House of Commons Hansard #219 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was sentencing.

Topics

Criminal CodeGovernment Orders

10:25 p.m.

Some hon. members

Yea.

Criminal CodeGovernment Orders

10:25 p.m.

The Speaker

All those opposed will please say nay.

Criminal CodeGovernment Orders

10:25 p.m.

Some hon. members

Nay.

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10:25 p.m.

The Speaker

In my opinion the yeas have it.

And more than five members having risen:

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10:25 p.m.

The Speaker

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

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10:50 p.m.

The Speaker

I declare the motion carried.

(Bill read the third time and passed.)

The House proceeded to the consideration of Bill C-89, an act to provide for the continuance of the Canadian National Railway Company under the Canada Business Corporations Act and for the issuance and sale of shares of the company to the public, as reported (with amendments) from the committee.

Cn Commercialization ActGovernment Orders

June 15th, 1995 / 10:50 p.m.

The Speaker

Order. I want to make a ruling for the groupings on report stage of Bill C-89.

There are 16 motions in amendment standing on the Notice Paper for the report stage of Bill C-89, an act to provide for the continuance of the Canadian National Railway Company under the Canada Business Corporations Act and for the issuance and sale of shares of the company to the public.

Motion No. 16 is identical to a motion we considered and rejected in committee. Accordingly, pursuant to Standing Order 76(5), it will not be selected.

The other motions will be grouped for debate as follows: Group No. 1, Motions Nos. 1 to 4.

Group No. 2, Motion No. 5.

Group No. 3, Motions Nos. 6 to 11.

Group No. 4, Motions Nos. 12 and 13.

Group No. 5, Motion No. 14.

Group No. 6, Motion No. 15.

The voting patterns for the motions within each group are available at the table. The Chair will remind the House of each pattern at the time of voting.

I shall now propose Motions Nos. 1 to 4 to the House.

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10:50 p.m.

Reform

Jim Gouk Reform Kootenay West—Revelstoke, BC

moved:

Motion No. 1

That Bill C-89 be amended by deleting Clause 8.

Motion No. 2

That Bill C-89, in Clause 8, be amended by adding after line 23, on page 6, the following:

"(8) This section ceases to be in effect five years after the coming into force of this Act."

Motion No. 3

That Bill C-89, in Clause 8, be amended by adding after line 23, on page 6, the following:

"(8) Paragraph (1)( c ) ceases to be in effect five years after the coming into force of this Act.''

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10:50 p.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

moved:

Motion No. 4

That Bill C-89, in Clause 9, be amended: a ) by replacing line 27, on page 6, with the following: jurisdiction''; and <em>b</em> ) by replacing line 31, on page 6, with the following:section 8(1); or ( c ) sell any subsidiary or part of the operations of CN unless CN and the purchaser have given the Minister written undertakings, in terms satisfactory to the Minister, that all reasonable steps have been taken to ensure that it will continue for a reasonable period as a viable operation and that the interests of the employees affected by the sale will, so far as is practicable, be maintained after the sale.

9.1 The Minister shall, in respect of every sale mentioned in paragraph 9( c ), cause to be laid before both Houses of Parliament the undertakings given pursuant to that paragraph.''

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10:50 p.m.

Reform

Jim Gouk Reform Kootenay West—Revelstoke, BC

Mr. Speaker, I will say a few words with regard to the amendments I have submitted and then I will defer to my colleagues for debate.

The first two motions deal with the restrictions the government has placed on the sale of CN shares dealing with the requirement for the head office to remain in a particular location. I would like to point out to my colleagues from the Bloc that this is not a Quebec issue. I do not care if it is Montreal, Toronto, Winnipeg, Vancouver or some obscure place no one has ever heard of, a company should not be tied down to any location. It should be free to choose.

With regard to the 15 per cent shares, I feel that places restrictions. We heard in committee that it did not solve any problems but it could create some in the long term. Consequently, we have to view this as an unwarranted restriction.

The third motion deals with if the government does not see fit to remove these then perhaps it would at least see fit to put a time limit on how long it requires the company to comply with this. It is an attempt to put in a five year sunset clause.

The only comment I would make with regard to Motion No. 4 by the Bloc is that I understand why the Bloc is doing it but it is a bit overrestrictive in terms of creating more obstructions in the way of the sale. We believe this can be dealt with in other more appropriate ways. Beyond this, I defer to my colleagues for debate on this grouping.

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11 p.m.

Reform

John Duncan Reform North Island—Powell River, BC

Mr. Speaker, I rise to speak to Motions Nos. 1 to 4 in Group No. 1 on Bill C-89.

