Debates of Feb. 13th, 1997

Supply

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, with your permission, I would like to ask my colleague to expand on what he intended to tell us earlier, with further details on the way the transportation sector was managed, especially in his own Quebec City, since he was about to do so when you signalled that his time had expired. I would like to give him this opportunity to fill us in on the missing details.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I want to thank the hon. member for Joliette for his interest in the matter. I am appalled to see that the transportation sector does not seem to be very popular. Frankly, it is Thursday afternoon, and many members are in a hurry to leave. Unfortunately, it means that a member of my own party has to ask

the questions. That is a pity. This is a very important subject, and I thank the hon. member for Joliette for his question.

Before the Liberals took office, in the marine sector, under the Conservative government, if we compare spending on marine construction in the maritimes and Quebec, the ratio was 13 to 1, with 1 for Quebec. Of course there was Hibernia. But since the Liberals came to power, not a red cent has been spent by the federal government or the Department of Transport on marine construction. Not one penny.

There is a connection with the defence industry, because marine construction is marine transportation, but also includes ships ordered by the Department of National Defence. One example is the Preserver , a supply ship. Two shipyards submitted tenders: Lévis and Halifax. There was a difference, but since this was for repairs, the difference was in the Halifax shipyard's favour.

We asked to see the tenders. We asked the minister and the government but never received a reply, as usual. We used the Access of Information Act and found that 85 per cent of the 435 pages submitted by the bidder had been blacked out, as we saw in the Somalia affair. There was no way to find out the hourly rate or salary. This is an important point.

When we are talking about refitting a ship, we know that it always costs at least twice as much as expected. There are always some surprises. There is a clause called "open and expect". This clause is variable, and it is very important to know the salary, the hourly rate for overtime and how it will be done. So there was no way to get that information.

The only way to get the information, allowing of course for the lag after the election, is that once the job is finished, the public accounts committee headed by the hon. member for Beauport-Montmorency-Orléans, will be able to have access, but only once the invoices are in, which means in about a year and a half or two years.

Until then, there is a total blackout on any information concerning the Preserver . Other than that, there is nothing on ship construction.

In the area of transportation, let us add the changes to the Coast Guard. This is a plan the government has found to divide its strengths. The Coast Guard, once the responsibility of the Minister of Transport, now reports to the Minister of Fisheries and Oceans.

In the St. Lawrence Seaway, they want to start charging for ice breaking, and they already charge for navigational aids. Step one: $20 million more. These charges apply to ships that put in at Canadian ports. But a ship that travelled all the way down the St. Lawrence Seaway to the United States without ever putting in at a Canadian port would not pay a cent for those same services. Yet we know that the Seaway is operating at a deficit. Because the ship does not put in at either a Quebec port or one on the Great Lakes, it would not pay a cent.

The government's inertia on shipping is scandalous, yet this may be the most economical means of moving freight. What is missing at the moment in Canada is an integrated view of all means of transportation, a national view of transportation.

[David Anderson, Liberal, Minister of Transport]

Mr. Speaker, it is with great pleasure that I rise in this House to explain the government's policy in the area of transport. It certainly seems necessary in light of the comments I heard. I am surprised to see that the opposition members do not really understand what the transport policy is all about. They do not appreciate the details and how transportation is Canada's lifeline.

Many hon. members this side of the House have eloquently explained today many aspects of the government's position. I would particularly like to pay tribute to my parliamentary secretary from Hamilton. He has done such an outstanding job with the legislation and in the debate we have just had in putting forward the reasoning behind many of the decisions on transportation. His service in the House and on the committee has been outstanding. He has explained in great deal and with great eloquence the progress that has been made in the House and by the government as a whole outside the House in modernizing the transportation system in Canada.

When we took office three years ago we were confronted with very serious problems in the transportation area. We had a transportation system that was overbuilt, over-regulated and oversubsidized. It was a system that despite previous successes of which there have been many was degenerating to the point where it could become a damaging factor to Canada's economic competitiveness and international trade.

As a result of a far-reaching modernization program which is under way we now have very beneficial effects in the tourism trade and in the job creation area in the transportation field.

The government is basically moving out of operations in the transportation sector which will allow us to focus on the proper role, that of policy making and safety regulation. At the government level, now that we are out of operations and the detail they led to, we can look at a bigger picture which for me means maximizing the benefits of a modernized transportation for Canadians. The benefits can be found in three key areas and our transport system is geared toward these three objectives.

First, we need to use our modernized transportation system to improve our competitiveness in international trade. Second, we need to make sure that our transportation system boosts tourism in Canada. Third, a major interest of the government is using our transportation system to increase and strengthen our links with the Asia Pacific region.

By the end of this century, if I could spend just a moment on the last point, the Asia Pacific region may well be home to 60 per cent of the world's population, 50 per cent of global production and 40 per cent of world trade.

As the Prime Minister has said many times, the Asia Pacific region is important to Canada and Canada is a Pacific nation. This means there are real opportunities for the whole country but particularly in western Canada and in my home province of British Columbia, our gateway to the Pacific region.

We must improve the effectiveness of this gateway and maximize the advantages to Canada of this geographic opportunity. That and the other two objectives I outlined a moment ago work toward the overarching goal of the government of job creation for Canadians.

