Debates of Feb. 13th, 1997

Supply

[Stan Keyes, Liberal, Hamilton West, ON]

Mr. Speaker, I was a little disappointed that the Speaker did not rise on that intervention only because the hon. member pointed out I was not in the House at the time of his remarks. I was behind this curtain communicating with my colleagues. There are television sets back there. I am well aware of every remark this hon. member made.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, if the hon. member was listening, he would have known what I said. His response made it seem as if he was not in the House. I did not say he was not in the House. This shows how sensitive he is on this issue.

If he were listening, wherever he was, whether he was in his chair or hiding behind the curtain, the suggestions Reform has made have been very articulate-

[An hon. member]

Point of order.

[The Deputy Speaker]

This again will not come out of the hon. member's time in reply. The hon. parliamentary secretary, I hope it is not on the same point of order.

[Stan Keyes, Liberal, Hamilton West, ON]

No, Mr. Speaker. The hon. member said that I was hiding behind the curtain. I want to correct the record. I was not hiding behind a curtain.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

While the hon. member was standing in plain view behind the curtain, I was making some clear comments about Reform's constructive alternatives to the transportation mess.

I suggest to the member that he knows, because he sits on the transportation committee, that CN and CP are regulated by federal legislation. He is saying that government has no control over private companies but he knows that is wrong. He knows it is incorrect because recently Bill C-14 that his government introduced was passed which made changes to the transportation system.

There were suggestions for amendments. Prairie pools came forward with suggested amendments. The Western Grain Elevator Association came forward with amendments. Every grain company and farm group suggested the legislation would not solve the transportation problems. Reform pointed out that there was no reward for efficiencies in that legislation, and no penalties for inefficiencies. The Liberals turned a deaf ear to those suggestions.

We came forward with specific changes to labour legislation that would provide for final offer arbitration to settle disputes that affect grain handling at west coast ports. That was an inquiry they set up. We presented a brief to that committee with specific recommendations. He has not even read it. He does not know we have made those recommendations.

We have suggested marketing alternatives, other ways of marketing prairie grain, besides single desk selling through the Canadian Wheat Board, that would improve prairie marketing of grain on the west coast, give farmers new opportunities to move their grain and initiate more competition in our grain handling system.

We have made those recommendations and they have fallen on deaf ears. The member has not even heard what we have been saying. He has a lot of nerve to get up in this House and say that we have not come forward with constructive alternatives. He is wrong and I wish he would apologize and admit that he has not been listening.

[Ralph Goodale, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, I am pleased to have an opportunity to take part in this discussion. Although I must say after listening over the last number of moments to the member for Kindersley-Lloydminster that once again we have been subjected to that Reform Party diatribe which is typically negative, typically partisan and typically superficial.

In my few minutes I will focus mostly on that element in the opposition motion that refers to grain transportation. Before doing that I would like to mention briefly the issue of highways and roads which is also mentioned in this motion. I will do so in the specific context of my own province of Saskatchewan.

By way of introduction it must be noted and underscored that the sponsors of this motion in the Reform Party are absolute masters of inconsistency. They are on all sides of every issue all the time. They are going to do themselves some very serious physical harm if they continue to try to engage in those kinds of gymnastics.

On the one hand they want to bring the federal deficit down to zero overnight. On the other hand whenever they hear or perceive a squeaky wheel that might be of partisan advantage to them, they want to spend more.

On the one hand they demand complete provincial autonomy in areas of exclusive provincial jurisdiction under our Constitution. On the other hand they want the federal government to get more

involved in things like roads and highways which are entirely a provincial responsibility.

On the one hand they want more deregulation in the field of transportation, less government involvement. On the other hand they want direct government action to sort things out when the magic wand of the private sector fails to deliver the desired results.

In typically inconsistent Reform Party fashion, its members fling themselves upon their horse and ride off madly in all directions at once. To a certain extent this explains the rather severe credibility problem which so afflicts the Reform Party in western Canada these days. They want to be on all sides of all the issues all the time and as a result they are just not believable.

Let me turn now to the point about Saskatchewan's roads and highways. The legal and constitutional responsibility here is very clear. This is an area of exclusive provincial jurisdiction.

It is equally clear in Saskatchewan that no provincial government in the past 25 years, not the Blakeney government, not the Devine government, not the Romanow government, none of them has paid any serious attention to the province's road system. Year after year they have quite literally run it into the ground. One has to stretch back to the Liberal administration of Ross Thatcher in the 1960s to find a Saskatchewan government that put a priority upon transportation. It is no wonder that the province's roads and highways are in bad condition today.

