half Staggers bill which addresses some parts of the need to simplify rail line abandonment but does not address many of the other necessary components for rail industry prosperity with proper consideration for shipper needs.

The rail industry is quick to point out that we cannot compare ourselves directly to the United States because of differing taxation and labour laws. While that is not incorrect, our approach would be to harmonize these differences instead of bowing to them as unsolvable and tinkering with our problems instead of dealing with them head on.

Rail transportation is essential to get Canadian goods to their markets and to get supplies and materials to Canadian companies. Likewise, economic survival of these same Canadian companies is essential to the rail companies.

Many years ago I remember seeing a cartoon dealing with nuclear war. A single picture showed the president of Russia and the president of the United States both with their heads in guillotines each holding the release rope of the other. If either of them released the rope the blade would fall which would cause the other to release his rope in the ultimate no win situation. That is similar to what would happen in Bill C-101 if the legislation does not consider both sides fairly and pushes them into hard adversarial roles.

Shippers' products must be able to compete internationally with those of their competitors from the United States. A significant component in their cost structure is transportation. If their cost component for transportation is substantially higher than that of their American competitors, shippers are operating under a severe handicap. The potential is that these shippers will use the American shipping system affecting the Canadian economy through job losses not only in the rail sector but at Canadian ports as well,

moving their operations to the United States, or folding their operations if they are unable to market their products at a profit.

The first thing the bill should examine is the reduction or removal of unreasonable cost factors to rail companies. This includes such items as federal fuel taxes, lengthy capital cost allowance terms, application and renewal fees and cabinet authority on rail line abandonment.

We must also address problems at the provincial level. Provincial fuel and property taxation as well as labour legislation impact on the competitiveness of federal rail lines and their ability to divest themselves of low density lines without loss of that rail infrastructure. This issue will not be resolved by ignoring it.

The other main problem with the bill is the lack of a clear sense of direction. The ultimate goal of rail deregulation is to establish a market driven and market regulated industry which can compete with the United States. I recognize this may be a huge single step but Bill C-101 not only fails to allow the market to be the final arbiter over price decisions, it also attempts to block access to the present arbiter through clauses like 27(2) and 34(1).

I could provide much more detail on the deficiencies of this bill and solutions for the problems faced by both the rail industry and Canadian shippers, but the action of the Liberal government to eliminate second reading debate severely restricts the amount of time available.

Be assured I will deal with these solutions in detail at committee hearings and I will ensure that all interested parties have the opportunity to bring their concerns before their elected representatives. I call on the Liberal members to co-operate with this process and agree to deal with the needs of the Canadian transportation industry instead of their own partisan agenda.

Canada Transportation ActGovernment Orders

12:25 p.m.

London East Ontario


Joe Fontana LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, let me assure the hon. Reform Party critic that it is the intention of the government and the committee to get some positive and constructive comments from the Reform members who seem to always criticize and have absolutely nothing good to say about anything.

I rise today to lend my support for Bill C-101 and the Minister of Transport's motion to refer Bill C-101 to the Standing Committee on Transport before second reading.

This is an important bill. Transportation touches all our daily lives and has far reaching ramifications in today's business world. The government is advancing a comprehensive program and a vision to overhaul the large unwieldy framework of regulations, outright ownership and specific involvement in transportation particularly as it pertains to rail. While the bill deals with all modes, there is no doubt that the most talked about provisions deal with the rail industry, so I will address myself to that aspect in particular in these remarks.

In this regard I see the 30 or so railways now operating in this country as being at a critical juncture. CN and CP are two mainline carriers that dominate the rail freight sector and have, as have other railways, managed to weather the recent economic downturn.

CN and CP have done this by introducing new marketing initiatives and operations more closely tailored to the 25,000 shippers they serve. They have also expanded intermodal links with the trucking industry and have implemented new technology and operating methods.

Stringent cost cutting measures have been taken and since 1983 CN and CP have abandoned 20 per cent of their rail lines. Total employment has decreased by 40 per cent.