I will quickly go over the progress in these areas. We have taken major strides in modernizing the transportation system. In the air transportation sector, for example, we are commercializing Canada's federal airports. Under the national airports policy announced in June 1994 we have begun leasing Canada's largest and busiest airports to local control. This policy has been very successful and has been embraced by communities right across the country that recognize the economic potential of their areas depends upon their maximizing the advantages their airports present and in turn having those airports best serve the requirements of their local communities and economies.

To date 17 regional local airports have been transferred to local control and some 40 others are in the process of being transferred. Under the same policy 11 small airports have been placed under local control and a further 23 are in the process of being transferred to the local community.

I found interesting-and I listened with great care-the comments of the opposition with respect to Pearson airport. Thanks to the government's airport policy this airport is now like the other major airports of this country: Montreal, Vancouver, Edmonton, Calgary and others. Thanks to that policy Pearson is now managed by a local not for profit corporation representing local interests of the greater Toronto area.

The Greater Toronto Airport Authority which now runs Pearson recently announced plans to invest $2 billion in upgrading the airport. This will, in turn, turn that airport into the premier gateway for the European traffic of the whole of the central heartland of North America.

I certainly applaud the vision of the airport authority and the energy with which it is applying itself to achieving that goal. I might point out that the investment it has proposed is substantially higher than that which was originally proposed by other airport management groups in the past.

In addition, we have transferred the air navigation system of Canada to Nav Canada, another not for profit corporation. This transaction put $1.5 billion into the federal treasury to reduce the deficit in that year and the debt as well. Safety will continue to be monitored by Transport Canada. That will be the highest priority of Nav Canada.

Two years ago we signed an agreement with the United States known as Open Skies which created a whole new area of opportunity for transboundary traffic. It was part of our new liberalized air transportation policy that the airlines themselves could choose what cities they would fly between, at what price, at what frequency and at what times. The benefits of open skies have been enormous. In the 14 months following that agreement there was a greater increase in traffic with the United States than in the previous six years.

The agreement has created well over 100 new links between American and Canadian cities. Let me point out it is not just between major airports, but also smaller airports, smaller communities. Cities in the 100,000 to 250,000 population range also are getting the direct links. Indeed some cities that are smaller than that are having direct links established with American cities to the south of the border.

Vancouver and Toronto in particular have benefited tremendously from open skies and the open market that exists now in transborder air travel. Of course, hundreds of thousands, millions of Canadian travellers have benefited as well.

Let us not forget that when I talk of airports, when I talk of airlines, when I talk of rail, when I talk of ships, when I talk of any transportation mode or system, I am talking about the consumer, the user who takes advantage of those systems. That is what the systems are for and why it is so important that they be efficient.

Let me quickly point out that other areas of air travel have come along. I should mention Greyhound which is now flying in Canada and provides low cost travel between Vancouver and Ottawa. That was an innovative proposal put forward by Greyhound and its partner Kelowna Flightcraft Air Charter Ltd. This has expanded travel options and has reduced costs for Canadian travellers throughout the year.

With respect to marine transportation, let me say a quick word about Marine Atlantic. Marine Atlantic is having its subsidies reduced year by year. What was previously an organization which took very large amounts of taxpayers' money is becoming leaner and a great deal more efficient. It is providing equally effective service as it did in the past.

We have taken the strides to modernize the marine sector. I would point out the Canada Marine Act was in this House not so long ago, in fact last year. The Canada Marine Act will implement this country's new marine policy. The policy which was announced in December 1995 calls for the modernization of the marine management and regulatory regime, less red tape and greater efficiency and effectiveness in the marine transportation sector.

It will bring local control, local decision making and private sector involvement to Canada's ports. It is much the same approach as we have taken in the air sector.

The policy calls for commercialization of the operations of the St. Lawrence Seaway. In July last year Transport Canada signed a letter of intent with a group representing the St. Lawrence Seaway's major shippers and carriers. The goal is to establish a not for profit corporation which will operate the seaway more efficiently than the current system. Decisions with respect to the seaway will be made at a level which is more appropriate, namely the users of the seaway, the people who are affected by the operations and the efficiency of the operations and obviously the costs that are charged for use of the seaway itself.

On a separate track I should add we are also in touch with the Americans. We are creating a more efficient binational co-ordination group to manage seaway problems which are of a binational nature. It is my belief that working together Canada and the U.S. can better co-ordinate seaway management, reduce the duplication of facilities and ultimately save both countries, not to mention seaway users, substantial amounts of money.

The marine policy calls ultimately for the modernization of marine pilotage and the commercialization of ferry services.

I mentioned the bill was in the House. I trust it will be back in the House very soon so we can all proceed with it. As there are members of the opposition here, I will say that I really appreciate the work they did at the committee stage.

There were two committee stages for the bill, once before the bill was put in and once after the bill was before them. They worked hard. The ultimate report was unanimous, which shows that we had very good co-operative spirit, which sometimes people watching on television what goes on in this House do not fully understand. At the committee level, my friends in the Bloc and in Reform get together with friends from this side of the House and work effectively in the interests of improving legislation.

I pay tribute to the opposition members who took part co-operatively, constructively and effectively. When the bill finally comes back and members see it, they will see that the suggestions they have made have been given full consideration in the final writing of the legislation.

I will turn to rail transportation. We must have port activity co-ordinated with transportation that reaches beyond our country's waterways. That means grain transportation in particular, which is often handled by both rail and marine modes of transportation. One reason our government is working so hard to ensure the rail sector becomes more efficient is our concern over the impact of rail costs on bulk users such as those dealing with grain, potash and many other commodities.

