Mr. Speaker, I am pleased to take part today in the debate on Bill C-101, known as the Canada Transportation Act.
This long awaited bill is the outcome of numerous independent and government studies concluding that the Canadian government must take steps to restore the viability of Canada's railway industry. The most recent of these studies was conducted by the National Transportation Act Review Commission. In 1993 it wrote: If Canada is not prepared to pay the price of serious deterioration in the rail sector as the decade progresses, it is indispensable that
carriers be authorized and encouraged to make the changes necessary to becoming competitive.
The Commission also said that Canadian railways will be unable to contribute to making the national economy more competitive without major changes to their cost structures.
The Bill the government is proposing to us today was therefore very much expected. Essentially, its objectives are to modernize railway legislation, to redefine the mandate of the National Transportation Agency and to rename it the Canadian Transportation Agency, and to further deregulate the airline industry.
Although some of the proposed changes had been requested for some time, other proposals miss their target because of these measures are incomplete.
For instance, one of the main provisions of this bill is to allow large national corporations like Canadian National and Canadian Pacific to get rid of rail lines that are no longer viable. Potential buyers would create so-called short line railways.
This has been very successful in the United States. In fact, like us, the Americans have had to revamp their legislation and regulations on railway transportation. They did so in 1980, when they passed the Staggers Act. One of the measures included in the bill was the development of short line railways. Since the Staggers Act was passed, more than 250 short line railways have started operating in the United States. This proliferation of regional railway companies made it possible to recycle more than half of the surplus rail lines abandoned by the large railway companies. According to information provided by Canadian Pacific, these short line railways, and I quote: "co-operate with the main rail carriers to provide efficient transportation for shippers located along lines with a lower traffic density".
In Canada, railway overcapacity is a major problem. In fact, according to CP Rail and I quote: "more than half-53 per cent, to be exact-of the 20,000 kilometres of CP Rail tracks in Canada carry only 5 per cent of railway traffic. The situation is similar at CN".
The railway company adds: "As far as CP's system is concerned, we are looking at more than 10,000 kilometres of rail that bring in insufficient revenue and on which millions of dollars in land taxes must be paid. -Establishing short line railways is one way of resolving the excess capacity problem. With their smaller cost structures, these railways are able to provide services that are not viable for larger railways".
The government claims to want to foster the establishment of short lines. In the background paper on this bill, the Canada Transportation Act, the government states that the new process was designed to encourage the sale or lease of rail lines to short line railways.
To this end, the government suggests that major railway companies develop a three-year plan in which they will identify how they intend to dispose of their railway lines. CN and CP will be required to put up for sale those lines they no longer want to operate before they can abandon them.
Interested short line railways will have five months to come to an agreement with the national company, after which time, if no short line railway has come forward and no agreement was reached by the parties, the government, whether municipal, provincial or federal, will be entitled to exercise the option of operating the line. And, if no interest is expressed by any government, the company will then be allowed to just abandon the line.
This is a simpler procedure than the one in place until now. It has the advantage of fostering the establishment of local and regional rail transport companies. However, the government went only halfway, failing to stimulate the development of these short line railways which could become major players in regional development. Moreover, the process provided in the bill to allow national railway companies to dispose of their railway lines is flawed in a number of ways.
For instance, the establishment of short line railways will require huge capital investments on the part of those interested in such a venture. However, the federal government does not include any measure to facilitate the funding of these new ventures, unlike what the Americans did with the Staggers Act. For example, the government could have included loan protection measures to help establish these short lines.
Also, it appears that, between the time when this bill is proclaimed and the time when CN and CP's three-year plans are available, there will be a gap during which railway companies will be able to divest themselves of part of their surplus lines, without any interested party having time to review the potential of these lines, or find the required capital to buy or rent them.
Finally, the bill provides that, if no company is interested in operating a line declared to be surplus, or if no agreement is reached between the potential buyer and the railway company, governments will only have 15 days to decide whether or not to acquire that line. Such a deadline is definitely not reasonable, in my opinion. In imposing such a short time frame, the federal government adversely affects the regions, since they will simply not have time to inform their officials of the situation that will then prevail. These three flaws in the bill could jeopardize the establishment of short line railways. The government must make appropriate changes before the bill is passed.
As for airline transportation, the government is proposing a measure which gives me great concern. I am referring to clause 70(2), which reads:
The Minister may, in writing to the Agency, designate any Canadian as eligible to hold a scheduled international licence and, while the designation remains in force, that Canadian remains so eligible.
That clause must be repealed. Indeed, it is common knowledge that this government favours Canadian Airlines, at the expense of Air Canada, which is based in Montreal. To grant the Minister of Transport the discretionary power to decide who can hold an international licence when a transportation agency was established for that purpose is just plain unthinkable.
Air service licensing should be open and impartial. The licensing process must not be subject to pressure from lobbyists, like it was last winter, when the Liberal government granted Air Canada only partial access to Hong Kong, while Canadian was granted unlimited access to the U.S., designated secondary carrier for Frankfurt as well as licensed to service Vietnam, the Philippines and Malaysia.
As the official opposition's critic for Canadian heritage, I am baffled by the fact that this bill gives such discretionary power to the Minister of Transport. I am afraid that this could create a dangerous precedent and become standard practice in all federal departments.
It worries me to think that such power could be given to, say, the Minister of Canadian Heritage or the Minister of Industry regarding the CRTC. Imagine for a moment what could happen in Canada if, just by sending a memo to the CRTC, either of these ministers could make people eligible to hold a telecommunications or broadcasting licence. One can easily infer that, given such power, the government would not have had to issue an order in council to favour Power DirecTv.
Consequently, the Prime Minister's son-in-law would not have had to appear before the CRTC and American T.V. would have flooded the Canadian airwaves.
Giving discretionary power to a minister jeopardizes collective good and interests. That is why I ask the government again to delete clause 70(2) from Bill C-101.