Debates of May 31st, 1995

Budget Implementation Act, 1995

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 76.1(8), the recorded division on the motion stands deferred.

We now move to group No. 2, which includes Motions Nos. 5, 6, 7, 8, 9, 10, 11, 12, 14, 17, 18, 19, and 74.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 5

That Bill C-76 be amended by deleting Clause 11.

Motion No. 6

That Bill C-76, in Clause 12, be amended by replacing line 11, on page 9, with the following:

"12. Paragraph 47( b ) of the National Transportation Act, 1987 is replaced''.

Motion No. 7

That Bill C-76 be amended by deleting Clause 16.

Motion No. 8

That Bill C-76, in Clause 17, be amended by replacing lines 20 to 22, on page 10, with the following:

"branch line or a segment of it than to continue to make payments under".

Motion No. 9

That Bill C-76 be amended by deleting Clause 18.

Motion No. 10

That Bill C-76 be amended by deleting Clause 19.

Motion No. 11

That Bill C-76, in Clause 20, be amended by replacing lines 1 to 7, on page 12, with the following:

"20. The portion of sub-section 178(1) of the Act after subparagraph (b)(iii) is repealed."

[David Anderson, Liberal, for the Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

moved:

Motion No. 12

That Bill C-76, in Clause 21, be amended by replacing lines 4 and 5, on page 14, with the following:

"subsequent crop year shall be determined by".

Motion No. 14

That Bill C-76, in Clause 21, be amended: a ) by replacing line 6, on page 16, with the following:

"181.18 (1) During 1999, the Minister shall, in"; and b ) by replacing lines 13 to 15, on page 16, with the following:

"and on the sharing of efficiency gains as between shippers and railway companies.

(2) The Minister shall, as part of this review, determine (a) whether the repeal of this Division and Schedules I, II and III will have a significant adverse impact on shippers; and ( b ) whether this Division and Schedules I, II and III should be repealed.

181.19 If the Minister determines, pursuant to paragraph 181.18 (2) ( b ), that this Division and Schedules I, II and III should be repealed, then this Division and those Schedules shall be repealed on a day to be fixed by order of the Governor in Council.''

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 17

That Bill C-76 be amended by deleting Clause 21.

Motion No. 18

That Bill C-76 be amended by deleting Clause 22.

Motion No. 19

That Bill C-76 be amended by deleting Clause 23.

Motion No. 74

That Bill C-76 be amended by deleting Schedule I, on pages 39 to 45.

Mr. Speaker, I am pleased to table this series of amendments to Bill C-76, more specifically to the part of the bill which repeals the Western Grain Transportation Act and which transfers, at least as regards that part of Bill C-76, the railway line regulations to the National Transportation Act, 1987.

These amendments are tabled for a simple reason. We feel it is unfair to apply a double standard when it comes to streamlining railway operations in western and in eastern Canada.

Indeed, several sections of Bill C-76 seek to maintain western lines used for grain transportation, for reasons of public interest. In other words, under Bill C-76, a western line will be maintained if it is deemed to be of public interest, even if it is not cost effective, as long as it is used to transport grain.

However, the rules are different in eastern Canada, and that is why we speak of a double standard. Indeed, at least until the Minister of Transport tables appropriate legislation, some branch lines and main lines are being closed in the east, particularly in Quebec, based only on cost effectiveness. This is why we say there is a double standard. In the west, railway lines are being protected.

But the east is passed over because it is not cost effective. Just look at the double standard regarding the west: a huge compensation package, literally huge, will be paid to western producers to offset the decision to abolish the Western Grain Transportation Act.

And when the federal government commits to paying $1.6 billion in tax-free compensation over the next three years to prairie farmers because it is going to phase out the Crow rate, a preferential rate, over a period of six years, that $1.6 billion tax-free is really worth $2.2 billion.

The federal government did not compensate Quebec industrial milk producers when it reduced dairy subsidies. Neither did it compensate them when it announced, after GATT negotiations, that it will be opening up our borders more and more to foreign competitors. Quebec farmers were not compensated when federal subsidies were cut here and there. They were told: "We are cutting, so deal with it".

