Debates of Feb. 9th, 1998

Grain Transportation

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

moved:

That, in the opinion of this House, the government should immediately conduct a review, with the participation of all stakeholders, to develop a solution to grain transportation inefficiencies.

Mr. Speaker, what a better way to start a Monday morning than to speak in this wonderful Chamber. I know that you, Mr. Speaker, having rested over this past weekend, will no doubt appreciate the comments that I as well as members of other opposition parties will make.

Unfortunately the motion was deemed non-votable. I would have preferred it votable, but when I appeared before committee there were only so many motions that could be put forward as votable. This was not chosen as one of them.

This motion is what I believe to be one of the major agricultural issues that will be facing Canadian producers and certainly Canadian trade in not only 1998 but years to follow.

I put forward Motion 225:

That, in the opinion of this House, the government should immediately conduct a review, with the participation of all stakeholders, to develop a solution to grain transportation inefficiencies.

As part of my presentation to the committee, I quoted that the delayed 1997 shipments to contracted international customers, primarily in wheat, have resulted in demurrage charges of $65 million paid for primarily by producers. It has been estimated that an additional $35 million was lost in potential sales because of Canada's inability to deliver product. This does not only reflect poorly on westerners but on Canada as a whole in the international marketplace.

I would also like to inform the House that this motion does not put forward any partisan interests. I am not suggesting any changes in policy. I am suggesting that we, as parliamentarians, listen to stakeholders involved, draft a report and table that report to the House for consideration.

On December 18, 1997 the transport minister sent out a news release announcing the appointment of the hon. Justice Estey to conduct a review of Canada's grain handling transportation system. The timing is very important. In October I put forward this motion to committee. In December of that same year the government did announce Mr. Estey as being the individual who would take the review forward. There are still some issues and some problems with that. I would like to consider that the transportation committee and the agricultural committee have a joint committee struck so we can, as parliamentarians, listen to stakeholders and put forward their views to this House in a separate report.

I welcome the appointment. It has been a long time coming. A preliminary report will be available by May 31, 1998. The final report of the review is to be completed by December 31, 1998.

A grain review advisory council comprising of representatives from grain handling and transportation will be appointed by the Minister of Transport to support Mr. Estey throughout the review process. Hopefully the advisory council will not end in the same fate that the western grain marketing panel suffered after most of its key recommendations were shelved after they were given to the minister responsible for the Canadian Wheat Board.

I welcome the government's decision to finally begin the process of the review. The unfortunate part of this is it is about two years too late. With this review scheduled to end by December 1998, it will not be until 1999 when there can be something actually done about the recommendations.

That being said, I would now like to elaborate on my motion today which unfortunately was deemed not votable.

On July 25, 1997 the federal ministers of transport and agriculture and the minister responsible for the Canadian Wheat Board convened a grain summit in Winnipeg. A key objective was to gauge the interest among those who handled and transported grain and the value of embarking on a comprehensive review system. It was a productive exercise but it did not answer the problems that thousands of farmers have out west with our current system. However, there was a consensus that the review should be conducted in 1999. With all due respect, Canadian farmers cannot wait for two years.

We as parliamentarians have a role and a duty in committee to begin immediately to listen to the concerns of all stakeholders so that we may be able to have a better understanding as to how we might tackle this problem.

I also understand how we might tackle the problem. I also believe that the most appropriate way of conducting an immediate comprehensive review is to form a joint standing committee of agriculture and agri-food and transport, pursuant to Standing Order 108(1)(a). The committee would hear witnesses from farming communities across western Canada, railways, the Canadian Grain Commission, the Canadian Wheat Board and those who operate and regulate the industry.

I would also like to dispel any thoughts that this is an issue that affects only western Canada. It is an issue that has widespread ramifications across Canada even though it has directly affected those west of the Ontario border. It is Canada's international reputation that is at stake as supplier of some of the world's best grain and best product.

The review is necessary because of the new market realities for Canadian grain. With the end of the Crow rate two years ago, farmers have to be more competitive. Also, it should be noted that the federal government's 13,000 hopper fleet is yet to be sold, leaving farmers wondering the government's reasoning for not doing anything with it. This is not helping the situation.