The new Canada Transportation Act brought in last year gives railways the flexibility to compete by reducing costly excessive regulation and red tape. The new act cuts the number of railway actions or decisions that require government approval from 200 down to 40. I am not happy with having 40 still on the list. I would prefer to have that number come down even further. Such reduction in red tape, bureaucracy and delay will benefit not only the railways themselves but obviously their customers through lower rail rates.

We will again be looking at regulation in the railways in the year 1999. It is scheduled to take place at that time. Once again I expect we will have a valuable discussion on that in the light of the experience we have gained since the introduction of the new transportation act last year.

The new act shifts the focus from rail line abandonment, which we had in the past, toward the development of a healthy shortline industry. It is not generally known that Canada has some 31 functioning railroads, not just the big two that we hear about. Many of those 31 are small railroads established as a result of a group of local people taking over a line that was abandoned by the majors because with their cost structures it was no longer economic to run it.

Canadian National Railways is now a private and dynamic company. I believe it has the tools it needs to compete. Putting CN in the private sector was a very important step in our plan for modernizing rail transportation. It puts CP and CN, the two major systems, on a level playing field. Most important, it subjects CN to the discipline of the marketplace.

This will help ensure, and I think it will guarantee the survival of the railway. The gross proceeds of the sale of the shares has brought the Canadian taxpayers a little more than $2 billion. It has similarly reduced the debt and deficit as was the case with the Nav Canada sale.

Much has been made today by my hon. friends opposite about subsidies. I do believe they should check the record of the government over the last three years. Since coming to office we have eliminated close to $700 million in subsidies to the transportation sector.

As my parliamentary secretary, the member for Hamilton West, so ably pointed out in response to questions and in his presentation to the House this morning, VIA Rail will see its annual subsidy chopped virtually in half by fiscal year 1997-98. I might add, that is substantially less than it was a few years before.

With respect to VIA Rail hon. members should know that I have examined very carefully VIA Rail's application to expand service through the Rocky Mountains. I am well aware of the concerns that have been raised about the possibility of VIA Rail competing with Rocky Mountain Railtours which is a private sector company.

I have listened to and I have read what the members of the Standing Committee on Transport have said on the issue. I have had discussions with my parliamentary secretary on numerous occasions and also with members of the Liberal caucus from British Columbia and elsewhere in the country on the subject. I might add that I have received hundreds of letters from all parts of British Columbia and elsewhere on the subject. I have also met with representatives of VIA and of Rocky Mountain Railtours, both of whom made excellent presentations, both of whom made presentations more than once. I have listened very carefully to all points of view and I will be announcing my decision on the matter very soon.

This country was built by transportation. In the 203 years since Alexander Mackenzie first crossed the continent from Montreal to the Pacific tidewater, we have built this country on our transportation system.

Our government has changed the Canadian transportation system and it has changed it for the better. But one thing will not change. One thing which Transport Canada and myself as the minister put above all others is safety. We not only want efficient transportation systems in every mode, we not only want systems which lock in together in a seamless web, we at every level in every area want to assure Canadians that they have the safest transportation system that we can provide, the safest that is, within all reasonable expectations. That is where we see our role as being critical. I can assure all members of the House that safety will remain Transport Canada's major objective in the years ahead.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, the minister had a few good words about the opposition regarding our work on the committee. I must say that the current Minister of Transport is always very kind and courteous.

The fact remains, however, that some situations can be quite dire. As you know, I represent the riding of Lévis. It saddens me to see a shipyard that once employed up to 3,000 workers, a prosperous industry, the leading shipyard in Quebec, stop building ships because of a decline in shipping. This decline is the result of policies that discourage shipbuilding, the building of a Canadian fleet of merchant ships.

I know this also concerns the Minister of Industry, but why was the promise made in the red book not kept? A Canadian shipbuilding summit was to take place in the first year following the election of the Liberal Party. Why did it not take place?

Why does the government not draw inspiration from American policy, the Jones Act for instance, regarding shipping? Why not follow the same policies as those of other countries, particularly Scandinavian countries, on this subject? Why has the Liberal government not done more for shipbuilding? To this day, it has done nothing.

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, regarding shipbuilding, the hon. member must realize that the Canadian government has had several ships built for the Canadian Armed Forces.

After this program, which involved the construction of 12 ships, was completed, this government went on to have another 12 ships built; these ships were smaller than the big frigates built during the 1980s.

We are continuing this program, which, incidentally, comes under National Defence and not under Transport Canada, as well as programs administered by Industry Canada to ensure a shipbuilding capacity is maintained in Canadian shipyards.

It is true that we do not have the equivalent of the Jones Act he referred to. The Americans themselves are currently considering the possibility that the Jones Act may no longer be relevant, that it may no longer be useful to them or to the merchant navy.

This is a very important issue and I do not think that we can just follow the American example; the Americans themselves may well feel that exportation costs are too high because of the Jones Act and that the time may have come to amend the act.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, I appreciate the opportunity to put a question to the minister, specifically with regard to VIA.

The minister said he will be coming to a decision soon. I trust he has given due consideration to the input he has received and that he will make the right decision. In my opinion, that decision is against

allowing VIA to expand to compete against the very company that it sold.