The federal government is asking all Canadians, all Quebecers, to tighten their belts while it hacks away at the unemployment insurance fund, social assistance transfers to the provinces, post-secondary education and health, tax benefits for seniors. For example, when the Minister of Finance's first budget abolished the old age tax credit, it took $500 million out of seniors' pockets. There is also the threat of cuts to old age security. But, at the same time, the federal government' old double standard comes into play: it is greasing the palms of western producers, the "cattlemen", to the tune of a $2.2 billion package to compensate for the gradual phasing-out of the preferential rate for western grain transportation, which was already loathsome in itself. There was no uproar from Reform members regarding that move.

When subsidies are paid to their constituents, there are no shouts of protest. Not a peep from the hon. member for Capilano-Howe Sound, who merrily keeps hitting at the neediest in our society, day in, day out, and who even suggested abolishing all social programs in Canada. There were no protests from him when it was about subsidizing the people in western Canada, the people he represents. It is perfectly proper to pay billions of dollars to grain producers in the Prairies.

Yes, a double standard, because by getting rid of the Crow rate and paying a subsidy of $2.2 billion, the government is upsetting the balance achieved at the end of the last century, in 1897, when this rate structure was introduced. It upsets the competitive balance that developed over time between western grain producers and eastern producers who are mainly involved in meat and dairy production.

Although the gradual phasing out of the Crow rate destroys this balance, there is no mention of compensation for eastern producers. Not a word about compensation for farm producers in Quebec. However, destroying this competitive balance will

result in losses estimated at from 24 to 40 million dollars annually, losses that Quebec farm producers will have to absorb. The federal government, which has always applied a double standard in the case of eastern farm producers and farm producers in Quebec is not providing any compensation for Quebec producers.

Negotiations between the federal government and Quebec producers have just ended. Last week, I was told that what the federal government offered was peanuts, a small amount that might be paid at some time in the future, provided Quebec producers keep quiet and do not condemn the inequities of this system.

A double standard, because abolishing the Crow rate means that local grain prices in western Canada will go down-not the international price but the local price. This provides an incentive for animal production.

As the preferential rate is phased out and ultimately abolished in 2001, western beef and pork producers are being given a considerable competitive edge over Quebec producers. And on top of this, as I said before, they are getting $2.2 billion in federal funds, part of which, in fact 23.8 per cent, is paid for by Quebec taxpayers.

And so federal subsidies are being given to western farmers, subsidies paid for in part by Quebecers' taxes, enabling western pork and beef producers to come and compete with Quebec producers in their own market.

If this is fair federalism, what can unfair federalism be like? If flexible federalism means looking only at the collapse of a balance in the west and not looking at the other part of the country, which is affected by a decision such as the one to eliminate the WGTA and then compensate western farmers, there is a serious problem here.

We would have preferred, and this is the thrust of our amendments, first, that the Crow's Nest rate, the preferential Crow's Nest rate, be eliminated immediately and not over the next six years. The debate on this issue has been going on in Canada since 1978. I was present at the first, the second and the third debate, in different positions. Quebec's position has remained unchanged: if the preferential Crow's Nest rate, which has no equivalent in the east, is to be abolished, let us get on with it. As for the producers, and here I agree with the Reform Party on certain points, when they talk about areas other than those they serve, they should be made competitive right away.

Why gradually reduce the Crow's Nest subsidy and why gradually get around to increasing railway transport rates, when, according to the Reform Party, all of the west should operate as a free market system, efficiency driven and subsidy free?

They are engaging in double talk. When it suits them, they oppose subsidies. When it does not suit them, because the pressure in their ridings is too great, they say nothing. Look at them. They have no amendment to eliminate the $2.2 million in compensation to western grain farmers.

We in the official opposition would have preferred this rate structure and the compensation to be dropped immediately, because Quebecers and Canadians everywhere else are being asked to tighten their belts. They are not getting any compensation. There is no transition.