The review should assess the effectiveness of the process, the adequacy of shipper protection, lack of railway competition and alternatives and potential improvements and efficiencies, bearing in mind the costs to all stakeholders.

Canada exports approximately $18 billion to $20 billion worth of food products every year. About half of those exports are grains, oilseeds and related products. Inefficiencies in the management of the Canadian grain transportation system have caused serious damage to the Canadian grain export industry and prairie economy.

Delayed 1997 shipments to contracted international consumers, primarily in wheat, have resulted in demurrage costs of approximately $65 million, paid for by producers. It has been estimated that $35 million was lost in potential sales because of Canada's inability to deliver. These are conservative estimates.

Prairie pools, for example, have suggested estimates of hundreds of millions of dollars in lost sales of prairie products. This does not only reflect poorly on westerners but Canada as a whole and the international global marketplace.

Instead of dealing with the situation rationally, the Canadian Wheat Board's knee-jerk reaction to the problem was to file a complaint against CN rail before the CTA, which is only costing taxpayers and producers more money, in a battle of egos instead of sitting down rationally in committee and solving the problem.

I have asked the minister responsible for the Canadian Wheat Board to drop the complaint so that we can get on with the constructive review. He has declined to do so. Unlike what the Canadian Wheat Board and CN have done, the committee review will not be an exercise in finger pointing.

The CTA hearing has literally handcuffed the government's ability to conduct this review on grain transportation. Legislation governing the Canada Transportation Act allows 120 days to lapse between the time a complaint is filed and when the public hearing must take place.

Unfortunately the CTA has delayed public hearings three times since the complaint began and now is not scheduled to hear until March 1998.

Once again I would like to inform this House that this motion does not put forward any partisan interests. I am not suggesting any changes in policy. I am only suggesting that we, as parliamentarians, listen to stakeholders, draft a report and table the report for consideration in the House of Commons.

Every provincial government in western Canada wants the review conducted as soon as possible. Even Saskatchewan's transport minister has said, referring to Ottawa's response to the issue, it is a process that is taking much too long. There is not a stakeholder involved who does not want an immediate inquiry into the issue.

The committee process is vital to our role as parliamentarians. Since the time of Confederation, the House of Commons has created committees to study matters of national importance. It is just one of many issues that are important to western Canadians and Canada's reputation. If anything, I hope this exercise is not a waste of time. At the very least those on the government side can consider this an information session so that the next time they might actually try to listen to the concerns of farmers across western Canada and be proactive instead of reactive.

I have a number of concerns. As I said earlier, Mr. Justice Estey has been identified as the individual to take this banner across western Canada to try to find out exactly what the inefficiencies are in the transportation system. And there are many.

One of the concerns I have right now is the changes that are going on constantly in the rail transportation system. One is that of rail abandonment. Our concerns and certainly my position would be, rather than rail abandonment because of the change in the transportation system in the inland terminals that we have more short lines. The short lines should be available to those entrepreneurs who wish to develop the process within their own marketplaces. I believe that is one very major issue that has to be studied not only by the committee but certainly by Mr. Justice Estey and his individual groups.

Another very serious concern I have, and I talked about it briefly, is that of political will. We recognize there is a very major problem with the system of grain transportation now in western Canada. There is no finger pointing. A number of stakeholders and organizations are equally at fault by operating a system that is unimpeded by progress in the last number of years. They are steeped in tradition only but have not developed the same way that farming has developed in western Canada.

It is going to take political will to make the system change. Right now the Canadian Wheat Board controls the allocation of cars. The question should be asked, should in fact they be controlling that particular aspect of transportation, or should it be controlled either by the producers or for that matter by the railroads themselves.

I find it very strange that a producer when he sells his product is responsible for that product until it gets on a ship. However he has no control of that product. This is the political will that is required to make the necessary changes in order to make the system work better. I believe that a joint committee of agriculture and agri-food and transportation would at least allow the nurturing of that political will, non-partisan, to do what is best for the producer and certainly what is best for western Canadian trade abroad.

