Mr. Speaker it is an irony speaking today on Bill C-14. The hearings are finished, the amendments are finished. They were voted on last night.
All we will do today is have a post-mortem on what has taken place, a eulogy for the things that might have been much better in a bill that has a lot of good merit in it.
There are a lot of good points in this bill, but it could have been much better. There are several areas where the government has either included things that should have been taken out or failed to inject things that should be in the bill.
I will deal with both the things that should have been taken out and with the things that should have been in such as protection for utility companies or municipalities with regard to their infrastructure systems, sewers, water, roads and so on.
Before I get into that, I find myself in the strange position of defending the government. There are some good things in the bill. We have heard in debate from the NDP objections to some of the very things that give the bill some merit.
NDP members talked at length about the abandonment procedure and tried very hard to put in a bunch of amendments which would have basically cancelled the changes that took place. They lacked a basic understanding of the entire abandonment procedure, both the old one and the new one.
NDP members claimed during debate that they have been talking in the coffee shops of Canada. I do not doubt they have. It is too bad they did not know what they were talking about when they were doing it.
The Canadians I have talked to both inside and outside Parliament want a continued rail service, period. They would like to have the service we have now continue, but short lines are certainly a viable alternative.
I have to reiterate what I said in debate about how the old procedure worked and what the problems were. If a rail company wanted to abandon any rail line, short line, main line, it does not matter, the procedure for abandonment of a rail line was that it first had to prove financial hardship.
Before it made that application, and rail companies would be loathe to admit this but we all know it is a fact, it made sure that if financial hardship did not already exist it created it.
The way it creates financial hardship if it does not already exist is by demarketing the line, by going to the shippers on the line and providing some alternative method of shipping their goods to market or at least to a railhead.
This happened in my riding in the Slocan Valley where there was one primary shipper, Slocan Forest Products. CP Rail, in its intention to abandon that line, went to Slocan Forest Products and wrote a confidential trucking contract, we presume at very favourable rates, perhaps even below its cost, to ship its goods to the nearest reload centre in Nelson, B.C. where rail lines still exist.
It also did absolutely minimal maintenance on that line. That is not to say it did anything illegal or that it ran a line that was unsafe, but it ran it at absolute minimum standards. The evidence of that is by the time abandonment was actually approved, we had trees growing in the middle of the rail line. That does not happen on a well maintained line.
As a result the line was abandoned, but no short line operator in its right mind would bid to preserve and operate a line which had no customers left and which would cost a fortune in repairs and upgrades, when normally the rail line would have been maintained.
With the new procedure a rail company does not have to prove financial hardship. It can apply to abandon whatever line it wishes but it has to go through a very set procedure.
First it has to publish on a three year planning list which lines it wishes to abandon. It is not committed to abandoning them, but they would be lines under investigation or under scrutiny by the rail company with the possibility of divesting itself of those lines.
If it wishes to proceed, it has to offer in a prescribed manner those lines for sale with all kinds of published information to the general public so that short line operators or those that wish to become short line operators could consider purchasing them.
After the set period of time, if the company has not succeeded in selling the lines, it then has to offer them, in turn, to the federal, provincial, local, municipal and regional governments at their net salvage value. This gives every possibility of preserving those lines because the lines have not necessarily been demarketed or brought down to the lowest possible maintenance standards.
We believe these measures will enhance the ability of short line operators to take over the operation of rail lines.
I have spoken to several short line operators and they are aggressively looking to increase their operations and take on new lines. This is a very positive move to enhance the viability of short line operations, which may be a viable alternative to rail operations in marginal areas.
The amendments put forward by the NDP, though well meaning, may have harmed rather than helped the situation. I will now deal primarily with Reform motions which would have either added things that are missing from the legislation or taken things out which should have been out in the first place.
Three Reform motions deal with municipal government and utility company protection. We heard from representatives of the Federation of Canadian Municipalities and various utility companies regarding their concern about the infrastructures of their sewers, water, gas and power which pass in most cases under, and in some cases over, rail rights of way.
The problem is that if a line is sold or ultimately abandoned, in most cases there is no registered easement for the companies or for the various municipalities. This is a problem for municipalities which have designed their whole infrastructure systems for the crossings. They would like to have something in the bill which would ensure the protection of the lines for all the people they serve in the various communities in their areas.
I do not think that is a particularly unreasonable request. It is not a cost factor to the rail companies. Those who would argue against this would say the municipalities or the utility companies can expropriate. They can in many cases, but that costs money. In the end those costs fall to the very people who use these services, the taxpayers.
Again I am defending the Liberal government. The Liberal government needs the Canadian taxpayer to have as much money as possible in order to pay all the Liberal bills generated by the government. I truly am looking out for the best interests of the Liberals with these motions.