When the Minister of Finance decided to withdraw $2.5 billion from the unemployment insurance fund, he did so in one shot, all at once. He said nothing about transition. He said nothing about transition for the poorest families either, for those who are the most disadvantaged whom we have deprived of their only way out, through public housing, for example. He made no mention of transition, the Minister of Finance. There was no talk of spreading these decisions over five or six years.

It is outrageous that, for election purposes, the Liberals, who, as we know, are not strong in the west, are offering gifts to western voters and forgetting about voters in Quebec and the rest of Canada in general.

I find this double talk, this talk of the extreme right, from those beside us really distasteful in the context of subsidies to the most disadvantaged to ease their misery. The Reform Party's attitude toward our society's most disadvantaged is of the extreme right, but when it comes to paying out $2.2 billion to western producers, it becomes most conciliatory, nearly socialist.

The thrust of our amendments is: let us get rid of the Crow rate.

[David Walker, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, we are now looking at 12 motions in group 2. I will explain the government motions and the reasons for them and then return if time permits to some of the motions being presented by the other parties.

The two motions being presented by the government are Motions Nos. 12 and 14. In Motion No. 12 the Minister of Finance is proposing that subsection 181.12(2) of the National Transportation Act, as contained in clause 21, be amended so that the agency will establish maximum regulated rates from and after the 1996-97 crop year.

This motion, together with Motion No. 14, which I will explain in a minute, will amend the NTA so that the maximum regulated rate provisions will be retained beyond July 31, 2000

as currently provided in Bill C-76. The motion is a consequential amendment required as a result of the proposed amendments to sections 181.18 and 181.19 as set out in Motion No. 6.

The Canadian Federation of Agriculture and Prairie Pools Inc. both proposed to the Standing Committee on Finance that the review to be conducted by the Minister of Transport be expanded to include whether efficiency gains are shared between shippers and railroad companies.

In proposing this amendment and the amendment to section 181.18, the government is being responsive to the concerns of farmers, as expressed widely throughout western Canada and by many industry spokespeople. I compliment the minister for the number of hours he spent with groups across the country making sure that the bill is absolutely correct.

Many of these farmers ask that the Minister of Transport conduct a review of the grain handling and transportation system and whether efficiencies of the grain transportation system are being shared by shippers and railroad companies before moving to a deregulated system.

In Motion No. 14, the Minister of Finance is proposing that the review conducted by the Minister of Transport pursuant to subsection 181.18(1) be broadened to include whether efficiency gains are being shared between shippers and railroad companies.

Under subsection 181.18(2), the Minister of Transport will also consider whether the repeal of the maximum regulated rate provisions will have a significant impact on shippers and if those provisions should be repealed.

Section 181.19 will be amended so that if the Minister of Transport in conducting his review determines that the maximum regulated rate provisions should be repealed, those provisions will be repealed as of a date fixed by order of the governor in council.

The Canadian Federation of Agriculture and Prairie Pools Inc. both proposed to the Standing Committee on Finance that the review to be conducted by the Minister of Transport be expanded to include whether efficiency gains are shared between shippers and railroad companies.

In proposing this amendment to section 181.18 the government is being responsive to the concerns of farmers who asked that this review be done. In addition, the Minister of Transport in conducting his review in 1999 will take into account the interests of both the railroad companies and the shippers in determining whether the maximum regulated rate provisions should remain in place. Both the shippers and railroad companies will have ample opportunity to make their views known to the minister before he completes his review.

The motions being presented, first by the official opposition, will completely undermine the efforts being made to modernize the western Canadian grain transportation system. I do not have to tell members that there is a lot of history in the legislation we are presenting. It is one in which the farming community has been back and forth on for one generation after the other.

This is that rare time when the major actors in the industry have come together to support legislation that will be a giant step forward in the reorganization of the grain industry. Like others, there is lots of speculation on what these changes are going to mean. Nevertheless people see many positive benefits coming out for western Canadian agricultural producers.

Considering how much wealth they contribute to this whole country, anything that benefits the farmers of western Canada can very quickly benefit the rest of the country.