Recently there has been a little bit of improvement but let us trace the source of that improvement. Where did it come from? We have seen for example rehabilitation and upgrading work undertaken on highways numbers 1, 7, 11, 16 and 39 in Saskatchewan.

How was that work done? Through the strategic highway improvement program of the Government of Canada. For Saskatchewan this involves a federal investment of $35 million over a five-year period. The province is supposed to match these federal dollars for a total of $70 million invested between 1993 and 1998. Without federal incentives, this work would not get done. Reform Party members either ignore this fact or they just have not done their homework.

Further, there is the Canada infrastructure works program which we introduced in 1994. In Saskatchewan we set aside $10 million for municipalities for rural roads. The municipalities themselves contributed a further $20 million for a total of $30 million altogether. As a result miles and miles of this vital rural infrastructure have been built or rebuilt across the length and breadth of Saskatchewan in the last couple of years. The province incidentally contributed nothing to this aspect of the Canada infrastructure works program. It was entirely a co-operative venture between the Government of Canada and the municipalities.

Most recently in our province we have established the Canada agri infrastructure program as part of the adjustment funding after the termination of subsidized freight rates. Saskatchewan's share of this prairie-wide program is approximately $85 million. Twenty million dollars was invested in 1996. Twenty-one million dollars is being invested in 1997. A further $44 million is coming over the next two years. It is all going into Saskatchewan's roads and highways and it is 100 per cent from the Government of Canada. The Reform Party again either does not know about it or simply chooses to ignore the facts.

Let me now turn to grain. Over the past three years we have moved on several fronts to deal with some of the historic inefficiencies in the Canadian grain handling and transportation system. For example we have eliminated that old Thunder Bay scenic route grain back haul situation which for many years actually subsidized the movement of prairie grain several hundred miles in the wrong direction. That anomaly is now gone.

We have provided for the orderly discontinuance of some extremely high cost and low volume railway branchlines. That is a controversial subject on the prairies, but detailed analysis has shown that even after taking trucking costs and elevation costs into account, the system overall is cheaper for all of those concerned if those particular lines are terminated.

We have encouraged the conversion of certain appropriate branchlines to shortline rail operations which can in fact function more efficiently than if they were to remain a part of the more expensive mainline system.

We have provided in legislation for the equitable sharing of cost savings in our grain transportation system among the railways, the grain companies and the farmers. As greater efficiencies are achieved, as costs are actually saved, then the benefit accrues to all of the parties and not just to the bottom lines of the railways. The farmers and grain companies will also participate in those earned benefits.

We have in fact, quite in contrast to the extreme rhetoric of the Reform Party, introduced legislation to help avoid work stoppages in port operations to keep grain moving, even while labour management disputes are being negotiated.

I am pleased to tell the House that I have received dozens and dozens of letters from farmers and farm organizations across western Canada applauding this very forward looking legislation introduced by my colleague, the Minister of Labour, in his amendments to part I of the Canada Labour Code. I certainly hope that members of all parties in the House will support those amendments when they come forward for debate in the days immediately ahead because farmers are supportive of what is in the package.

We have fostered the creation of a grain car allocation policy group representing the grain companies, the railways, the Canadian Wheat Board and farmers, to set policy principles for how railway rolling stock is to be distributed in the service of grain across western Canada. In fact, again in contrast to the inflated rhetoric of the Reform Party, the CAPG has been functioning quite well over the course of the last number of months. The parties who are participating in the car allocation policy group believe it is performing the function it was intended to do.

All of these measures will help to improve overall efficiency and avoid unnecessary costs in our grain handling and transportation system. But still, serious problems can and do occur.

The last time we confronted a major backlog in the grain transportation system was following the winter of 1993-94. By early spring the congestion was serious. There were many reasons behind the problem that occurred at that time. There was in the fall of 1993 a very complex harvest on the prairies. It had generated a heavy and complicated mixture of different grain volumes and different crop volumes that had to be shipped in what turned out to be a very complex logistical situation.

Rolling stock at that time was in particular short supply. Hopper cars that we would usually lease from the United States were unavailable for the Canadian market due to local demands that existed south of the border. There were weather disruptions. There were labour disruptions. There was a general lack of co-ordination in a lot of places throughout the grain handling and transportation system in the winter of 1993-94 and the spring of 1994.

To come to grips with the problem, being interested in solutions, not just rhetoric but solutions, we summoned all of the players together on May 16, 1994: the railways, the grain companies, the Canadian Wheat Board, the Canadian Grain Commission, the port operators, the unions, farm organizations and others. We came together to find better ways of getting the grain moving again. In fact after that conversation in a serious and conscientious way with everyone really putting their shoulder to the wheel to find answers, within three weeks the whole system had visibly and tangibly improved. By the end of that particular shipping season we had more than caught up. We were actually ahead of the game.