Motion No. 1 calls for the deletion of the head office clause which stipulates that CN's headquarters must reside permanently in Montreal and calls for the deletion of the 15 per cent ownership restriction.

In today's marketplace the stipulation of the permanent location of a head office is absurd and makes a mockery of a bill of serious intent. This whole question of permanence reminds me of a story of a fellow who applied for a job with a previous employer. When he was offered the job he asked whether it would be temporary or permanent. The response was in that company there were no permanent jobs. This stipulation would not occur in a free market and no private sector companies face these same restrictions. This is purely for political reasons and should be expunged from the bill.

As well, restricting the percentage of shares any one individual, corporation or association may own is not sound. Where is the incentive for new investors to bring in a new management style to revitalize this dinosaur? To which latest investor advice fad is the government listening?

This clause also restricts the best price CN could fetch in the marketplace. As one investor put it, the 15 per cent restriction circumscribes the deal. This restriction dampens investor confidence and freezes out the type of investor who looks for troubled, debt ridden companies that can be restructured and made profitable, generating dividends and capital gains. I support Motion No. 1.

Under Motions Nos. 2 and 3 of Group No. 1, I support the introduction of a sunset clause of a five year time limit on the headquarters and ownership restrictions should Motion No. 1 not carry.

Motion No. 4 calls for parliamentary approval on each offer made by the private sector for CN assets. This is redundant. If Bill C-89 passes Parliament has already given its approval for the sale of CN. I will not support Motion No. 4.

If the government cannot attract a good offer it will have to answer for that later.

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11 p.m.

Bloc

Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Mr. Speaker, I am pleased to rise, despite the late hour, on our fourth amendment, which reads as follows:

That Bill C-89, in Clause 9, be amended;

(b) by replacing line 31, on page 6, with the following: "section 8(1); or (c) sell any subsidiary or part of the operations of CN unless CN and the purchaser have given the Minister written undertakings, in terms satisfactory to the Minister, that all reasonable steps have been taken to ensure that it will continue for a reasonable period as a viable operation and that the interests of the employees affected by the sale will, so far as is practicable, be maintained after the sale.

9.1 The Minister shall, in respect of every sale mentioned in paragraph 9(c), cause to be laid before both Houses of Parliament the undertakings given pursuant to that paragraph.

You will have noted with the reading of the amendment that our party's principal aim was, despite the Liberal government's decision to privatize CN, to maintain and keep jobs, because behind privatization or the end of business, although economic aspects are certainly sometimes given consideration, the human element, the experiences of the people affected by changes in their working conditions or even the cutting of their position, must be considered.

You will note that the aim of this amendment is to give this House a certain right over the selling of CN assets, not directly related to rail transportation.

Our decision, in the Bloc Quebecois, to table this amendment was based on the statement made several times by the Minister of Transport that he intended to sell off individually the assets of CN not directly related to rail transportation. Being familiar with CN operations, we know that one of the largest CN subsidiaries to be sold is AMF Techno Transport, located in Pointe-St-Charles, in Montreal. We are talking here about 1,300 jobs, 1,300 workers who, unfortunately, saw their company lose some $35 million last year.

When the minister appeared before the Standing Committee on Transport, he told us that, in his opinion, AMF had a very precarious future and he refused, despite our questions, to guarantee its survival. As you can understand, the loss of this company would have disastrous consequences for the greater Montreal area.

One European company, however, showed interest. Alsthom is a French company that can brag about its major contribution to the high speed train in France, in partnership with none other than the pride of the Quebec business community, Bombardier.

Alsthom has no North American subsidiary that makes railway equipment. AMF Techno Transport, which is located in Pointe-St-Charles, could thus easily become its bridgehead in North America, which would have a very positive impact on AMF and the greater Montreal area.

Before closing, I wish to add that perhaps if we gave Alsthom the possibility or the incentive to take over AMF-this is the purpose of our amendment- I am confident that Quebec would be in a very good position when the decision is finally made to build a high speed railway corridor between Quebec City and Windsor.

Let us not forget that Alsthom Bombardier holds an exclusive licence for building a high speed train or HST in North America.

Let us not forget that about seven or eight HST projects are planned for the next 12 years, which would put the new Alsthom AMF consortium in an excellent position to bid on contracts to make railway equipment for future HST projects in the U.S. Or that economic benefits in the order of $200 billion are being mentioned. Again, a Quebec manufacturer could very well succeed on the international market.

In closing, I will say to you that the purpose of the amendment is to ensure that, whoever the buyer is, precautions will be taken to keep AMF viable and to protect the jobs of the Montreal men and women who work there as well as those of the people in the greater Montreal area.

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11:10 p.m.

Reform

Jim Silye Reform Calgary Centre, AB

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.

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11:15 p.m.