I also have a concern about the delay in Justice Estey's report. We have some serious concerns right now about the fact that we are being affected in the international market because of just in time delivery. If Justice Estey wishes to bring his report forward in two years, we may have lost a wonderful window of opportunity to have additional sales in the world market where we could not access them because of the lack of ability to deliver on time.

There is another issue too with respect to transportation which has not been dealt with but which the committee should be studying. That is the effect on municipal roads that rail transportation is going to have in the not too distant future. We have seen a number of the private sector corporations developing huge inland terminals where producers are required to ship their product by rubber tire many kilometres further now than what they did previously with other rail lines.

The problem with that is that road infrastructure is being impacted by the grain trucks and municipalities are responsible for the repair, the construction and the maintenance of those roads. I believe it is important that this government and the committee design and help to put in place a policy which will assist that road infrastructure.

There is one other issue that I have a real serious concern with. It is the CTA hearing itself. How can Justice Estey expect to have open, honest, transparent dialogue when the Canadian Wheat Board is taking the same people to a quasi-judicial court and asking for millions of millions of dollars? It cannot be expected to be honest and open unless we get rid of the CTA hearing. That too should be debated and discussed openly at the committee level so that parliamentarians can make an honest decision and judgment and bring it back to the House.

Mr. Speaker, I thank you and I hope your Monday morning has gone well. I hope the rest of the week goes equally as well for you and the rest of the House.

[The Deputy Speaker]

I am sure the hon. member's views are shared by all hon. members.

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

Mr. Speaker, I had truly expected that a deliriously happy member for Brandon—Souris would stand in his place today to withdraw Motion No. 225 because for all intents and purposes it has been nullified by the transport minister's wise decision to undertake a comprehensive review of the grain handling and transportation system. Unfortunately such is not the case. The hon. member wants to play politics while this government is committed to finding solutions with the co-operation of all the stakeholders concerned.

I would like to go back a bit. The Canada Transportation Act enacted on July 1, 1996 is intended to modernize and streamline rail regulation, promote the formation of short line railways and ensure that shippers continue to have access to competitive transportation services. The act provides for a review of the provisions of the act during 1999 as they relate to grain transportation. However, given the difficulties incurred by the system, which the hon. member mentioned, during the 1996-97 crop year and the calls from stakeholders, the Minister of Transport decided to accelerate this review.

On December 18, 1997 the Minister of Transport appointed Mr. Justice Willard Estey to conduct this review. Justice Estey is one of Canada's leading jurists and he has been given broad terms of reference which allow him to conduct a comprehensive review of the system. Justice Estey's appointment has been exceedingly well received by the entire stakeholder community, including provincial ministers of agriculture and transportation.

For instance, Manitoba's minister of highways and transportation said “The western provinces are pleased that the federal government has appointed the honourable Mr. Justice Willard Z. Estey—. Justice Estey's pre-eminent background makes him a highly qualified individual to examine potential changes in the grain handling and transportation system”.

Leroy Larsen of the Saskatchewan Wheat Pool said “This is exactly the broad mandate we were looking for—. Let us get all the issues on the table”.

Ted Allen, the president of the United Grain Growers, said “You have to see it as a positive”.

Justice Estey will be conducting the review in two phases. During the first phase he will consult stakeholders in order to identify the key issues and problems. Work in this phase of the review is already under way. Justice Estey will report to the minister on his phase one findings by May 31, 1998.

I want to stress to the hon. member that this is an important part of the review. The second phase will commence after the resolution of the complaint currently before the Canadian Transportation Agency. Phase two will involve the development of a package of recommendations on issues and problems identified during phase one. It is expected that Justice Estey will submit his report on phase two findings to the minister by the end of this year.

Justice Estey has eagerly begun to perform his duties. He has already taken two trips to western Canada where he has met with over 50 stakeholders and he has met with provincial transport ministers from the western provinces. Several more trips to the western provinces by Justice Estey and the review secretariat are planned. This will ensure that the consultation process for the review will be broad and that all interested stakeholders will have the opportunity to make their views known to the review.