Motions Nos. 5 to 11, because of the nature of the official opposition amendments, would result in the deletion of the provisions that identify grain dependent branch lines and exempt designated grain dependent branch lines from certain provisions of the NTA, such as the notice of intention and conveyance provisions with respect to abandonment of branch lines. These motions would make it more difficult for rail companies to improve the efficiency and reduce the cost to ship grain from the prairies.

In Motion No. 5, the financial critic for the opposition party is proposing that clause 11, which amends section 4 of the National Transportation Act, 1987 to add a definition of grain dependent branch lines, be deleted.

The definition of grain dependent branch lines is necessary as this and other provisions in Bill C-76, identify grain dependent branch lines and exempts designated grain dependent branch lines from certain provisions of the NTA, such as the notice of intention and conveyance provisions with respect to abandonment of branch lines.

This provision and other provisions in Bill C-76 will make it easier for railway companies to abandon inefficient and costly grain dependent branch lines.

The motion proposed by the official opposition would make it much more difficult for railway companies to improve the efficiency of the grain transportation system and to reduce the cost to ship grain from the prairies.

Motion No. 6 proposes that the heading of clause 12 be amended by replacing the words "the act" with the National Transportation Act, 1987. This is a proposal which follows from the changes and the refusal of the opposition to deal with the changes we are proposing.

The official opposition is proposing in Motion No. 7 that clause 16, which exempts grain dependent branch lines from the notice of intention provision under the NTA be deleted. As I stated, this proposal would make it more difficult and cumbersome for railroad companies to abandon inefficient and costly grain dependent branch lines.

I will not take the time of the House to go through some of the other motions. In these I have reviewed the major differences we have with the official opposition. As I stated before, the changes being proposed in Bill C-76 will be of great benefit to the western Canadian agricultural community and that spills over to the rest of the country. People in every province will see a much stronger Canada as the western grain farmers and other agriculture producers gain maximum advantage from changes in our regulations and laws.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, it is a pleasure to speak to this group of proposed amendments. We have some difficulties with some of the clauses of the budget implementation act. Some of the clauses give arbitrary powers to cabinet to make decisions.

I reminds me a little of earlier in the bill of some of the powers given to the Public Service Commission, for example, where it is allowed to appoint people without competition. Arbitrary powers are never a good thing to give out.

Under the powers of the Public Service Commission, members will know that over the next three years the government will be spending some $41 million to, among other things, recruit new public servants from designated groups under the special measures initiatives run by the Public Service Commission. At a time of substantial layoffs it is a huge amount of power given to a commission to recruit people at the cost of tens of millions of dollars, when we are laying off 45,000 others. It seems a little ridiculous to me. It is obviously unfair to be hiring new workers at a time when thousands of surplus ones are eager and willing to work at any of the jobs.

It is particularly an insult to hard working civil servants who have spent many years working in a position only to come to work one day to find that their desk has been cleaned out and a fresh new face is in the office doing their work and the job they are fully qualified for, but they lost it because another person was hired under the special measures initiative or the employment equity program.

That is the kind of arbitrary power we do not think the Public Service Commission should have. We believe that arbitrary powers giving cabinet or in the case I am talking about, the Public Service Commission, the ability to bypass merit or the regular way of doing business, to hiring, promoting, firing and so on, is not a good thing.

We need checks and balances on government. The bill gives too much power to a select few people. The power I mentioned the Public Service Commission has under the bill is typical of that. Other clauses in this transportation area give the cabinet in our opinion too much power but I will leave it at that.

[Mark Assad, Liberal, Gatineau—La Lièvre, QC]

Mr. Speaker, Bill C-76, which is the continuation of the budget and deals with the Work Force Adjustment Directive, is a rather important one. It drew many comments, especially from the Reform Party and the Bloc. I believe there are some fundamental elements we should take into account in Parliament. For all intents and purposes, we are the voice of our fellow citizens, and it is important that they know exactly what is at stake here.