To move into the 21st century, however, I believe CN and CP must further adjust to changing trends, increased competition and the need to reduce costs. CN and CP cost cutting efforts have been stifled by the regulatory hurdles they must jump in order to tailor their rail line networks to their core markets. While the Minister of Transport has made reference to the proposed rail line rationalization process, I will build on his comments.

Like shippers' rights, rail line rationalization can be controversial. I will first set the issue in the context of the current rail environment. The main line rail network is vastly over built. Even after efforts by both railways in recent years to reduce trackage, 84 per cent of CN and CP traffic travels on one-third of the network.

The adversarial nature and the length of the process can deter the sale of underutilized lines to short lines and some say can lead to the downgrading of a marginal line on purpose. A line must be uneconomic or near so for abandonment to proceed. It is the creation of short lines that we wish to foster in the legislation now before us.

The process for sale of a rail line under current legislation can be long and drawn out. In one instance the owner and the potential purchaser had agreed to the sale, in other words the continuance of a line, but under the existing NTA process with its convoluted regulatory approvals the prerequisite abandonment proceedings took two years with a cost of $10 million per year to CP before the sale could be finalized.

In the U.S. the sale of a line, not an abandonment, to another operator can be accomplished in as little as seven days. Purchasers are required only to prove public need and that they have the financial capability to purchase and operate the line.

The most important means by which the federal government can help our rail carriers to reduce their cost is through regulatory reform, and that is what we intend to do.

The new proposed Bill C-101 will do this and will focus on the encouraging of the sale of rail lines to other rail operators. The process will require a railway to set out for all interested parties its intention for its network in a three-year rolling plan.

The owner railway will not be allowed to abandon a line unless it has made every effort to negotiate the sale of the line for rail purposes. The negotiating phase has a finite limit of seven months. This phase could take as little as two months if there is clearly no buyer interest.

If no private sector buyer comes forward, governments at each level will in turn have 15 days to exercise an option to buy for public purposes. They will have had ample notice of the possibility through the plan at the start of the whole process.

No abandonment of a rail line will take place unless no one, neither the private sector nor governments, is interested in acquiring that line.

The process advanced in Bill C-101 is not as radical as that adopted in the United States but is instead a made in Canada approach that gives every interested party ample opportunity to acquire the line. It allows CN and CP to rationalize their track within a specified time frame. It allows for a more planned approach to the future of the Canadian rail system, which will be a benefit to the railways, shippers and communities alike. It also promotes the creation of a short line industry which will benefit all and which is key to keeping the most extensive network possible.

The experience in the United States under its deregulated environment has shown the high potential for rail lines to be acquired by short lines, providing hundreds of jobs.

Today there are over 500 short lines in the U.S., of which 263 were created since 1980. Conversely, there are only 12 Canadian short lines in operation. I believe under our proposed new regulatory process many more will emerge. Short line railways typically operate under a less burdensome cost structure than the main line railways and pass much of the savings on to their customers.

In addition, through more focused marketing and closer tailoring of services to customer needs, short lines can both recover traffic previously lost by the main line railway and generate traffic that was not previously present.

It is in the interest of main line carriers to sell to other railways rather than to abandon. The main lines get both the proceeds from the sale and a new partner that can act as both a generator and a feeder of traffic.

The proposed legislation not only eases exit but makes getting into the railway business less onerous. In future all railways under federal jurisdiction will simply require a certificate of fitness to either operate or perhaps even to construct a railway. Shippers and railways agree this is a significant improvement over the process now in place.

While no one can guarantee continued rail service in every corner of the country, the law will create the right environment so that wherever possible service should be maintained it will be maintained.

Rail is the only mode of transportation in Canada whose business decisions can be easily and often delayed, varied and sometimes even reversed by public authorities. Everything from sales to bookkeeping is subject to regulatory permission, sanction or appeal, with some regulations dating back to the turn of the century.

Under the proposed legislation, treatment of the rail freight industry will be brought more in line with other Canadian transportation businesses and U.S. rail counterparts, thereby enhancing competitiveness.

