Mr. Speaker, I welcome the opportunity to speak to the motion put forward by the hon. member for Beauport-Montmorency-Orléans.
His concerns reflect an appreciation for the approach advocated by the government toward rail line rationalization. The wording of his motion implies support for the line rationalization process set out in Bill C-101, the National Transportation Act.
The government has noted the widespread concerns expressed by several interested parties regarding the existing rail line rationalization process. Deficiencies have been recognized and we believe a remedy has been proposed through Bill C-101.
On October 2, 1995, Bill C-101 was referred to the Standing Committee on Transport. Committee hearings are currently under way.
Canada's rail network is overbuilt. Eight-four per cent of CN and CP traffic is moved over one-third of the network. Traffic density is only 60 per cent of the average of the top seven major railroads in the United States. It has been estimated that some 50 per cent of current CN and CP trackage is surplus to their needs. However, many of these lines could be successfully operated by short lines or regional railways.
Rationalization is under way but it is occurring slowing due to the complicated abandonment process contained in the National Transportation Act, 1987. There is widespread recognition that future rail financial viability will depend greatly on the railway's ability to accelerate plant rationalization and restructuring its networks.
Bill C-101, the National Transportation Act, is intended to streamline and modernize transportation regulations. In particular it will lift the regulatory burden on rail to increase its competitiveness in an increasingly continental market.
The bill contains provisions to streamline and shorten the current process for rail rationalization, making it commercially oriented, less adversarial and more conducive to the sale or lease of surplus rail lines to new operators. In conjunction with those provisions, the process for entry of smaller low cost rail carriers to operate in co-operation with CN and CP has been eased.
As demonstrated by the U.S. experience following deregulation of its railway industry in 1980 with the passage of the Staggers Act, railway rationalization need not result in the abandonment of track. In the United States since 1980, although 34 per cent of the total rail route miles were trimmed from the rail line railroad networks, less than half that track was abandoned. Almost 30,000 miles of track were sold to successful short line railways and saved from abandonment.
Today there are over 500 short line railway companies in the United States, of which 263 were created since 1980. In Canada only 10 new independent short lines were created since 1988.
Let me emphasize that the line rationalization process set out in Bill C-101 is not as radical as that in the United States. However one of its main features is that it will provide opportunities for any interested party to acquire lines surplus to the needs of CN or CP for continued use as rail lines.
In the event that there is a lack of interest in purchasing a particular line for rail purposes or a sale agreement is not reached, each level of government will have an opportunity to decide whether or not to acquire a line at net salvage value for public purposes.
Only after a railway company has gone through the process I have described and it has been unsuccessful in transferring the line to a new owner, whether it be a private company or a government, will it be able to abandon operations over the line and dispose of the land corridor and track assets. This will be a major improvement over the current process.
The current process has caused some parties significant concern. For example, some provincial governments have expressed their wish to preserve an economic rail line, even though they have not had any traffic on them for many years, in the event that some day there may be a need for them. However, it has been normal practice when lines are put forward for abandonment that the provinces do not take positive action to find a new operator or acquire the lines themselves.
Under the National Transportation Act, if a rail line is not purchased by new operators for continued rail purposes the onus is placed on governments at all levels to come forward and express their interest in the rail corridors by financing the cost of their acquisition at net salvage value.
Even if the government possessed the powers to comply with the action requested in the member's motion there would be no beneficial outcomes. Currently only five rail lines have been ordered abandoned by the agency. Three of them are scheduled for abandonment in 1995 and the remainder in 1996. Negotiations are under way for the purchase of one of the lines to be abandoned in 1996 and no interest has been expressed by anyone in the purchase of the others.
There is really nothing more to add except that on the strength of the motion I look forward to the hon. member's support of Bill C-101, the National Transportation Act. We should not delay the bill, as the hon. member has suggested, but should get on with, hopefully in the next two to three weeks, getting it through the House so that the process is improved and interested parties, be they short lines, governments or other interests, can take advantage of the opportunities presented by the new rationalization policy of the government.