Mr. Speaker, I welcome the opportunity today to speak on second reading of Bill C-89, whose purpose is to privatize Canadian National, a decision that was announced in the last budget and is well on its way to being implemented.
However, before this bill does what it is supposed to do, which is to privatize CN, there are a few points I would like to raise for the benefit of the Minister of Transport and his colleagues, and I am referring to the importance of the railways for resource rich regions like the Abitibi in Quebec, the riding I represent in this House. My concern is that this bill should benefit, not penalize the railways.
The railway system was one of the keys to the economic development of the Abitibi and, as we all know, was also instrumental in the development of many other resource regions in Quebec and Canada. I often wonder, when I see these small rural municipalities along the railroad tracks, whether they grew up around the railway station or attracted CN to the area so they could expand.
We have to ask whether this government, like previous governments, will again be wide of the mark with its railway development policy and this new policy of privatization.
Could it be that once again, Quebec has been the first to realize the importance of having a modern railway adapted to the needs of today's economy?
We all know that the decline of our Canadian railways is not a measure of their usefulness, since during the recent debate on
special legislation tabled by the Liberal government to put the railway companies and their employees back to work, much was made of the importance of the railways for the economy in general.
Oddly enough, the railways were called an essential national service. so that the government could force a settlement during this latest dispute, while in our region we had to fight to justify maintaining sections of the railway network in order to preserve our principal means of shipping our natural resources, our mining and forestry products.
Despite the importance of the railways, the reason for their decline is simple: no government has ever made a serious attempt to remedy the situation when there was still time, although it provided substantial grants for operating the railways.
We have been trying to placate unions for too long, instead of searching for efficient or cost-effective solutions for both the employer and the employee. What effort has this government or previous governments made to promote this means of transport over the past 20 years? Absolutely none. We can sum up the actions of the successive governments by the word "cuts" and the federal leitmotiv "we cannot afford it". Infusions of capital were certainly not the best solution, as we can see by the results today.
Over the past twenty years or more, the only notable things about the coast to coast rail system have been staff cuts, abandonment of lines and cuts to client services. Instead of investing in this great Canadian asset and creating jobs, the government is cutting.
On the other hand, the government found a way to meet the needs of western grain transporters, justifying itself by saying that we need international trade and that our wheat producers have to be competitive. Why did the government not place the same importance on the transport of wood and minerals from northern Quebec and northern Ontario?
Natural resources, and the jobs they create, are the foundation of our economy. The executives controlling rail transport in this country exhibited a flagrant lack of leadership skills. They failed to rationalize an essential service and to make it cost effective when they had the chance. They neglected their responsibilities by letting rolling stock age without replacing or improving it.
The longer they let it go, the higher the costs of getting the equipment back on track. They had gotten so behind in their upkeep and replacement of rolling stock that the situation came to a head at the beginning of the 1970s. The situation only worsened under VIA which, with the weather beaten material it inherited from CN, was never able to break even.
Furthermore, the leaders at the time denied the importance of also maintaining efficient, competitive and aggressive passenger service, deeming it less profitable than freight transportation and not essential because road transportation was available by car or bus. Through its policy, the government supported this situation rather than look for solutions that would put the industry back on a solid footing and would serve the real needs of the communities affected by the flood of lost jobs and services.
Is the government trying to isolate distant localities once and for all by taking away their trains, airports, TV stations and even the social programs the people have contributed to in large and ever growing measure? No study has compared the huge costs of highway maintenance with rail line maintenance in northern regions such as Abitibi, with its notorious climate. The potential end of rail transportation could mean increasingly poor roads. The people in my riding know about this problem. They are faced with increasing numbers of trucks on the road, since the railway was not competitive and lacked the services to compete with the trucking industry.
In my region, this type of transportation is causing a lot of problems, since the highways were not designed to take such heavy loads. It is always the same problem, unfortunately-a lack of consultation. Government makes decisions without consulting the regions and without taking their particular needs into account. Even today, privatizing CN as outlined in this bill does not guarantee that services will be maintained in outlying areas. In spite of this, the federal government gives itself the power to interfere in short-line railway operations through clause 16 of Bill C-89.
This is totally unacceptable, since short-line railways were created thanks to the initiative of rail staff and unions, who took the risks that our leaders had avoided taking in the past. These people feel that some sections abandoned by CN and the government can become profitable through sound management. To fulfil their potential, short-line railways also needed the operating flexibility that only provincial regulations could provide.
It would be dishonest for the government to discourage the creation of short-line railways, or to try to hamper the development or operations of those already in existence by interfering whenever it feels like it. The short-line railway in my riding of Abitibi is a very good example of a CN section. It meets with the Lac-Saint-Jean line. We managed to rescue it from abandonment with all the attendant advantages for our region in terms of jobs, economic benefits, development, transport, and so on.
I would also like to take this opportunity to address clause 8 of this bill. As it now stands, this clause is unacceptable. Let me explain. The government plans to sell most of CN, an institution over 100 years old, through the largest share issue in Canadian history, which would amount to some $2 billion.
Like my Bloc colleagues, I deplore the fact that this government did not include in the bill a clause explicitly prohibiting foreigners from holding a majority of shares. Today, I will try to explain to the Minister of Transport and all his colleagues how important it is to encourage local purchase by local investors if possible or any concrete gesture through short-line railways.
Railways have played an important part in the development of my region and many others, and they can still play this role if we make the effort of identifying the needs of people in the regions and helping them meet these needs. May I point out that we are not dependent on the U.S., and yet the danger is real. The presence of Goldman Sachs, an American firm, among the brokers appointed by the government confirms the government's need to issue shares outside the Canadian stock market.
We also know that American investors are used to assessing railway companies. There are at least a dozen on the stock exchange list in the U.S., while in Canada, there is only CP, hence the risk that less informed Canadian investors may not recognize a good deal when they see it. That is why I propose that clause 8(5) be deleted or at least amended to apply only to Canadians.
To conclude, if the railway system was the connecting link for all the regions of this country, and promoted its development, why is it that today, on the eve of the 21st century, we are not able to find innovative ways of making it profitable? The railway is an essential public utility, connecting people and businesses.
If a committee to save the railway system were set up, I am sure that we could come up with solutions, because I am still convinced that solutions do exist and that short-line railways are part of the solution. Personally, I think that privatizing CN is not a bad idea in itself since investors are needed to boost the rail industry if it is to become more performing and modern. And I think that regional business functions may offer solutions.
Privatizing must take place in the interests of all stakeholders: customers, employers and employees. In terms of profitability, CN is not doing as bad as in 1992, with estimated profits for 1994 between $240 million and $250 million.
Perhaps we have the time and resources to make the right choices. Let us take the time to weigh up the pros and cons of Bill C-89 to try to make up for the mass of not so great decisions made by rail officials and our governments over the past 20 years.