Transportation has historically been highly and intricately regulated. I was amazed at the mass of the build up on the economic side. For rail alone it filled over 1,000 pages of statutes spread over eight different acts.

With the passage of Bill C-101 we have the opportunity to help our railways, large and small, and ultimately their customers in their efforts to improve competitiveness.

Under the proposed amendment to the Transport Act, regulation of non-safety matters will be condensed into just over 100 pages. This reduction in volume alone will make the regulatory burden less onerous and costly, fostering a more commercially oriented basis for the provision of rail service. It will also make the legislation governing transportation much more logical and understandable.

I hope I have not given the impression that the bill is good only for the railways. On reflection I believe listeners will recognize that what I have outlined for the railways can easily be seen to benefit shippers as well. Once the railways have their house in order, the benefits will surely flow to their customers.

The Minister of Transport has made it clear that the bill preserves key rights now enjoyed by the shippers. A balance between the needs of shippers and railways must be found or our railways will continue to suffer. That outcome ultimately will not serve their customers either.

The sweeping nature of the regulatory housecleaning for all transportation modes will necessarily have an effect on the National Transportation Agency. The proposed legislation defines a streamlined and more focused regulatory body and renames it the Canadian Transportation Agency. Its role and powers will be clarified and brought into line with the reform of rail regulation and changes to the other transportation modes.

In future the agency will concentrate on core quasi-judicial and administrative functions such as the issuing of licences and the setting of regulated rail rates. Regulation is always a poor substitute for market discipline. We need regulation only when there are no practical transportation alternatives.

The federal government is aggressively examining the way it does business on all fronts. It is regulating only where needed and leaving the private sector to activities it can do better and at less cost to taxpayers. Regulatory reform in the transportation sector is one very important part of all these efforts.

Canada Transportation ActGovernment Orders

12:35 p.m.


Paul Mercier Bloc Blainville—Deux-Montagnes, QC

Mr. Speaker, it is said that the road to Hell is paved with good intentions, and the same goes for Bill C-101, which revises the National Transportation Act, especially with regard to rail transport. It is this issue that I will address.

The intention announced by the government in this bill is a good one. In a nutshell, its purpose is to modernize, streamline and deregulate. No one can criticize this, as no one is against virtue. Unfortunately, as is its habit, the government could not resist its usual temptation, which is to encroach on provincial jurisdiction, with an added bonus in that this bill significantly increases its opportunities to engage in patronage.

Plain common sense and efficiency concerns should have led lawmakers to split the rail network clearly and willingly without exception between national railways under federal jurisdiction and intraprovincial railways under provincial jurisdiction. But this would have been too simple, too logical. And how could they resist grabbing a few more powers that should normally come under provincial jurisdiction? That is just unthinkable.

Under this bill, intraprovincial and other short line railways in which national railways have an interest will come under federal jurisdiction. In addition, Ottawa will still have the right to place any short line railway under federal jurisdiction.

Therefore, depending on where their capital comes from and on Ottawa's wishes, intraprovincial short lines will come under two different jurisdictions. How logical can you get?

Clauses 140 through 146 dealing with the abandonment and sale of railway lines could, in return for some improvements, facilitate the establishment of more short line railways, which should revive our dying rail network. From now on-and this is great-, rail companies will have to prepare three year plans specifying which lines they intend to continue operating, which they intend to sell, and which they wish to abandon. When this provision will be fully in effect, short line railway companies will be able to determine which lines they are interested in and to plan accordingly. It seems, however, unrealistic to hope that these plans will be of any use for 1996.

Another thing: some of the deadlines set for potential buyers to make up their minds are surprisingly short. If no private buyer is interested, the company must offer the railway line to the governments. Do you know how many days public authorities will have to make a decision? Exactly fifteen days. This is totally unrealistic.

Finally, it means no more public hearings, where people could explain why a specific line should be kept in service for the benefit of the public, and should therefore be bought by a government, when there is no interested private buyer, given the market conditions. Indeed, how will public authorities have the time to hold hearings and consult the public before making a decision, if they only have 15 days, not to mention the fact that people will also not have time to prepare submissions?