For two years after that meeting on May 16, 1994, the flow of grain through the system moved pretty smoothly, until we got into the winter of 1996-97. Once again we are confronted with a serious problem. The source of that difficulty this time appears to be twofold and it is somewhat different from the problem that we faced in 1994.

It is clear that we have been facing one of the most severe winter weather seasons in a long time, certainly in more than a decade. As it turns out the snowfall in certain parts of the Rockies where the grain must be moved has been heavier than has ever been recorded before in history. Everyone knows the kind of temperature conditions we have been dealing with in western Canada over the course of the last two to three months. We have faced and the railways have faced some extraordinary weather circumstances.

As I have said on other occasions both in this House and outside, one has to anticipate that we could have severe weather in Canada in the winter. We could anticipate heavy snow and low temperatures during the month of January but we do have to acknowledge that this January was a particularly tough one. Nevertheless that is not an adequate explanation of the situation.

There is another complicating factor. That appears to be the lack of locomotive power in the system, particularly at a time when the weather conditions, the low temperatures, reduce the efficiency of railway locomotives and it requires more locomotives than would normally be the case to move the same volume of grain at higher temperatures.

Accordingly we have difficulties in the system. Rather than getting into the purple rhetoric that seems to fascinate the Reform Party, once again what I have tried to do is to call together the key players to get to the root of what is wrong. Tonight in Calgary I will be meeting with the Canadian Wheat Board, the Canadian Grain Commission, the grain companies, the railways, the car allocation policy group and other players who have a particular responsibility and a logistical responsibility for making the grain handling and transportation system in this country work.

When I meet with those leaders of the grain industry tonight in Calgary, I will first of all thank them for making themselves available on relatively short notice for the discussion of a very serious topic. I will remind them that the topic is indeed serious. I will tell them that I am approaching this discussion with a deep sense of fiduciary responsibility, a sense of responsibility which I hope that they all will share, to those who for the most part will not be in that room tonight but have in fact the biggest personal and financial stake in what we will be talking about. Of course I am referring to the grain producers of western Canada and their customers around the world.

For the most part the backlog in grain movement this winter is a temporary business problem to be overcome in the due course of doing business. Grain companies will ultimately collect their handling fees as the product moves through their facilities sooner or later. Railways will ultimately collect their freight rates. Politicians, officials and others will continue to collect their salaries.

For the farmers, it is not that simple. They are at the end of the line when it comes to picking up the tab. Handling fees get paid off

the top. Freight rates get paid off the top. All the other market costs get paid off the top. After everyone else has been paid off the top the farmer gets what is left at the bottom.

The toll gets heavier when ships are waiting, paying demurrage, and farmers pay more. The toll gets heavier when buyers cannot run the risk of further delays. When the Japanese start to look elsewhere for their supplies, the farmer pays again. It is not just this year. The bad reputation tends to linger for years to come. When I meet our customers in Tokyo next month they will not be easily reassured about the reliability of the Canadian grain transportation system.

Once again the toll gets heavier when potential sales get deferred into a falling market at some future date. The price later will be less, especially with the U.S. export enhancement program looming on the horizon again to distort world markets with artificial subsidization. Once again the farmer will pay more.

I know none of the remarks I will deliver tonight in Calgary will be news to any of the people in the room. They are after all the leaders of the western Canadian grains industry. I will tell them that as we grapple with the problem of what is wrong at the moment in our grain handling and transportation system we should all keep in mind who is truly being hurt by this situation, that is the farmer. We do not have any time to waste on excuses or finger pointing. We only have time for solutions.

I want the analysis of those people at the meeting tonight of exactly where we are now in comparison to where we ought to be at this point in the shipping season and in relation to where we need to be week by week and month by month for the rest of the crop year. In other words, we must define the nature and the magnitude of what needs to be accomplished in the days, weeks and months ahead.

Also we must define the steps that each one of us in the government, the private sector, the grain companies, the railways and so on need to take week by week and month by month to get the job done. In the interest of the farmers and in the interest of the public we need to emerge from the discussion tonight, and undoubtedly other discussions that will take place in the days ahead, with a workable game plan to deal with what is wrong and an absolute commitment to implement the plan without fail.

When the grains industry in the past has been challenged with critical situations it has typically been able to set aside some of its differences on other issues, focus on the problem at hand and come up with creative, productive successful solutions. I hope that kind of attitude will prevail this evening and that at the end of the day farmers will benefit from a better situation.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, I would like to comment extensively on the minister's remarks but I will only mention one comment and ask one question so that others can ask questions.