The minister mentioned that he had received a tremendous amount of input. I have seen much of that input. The only input, I believe and understand other than from VIA, which supported this application, is from the CTC which is in an incredible conflict of interest position.

The minister also mentioned that he understands the committee's position. I would like the minister to know the position that the chair of the committee agreed to with the Reform Party. In a message in writing from the chair of the Standing Committee on Transport he states: "As to your suggestion regarding VIA and Rocky Mountaineer I have no problem supporting your request".

A follow up to my request in writing to him states: "that VIA Rail not be permitted to expand its service to compete in any way against the business it sold to the Great Canadian Railtour Company, the Rocky Mountaineer".

In his written response dealing with VIA Rail the chair writes: "I want you to know that I agree with the position that you have advanced on this matter and I will support you when it comes up for discussion in the final report of transportation, trade and tourism. "Furthermore, I have spoken with-and I will not name the member-the parliamentary secretary to the minister who has also agreed to support your position as you have stated it".

I have faith in the wisdom of the minister. I know he will do the right thing. To decide in VIA's favour would be devastating to Rocky Mountaineer, to British Columbia, to the tourism industry in British Columbia and most specifically to the town of Kamloops. I trust he will make the right decision.

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, this is very pleasant afternoon. I have had kind words from the Bloc and now I have the kinds words from the spokesman of the Reform Party who says he has faith in the wisdom of the minister and he is certain that I will make the right decision. I can assure him that is true, I will make the right decision. I will make that announcement very soon.

However, I should point out that the chair of the committee, who is a very hard working member from Winnipeg South, is not necessarily speaking for the minister in communications. We like to have free and open discussion in committees, be it my parliamentary secretary or the committee chair or member of the Liberal caucus who happens to be there. We know that members can make up their own minds what they do and how they vote. We have a very lose, open system in the Liberal Party, not one that is dominated by any authoritarian rules. I would be happy to have a discussion with him face to face rather than through intermediaries at any time that he wishes.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, the minister in his remarks made reference to Bill C-14 as having made it easier to develop short line railways. We know quite a number of grain dependent subdivisions in western Canada that would make great short lines. However, all that Bill C-14 has done is it has expedited the ease with which railways can do an abandonment.

I do not see where it has helped with the creation of the short line. I would like him to elaborate a little on how short lines will be created, how Bill C-14 helps. In particular, could he elaborate on how potential buyers of short lines are going to be able to deal with the question of successor rights which, right now, is the really big stumbling block?

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, the hon. member has raised a very good question, namely how has the situation improved.

The situation has improved in this way. Previously, before abandonment, with the heavy and very complicated mechanisms that were laid on the railways, they had to show it was an uneconomic route. Once they had showed it was an uneconomic route, sometimes we suspect, occasionally on certain lines they tried to help to make it look bad, no one was interested in buying the short line.

With the new system, there is an opportunity of having the route given a fair chance of being analysed by some potential buyer, being put forward and turned into a functioning railway.

The previous system deliberately discouraged the type of entrepreneurship of which, I hope, the hon. member's party is in favour.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, I thank you for allowing me to put a question to the minister. Unfortunately, I am not as optimistic as he is regarding his government's transportation policy, particularly as regards airports.

I have a concrete example and I would like to get the minister's answer regarding airport transfers, more specifically the transfer of the Sherbrooke airport, in my riding, which has been delayed since the government implemented its new policy. This transfer is simply not taking place, because those who are prepared to take over the airport, and who have already taken steps to that end, are asking that the facilities be in a reasonable shape. In order for these facilities to be in a reasonable shape, they are asking that, before giving up its responsibilities, the federal government provide $1 million in assistance to repair the runway.

My point is, and I will conclude-

[The Deputy Speaker]

I am sorry, but your time is up. I must give the minister time to reply.

[David Anderson, Liberal, Victoria, BC]

Mr. Speaker, it is true, the pessimists are on the other side of the House, and the optimists are here on the government side.

With respect to small airports, such as the one at Sherbrooke, that is what we want to do, to run airports with local input, which is very important, local enterprise, and local energy from the people on site. That is very important.

As for money, we have set aside several tens of millions of dollars, approximately $35 million in all, I think, for the transfer of airports. Yes, there are times when people from the region, the particular city, say that $10 million is needed. The department says that is a bit too much, that it can give a lower amount.

These are the negotiations we go through for each airport. It depends on the condition of the airport, and also on what was spent in previous years. Often an airport is in very good condition, and the last time any money was spent on it was maybe ten years ago.

What is needed is to look closely at each airport, and we must have some flexibility in our approach. But I can assure you we have transferred several airports.

[The Deputy Speaker]

The hon. member's time has expired.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, I will be dividing my time with the member for Comox-Alberni. Unfortunately that will only give me 10 minutes to discuss a national transportation system in shambles. I will not bother to get into the question of the Pearson airport mega-mess or the St. Lawrence pilotage rip-off. Instead I will deal with two problems which are of immediate interest in my specific riding, Swift Current-Maple Creek-Assiniboia.

The most pressing is the sudden, unexpected shutdown of most of our branch railway lines. Early this month the two railways announced that service would be suspended on almost all branch subdivisions in western Canada, including nine in my riding with 600 miles of track. Actually this was a bit anticlimactic. They said that there would be no service for three weeks, with those three weeks to expire some time around the end of this month, but service had been de facto abandoned on several of these lines for three weeks before they had even made the announcement. We have rarely seen a train since Christmas time.