I listened to the Reform members talk about the deficit, government spending, and the debt which is growing at the rate of $100 million a day, and also to all their arguments to the effect that the government must cut expenditures. As we know, it has been proven, on many occasions, that at the present time, except for the debt service, the regular operating expenditures of the government do not exceed its revenue. The debt service is very high in Canada because we have an accumulated debt of close to $500 billion.

Members opposite keep on talking about government spending. But we must not forget that expenditures are only one of the elements of the deficit we are facing in this country. One must not single out the expenditures of the Canadian government as the only reason for our deficit.

In the past, deficits were very high, as compared to total expenditures. Expenditures were high in the past, as we saw under the previous government. I am not trying to say that we were blameless in the past; in some instances, expenditures went well beyond what should have been tolerable. In any case, what is important now is to correct the situation. One must not lose track of the fact that expenditures are but one element.

Second, we must recognize that our tax system being slightly obsolete, the in-depth reform of our tax system is one of the elements which is going to put our economy back on a level that is acceptable to all Canadians, especially the middle class.

Third, and this is important, it is the monetary system of this country which causes our interest rates to be too high. We must recognize that the Bank of Canada has a role to play. In the past, the Bank of Canada played a very important role in controlling interests rates nationally. But, because of our deficit, we lost this power. However, with good management, it should be possible to get it back. We are trying. It will take several years, but let us hope we will succeed within one mandate or one and a half at the most. We want the Bank of Canada to really play an

active role, we want complete fiscal reform, and we hope that our monetary system, which is not working to our advantage, will be modified.

So three different elements come into play.

Furthermore, the Minister of Finance proposed some workforce adjustments. Since we are being told to reduce spending, we tried to achieve this by streamlining of the public service.

When I hear that 45,000 employees will lose their jobs, I think this is a bit of an exaggeration, because this will happen over a three-year period, and most of these 45,000 people will either take normal retirement or early retirement, or accept what we call a buy-out.

In conclusion, therefore, I would like this House to understand that our problems cannot be ascribed to one thing only, that is spending alone. High interest rates, largely the result of our monetary system of the last 15 to 20 years, made it difficult for us to carry out reforms, especially the reform of the tax system which is sorely needed because of the very heavy tax burden on the middle class.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, I am pleased to take the floor to talk about the amendments to Bill C-76. When I heard the hon. member for Gatineau-La Lièvre talk about the monetary system and cuts in the public service, when the subject is really amendments to the Crow's Nest Pass policy and to the subsidy to Western grain farmers, I thought I had got my day wrong.

Well, we cannot very well prevent him from talking about the subjects dear to his heart, but I am happy to hear that he does not share the views of his Minister of Finance, and I urge him to point that out to the minister, who is following a monetary policy basically similar, if not identical, to that of his Conservative predecessors. I also urge him to mention it to his constituents.

This is a good illustration of a policy which makes it difficult to deal equitably with an issue. It happened in the past, and it continues in the budget, which treats dairy producers from Quebec and grain producers from the West differently. This is the continuation of a long series of historical decisions regarding agriculture and rail transport which, in both cases, worked to the advantage of Western Canada.

I am quite pleased to point this out, because we still hear Liberal and Reform members criticize the fact that Quebec receives, in some areas, transfer payments or equalization payments. They called them gifts to Quebec, but they do not criticize this policy which, for a long time, has allowed the West to develop. The development of the railway system cost billions of dollars, and allowed a lot of farmers to grow and prosper in Western Canada. However, we seem to forget all the money that was poured into this because it is less visible nowadays, since it was done over a period of time.

But now, with all the financial choices and spending cuts we face, this resurfaces. A moment ago, my colleague from Saint-Hyacinthe-Bagot talked about that. When the unemployed are victims of cuts, we do not say to them that we are going to allow them transition, adjustment periods. Soon, we will be making changes to the Canada pension plan or looking at the income security program, and throughout this debate that will be held in the fall, I am sure that these changes will not provide for long transition periods for the persons affected.