The minister referred to the infrastructure. While he praises infrastructure there are no permanent jobs in Saskatchewan as a result of the infrastructure program. On a per capita basis Saskatchewan is the largest loser of any province. A family of four falls about $80 short of the medium benefit of the infrastructure program across Canada.

When we take the contribution of taxpayers to the infrastructure program into account, we recognize that Saskatchewan has transferred money out of the province to other parts of Canada. We have in fact exported jobs and potential rather than benefited from the program.

Most of what the minister said was rhetoric. For about two minute the minister was hitting the nail right on the head when he talked about the lack of accountability in our system, that the grain companies would make their profits on handling the product, that the railways would make their profits from the freight rates they extract and that the politicians would get paid-he and I will get our paycheques-regardless of how well grain is moving to the west coast. That speaks of a lack of accountability in our transportation system for the inefficiencies that exist.

The most notable illustration of the inefficiencies right now are the 46 ships sitting in English Bay collecting demurrage, $10,000 a ship every day. They are just sitting there. The numbers are getting higher. It was 30-some ships a week ago. Now it is 40-some ships. If we do not get this fixed soon it will go to over 50 ships and over half a million dollars a day in potential costs to prairie farmers. That is totally unacceptable.

In his speech the minister acknowledged that it was not the fault of farmers. How will he bring accountability to the transportation system? Who should be paying that demurrage? The railways have failed partly because of the taxation policies of his government and because they did not have the locomotives in place. Will they pay some of the demurrage? Will the grain companies that put the wrong grain in their terminals and plugged the system pay some of the demurrage? Will he wash his hands of this situation and say: "Let the farmers keep on paying like they have always paid. Those poor suckers, they have no choice. We will let them pay the shot. We will diddle and provide the rhetoric while they pay the bills?"

[Ralph Goodale, Liberal, Regina—Wascana, SK]

Mr. Speaker, there were two distinct parts to the hon. gentleman's question. To start with he made some references about infrastructure.

I believe he knows the Canada infrastructure works program as presently devised, even without the recent extension that has been

discussed, would invest something in the order of $58 million in Saskatchewan from federal funds. These dollars have been more than leveraged threefold. The amount of investment in total in the program in Saskatchewan if we include what the province, the municipalities and those in the private sector are investing is in excess of $200 million.

The program has generated more than 3,000 jobs in Saskatchewan, some of which are of a permanent long term nature. Approximately 1,200 to 1,500 very valuable projects have been undertaken.

The hon. gentleman demeans the value of the program in Saskatchewan. I hope he has the courage to go on to the campus of the University of Regina to explain his criticism to the faculty, the staff and students of the University of Regina who are benefiting from a new fine arts and multi-purpose building on the campus due to the Canada infrastructure works program.

I hope he will explain to the people who will benefit from the new Lewvan overpass in Regina how he is opposed to that kind of important public infrastructure being built to improve the transportation situation around the city of Regina.

I hope he will go into Saskatoon to explain to the people there how he is opposed to the infrastructure that has made a major contribution to the development of our high tech research facilities at the University of Saskatchewan.

The hon. gentleman should know as he hollers from his seat in a typical fashion that a portion of the infrastructure program in Saskatchewan was used for schools and health care facilities under the formula devised by the Government of Canada, the Government of Saskatchewan and the municipalities.

This program has been a tremendous success in Saskatchewan. No matter how the Reform Party may bleat about it, it cannot undercut and defeat the value of that program in the eyes of the municipalities and many Saskatchewan citizens who have participated in it and benefited from it.

On the second aspect of the hon. gentleman's question, there are some provisions in the new Canada Transportation Act that go to the issue of accountability. It is important to note that there are now some incentives built into the system to encourage performance on time and according to specifications.

We need to have an important discussion sooner rather than later about the other kinds of performance standards and accountability guarantees that can be written into our system to ensure those who have obligations to perform pay the penalty that should logically occur when they do not perform up to the standards that should be expected of them.

It is not fair in our system that others who are innocent of any failure to perform end up picking up the tab. The way the system has been structured historically, as I said in my remarks, the farmer tends to be at the end of the line and after everyone else has taken their cut the farmer gets what is left.

It is incumbent upon every player in the system further up the line to make sure that they are performing their responsibilities in the most efficient fashion so that the maximum amount possible is transferred into the hands of farmers and nothing is consumed by way of unnecessary costs that could have been avoided.

When a cost that could have been avoided is incurred in my judgment the person responsible for that cost should pay the bill.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, in the aftermath of the repeal of the WGTA and the aolition of federal subsidy for eastern Canada, the government had earmarked $77 million over a 10 year period to help the eastern regions to adapt to this, particularly eastern Quebec and the maritimes.