Unfortunately the Liberals rejected every one of the motions that would have protected the municipalities. They would have protected all the towns and villages that rail lines go through and all the infrastructure systems that go under or over the rail rights of way. The Liberals turned their back on them.
I hope those people will remember that when the Liberals start trying to get even more tax dollars out of them and there are problems at the municipal level because of these rights of way.
Another Reform motion that is missing from the legislation is some measure of protection for Atlantic Canada. Motion No. 38 was a Reform motion that provided one of those protections. This was an amendment that would have seen a five-year guarantee that the CN Rail line from Montreal to Halifax would continue in operation. This goes back to Bill C-89 which was the CN privatization bill.
People from Halifax, the port authorities and other representatives from Atlantic Canada came before the committee with regard to Bill C-89 and asked for a 10-year continuance of that line. They put forward some very good and sound arguments.
I put that amendment at committee level and it was supported by at least one Liberal member of the committee from Atlantic Canada. In fact the vote was a tie and the Liberal chair of the committee had to break the tie and did so by voting against Atlantic Canada. The same people came before us with regard to Bill C-89 and Bill C-14 or Bill C-101 at that time, saying they still need this. They said they could live with five years and cut their request in half.
Ports commercialization or privatization is coming in. All the ports will have to look out for themselves, raise their own capital on the marketplace and be responsible for it. The federal government is not going to guarantee the loans. I do not have a problem with that. These ports should stand on their own. They should operate on a commercially viable basis. The ports that came before us on this issue said they were prepared to do that.
However, they cannot go to investors and ask them to put money in if they cannot ensure those investors that while they are developing their post-Panamax facilities to get ready for the coming generation of new and larger freighters, they do not have some guarantee that they are going to be able to transport those goods from Atlantic Canada into central Canada and the American midwest.
As it happens Halifax is the ultimate best port for not only reaching central Canada but for reaching the American midwest. This does not take away from any of the inland ports, for example, Montreal or the Lakehead, because if these post-Panamax ships do not come to Halifax they are going to the New England states or to New York. It is Halifax or it is somewhere outside of Canada. The ports need the CN Rail line with its connection through the Sarnia tunnel to get to the American midwest market.
If I were going to invest in the infrastructure of the Halifax area I would want some assurance that the rail line was going to stay intact until such time as these post-Panamax facilities were developed, the market was there and the goods were being shipped. At that time the port will be prepared to stand on its own.
Liberal members were asking why Reform was interfering with the free enterprise of CN Rail by saying it had to do something for a
five-year period of time. The Reform Party is supposed to be the free enterprise party so why is it trying to bring in such an amendment?
I pointed out that for 80 years successive Liberal and Conservative governments had interfered with the marketplace, specifically with CN Rail, by having this crown corporation doing things that were far removed from normal commercial practices. All I was asking for was a five-year transition period while it went from this crown entity to the private sector.
The head of CN Rail, Mr. Paul Tellier, appeared at the hearings on Bill C-14. I asked Mr. Tellier that as he was required under the act to provide a three-year plan was he looking beyond that to four, five or six years? He said that he was. I then asked if he had any plans over the next five years to discontinue the line between Montreal and Halifax. His response was, no, absolutely not because CN had made a lot of investments in Atlantic Canada in facilities and there were no plans to do that.
The Liberals could have accepted the amendment that I brought forward so that Halifax could go to the investors and say: "There is your guarantee that the rail line will remain". It would not have cost CN or the government or the taxpayers anything. In fact, the only thing that could cost the taxpayers money is if Halifax has trouble raising capital in order to do its post-Panamax facility upgrades and loses the traffic to the United States. This was a win, win situation but the Liberals said no to Atlantic Canada.
Last night we had a standing vote on Motion No. 38 and one by one, each and every Liberal in this place rose and voted against Atlantic Canada. Why did they do that? Could it be that they simply do not want Atlantic Canada to develop any form of financial independence? There can be no other explanation.
Clause 27(3) would not have been required at all. The Reform Party tried to amend it but that would not have been needed if the Liberals had done the right thing with clause 27(2) but they did not. This does not fix clause 27(2). I have to make that clear. Our motion tried to make it slightly more acceptable.
The main source of the items we listed in our amendment to try to better define what is significant commercial harm was provided by the NTA representative stating items that would clarify clause 27(2) so we put those in.
I am going to mix a couple of things together here because clause 27(2) is strongly entwined with this. The minister said this morning that clause 27(2) got unanimous support at committee. Unlike Bill C-89 which went to committee after first reading, we supported it. The Liberals said this would make it more amendment friendly. They were not telling an accurate story, shall we say. When it got there we did propose amendments after listening to the various people who came before us. The Liberals rejected each and every amendment out of hand with very little discussion. After the fact, we discovered that they would have been much better off had they brought in at least the majority of those amendments. The government knows that now. Maybe it knew it then, but for whatever reason it chose not to listen.