But when we speak about capital gains, family trusts, and other matters, then we have to have long transition periods to give people a chance to adapt. However, when the ordinary people, who are the most affected, are concerned, we forget about that.

I talked briefly about the impact of this policy on the development of the railway system. This has also encouraged farmers. For years now, in Quebec, we have been told that every rail section must be viable. When they are not, the tendency is to privatise them, to get rid of them, to give them to anybody, and not to keep them. Under the same policy out west, we have always supported the maintenance of this system, because they were very clearly linked to the development of the farming industry.

Earlier, I tried to describe the situation in this way: if you are a grain producer, it is not the dairy truck which goes by your house, but the rail system, to help you, support you or allow you to send your crop to the export points. Over the years, things have evolved. At the beginning, almost 90 per cent of the financial support came from the government.

And now, financial choices have to be made. In its budget, the federal government says that it must cut in that area, but it is planning a $1.6 billion compensation package. An important factor to consider is the fiscal side of the equation. When we talk about non-taxable money, the amount is higher than that, perhaps more than $2 billion.

In the same budget, we are told that tens of millions of dollars will be cut for milk producers in Quebec, but no mention is made of any compensation. So, we have the unfair treatment given by the federal government which has supported the railway system and supported Western Canada to the tune of hundreds of millions of dollars, on the one hand, and has funded development differently in Quebec, by giving it less support, on the

other hand. And now, this historical imbalance is being perpetuated, under the pretext that market forces must now be left to come into play.

In Quebec, there is no compensation package, no transition measure. The federal government is saying to milk producers that they can raise their prices, and that they have the flexibility to do that. In other words, it is saying to Quebec consumers that they will pay for that. We account for some 23.8 per cent of total tax revenues, so we will also pay 23.8 per cent of the compensation package given to Western producers.

In this bill, there are many examples of the federal government's approach toward development in the different regions, particularly those in Quebec. This is the same bill sets up transfer payment negotiations which, for Quecbec, can only lead to reduced transfer payments, and a smaller percentage than what it is getting now. No matter what solution is found, I am convinced that Quebec will not receive more than before.

The Ontario government will come to the negotiating table with many huge claims. This has been going on for several years, and just because Ontario changes government does not mean that these claims will also change. Quebec is facing cuts that will affect it more than the other provinces. It is said that more than 40 per cent of the cuts will be made in Quebec. In the same bill, dairy producers are also being hit harder, because they will not get any compensation package.

There are many reasons why, once this bill is passed, the federal government will be even less committed than before to supporting Quebec's development. These people are the same ones telling us that this system is cost effective, that it is good for Quebecers.

I want to raise a point in response to what the hon. member for Gatineau-La Lièvre said about federal public servants. Whenever the issue of sovereignty comes up, the people across the way are eager to tell us that it would spell disaster for the Outaouais, although they are saying very little about the roughly 15,000 jobs they are cutting in the region. The hon. member was very subdued in the House, probably because he has a carefully crafted quote for his next householder. He does not criticize his government's decisions in the newspapers or anywhere else. He did not defend them in committee. Where was he? Where are these great champions of the Outaouais who enjoy telling us that we are very well served by the current system? This bill also contains provisions affecting federal public servants.

The government whip did not rise either. Government members make timid speeches to keep their constituents happy; their remarks are never very searing. There are fiscal choices to be made. If the Western Grain Transportation Act must indeed be repealed, they should stop trying to provide indirect financial support and incentives, and stop attempting to raise the Liberal Party's profile in the West, as was recently done in Manitoba. Although we understand why they want to improve Liberal prospects in that region, $2.2 billion is a lot to pay just to buy votes. We have serious reservations here. If this policy must be scrapped, they should have the courage to do so now and to respect the commitments made by the Bloc Quebecois.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The vote is on Motion No. 5. All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Pursuant to Standing Order 76(8), the recorded division on the motion stands deferred. Accordingly the recorded division will also apply to Motions Nos. 6, 7, 8, 9, 10, 11, 18, 19 and 74.

The next question is on Motion No. 17. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.