Rumours are circulating to the effect that this transitional fund might be used, not for personal use, but for a small group targeted very precisely by departmental employees, or perhaps by the Minister of Agriculture himself. Could the minister reassure me on this?

[Ralph Goodale, Liberal, Regina—Wascana, SK]

Mr. Speaker, with the repeal of the Western Grain Transportation Act and the consequential elimination of the former Crow benefit we put in place a number of transitional measures. One of those was the western grain transition payments program which was a total of $1.6 billion distributed to prairie farm land owners in recognition of the impact upon them of the elimination of the subsidy that had existed for the better part of 100 years in one form or another.

I am pleased to tell the hon. gentleman that the $1.6 billion has now been distributed. The process is completed except for a final handful of cases where there are some legal issues to resolve about land ownership and so forth.

I am pleased to say that the payment process was reviewed, as it would normally be, by the auditor general. We got a favourable review indicating that the program had been conducted very well and handled according to the appropriate financial standards.

I can assure the hon. gentleman that in terms of the program we not only believe the right money went to the right place at the right time but the auditor general appears to agree with our assessment.

The second part of the compensation system is the western grain transportation adjustment fund which totals $300 million. It will be invested over a period of two or three years. A portion of that-

[The Deputy Speaker]

The hon. member's time has expired.

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, it is unfortunate the minister did not shorten his responses somewhat to allow more questions from the opposition parties.

It is a pleasure to debate today the Reform Party opposition motion condemning the government for its partisan approach to federal transportation policies. The government's handling of transportation issues is a litany of mismanagement, neglect, politicization and outright incompetence. From Pearson to airbus to VIA to our national highway system, the government has brought new meaning to the word botched mostly at the expense of the taxpayer and in some cases at the expense of private sector transportation operators.

The government's record on transportation is devoid of vision. In the area of rail policy the government seems to feel that money can buy vision and decisiveness. The solutions of the sixties and seventies are not compatible with today's problems. No longer is there a bottomless pit of dollars to salvage and subsidize sinkholes like VIA Rail. So-called privateers like the Bombardiers that innovate as long as government dollars are there are not solutions but drains and no more so than in rail policy.

Let us take a closer look at VIA Rail. It is one of the biggest money losing, over-bureaucratized entities in Canadian transportation. What does the government do to improve the situation? It subsidizes VIA Rail to the tune of $200 million per year and pays its executives six figure salaries to run it further into the ground.

There is only one solution to get VIA out of this morass. Without question, putting VIA into private hands would cut costs, revitalize the corporation and its people and allow it to return many passenger routes that have been abandoned or are in danger of being cut. It does not take any vision to keep cutting and make a few dollars, but in the case of VIA it takes a special touch to cut and still lose money.

If VIA were to be turned over to private entrepreneurs, marginal routes could once again be viable. Complacency and debt endure under the public ownership of VIA. It has exhibited no marketing strategy, business plan or scintilla of vision in its current operations.

In 1989 VIA Rail made one enlightened decision. It sold a passenger railroad it had abandoned to the Great Canadian Railtour Co. With this came the birth of the new service, the B.C.-Alberta Rocky Mountaineer Railroad. VIA could not make a go of it. In fact, it lost millions and felt that the private sector would not make a dime either.

Here is an update. The Great Canadian Railtour Co. has made money and increased rail service on this line by an average of 30 per cent a year since the takeover. VIA Rail, never an organization to miss an opportunity to lose money, screw up or betray a deal, has decided that it wants to compete head to head with this passenger route now so competently run. VIA could not turn a dime for years, but the federal government, prepared to enable this pettiness, is about to let VIA in on the action.

How in the world can the Minister of Transport possibly justify allowing a crown corporation, subsidized by a weary taxpayer to the tune of $600,000 per day, to compete against an unsubsidized, tax paying, private sector company? It is another example of irrational and unfair strategic thinking by the Minister of Transport and the brain trust at VIA.

I wonder what the projected loss is estimated at and how much the subsidy is going to be to prop up this bad decision. The minister will not admit the policy flaws of this type of decision and clings to the notion that throwing money at a problem will solve it. Once again he is confusing motion with progress.

Rocky Mountaineer had planned to increase its capacity this year to meet the demands on this exceptional service. I ask the minister: What private sector company in its right mind would ever want to do business with him and his government again if such an act of betrayal is perpetrated by these uninspired and visionless executives at VIA?

Here is some advice for the minister to get rail policy back on track. The government cannot simply abandon its financial stake in the transport industry without having the sense to recognize how much revision needs to be enacted to bring transport legislation into the 1990s. Present legislation harshly, though unofficially, penalizes the rail industry through the present tax structure. It behooves the government to rewrite rail policy, clear up the anomalies and set a strategy in place to allow investors to enter the arena with clear parameters. To encourage and support this new regime, the Reform Party suggests the following measures.