I agree with the hon. member that consultation is crucial to the success of this process. If stakeholders are not consulted, then the resulting product simply will not be good enough to serve the needs of the industry.

Producers are the experts, shippers are the experts, railways are the experts, grain companies are the experts and so on throughout the entire system. These are the people who matter in this review and these are the people Justice Estey is eager to hear from. Without their input the review would be a sterile exercise because it would not be able to serve the needs of all elements of industry.

Taking advantage of the opportunities afforded by modern technology, the Estey grain review will have a dedicated Internet web site which will allow all individuals to make representations directly to Justice Estey for his consideration. This will allow all, and I stress the word all, interested parties to have their say on this important topic and it will ensure that everyone is heard.

Even before the announcement of this review, the Minister of Transport had taken steps to ensure that the difficulties incurred during the 1996-97 crop year were not repeated. In July the Minister of Transport along with the Minister of Agriculture and Agri-Food and the Minister responsible for the Canadian Wheat Board met with industry representatives to discuss plans for the upcoming crop year.

The Minister of Transport challenged the industry to take steps to ensure that grain movement would proceed without incident. As a result of that meeting an industry led contingency plan was developed. This plan would allow the industry to respond to emerging logistic problems before they became serious enough to materially affect grain flows.

By identifying and dealing with the issues before they get out of hand, the contingency provisions would ensure that the system would not repeat its 1996-97 difficulties.

The system has responded well to the challenge by the minister. We are currently about halfway through the crop year and already the system has exported more than two million tonnes of grain than it did at this point last year. That is good news for everyone and it ensures that Canada can maintain its leading role in world grain markets.

In addition to the contingency plan however, the more important achievement of the minister was that he help initiate a dialogue within the industry so that everyone's efforts were focused on moving grain this year instead of pointing fingers of blame for last year.

Finding solutions to the difficulties in Canada's grain handling and transportation system will require the co-operation of all parties. This review is only the start of that process. We need to focus on solutions to improve the efficiency of the entire system from the time the grain leaves the farm gate to the time the vessels leave the port loaded with Canadian grain for its export destination.

The Minister of Transport took great care in the selection of Justice Willard Estey. Many candidates were considered for this position but few could match Justice Estey's impressive credentials. As a former supreme court justice, Justice Estey is skilled in absorbing and processing vast amounts of technical material and then making sense out of it all in a rational manner.

As a former judge, Justice Estey is also skilled in the important quality of giving equal consideration to all the material that is relevant to a question before passing judgment. Justice Estey is new to the grain industry but his actions to date indicate that he has thrown his energies into this process with great enthusiasm. Stakeholders have been impressed with his vigour and candour and they are pleased that the minister has made such a fine choice for such an important matter.

There can be no doubt that this is a matter that is of the utmost importance to the Canadian economy. The Minister of Transport is confident that the work that will result from Justice Estey's review will help us achieve the most cost effective, customer friendly grain handling and transportation system possible. Canadian producers deserve no less and they will get no less from this review.

I appreciate that the hon. member brought forward his particular motion. At the time he brought it forward, yes, he had concerns and believed that we as an all-party committee could sit down and discuss these issues. However, we now have a review process that is independent of the political process.

This is the hon. member's first term here so I can understand where he might be coming from, that we could do a heck of a job in committee, bring two committees together and discuss the issue at committee stage. However, the member will discover as he lives on through politics and attends many of these committee meetings over the next short term of his political career, that the walls start to go up, the divisions start to happen and sometimes not everyone can be heard because of limitations of time, limitations to what the committee can do and limitations on how much money the committee can use to travel.

As a result, by putting it into independent hands and out of the political process, we are confident that Justice Estey will be able to take into consideration all the views from all the stakeholders and all the individuals through the web site in order to come up with a solution that is satisfactory to everyone in this system.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I am very happy to rise in debate on this private member's motion. Indeed I wish it were votable as well.

I would like to assure the hon. member who just spoke that I am not here to criticize the appointment of Mr. Justice Willard Estey. The point I want to make is that this has come far too late.

