Madam Speaker, it is with pleasure that I rise in the House to participate in the debate on Bill C-31, an act to implement certain provisions of the budget tabled in Parliament March 6, 1996.
I would like to take this opportunity to discuss the portion of Part II of Bill C-31 that deals with the sale of government owned railway cars, or hopper cars, as they are known. In the budget of the Minister of Finance on March 6, 1996 he announced that in order to continue the transformation of the western grain handling and transportation system, the government would do primarily two things. First, it would dispose of its fleet of grain hopper cars and second, it would minimize its role in the day to day operations of that system.
The government has committed itself to selling all of its fleet of 13,000 grain hopper cars. This policy change is designed to enhance the competitiveness of the grain handling and transportation system while keeping increases in freight rates paid by producers to a minimum.
I would like to remind the House of a couple of incidents, in particular in the use of grain hopper cars in the export of grains to the Vancouver port, the difficulties that western farmers have had in the control over that process. I am pleased to say that this allocation process will give western Canadian farmers greater control over that export process.
These decisions were adopted from a package developed by senior executive officers or the SEO group. This industry group was tasked last year with reviewing car allocations, the disposal of the government hopper car fleet and the Canadian Wheat Board's role in transportation. The review was announced in the 1995 budget. The report by the SEO group was carefully reviewed and it is important to note that several of their recommendations were not accepted due to concerns voiced by producers and producer led groups.
Two of the discarded proposals which were very important included a proposal by this group to sell the government cars to the railways for $100 million with a $1 per tonne freight rate increase for up to five years to cover the cost.
Second, producers were also concerned about the lack of a producer's voice on a proposed car allocation policy group. The Minister of Finance listened to these people. He listened to the producers and he acted accordingly.
I should point out that between 1972 and 1979 Canada had a Liberal government that listened to the pleas of farmers who were concerned about the transportation of grain at that time. It spent up to $500 million with interest payments on those capital costs to provide an additional 13,000 grain hopper cars for western Canadian farmers.
How will the commercialization of the grain hopper cars affect farmers? Selling the fleet will allow for the efficient use of grain hopper cars. Cars will now be allocated on a commercial basis responding to market need. This will improve the ability of farmers to get their products to market quickly. It is an essential element, particularly with regard to a disposable good such as grain and in getting it to our international markets in the Asia Pacific rim and eastern Europe.
The government has already acted in its latest budget to protect the farmer's position by limiting the freight increase associated with the sale of the cars to 75 cents per tonne, as announced in the finance minister's budget. It will also postpone that same increase by another year to 1998. Further, efficiency improvements will generate reductions in the freight rates which should offset the increases over time.
Other measures, such as legislating the fair sharing of productivity gains between farmers, railways and shippers will assist farmers. The other side of the coin is how will this policy affect the railways?
Currently cars are allocated on an administrative basis which is not effective. Selling the fleet will result in more efficient use of the cars that will be allocated in response to market demand.
The railways will be given the flexibility they need for efficient day to day operation of the system. These efficiency improvements will over time result in lower costs for the railways and consequently lower freight rates which will help farmers. Proposals to buy the cars will be encouraged by all interested parties including-from my perspective most importantly-producer friendly entities. Producers, farmers, the railways and any other interested party will be given their say.
As the budget stated, the federal government will consider all proposals put forward for the disposition of these cars. It will take into account the interests of producers, shippers and railways and the need to make the most efficient use of these cars.
Bill C-31 seeks to implement the measures I have outlined and to implement the budget the minister has given. The commercialization of these cars is a sound and productive measure of the budget. It should be allowed to be implemented at once. Producers, grain companies, railways and ultimately Canadians will benefit from this privatization exercise.
As my colleague, the Minister of Transport recently stated: "We have to ensure that Canadian grain reaches world markets as efficiently as possible. Improving global trade in this way enhances Canada's international competitiveness, a key element of the government's economic growth and jobs strategy."