Mr. Speaker, I am pleased to speak in support of Bill C-89, an act to commercialize the Canadian National Railway. This proposal is one part of the government's larger plan for ensuring a viable and competitive transportation system in Canada. It is also part of the government's intention to have the private sector operate in areas where it can do the job better than government. As the Minister of Finance said last February, our view is straightforward. If government does not need to run something it should not and in future it will not.
Under Bill C-89 all of the government's current shares in CN will be sold on the public market. All Canadians, including CN employees, will have the opportunity to buy shares of the railway.
During the hearings of the CN commercialization task force and of the Standing Committee on Transportation, concern was expressed by employees regarding their jobs and pensions. I am pleased to confirm that CN employees will continue in their current positions in the new CN and their pensions will be protected under the Pensions Benefits Standards Act.
Employees will also have a special opportunity to take a stake in CN through a standard stock savings plan which will be part of the share sale.
While we hope that many Canadians will be interested in buying a piece of CN to maintain its historical value, we cannot believe that the Canadian market is large enough to absorb the entire equity of CN. Therefore, recognizing the need for foreign participation in the share offering to ensure success, we have not limited the extent to which foreigners can participate any more than we have restricted Canadians.
The 15 per cent individual ownership restriction, which is included in the bill, treats all investors equally by limiting their ability to take over CN by putting a ceiling on how much stock they can own. This represents the balance between not jeopardizing the government's ability to sell all its shares which would be the case if foreigners could not buy the stock and ensuring that no individual will be able to take over CN.
The bill strikes a balance between the objective of maximizing return for the taxpayer by ensuring CN is viable into the future and the operating obligations some may wish to impose on the railway.
I am also pleased, contrary to the Reform Party, that the headquarters of CN will remain in Montreal and the Official Languages Act will continue to apply to CN employees. This is a bilingual, bicultural country. However, these are not changes from the way the railway currently operates and will not affect the saleability or price which will be received for CN shares because investors will expect CN to continue to operate in this manner.
We cannot, however, impose any serious obligations on CN that do not apply to its competitors if we are to ensure that CN can compete on a level footing with the other transportation sector players into the future, nor can we allow CN to become a private company without addressing its capital structure.
CN must be able to finance itself in the public markets in the future at a premium similar to what its competitors pay. For that reason CN is doing all it can prior to the public offering to reduce its debt. In addition, CN will transfer its real estate assets to the government for a fair consideration which will also pay down debts. Any further debt reduction will be the minimum necessary and will be undertaken with the goals of fairness and competitiveness in the rail industry and the transportation sector in mind.
I believe that Bill C-89 will enable the government to sell 100 per cent of its equity in CN, maximizing the return to the taxpayer and ensuring that CN can remain a viable, national railway serving Canadians long into the future from the Atlantic to the Pacific.