First, we would encourage through tax reforms and low interest loans the development of short line rail operators in regions of the country where major rail companies are no longer viable or willing to provide the amount of capital needed to recreate a viable rail transportation industry.

Second, we would negotiate the reform of the property and fuel tax structure for main and secondary rail operators to bring these costs into line with their U.S. counterparts.

Third, we would formally recognize through federal tax reform the environmental safety and infrastructure benefits provided by rail transport as opposed to modes such as long haul trucking.

Finally, in relation to the last point, we need a thorough and fair revision in the overall tax structure for the nation's trucking industry to bring it more fairly into line with the costs now being incurred by rail companies.

Currently the government gives with one hand and takes with the other. Since taking power in 1993 the government has done an inadequate job. It is mired without clear vision or policy direction. Governments should set guidelines and step out of the way. Right now no one is pleased with the situation and the rail industry is suffering as a consequence.

I would like to turn to the national highway system, another example of a policy full of potholes. The government's recently released report on highway revitalization fails to address any of the long term funding problems that threaten the safety and integrity of Canada's national highways. The flaws in this report fall into three categories: dedication of federal tax revenues to highway renewal; alternative funding sources for construction and renovation of roadways, and public-private sector partnerships to carry out this renewal process.

In committee a significant majority of witnesses supported the dedicated revenues concept. The committee is supposed to report what it hears. It did not do that. It not do that with the Canada Transportation Act. It did not do it with the national marine strategy report. And it has not done it with this current highway report. The committee is acting as the minister's lapdog.

The committee's report-or should I say the minister's report-is misleading and an obfuscation in that it claims the concepts of public-private partnerships and shadow tolling are alternate funding sources. The fact is the only way these would provide a substantial source of funds is if the federal government is planning to repair our national highways by charging drivers tolls across the entire system.

The report simply does not answer the question facing our deteriorating highways network: where is the money to come from? The government's report states it must look to the private sector for participation. Is this a commitment or a platitude, I ask? The Reform Party has real fears with anything emanating from the transport committee and was forced to write a minority report on the renewal of the highway system.

As I stated earlier, we have three major concerns in our minority report, the first being dedicated funding. The federal government currently collects $5 billion a year in fuel taxes and spends $300 million on highway infrastructure. By any logic this is a national embarrassment. Second, the majority report is misleading on alternative funding sources. The concept of shadow tolling as an alternative funding mechanism does not answer where the money is to come from. And finally, the Reform Party has a major concern with government competition with the private sector. I mentioned the Rocky Mountaineer issue.

[The Deputy Speaker]

I am sorry the hon. member's time has expired.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I have a question for the hon. member.

The hon. member addressed VIA and the Great Canadian Railtour Company. I would like to touch on both of them in my question.

He mentioned that VIA is cutting and still losing money. I suppose it is losing money because the federal government has to subsidize it. But let us put the whole story before the Canadian people. The whole story is that VIA Rail had operated with over $300 million in subsidy per year and has had that subsidy reduced by the government to not $200 million as the hon. member said in his speech, but $170 million.

VIA has been able to streamline, to work efficiencies into its company in order to maximize its return. It has managed to keep virtually the same VIA Rail service it had a couple of years ago with over $300 million in subsidy money, with only $170 million in subsidy. That subsidy is going down again. That company is demonstrating it can get on a commercially sound footing.

Unlike some provincial governments that just slash it and say off you go and that is it, the government understands the need for VIA Rail and the service it provides for Canadians from coast to coast. It does not want to jeopardize that need, as some of his colleagues have addressed, of Canadians and communities that rely on a good passenger rail service and VIA is working toward that end.

As far as the Great Canadian Railtour Company is concerned, I want to assure the hon. member opposite and the critic for transportation in the Reform Party that the government has no intention of watching a government subsidized rail company called VIA go up against any private company in Canada that is trying to do its job. It has no intention of doing that.

If it can be established, and the Minister of Transport has talked to the people of Kamloops, he has talked to this caucus, he has talked on many occasions to Peter Armstrong at the company and VIA-

[The Deputy Speaker]

I am sorry to interrupt the hon. parliamentary secretary but we have to give half the time to each and five minutes has now expired. The hon. member may reply.

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, only a Liberal could say that a $400,000 a day subsidy is maximizing the return.

[Stan Keyes, Liberal, Hamilton West, ON]

That is not what I said.