We have had a disease hit western Canada which obviously this government is not aware of. It is a disease called terminalization. This terminalization has us in a situation that is changing the western grain transportation movement so quickly that the appointment of the hon. Mr. Justice Estey may be redundant.

In the motion by the hon. member for Souris—Brandon there is one word that is key in the debate, that in the opinion of this House the government should immediately conduct a review with the participation of all stakeholders.

Up to this time, I want to assure this House, that the most important stakeholders, the most numerous stakeholders, the stakeholders whose livelihoods depend on it have not been consulted by the railways. They have not been consulted by this government and they have not been consulted by the grain companies.

The farmers in western Canada today feel they have been betrayed wholesale. In May, during the campaign, we had the three members of this government move a public inquiry as to what was happening.

At that time I said that the inquiry would never take place. It did not. It moved on until July. A joint statement by three members, as the member alluded to, said that things were going to go well.

I want people in this House to think for one moment. I have a constituency right now where there is an oil boom. Still the majority of people are dependent on agriculture for a living.

In light of what my colleague from Souris—Brandon had to say, if something is not done very drastically within the next two years, and I will be coming to this a little later, I will have farmers attempting to get the grain to market not 100 kilometres but 100 miles.

Those people are out of business. Mr. Justice Estey will find that it has gone too far, too fast and we have people who can no longer live in the land. I have examined several of my constituents' grain bills. Now almost half the total cost of grain is in transportation alone. It is a dreadful thing. Nowhere else in Canada does agriculture face this type of transportation cost.

I want to inform the minister and members of this House what has happened. I have a formula from a paper in western Canada: deregulation minus competition equals a monopoly. Let me take a moment to explain how that monopoly has taken place.

In Saskatchewan all the CN lines were traded to CP and CN went to northern Saskatchewan. The CP branch lines to northern Saskatchewan came to southern Saskatchewan and created a mammoth monopoly. That is what is existing at the present time.

I do not really think the transport minister, the agriculture minister and the sole government member in charge of the wheat board are even aware this monopoly has been created on the prairies. It is a zero plus for any western farmer today. That is what has happened.

I want to talk a little about the situation that the chief justice finds himself in.

I know the railways are not happy with me but the producers are, and they are the ones who count. For the last five years they have been meeting behind closed doors and they themselves are establishing a monopoly. We have CN to the north, no competition, and CP to the south, no competition. The grain companies have decided where they are going to put the various terminals. Even the producer will not have an option as to who buys the grain.

Talk about living under a regime. They do not have an option to where they haul their grain and they do not have an option under the Canadian Wheat Board as to how the grain is to be sold. They have developed a very serious thing in the prairies.

I would like to provide information which I think is very important. The Reform Party proposes that a moratorium be legislated on the abandonment branch lines west of the city of Winnipeg. What is the hurry? The branch lines are there. They are in top shape. The elevator houses are there. Let us slow down for a moment until we get some sense of the disease which I have referred to as terminalization.

Under section 43 of the Canada Transportation Act, they should be protected from dismantlement for not less than three years to allow time to investigate and develop the short line proposals. We have moved too far, too fast and if we continue to move at the current rate we can forget about any short line proposals. It is reaching the point where it is case closed. We will have to live with the results of not the shareholders but the railways and the grain companies. The producer is going to suffer the consequence of the government's sitting by and allowing this monopoly to develop.

Both CN and CP are issuing notices of discontinuance of rail lines on a piecemeal basis. If this happens I will have no railways in the western half of my constituency operational by the year 2000. Not one. Everything is going to be wiped out. In doing so, most of the subdivisions are available for sale and would not be viable for stand alone short lines because of the railway abandonments. There is no place for them to haul.

There is a cartoon in the paper showing a main line going but all the branch lines coming into the main line being cut. Short lines are out. The monopoly of the railways and the monopoly of the grain companies is already taken place. Most of the branch lines are at risk in Saskatchewan.