The Liberals had a change of heart on Bill C-14. They seemed to be much more open to amendments and they did support a tremendous number of Reform amendments which were brought forward. They went so far as to ask me what I would like to see in the bill. That is very hopeful for the future if they are prepared to do this.
The Liberals did accept a lot of our amendments. Unfortunately, a couple which they did not dealt with clause 27(2) and 27(3). One thing that I tried to do was recognize that if the government does not want to take clause 27(2) out it is going to be passed because after all it has a majority and can pass anything it wishes.
At committee level I tried, first, to make the clause a little more palatable with an amendment which would define much more specifically exactly what was then referred to as significant prejudice. In part, the agreement I made verbally was that if the government accepted this, I would support clause 27(2) at the committee level, knowing full well that we still had report stage to deal with this after I had another opportunity to speak to the various shippers who were concerned about this.
What the government did was a little sneaky. Perhaps I should have said that it had broken its agreement and therefore I no longer had an obligation but I stuck with it.
I put forward an amendment that would define the meaning of clause 27(2). The government pre-empted it with one of its own, which was much softer than mine. Once the government's amendment was in, there cannot have two amendments proposed on the same clause at committee stage, so it took precedent over mine and mine was not considered. That was the same amendment that I brought forward at report stage.
The government should have supported my amendment as it was proposed, as I did what I had agreed to and that was support clause 27(2) at the committee stage provided the government amended it.
Reform supported two amendments which removed objectionable clauses from this bill. I would like to discuss the one that deals with clause 11(2), commercially fair and reasonable. At the committee hearings I asked the NTA representative to define commercially fair and reasonable. The following is a quote from the testimony before the Standing Committee on Transport, November 7, 1995 by Mr. Ashley of the National Transportation Agency responding to my inquiry.
Mr. Ashley stated: "What is commercially fair and reasonable is I suspect consistent with what is competitive. What is competitive in any circumstances depends on product market, geographic market, the elasticities of demand for that product, temporal aspects, production efficiencies, market structure, market conduct and market performance".
"I can tell you that on the street it would mean covering the fixed cost long term average variable cost, contribution to fixed cost and perhaps a return on shareholder equity. But to say today that in the future it will be what the agency does in every case would be wrong".
"The competition people have appeared before you. The law is predicated on competition in the marketplace. If you look at case law under the Competition Act, the courts would have stated that even a non-compensatory rate, a below cost losing rate, can be a commercially fair and reasonable competitive rate. Perishable goods, production oversupply, the jurisprudence under the Competition Act shows that a commercially fair and reasonable rate can be many things in many circumstances and what is commercially fair and reasonable today may not be tomorrow".
Responding to Mr. Ashley I said: "Let me point out what you have just said. When I asked you about the meaning of significant prejudice you said
it could be argued'. When I asked you about the meaning of commercially fair and reasonable you saidI suspect it means'. That is little comfort to the shippers. If this is what the NTA does, if this is how they decide, it is no wonder the shippers are worried.
I suspect',it could be argued', that is no comfort at all, Mr. Ashley".
Continuing, I asked: "Can I then surmise from what you are saying that you don't necessarily agree with these provisions but you are going to work with them to the best of your ability. These things are highly subjective and the NTA, soon to be the CTA, will have to deal with them as best they can".
Mr. Ashley's response was: "That is correct, sir".
I responded again: "You can see where my concern is. The lack of objectivity in this is telling me that they're", and this is referring to the shippers, "probably are right to be worried".
That is the reason we are concerned about that particular clause and why we supported trying to take it out. Let there be no misunderstanding of what the government is saying. That is from the NTA.
Clause 27(2) is undoubtedly the most controversial part of the entire bill. It should have been taken out. This is what is referred to as significant prejudice throughout the hearings and later changed to substantial commercial harm.
I think there was a possible ploy on the part of the new Minister of Transport. Several shippers' groups visited with the minister and the new chair of the Standing Committee on Transport last week and brought forward their concerns about clause 27(2) and what this would do for them. The minister responded: "I was not aware of those aspects. That is really interesting. In light of this I will have to reconsider the government's position on clause 27(2)". This was echoed by the chair of the transport committee.
I asked how I could co-operate with them to ensure the matter was properly addressed. I told them I did not want to make a political football out of the matter, that I did not want to score political points, I simply wanted the bill to be good.
I offered to make an agreement to send the bill, or at least clause 27, back to committee where all committee members could reconsider and make changes so that it would not be a government response to a Reform amendment. They overwhelmingly rejected my offer. Up until the eve before debate they were very open, saying they were considering these things. The morning of debate it was gone from the table.