Right now west coast grain shipments are at their lowest level in over a decade. Forty-six ships are sitting at the west coast waiting for grain. They are rolling up huge demurrage charges. Some of them have actually been there for a month. It is the farmers, the producers of the grain, who are going to have to pay for all those demurrage charges which at this point have already reached about $15 million.

This morning the minister of agriculture admitted that it is unfair that farmers have to carry the entire demurrage burden. Unfortunately, as is his habit, he did not offer any solution to the problem which he had identified. He always gets half way there. He says: "Yes, there is a problem. Yes, we will deal with it", but when an interested party says: "But Mr. Minister, will you please tell us how," he suddenly loses his renowned eloquence.

The minister of agriculture loves meetings and he loves reports which he can ignore if he so chooses but he has little taste for constructive action. He is having another soiree tonight in Calgary. This will probably result in yet one more stillbirth.

What it the problem? That is probably what they are going to try to figure out at this meeting tonight. According to the railways the problem is that they are short of locomotives. If this is true, I would suggest that perhaps usurious provincial and federal taxes and silly requirements for locomotives to be depreciated over a 21 year period could have something to do with it.

However, locomotives can be rented. I understand the CPR has rented some. But it was poor planning on the part of both the railways and the Canadian Wheat Board that got them into the bind that they are in right now. We cannot blame it on the weather. Yes, it has been a hard winter. We have a lot of hard winters. They should have had their act together months ago and they should be sitting panting at the bar ready to go again. But they have completely mismanaged the system. That is why 46 ships are sitting in Vancouver harbour.

It is not just demurrage that the producers are going to lose. They are also going to lose about $50 million because of the falling markets that they are going to get into by being unable to ship right now.

A lot of this is due to historic inefficiency. We know that. But these historic inefficiencies are not addressed in the new amendments to the Railway Act, Bill C-14. There is nothing there to prevent this sort of thing. There is no pain or penalty to the railways if they do not organize their business and get the grain out when the ships are sitting there waiting for it. They get their money regardless of when they ship. They could haul that grain a year from now and they would still get the full freight rate on it. There is no pain, no penalty.

The Minister of Transport and the Minister of Agriculture and Agri-Food have referred to short line railways. There is only one short line in Saskatchewan and that is in my riding. It is operated as co-op. It does a good job because the producers run the thing themselves. They are not stuck with the costs of picking up union successor rights from previous operators. But thanks to the successor rights it would be difficult, if not impossible, for small

corporations specializing in the business to operate these subdivisions which are now at risk.

A few minutes ago when I asked the Minister of Transport about this issue he neatly ducked and dodged and did not reply so to date I have not had an answer. I do not know what the intention is.

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

They may not have a plan.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

My hon. friend says there is no intention, they do not have a plan.

I would like to shift gears to another problem in my riding and that is the deterioration of the national highway system. Members opposite beat their breasts about our national obligations to bind this nation together. However, when we start talking about the national highway system, they retreat behind spurious claims that highways are solely a provincial responsibility. That is a red herring. Most highways are provincial responsibilities but the national highway system is a joint federal-provincial responsibility. It is national and I will provide a dictionary for any Liberal member who does not know what a national highway system is.

In my riding of Swift Current-Maple Creek-Assiniboia, a 113 kilometre stretch of the wonderful Trans-Canada highway from Gull Lake to the Alberta border is winding and hilly. It has not been twinned. Since 1979 that short stretch of road has claimed 31 lives. There has not been a year when someone has not been killed on that little stretch of road. There have been more than 350 personal injuries.

I live very close to that highway. I never, unless I have no choice in the matter whatsoever, drive it in bad weather or at night because it is a death trap.

This morning the minister of agriculture made reference to his claim that the province of Saskatchewan has never asked to have that particular piece of highway twinned. I presume he also meant the section from Indian Head to the Manitoba border. That is nonsense.

In the fall of 1994 the department of highways of Saskatchewan had its money on the table to pay its share of the $35 million cost of twinning that one little section of highway in my riding and the federal government, after saying it would do it, reneged on its promise. What else is new?

Then the minister of agriculture decided that we should debate Saskatchewan highway conditions, not the national system, but Saskatchewan. He said that no highway work had been done in Saskatchewan since the Liberal government of Ross Thatcher 25 years ago. I wonder if he ever heard the expression, Thatcher's patchers, which is how they referred to the Saskatchewan department of highways 25 years ago.

Yesterday's committee report confirmed what Canadians already know: the Trans-Canada highway system is substandard. The government collects billions of dollars in fuel taxes and yet last year it could only find $292 million for the entire national highway system from sea yea unto shining sea. This is chippy. This is unacceptable.

[Gordon Kirkby, Liberal, Parliamentary Secretary to Minister of Justice and Attorney General of Canada]

Mr. Speaker, I am happy that the hon. member for Swift Current-Maple Creek-Assiniboia is defending the NDP in Saskatchewan. The Reform and the NDP in many ways seem to get along quite nicely.

He is decrying the fact that the federal government has spent $292 million, or whatever the figure is, on highways. I wonder where he would get the money, seeing as the election promise of the Reform Party is to cut the deficit to zero in three years. How would he come up with more money for highways?