Obviously, the federal government could not care less about the development of those regions which could be affected by the foreseeable reduction in railway services.

I said at the beginning that Bill C-101 provides interesting opportunities for lobbyists and those who rely on patronage. The National Transportation Agency, which will now be called the Canadian Transportation Agency, currently includes nine permanent members and must provide national representation. Under Bill C-101, the agency will only consist of three members and will not have to ensure national representation. The reduction in the number of members will obviously make it easier to lobby and to exert political pressure. I am not making accusations, I am just stating the obvious.

Let me summarize my position. I criticize Bill C-101 for a number of reasons. One is the fact that intraprovincial short line railways are not clearly and unhesitatingly left under provincial jurisdiction. There is also the lack of provisions to truly promote the establishment of regional railways and thus help put the rail transport industry back on track. Another flaw is the fact that, for all intents and purposes, public hearings are excluded, since the unrealistic short time frame given to public authorities to decide whether or not to buy does not allow them to hold such hearings. Finally, there is the composition of the new Canadian Transportation Agency.

These are the four aspects which we will try to improve on through our amendments in committee.

In conclusion, the time had certainly come to streamline the railway legislation and to reduce the responsibilities of the agency. However, the priority given to unstated political motives, over the rational objectives stated, once again results in the government partly missing the target. My colleague, the hon. member for Beauport-Montmorency-Orléans, and myself will propose, in

committee, amendments designed to put this exceedingly political legislation back on track.

I am most willing, however, to admit that I should be thanking the Minister of Transport instead of criticizing him. Thanking him, yes, for providing new evidence that under the federal system Quebec has no hope whatsoever of one day seeing an end to the subordination of the logic of public interest to political interests. This will be possible only in a sovereign Quebec.

Canada Transportation ActGovernment Orders

12:45 p.m.


Werner Schmidt Reform Okanagan Centre, BC

Mr. Speaker, it is an honour and a privilege to be able to enter the debate on Bill C-101, a rather large omnibus bill.

I was interested to hear the hon. parliamentary secretary suggest that it was a straightforward, simple and small bill. This is not a small bill. It has at least 120 pages and it is a rather far reaching and overarching bill that covers the three modes of transportation in Canada.

The bill makes some progress toward levelling the playing field, especially in the railway sector with the United States. It makes it easier to abandon some short rail lines, which is an important issue. It also makes it easier to establish short lines under provincial control.

There are some positive developments taking place in the legislation that we need to recognize. However it seems the chief purpose of the bill is not so much to enhance the investor interest in the particular railways but rather to facilitate the selling of CN Rail or the privatization of the Canadian National Railway.

The bill continues to treat railways as a service rather than as a business. The bill is clearly not about rail renewal. Canada remains 15 years behind the American system. Instead of levelling the playing field for the U.S., the federal government has chosen to deregulate in a piecemeal fashion rather than in a consistent, logical pattern.

Bill C-101 fails to ensure true competition between the railways. The competitive line rates and final offer arbitration provisions only highlight an artificial competition that benefits neither shippers nor the railways in the long run. Under both these options the ultimate arbiter of freight prices is the National Transportation Agency rather than the marketplace.

In other words, competitive line rates and final offer arbitration are actually a hidden form of price regulation or managed competition. The bill has no guaranteed access provision or even study regarding the rail infrastructure in terms of further development and competitiveness in the industry.

In spite of these sorts of statements the whole business of transportation and shippers needs to recognize they need each other to sustain the economy that is there. The railway business exists to support shippers and shippers need the railway to send their materials and products to market. Each needs the other to be successful.

Let me list a couple of the major shippers that use the railway system rather extensively. I refer in particular to the Western Canadian Shippers' Coalition, which includes companies like Agrium Inc., Alberta Forest Products Association, the Canadian Oilseed Processsors Association, Canpotex Limited, the Council of Forest Industries, Luscar Ltd., Manalta Coal Ltd., Novacor Chemicals Ltd., Potash Corporation of Saskatchewan, Sherrit Inc. and Sultran Limited. These companies are significant customers of the Canadian railroad system. The products shipped tend to be bulk in nature and must travel substantial distances to distant markets.