Since then shippers have told me they think they were set up. They think the minister gave them that hope to keep them quiet so they would not give a press release against what the government was doing. Once debate began, when it was too late to do any of these things, the government cut them off at the knees. I did not suggest this to the shippers, it came from them. I believe they were right.
There were many witnesses at the committee level. We had long hearings which lasted well into the evenings on several occasions. Most of the witnesses strenuously objected to clause 27(2). If we will not listen to the people who come before these committees, the overwhelming majority of them, why do we go through the cost of interpreters, technicians, research people, the clerks, the offices and all the other costs? Why do we have the expense of all these people coming to Ottawa to testify before the committee if we will not listen to them? Attempts to fix clause 27(2) were not accepted by these shippers.
Bill C-101, as it was first known, was basically lost from the Order Paper with the prorogation of the House. The government obviously wanted to bring it back, which it ultimately did. It tried first to bring it back in the old accepted way, by unanimous consent.
Moya Greene, who was an assistant deputy minister in the transport department, called me in British Columbia to ask if I would agree to unanimous consent to bring this bill forward. I said I would provided they take clause 27(2) out of it. She asked why I
wanted clause 27(2) taken out. I said it was because there was such overwhelming to it. She replied that they had fixed it. I said that I would give her the greatest deal ever: "Of all the people who objected strenuously on record to clause 27(2), if you can find me two or three who are prepared to say they objected to it but now accept it, I will reconsider my position". She did not know if she could do that. I suggest, as I did to her, that it has not been fixed.
As I have said, the minister led many concerned shippers to believe he would reconsider clause 27(2). I did everything I could to accommodate this. I brought forward a request to seek the unanimous consent of the House to do that so that it could be done in a non-partisan manner with all of the House agreeing to it. The government rejected my offer.
Who is really against clause 27(2)? The farmers and their organizations are against it, the grain companies are against it, the mining operations, sawmills, pulp and paper producers, chemical companies, manufacturers. Who really benefits? The two rail companies obviously benefit a little, but I do not believe they are the real beneficiaries.
I refer again to testimony of the NTA on November 7, 1995. In this text the term "significant prejudice" is used. This term was later amended to "substantial commercial harm". All shippers I have consulted with agree this change of words has not substantially changed the intent of this clause, if at all.
I asked the witness, Mr. Ashley from the National Transportation Agency, what "significant prejudice" meant. I asked him to define, from the NTA's point of view, what would happen to me if I were a shipper coming before it and it had do something for me or throw me out the door, depending on how it interpreted "significant prejudice".
Mr. Ashley's response was: "I will tell you what I expect the agency will hear by way of arguments as to what it will mean. On one end of the spectrum it could be argued, and I assure you it will be argued, that it is the mere inability of a shipper to get his goods to market because of the railway's refusal to grant a CLR that is, by definition, significant prejudice of the ability of the shipper to get his goods to market.
"On the opposite end of the spectrum, it will be evidence in argument tendered to the effect that in a shipper's inability to get his goods to market the test of significant prejudice will only be met if that shipper has to close his plant".
My response to Mr. Ashley was: "You can see where the problem is. You have just given me an incredible range, including the possibility that a shipper has to go bankrupt before this thing may be decided in his favour. We have to sort of say to shippers `do not worry about clause 27(2), it is great. It will not harm a damn thing as long as you are prepared to go bankrupt'. I find that absolutely astounding".
I continued to ask Mr. Ashley the following: "If we do not have clause 27(2) does it stop you from doing your job? In the last eight years have you had a problem doing your job?" Mr. Ashley's response was: "The answer to that, sir, is no".
Who really benefits from this, as near as I can see, are lawyers. This is according to the testimony of Mr. Ashley, himself a lawyer. Why would the government be interested in doing something that will benefit primarily lawyers?
I have an astounding list in my hand. It points out that the Prime Minister is a lawyer, the government House leader is a lawyer, the minister of agriculture is a lawyer, the Minister of Health is a lawyer and the Minister of Indian Affairs and Northern Development is a lawyer. There is a lawyer's growth industry right there. When the member became the Minister of Indian Affairs and Northern Affairs some aboriginal people he had been working with as a lawyer said: "I thought I had died and gone to heaven".
The Minister of Industry is a lawyer, the Minister of Natural Resources is a lawyer, the Minister of Justice is a lawyer and the President of the Treasury Board is a lawyer. The Minister of Human Resources Development is a lawyer. He is the former Minister of Transport who introduced and helped draft this legislation. Now we know who is benefiting from this.
Clause 27(2) is a deal killer for the Reform Party. Even though there are other objectionable inclusions or exclusions in the bill, there would be enough value in it to recommend its passage if it not for clause 27(2).
The government had the opportunity to improve the bill but did not take it. We all know it has the power to pass absolutely anything it wants whether it is in the public interest or not. Let us chalk up another win for an autocratic Liberal government and another loss for democracy.