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, I am glad he asked that question. If he would read the fresh start program he would see where we would cut $15 billion of unnecessary government spending.

To cover the $292 million by a multiple of three, I will give him two highly desirable cuts. One would be to stop giving money away to Liberal friends like Bombardier. That would amount to $87 million. The other one would be to privatize the TV portion of the CBC. That would amount to at least $700 million. We are already over the threshold, so I do not need to get into the entire $15 billion.

As far as me being a defender of the NDP, I am a defender of my province, unlike the hon. member opposite who is also from Saskatchewan but because he is a member of the Liberal government has forgotten it.

[Bill Graham, Liberal, Rosedale, ON]

Mr. Speaker, I listened with interest to the hon. member's observations about 46 ships in Vancouver harbour running up demurrage charges. We all agree that is a very unfortunate situation.

I was curious, given his known propensity for privatization and for respecting private industry as a way of dealing with these issues and his reticence to have subsidies deal with them, exactly what he would propose to enable the railways to move the grain faster, without giving them a subsidy.

He seemed to suggest that the legislation should impose huge penalties on the railways, as if they were not already being penalized by the fact they are not getting the grain to the harbour. I

am sure that if we asked a railway person they would say that they are anxious to move it because they could make more money by doing that.

What exactly is the member proposing as a concrete solution to this problem which would not involve either a subsidy or some form of government interference in private industry which he generally finds so offensive?

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Mr. Speaker, I am sorry, but the railways are not paying any penalty. That is the problem. They have a captive market. They can haul grain at their leisure, whenever they please. They are not going to lose a dime. If that grain does not get hauled until the next crop year, which is a possibility, they will still get their full tariff. The farmers will lose not only through demurrage charges, but also because they will have declining markets as they get into the new crop year. They will lose about $50 million in revenue as well.

If there were contractual arrangements which obliged the railways to move the grain according to a specified time, then there probably would not be a problem. That would be an incentive for them to get their act together.

It is a regulated industry. We say it is deregulated, but there is a freight cap. It is a semi-deregulated industry.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Mr. Speaker, to bring the House up to speed, the motion we are debating reads:

That this House condemn the government for its approach to federal transportation policies, and in particular, the cancellation of the Pearson airport deal, the continued neglect of Canada's national highway system, costly inefficiencies in the grain transportation system, and the ongoing subsidization of VIA Rail at the expense of taxpayers and private sector passenger rail and bus operators.

My colleagues have dealt in depth with Pearson. I would like to deal with some of the areas within the national highway system and some of the VIA Rail issues.

I do not think we have to travel very far across this country, in whatever province we are in, to recognize that the national highway system is in a mess. It needs to be addressed but that is not being done.

I would like to take the time to compare our highways to the American model. Anybody who has travelled in the United States recognizes that its highway system is excellent. It is superb. Why is that? The American system is excellent because they dedicate fuel tax revenue to the highway system. I believe that is a notion that needs to be looked at because in Canada the fuel tax revenues go into a big bin and governments, being governments, tend to draw it out. We are now in a huge mess financially because no directions are given to the government.

If one or two cents per litre of gas was dedicated back into the highway system we would get what the driving taxpayers want, their taxes going back into the highways that they finance.

Another area of concern in British Columbia is the B.C. ferries. People have to pay to take the ferry from the mainland to Vancouver Island. It is paid for by the B.C. taxpayer and the province of British Columbia. The real rub is that people are saying: "This is part of the national highway system". Highway 1 goes across to Vancouver Island. It does not even cross Vancouver Island, it goes to Victoria whereas the west coast is Tofino. It truly is not a Trans-Canada highway because it does not go to the west coast. There should be some form of revenue to address British Columbia ferries, which is a huge ferry fleet simply because we live in a maritime climate.

I could go on and on, but I want to leave some of my time to address VIA Rail. My colleague has addressed the situation where Rocky Mountaineer was sold to a private enterprise company which has been extremely successful and is doing very well. What is going to happen or potentially happen is that the government, through VIA Rail, could go into competition with the very outfit that it sold.

What have we got? We have a private enterprise that bought a business and has done extremely well in turning it around. What is the government going to do? It is now going to go into competition with it with taxpayers' dollars. That is absolutely wrong.

My colleague mentioned that the chair of the Standing Committee on Transport agrees with my colleague that the government should not be going into competition. He stated that in writing. However, the minister, just a few minutes ago, stated that the chair for the transport committee does not speak for the minister. I find that rather odd because whenever a Reformer says something, boy, we speak for all Reformers. However, when it fits the government, it says: "No, this really is not going to fit. The fellow was just speaking out of context". That just does not fit.

I hope the minister sees fit to make the right decision. I would also like to remind the minister that we are going into an election. The transport minister is the key minister for British Columbia. If he is going to wander into an election abandoning British Columbia, he will pay the political price. I would just like to remind him of that.

Another area I would like to deal with concerns the Esquimalt and Nanaimo Railway in my riding. A little history is required here. VIA Rail runs it at the moment but the E and N Railway goes back to 1883 when British Columbia was entering Confederation. It was part of the Trans-Canada Railway, part of bringing the rail head to the west coast.

The original E and N Railway was to go across Seymour Narrows and down Vancouver Island to Victoria. That was changed and almost caused British Columbia to withdraw from Confederation. The terminus was changed from Victoria on Vancouver Island to Port Moody on the mainland.