For many products highway transport does not present an effective, competitive alternative to rail transportation and water transport is not a practical alternative. Hence for the majority of the transportation requirements of industries like the ones named the only economical way of accessing the markets is through the railway.

There is a need for the railroad system to be reformed. There is excess track. There are impediments to the productivity improvements and there are too many threats to the profitability and long term viability of the railroads.

We must admit there have been improvements in the last couple of years in the productivity of railways and the net revenues of both CN Rail and CP have increased. These rationalizations, however, should not jeopardize the benefits of competition in the railway industry. I will refer to that in just a moment.

In the meantime we need to indicate as well that the Canadian railway system is not like the American system. The American system has many more railroads, to begin with. The distances to market are shorter. They have an extensively developed highway system and inland water routes. Therefore it is not valid to argue that Canada should have a regulatory system directly comparable to that of the United States.

We should recognize that rails are not like the trucking industry. Trucking regulations restrict vehicles by the availability of trucking services and limit shippers' freedom of choice. Accordingly the deregulation of major carriers has a pro-competitive result. We should also recognize that the capitalization required in that area is not nearly as great as it is in the railway business.

Railway regulation protects captive shippers against the excessive monopoly power of the railway. Herein lies the crux of the issue. The imposition of statutory provisions which limit or deter

accessibility to the competitive access provision will be anti-competitive by permitting the railroads to more rapidly and more extensively exploit their monopoly power.

We come back to the business of competitiveness. Are the railroads competitive? The conclusion of the group of industries we referred to before is:

It has become apparent to railway customers during the past eight years that Canada's railways have refused to compete for rail traffic which would become available by virtue of a customer's utilization of the competitive line rate provisions.

Page 131 of the National Transportation Act Review Commission report states:

CN and CP Rail have effectively declined to compete with each other through CLRs and as a result the provision is largely inoperative in Canada.

It is suggested that the failure of railways to compete through CLRs should now be shifted and, rather than be treated under the Transport Act, should now become subject to the provisions of the Competition Act.

There is a provision in Bill C-101 that there be an appeal to the National Transportation Agency. However shippers will have to prove that they suffer from significant prejudice. It is interesting that significant prejudice is not defined. Neither is suffering.

If this phrase is not defined in the bill it lends itself to all kinds of problems. First, it is difficult for shippers to be able to prove what is happening. Second, because that is difficult there will be a defence and the result will be extensive litigation proceedings that mitigate against the expeditious and objective determination of relief. That is precisely what is needed to get this business going and to get the economy rolling along smoothly.

Those terms are not defined in the bill. They have never been used in transportation legislation before. Consequently there would be very little, if anything, to go on in the way of precedent. The agency serves as a price regulator.

Another part the agency deals with is that the rates shall be commercially fair and reasonable. These words are used in the bill but are not defined. Hence they are likely to result in uncertainty, delay and contention which reduce the effectiveness of the level of service and competitive access provisions.

A further provision in the bill states that the clarification of these kinds of terms would come from the governor in council and does not help at all. It will introduce into the decision facing the council the politics of the day in preference to the economic considerations existing in the marketplace.

A further development is that a complaint, if one is issued by a shipper against the transportation agency, should not be vexatious or frivolous. These terms are not defined.

It is a very difficult situation. It is all very well to talk about the agency as being able to act as the final arbiter and to get agreements in place, but the result will be that litigation of one kind or another will come into play and the courts will become the arbiter.

There are two other parts of the bill that also need to be looked at: the idea of the interchange and the interswitch. These words have to be defined as well as the words limited running rights.

While the provisions of the bill go far they do not go far enough. Neither do they create a regulatory system which will provide an economic system that will look after the interests of transportation and shippers, so that together they can both meet their needs and we as Canadians will benefit from sound transportation and manufacturing systems that can deliver their products easily to the marketplace.