[John Duncan, Reform, North Island—Powell River, BC]

That is what I heard you say, that VIA is maximizing its return. It is only getting a $170 million subsidy. If we want to talk about the Canadian Railtour Company and VIA competing head to head, if we really want to level the playing field, how open is the government to providing a subsidy to Great Canadian Railtour Company? Not very open I suspect.

[The Deputy Speaker]

There is another minute and a half left. If the hon. parliamentary secretary wishes to speak again, I will give him half the time remaining.

[Stan Keyes, Liberal, Hamilton West, ON]

Mr. Speaker, I will say it quickly. Representations have been made to the Minister of Transport from this caucus, from the municipality of Kamloops, from Peter Armstrong, the head of Great Canadian Railtour Company, from VIA Rail and others. He is doing a full evaluation of this situation so that the right decision can be made in the interests of the travelling public as well as Great Canadian Railtour Company, a private company, and in the interest of VIA Rail that is trying to get on a sound footing financially.

I give my personal guarantee that the decision the Minister of Transport will make is one that is based on sound input and it will be the right decision.

[John Duncan, Reform, North Island—Powell River, BC]

Mr. Speaker, I am at a loss. I certainly heard what the parliamentary secretary had to say. Nevertheless I do not fully comprehend or have any confidence that this decision will be made on economic principles as opposed to political rationale. That is the point of our exercise. That is the point behind my speech today.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, it is interesting that there is so much discussion taking place about the Rocky Mountaineer. This rail company was based in my riding until recently when the expansion of the project meant it needed to move closer to its base in downtown Vancouver. I have had a lot of experience and direct contact with the Rocky Mountaineer.

I wonder how many MPs in this place have actually taken a look at that train. I know one of the deputy speakers and the Minister of Justice used their free rail privileges to travel on it last year. They have certainly had an opportunity to take a look at it. I wonder how many other MPs on that side used their free rail privileges to travel and are now seriously considering putting this company at risk.

This company has built up a tremendous relationship with the cruise ship industry. It sells trips to the cruise ship industry. The trip is a wonderful look at B.C. and the Rocky Mountains with an overnight stay on the way through.

The Parliamentary Secretary to the Minister of Transport claims there is no problem because VIA Rail will only be moving people from place to place. Actually, all of the evidence is that that is absolute bunkum. The Parliamentary Secretary to the Minister of Transport stated that he will stop VIA Rail if it starts running a tourist service and not a passenger service for British Columbia. We will take him at his word on that.

The service that VIA is proposing is actually between Jasper, Alberta and Vancouver. Fair enough. But how many people are going to need to travel from Jasper to Vancouver and vice versa, like catching a bus or a train? That is an important question because that surely would determine the type of facilities and how large the train would be. I think we can all agree that probably all of the passengers would travel the entire distance. So it is certainly not a service for B.C. residents travelling from one community to another.

I would like to read a copy of an advertisement which recently appeared describing the service. This advertisement was issued by VIA Rail, so this is its words. This should bring the debate a little closer to what we should be talking about here. This is the advertisement placed by VIA Rail:

Discover Canada the way it's meant to be seen. Up close and in comfort. The experience awaits in silver and blue class aboard VIA Rail's western transcontinental train, The Canadian, beautifully restored to its sleek 1930s stainless steel style. Here is a classic train journey that combines the breathtaking panoramas of Canada with unique first class pleasures.

Is this starting to sound like a train one would catch from little community to little community?

Silver and blue class travellers enjoy exclusive use of the park car with its famous observation dome and lounges, a spectacular dining car with meals to match, a choice of accommodations and shower in each sleeping car.

As I said earlier, this is absolute bunkum. This train is being set up to compete with a private company that has been successful, that has made a go of it. To argue that any type of passenger train could survive these days is also absolute bunkum. VIA Rail learned years and years ago, decades ago that people have stopped using trains to travel from community to community.

Generally speaking, people catch planes or buses and by preference most people will catch a plane simply because we are in a very rushed and hurried world and it is a lot easier to do that. Perhaps one could argue that the only people who would catch a train any more are afraid of the plane or do not like to go on the bus.

It is completely ludicrous to argue that all of this money which is going to be poured into VIA Rail at the expense of taxpayers has anything to do with moving people from place to place.

The debate today is about a whole bunch of transportation issues. I stood in the House on April 26, 1994 to speak on the ill-fated Bill C-22, the Pearson nightmare that keeps coming back to haunt this

government. That bill attempted to control the amount of compensation that could be paid as a result of the cancellation of the Pearson airport privatization deal.

Earlier in today's debate the parliamentary secretary tried to convince us that somehow this whole Pearson thing was tied to the PCs. But of course there were the Bronfmans and there were also some well known Liberals, a certain senator, and Herb Metcalfe and Bob Wright, a Liberal fundraiser.