Representatives of British Columbia went to Queen Victoria and said: "This is a key issue. If the terminus is going to Port Moody we are considering withdrawing from Confederation". British Columbia did stay in but it was a key issue.

The E and N Railway was built in 1883 by the Dunsmuir family. It went from Victoria to Nanaimo. In 1912 it was extended from Nanaimo to Courtenay. The key point is that CPR bought out the E and N Railway in 1905.

Part of condition of building that railway was huge land grant, two million acres of timber and land. To give a rough idea, it is a stretch of land about 150 miles long by 30 miles wide. This tremendous chunk of ground was deeded to E and N and hence CPR.

CPR, through VIA, does not run a decent railway on the island. Islanders are saying: "Come on, there is a wonderful potential for tourism". Actually rail freight works fairly well, yet the federal government and the British Columbia government do not have the political fortitude to pressure CPR to run the service well. CPR pops it off on to VIA but the point is that CPR received a huge land grant, a fantastic opportunity. It took over a billion dollars worth of timber through the years. They have sold through their Marathon Reality Agency a fantastic amount of real estate and it loses money. It loses $2 million to $3 million a year. That is why it got the land grant in the first place. The government must force CPR through VIA to run a decent railway.

CPR's point of view is that it needs a subsidy, some more money. The minister was talking about a VIA subsidy. In my mind not one cent of subsidy should be going to the E and N Railway because it was dealt with in the land grant. The Supreme Court has said the E and N Railway does not constitutionally entrench British Columbia, that British Columbia did not enter Confederation as part of the railway. That was dealt with by the Supreme Court. It was a side issue.

The contractual issue still remains. The contractual issue is that CPR must run that railway successfully through VIA. Yet the government refuses to push CPR. I wonder why it will not do it.

I would like to leave some time for questions and comments. However the issue my colleague was addressing about the Rocky Mountaineer is heated by today's discussions. The minister must make the right decision. The government cannot sell off a railway to private enterprise and then turn around a few years later and have VIA Rail compete against that private enterprise using taxpayers' dollars.

Therefore I would like to move:

That the motion be amended by adding immediately after the word "operators" the following:

"and most specifically, even considering allowing VIA Rail to re-enter the market to compete against the business it sold to the private sector".

[The Acting Speaker (Mr. Milliken)]

The resuming debate will be on the amendment.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I will be splitting my time with the hon. member for Leeds-Grenville.

I am pleased to rise today to participate in the opposition day debate on federal transportation policies. The government clearly outlined the role of the federal government through the 1994 national airports policy and set itself to ensure provision of a safe, efficient, accountable and locally sensitive airport network.

The first objective of the national airports policy is to maintain the existing high levels of safety at Canadian airports. The first order of business of anybody concerned with the air transportation industry is safety. The government is accomplishing this by focusing on the careful certification of all airports and the development of regulations after thorough consultation with the industry and by establishing the airports capital assistance program to ensure the provision of some capital at the local communities that might not otherwise have been able to provide the necessary safety infrastructure.

The second objective is to ensure the efficiency of the airport network across the country. The ability of Canadian business to get to market, the need for Canadians to travel the country and the accessibility of the transportation network to tourism interests all call for an efficient network of airports.

The government has accomplished this goal by ensuring the operation of the country's larger airports, the national airport system, through the operation of Canadian airport authorities; by recognizing that the location of smaller airports is more of a regional nature and more of a regional matter; and by recognizing local and regional governments are better able to make appropriate decisions concerning regional and local airports.

The federal government is phasing out its operation and subsidy of such airports over five years to ensure an orderly transfer of responsibility. It has ensured efficiency by establishing annual cost reduction targets for every Transport Canada airport for as long as they were operated by Transport Canada.

Efficiency improvements were required and the national airports policy implementation is well along to achieving its goal of at least $100 million in annual savings by the year 2000. In addition,

airport charges are based on local site specific forecasts bringing the discipline of user pay user say to the operation of Transport Canada operated airports. This has been done over a four-year period in a time phased fashion to ensure time for adjustment.

The third objective is to get the authorities responsible for managing airports to be as accountable as possible for their activities. There is some degree of competition between airports, whether within Canada or for transborder traffic with the U.S., but we all acknowledge that the airports may have a considerable monopoly.

In Canada, we have chosen not to regulate airport charges, but to ensure that the communities are aware of what is being done, via organizations with jurisdiction over this, and via good administration.

My hon. colleague, the Minister of Transport, has adopted a broader range of stringent principles of accountability for Canadian airport authorities, in order to ensure the transparency of decisions taken via appointments to committees, public meetings, operational audits and financial reports.

These changes will be included in current leases when they are modified: to ensure that the local authorities responsible have the opportunity, first of all, to assume ownership and operation of their regional, local or small airport; to support the continuation of airport operating committees made up of airport users, as was the case with airports operated by Transport Canada in order to ensure that local decision makers receive concrete feedback from users.

The fourth objective is to improve the sensitivity of airport management to local needs. Decisions made in Ottawa, however well intentioned, cannot take the full range of local conditions into account. Any responsible government has to look at an airport from a transportation perspective. Local communities can incorporate tourism objectives or other local priorities. Local communities will decide in conjunction with airport users what level of service best suits that community.

In addition, the federal government has undertaken to ensure a provision of airport services to remote communities where the federal government has an existing involvement and there are no alternative forms of access.