Bloc

Osvaldo Nunez Bloc Bourassa, QC

Mr. Speaker, I rise to support motion No. 4 amending Bill C-89. That motion, tabled by the hon. member for Beauport-Montmorency-Orléans, seeks to give the House a say in the sale of CN's assets which are not directly related to railway transport.

The minister said on several occasions that he intends to sell off one by one those assets which are not directly related to railway transport. One of CN's major subsidiaries, AMF Technotransport, located in Montreal's Pointe-Saint-Charles, will be sold in that fashion. Last year, that company, which employs over 1,300 workers, suffered losses of some $35 million.

When he appeared before the committee, the minister said that AMF's future was precarious, but he refused to pledge to ensure the company's survival. Yet, should AMF close its doors, the consequences would be disastrous for the Montreal region. CN workers fear that privatization may deprive them of their job security and pensions. In fact, the process has already started.

Today, the media announced that the arbitrator just imposed a new collective agreement which, among other setbacks, provides less job security. The CAW union, which represents some 12,500 CN workers, made representations concerning the privatization

process. The workers have already had bad experiences with the privatization of two sections of CN: Route Canada and AMF.

In the case of Route Canada, the new owners bought the company and then shut it down, thus putting over 2,000 workers on the street. AMF, which is now a CN subsidiary, did not recognize the collective agreement. It took the courts over a year to restore the workers' rights. Several unions represent CN workers, particularly, as I just mentioned, the CAW. Overall, the unions are in favour of maintaining CN's Crown corporation status, but they want to be represented on the board of directors.

It should be pointed out that these workers are very productive. Following very tough negotiations and sometimes long strikes, they managed to get acceptable and reasonable salaries and working conditions. However, CN's management obtained, and continues to demand, concessions from the unions, including on the issue of job security. However, job security, which is only one element, was gained in exchange for other concessions.

Therefore, unions are concerned about the future since there have been massive layoffs over the past few years. Moreover, management positions have not been affected to the same degree.

I believe it to be urgent to improve labour relations at CN, a task which should be mainly the responsibility of the company's management. Unions, and the workers they represent, are worried about their jobs. This amendment seeks to maintain some degree of job protection for workers.

The bill contains no provision protecting the CN workers' vested rights or maintaining the present level of employment. This is a very important issue for workers. They do not want to find themselves without a job in the new company. As I said, the problem is the same for the employees of the sister companies such as AMF Technotransport, in Montreal. The vast majority of CN employees have more than 20 years seniority.

I will monitor the new company to make sure it abides scrupulously by the collective agreements in effect in this Crown corporation. I intend to monitor closely the transfer to the new employer of the rights and obligations under these agreements.

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11:20 p.m.

The Speaker

Is the House ready for the question?

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11:20 p.m.

London East Ontario

Liberal

Joe Fontana LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, I wish to address the first grouping. I must apologize, I was told by the opposition that they had more than one speaker on the motion. If I could, I would like to deal with Motions Nos. 1 through 4, specifically on clause 8.

Motions Nos. 1 to 3 propose either the removal or sunsetting after five years of the 15 per cent individual ownership restriction and the stipulation that CN's headquarters remain in Montreal.

The government chose to include a 15 per cent individual ownership restriction in the bill for a very specific purpose. Since the public share issue of CN will be the largest in Canadian history and likely could not be absorbed wholly by Canadian investors, access to foreign markets will be essential for the success of this deal. Any form of foreign ownership restriction would be viewed negatively by foreign investors and could result in a significantly reduced demand for CN shares, even jeopardizing the government's ability to sell 100 per cent of the crown corporation.

However, in order to ensure that no individual, Canadian or otherwise, would be able to attain control of CN, the government decided to include a 15 per cent individual ownership restriction. This is a balanced approach which would allow investors to buy a substantial piece of the company and have some influence over its future direction without enabling them to take it over. Since this is not expected to impact on the value of the CN shares, there is no call for either removing or sunsetting the stipulation.

With respect to CN's headquarters, it has always been located in Montreal and there is no reason to expect that to change. Indicating that it will remain there sends a message of stability and consistency with past practice to the workforce and investors. It has absolutely nothing to do with politics but everything to do with good business.

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11:20 p.m.

The Speaker

Is the House ready for the question?

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Some hon. members

Question.

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11:20 p.m.

The Speaker

The question is on Motion No. 1. Is it the pleasure of the House to adopt the motion?

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11:20 p.m.

Some hon. members

Agreed.

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11:20 p.m.

Some hon. members

No.

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11:20 p.m.

The Speaker

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

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11:20 p.m.

Some hon. members

Yea.

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11:20 p.m.

The Speaker

All those opposed will please say nay.