Mr. Speaker, the issue we are discussing today is the privatization of Canadian National rail.
Although Reform supports the government in this endeavour there are still some problems with this legislation that must be addressed. The bill requires the headquarters of CN to be located in Montreal permanently. It includes the restriction that limits the percentage of shares any one individual can own to 15 per cent.
CN Rail currently owes about $2.5 billion. Industry representatives say the debt must be reduced to $1.5 billion to achieve a BBB bond rating and sell. The minister has the power to reduce CN's debt to any amount he chooses, which could mean an amount well below the amount for which taxpayers would see a return.
Let us take a look at crown corporations. In the auditor general's report of 1982 this is what was written: "Crown corporations are like an enormous iceberg floating lazily in the foggy Atlantic, silent, majestic, awesome. The public tends to see only the upper portions consisting of giants like Petro-Canada, the CBC, the Canada Mortgage and Housing Corporation. The great bulk of the iceberg below the surface is less spectacular, less likely to attract public interest, less likely to receive the attention of Parliament, yet costly to taxpayers".
That was 12 years ago and nothing has changed. In his 1994 annual report to Parliament the president of the Treasury Board gave us a view of this iceberg below the water line when he listed the Government of Canada's holdings: 48 parent crown corporations, 64 wholly owned subsidiaries, 5 mixed enterprises, 3 joint enterprises, 51 other entities, 8 corporations under the terms of the Bankruptcy Act.
Reform Party policy on privatization and corporations indicates we support placing the ownership and control of corporations in the sector that can perform their function most cost effectively with the greatest accountability to owners and the least likelihood of incurring public debt. We believe this would be in most cases the private sector but not necessarily in all cases.
The Liberal position which I had to try hard to read in the red book says that for the past decade the small and medium size business sector has been the engine of the Canadian economy. It says the Liberal government will focus on its growth. While debating Bill C-89 on May 2 the Minister of Transport stated: "This legislation is part of our government's intention to have the private sector operate in areas where it can do the job best".
The Minister of Finance said in the budget last February: "Our view is straightforward. If government does not need to run something it should not and in the future will not".
Let us get to an analysis of what the government's role should be when it comes to privatization and/or crown corporations, some general points. The role of government should be to do what only the government can do, which is to keep peace, order and good government. It should regulate, administer, pass laws and defend borders but it should not enter the marketplace to create jobs. With regional development funds, grants, subsidies and crown corporations, governments distort the private sector, create temporary jobs and promote unfair competition within industry sectors. Governments are, in fact, part of the problem and not the solution.
There is a big difference between the spending of debt capital that is borrowed money and equity capital that does not have to be repaid. The private sector understands the difference and it is time politicians did too. At risk money motivates; government money wastes.
In some concluding comments I would like to state that the government's role in today's world should be to develop an economic atmosphere, an environment and infrastructure that facilitates investment, not make the investment itself directly. The private sector will do that. The Reform Party believes in the principle of Bill C-89 and the privatization of CN Rail.
We would like to see some of the roadblocks removed from the legislation and we hope the government will accept our suggestions.