We are doing more for airports and the Canadian air transportation industry to implement a successful national airports policy. Canadian airports will benefit from the new Open Skies agreement. Results to date have been as follows.

The number of services and the total seat capacity in the trans-border market are up substantially. Competition has increased and Canadian and U.S. airlines are participating almost equally in the growth. Seat capacity has increased faster than traffic but this was to be expected in the early development of markets.

Business, tourism and trade interests of Canada and the U.S. are far better served than they ever were before and the greater activity permits more economic development in and around Canadian airports. Traffic improvements are not all due to the Open Skies with the U.S. Canada's airlines and airports are also benefiting from a number of recent successes in the renegotiation of international bilateral agreements, that is to say new or amended agreements between Canada and Japan, the Philippines, Malaysia, Korea and China.

Canadians' degree of confidence in the new methods of airport administration set out in our national airport policy can be gauged by the rate at which communities are taking over administration of their airports.

The figures speak for themselves. Today, more than 80 per cent of Canadian air passengers use airports that have been turned over to the community. By the end of 1996, the current government had turned over, or was nearly finished the process of turning over, 52 airports, including the national airports in Toronto, Winnipeg and Ottawa, 26 regional and local ones, 12 small ones and 11 Arctic airports.

By next March, the total will be 75, which represents a vote of confidence by numerous Canadian communities. I am sure that the process will continue and communities will continue to take over administration of their airports.

The government prefers that our largest airports be operated by not for profit organizations. This approach has proven its worth in Vancouver, Calgary, Edmonton and Montreal. These airports are pursuing their commercial potential by using innovative financing for capital works.

The new Vancouver international terminal and runway, the improvements to Calgary and its successful management of a high rate of growth, the focusing of Edmonton's scheduled traffic at the international airport and the improvements to the airports in Montreal, all attest to the success of the airport authority model in the management of major airports.

As the member for Halifax West, I look forward to that kind of success once the Halifax international airport has completed its negotiations to move to a national airport authority.

The national airports policy is a success story of the federal government. I am advised as we approach the end of fiscal year 1996-97 that we are ahead of the track set in 1994 to achieve the goal of at least $100 million in annual savings by the year 2000. This national airport system continues to play a vital role in the growth and development of Canada.

[Jim Gouk, Reform, Kootenay West—Revelstoke, BC]

Mr. Speaker, it was enjoyable hearing the hon. member give us his thoughts on the Liberal policies on the national airport program.

No doubt the hon. member has heard the word skimming before and is well acquainted with the meaning of the word skimming, to take something off the top. With regard to the national airport program, the program he says is doing so well with these 26 national airports, is he aware that some of those national airports are already financially insolvent? They are financially insolvent because of the fee the federal government collects from them. That fee structure is based on deemed revenues and deemed profits, not what they really make. The government said: "We will calculate it based on this projection and that projection, you will bring in this much money and it will in turn give you this much profit and we want it".

At least two of the airports, Calgary and I believe Edmonton, are already financially insolvent. The hon. member mentioned Halifax. Halifax is well aware of this and has hired the same financial consultants because they know that this is an absolutely unworkable formula.

With regional airports, which the hon. member also mentioned, there is another form of skimming. I will use my province of British Columbia as an example but this problem exists in every province. My home airport, Castlegar, feeds six flights a day to Vancouver and two flights a day to Calgary. The same thing happens throughout my region, at Cranbrook, Penticton, Kamloops, Williams Lake and all those other airports. The big airport that is part of this national airport plan, Vancouver airport, relies on these small airports.

In the case of Castlegar the federal government used to spend $800,000 a year to operate Castlegar bringing in only $300,000 in revenues. The government says: "We still need the flights coming from Castlegar because that is what makes our national airports work, but we are not going to give it any funding. We will help it if it needs to rebuild a runway or a taxiway, but in the general day to day operation of the airport, even though it was costing us 100 per cent more than the revenues, we will not give any money. We will phase it out and make it stand on its own".

That is not turning it over to local decision making; that is turning over financial burdens. The government should have allowed a larger portion of the profits coming from the national airports that make huge profits to be put into the regional airports on which the national airports rely to supply them with passengers. Likewise the federal government has to redo its formula to ensure fairness for the national airports so that they can survive and grow so that we will have as good a system as the hon. member would like to think we now have.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, before I go to the substance of these questions, it strikes me as fascinating that the Reform Party, the party that always calls for faster and deeper cuts and says we are not going fast enough in making cuts in government, is the same party that when it comes to things in their backyard Reform members say: "Not in my backyard. Make your cuts somewhere else, but not in this area". I have heard this over and over in this House. On every topic they say: "But do not cut here". If we were to add it up we would never cut at all.

On the topic of Calgary, if Calgary has problems, the biggest problem in Calgary is congestion. It has too much success. It is the growth of that airport and the authority is working to meet this demand. The government is taking a flexible approach on this.

One of the problems with Edmonton is that traffic has moved from the Edmonton municipal airport to Edmonton International Airport. That has changed the circumstances. The federal government is working with that authority to deal with the changed circumstances and it will change the lease accordingly.

It is important to be flexible and to recognize that as things change we must change the leases, we must look at the circumstances and act accordingly.

However, I find it remarkable how the Reform Party is always after us to spend, spend, spend, except when it comes time for the budget.