The hon. member from Souris Brandon alluded to this, but I want to say that no place is it more evident than in Saskatchewan that the public road system is in absolute shambles. There is tactic alliance between the railways and the grain companies to eliminate the branch lines as quickly as possible and concentrate grain facilities in high capacity main line terminals. That in itself would not be bad if the farmers, the real stakeholders, had a voice in this.

The absence of railway competition in western Canada negates the argument that controlling the abandonment process will interfere with the free market. What a joke. There is no free market. Surely the people of Canada, particularly of eastern Canada, recognize that for the farmers in western Canada there is no free market.

Large scale farming in western Canada would not have developed without the historical past, right or wrong, of money being injected into the railways.

With the time I have left I want to point out something this government should be aware of. The amount of energy that will be used to get the grain to a terminal has already been measured as between three to eight times the amount of emissions going through the air as it would by rail traffic. I believe every word of all those reports. It has to be more polluting to haul grain to terminals via roads that do not exist.

At least half the villages in my constituency have totally disappeared in the last 30 years. In some places there is not even the old store or an elevator or even a post office or even postal boxes to indicate where the towns had been. The remaining small towns have stabilized and are providing essential services in the west. But many of these communities will disappear as we continue the wholesale abandonment and betrayal of the western Canadian farmer.

[Dick Proctor, NDP, Palliser, SK]

Mr. Speaker, I am pleased to rise today on behalf of the NDP caucus to speak to the motion concerning this crisis put forward by the member for Brandon—Souris. There is a crisis in western grain transportation. We must try to find workable solutions.

I heard the member who put forward the motion lament that it was non-votable, but it certainly has been actionable. The government has seen fit to take some action. As previous speakers have noted, the government has appointed retired Justice Estey to look into the grain transportation crisis. We welcome Mr. Estey's appointment in this effort. He is a distinguished Canadian citizen and was a distinguished jurist at the supreme court level. A native of Saskatchewan, he knows in his bones just how important grain transportation is to our vast and land locked province.

In a recent interview in the Western Producer , Justice Estey said: “You know I'm a westerner from 100 years back and I don't remember four provinces ever agreeing on what day it is, but they did today”. The member for Souris—Moose Mountain noted that the four provinces are in agreement on the need for this urgent transportation review.

The federal government in 1975 appointed a royal commission to investigate grain and rail in western Canada. The commission was led by a colleague of Mr. Estey, the late hon. Justice Emmett Hall. At that time Justice Hall was being encouraged by the railways to move toward deregulation. He was wise enough not to accept their recommendations. He insisted there had to be a degree of regulation in the grain transportation system.

We have an historic problem which has been with us since the first stages of agricultural settlement in western Canada. Farmers grow grain and they have to move it to market. To do that effectively and efficiently in the land locked west they must rely on the railroads, as previous speakers have noted.

The railroads are effectively a monopoly or at least a duopoly made up of CN and CP when it comes to moving grain hundreds and thousands of kilometres from the farm gate to the port. From Sir John A. Macdonald's day until today, the railways have always had farmers and rural communities at their mercy. Much of western Canadian history revolves around attempts by farmers to force governments to create institutions and/or regulations to protect them from this monopolistic environment.

Mr. Hall did not buy the railway's cry for deregulation two decades ago. He knew the only protection for farmers in this monopolistic situation was the continuation of some form of regulation. But the governments of Pierre Elliot Trudeau and Brian Mulroney and the current government of today did buy those arguments from the railroads. First the Crow rate was abandoned and replaced by the Crow benefit. Then the Crow benefit was abandoned in the last Parliament and railways have now been given the green light to abandon rail lines at will.

We are not talking about hypothetical situations. I refer to the line that includes Eston and Elrose. The previous speaker moved around Saskatchewan when he ran for various legislatures. He will know about the Elrose area, Dinsmore, Beechy and Estonia.

This is an area where the farmers had to get together to move the grain in December because CN had indicated that it had no intention of coming in. I would like to quote from the minister of highways who is responsible for transportation in Saskatchewan. The hon. Judy Bradley said:

CN's refusal to negotiate in good faith with the West Central Road and Rail Committee is simply unacceptable. Communities will lose their railway system, not because rail service is not economically viable in the region, but because it does not support the bottom line of CN and the grain companies. This is not an answer Saskatchewan will accept.