Bill C-22 which we debated some time ago, this nightmare that keeps coming back, had a special neat little provision under clause 10. It had to be read carefully to see exactly what it said. It said: "If the minister considers it appropriate to do so, the minister may, with the approval of the governor in council"-nicely behind closed doors-"enter into agreements on behalf of Her Majesty to provide for the payment of such amounts as the minister considers appropriate".

If that was not a set up to reward or to look after the Liberals who were involved in Pearson and to make sure the Tories were punished, then what was it? That is certainly what it looks like to me. Maybe because there are so many lawyers on the Liberal side of the House they thought they could set this thing up in Bill C-22. It was a lawyer's dream to pass legislation to allow that they could not be sued and could then determine the outcome, who would be rewarded and who would not.

That was a wonderful piece of legislation. Thank goodness it met its fate along with the second attempt. As I keep mentioning, this nightmare keeps coming back to haunt the Liberal government. If the Liberals had dealt with this whole matter in an intelligent and productive way right at the beginning, Pearson today would be at the stage that Vancouver International is.

And what a spectacular airport that is becoming, because that airport has been developed by some people who got away from bureaucratic nonsense and government run institutions. They have built a beautiful facility using a user pay fee system. Occasionally people complain that they have to pay $10 or $15 to pass through the airport. But when people can see dedicated revenues going to produce something, it really makes a difference. Even now when most of the naysayers experience that new airport, they say: "It is great to see where the money went. This is really good. We like a user pay system that dedicates the revenues".

Unfortunately when we look at the state of the freeways and other parts of the infrastructure in the Vancouver region, nothing has been done for 50 years. I give credit to the foresight that our forefathers had in the Vancouver region, and with credit to the federal government at the time, in the late fifties and early sixties to build a freeway that ran from Vancouver all the way down the valley to Abbotsford. Hardly a soul drove on that freeway when it opened.

I have a friend who was living in the North Vancouver region at the time who had a cottage in the United States. He told me about the first time people drove on the freeway when it was opened. They asked who would ever use it. They asked when Vancouver would ever grow large enough to use that freeway. Now we look at that freeway 45 years later and it is absolutely crammed with cars.

Because of the failure of the governments of the past decades to control their spending, because they have poured more and more into payments on the debt, they have been subtracting money out of the transportation and infrastructure projects. So we in Vancouver are stuck with a freeway that was built 45 years ago that should at least be doubled, probably tripled in size to meet the future requirements of the region.

As some members would argue, there is a provincial involvement, but on most of these large freeway projects that are part of the Canada highway system, there is federal involvement. Members know that is the case. It would be a nice change for the western part of this country if instead of constantly having money sucked out, we got a little put back in to some of our major infrastructure.

That does not mean patronage infrastructure the way the $6 billion giveaway was set up. That was ridiculous. Where that money went was ridiculous. New seats in the superdomes. Many Reform Party caucus members stood in this place and criticized the spending of money in their ridings, and I did myself, because it was being spent on patronage. It was not being spent on creating jobs and it was not being spent on meaningful infrastructure that would have made a difference, that would have built for the future, that would have given us something to look forward to.

I realize that-

[The Deputy Speaker]

I regret to inform the member that his time has expired.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I want to remind the hon. member that the Canada infrastructure program was done in concert with the provincial government and the municipalities. Those spending decisions were not patronage spending decisions made by the government; they were made by the municipalities. This was a municipally led program. They determined where the money would be spent. They came to the Ontario and federal governments, or in his case B.C. and federal governments, and received the funding necessary for the municipality.

The member should not be talking about patronage funding coming from the federal government. That is ridiculous.

I found it quite entertaining and interesting to listen to the hon. member about Pearson airport. He does mention there were Liberal players involved in the Pearson airport deal. Yes, absolutely. We admit that there were. But it is this government that is standing up and defending the Canadian taxpayer by saying that we do not care if there was a Liberal involved with Pearson Development Corporation or a Conservative involved with Pearson Development Corporation. This is the corporation that came together because Paxport, the deal hatched by the Tories and Brian Mulroney's fundraiser, did not work.

We are saying that no matter if they were Liberals or Tories who were involved in Pearson Development Corporation, they are still only entitled to the money they spent on the project. They are entitled to $30 million, $40 million or $50 million, not the $600 million the hon. member is defending that these individuals should receive.

Where does the hon. member stand? Is he defending the Canadian taxpayer saying that the consortium is only entitled to what they spent or is he saying that they are entitled to $600 million? We are saying that we are protecting the Canadian taxpayer. What is the hon. member saying?