While I am on this point about West Central, I congratulate my colleague from Saskatoon—Rosetown—Biggar who notes that the West Central R and R has put together an excellent package, one that will ensure the future of the rail line and one which will work for farmers. There is no sound reason for CN to reject it.

The prairie provinces have suffered dramatically as a result of changes to federal regulations governing rail transportation. It is not enough that they are abandoning rail lines but they are dismantling the tracks at the same time. It is a real scorched earth policy.

I listened carefully to the exchange last week between the member for Cypress Hills—Grasslands and the Minister of Transport. The member was urging the government to place a moratorium on rail line abandonment until the Estey report was concluded. The minister gave a lot of platitudes and indicated he would look into it but he was certain that the railway companies were not abusing the situation.

There is absolutely no reason at this point that the government cannot simply issue an edict that says there will not be a centimetre of rail track that is lifted during this report by Estey. That is the real problem. If we abandon the track, we can always put rail cars on at a later date, but if we tear up the track, the cost is prohibitive and it means the line is gone forever.

We see examples of that in parts of Saskatchewan and in other provinces. The railway companies are tearing up a significant portion of track to make sure that short line railways will not be viable for Omnitrax or some of the other competitors that are thinking of coming in to fill the void created by CN and CP to move grain to Hudson Bay and elsewhere to the main lines. That is a very significant concern. It is something the government could and should move on immediately.

In addition, I mentioned the abandonment of the Crow rate and the Crow benefit. We have seen in the last few years that the railways have doubled and tripled freight rates on grain. At the same time they have ripped up tracks and shifted the costs of long hauls onto the backs of farmers.

This is not the only cost to individual farmers. The roads in western Canada and the grid roads in Saskatchewan—and we have some of the largest road networks in the country on a per capita basis—were not built for these huge trucks. The roads are taking a terrible pounding as the member for Souris—Moose Mountain noted a few minutes ago. They are taking a pounding because the grain has to be carried further and further to the giant inland terminals.

Mr. Estey, we believe, is off to a good start having met quickly with governments of the four western provinces and with various stakeholders. I agree with Mr. Estey when he says that he can and must proceed with his review even while the wheat board complaint against the railway continues concurrently. On this point I do not accept the member for Brandon—Souris' point that the wheat board's complaint against the railway should be dropped. Clearly the two situations can go independently of one another.

In conclusion, we are demanding again that the federal government stop all rail line dismantling until Mr. Justice Estey's review is complete. Whatever results from the review of the grain transportation system, it must ensure that a fair share of the benefits of an improved system find their way back to the farmers and thus to their communities.

Also, we must ask ourselves what government policies and regulations may be needed in a situation where competitive services and rates are not historic in a continuing monopoly by the railroads.

Finally, there are other various ideas which are of great interest to us, including joint running rights and the organization of short line railroads. Railways have thwarted efforts by Saskatchewan producers often in frustration for the establishment of short line railways.

[Steve Mahoney, Liberal, Mississauga West, ON]

Mr. Speaker, I am pleased to address this issue. Some of my colleagues have asked what a member from the great metropolis of Mississauga might be concerned about with regard to this issue. Obviously transportation, whether it be grain transportation or the rail system, is of significance to all Canadians right across the country.

When I was in the provincial legislature in Ontario I sponsored a private member's bill to try to assist short line rail lines from disappearing and to assist the takeover and privatization by providing an exemption to short line rail operators from successor rights. This very serious problem saw private business trying to take over certain short line rail lines having to assume as many as 17 different union contracts that simply made it uneconomic and inoperable. This is a concern right across the country with regard to our railway system.

Obviously, grain production and the marketing of such is a key sector of the prairie economy. It is also important in many other communities across Canada.

Since the majority of grains and processed grain products are exported off the prairies, the grain transportation and handling system must be as efficient and reliable as possible in order to minimize costs to farmers and respond to their customers' needs. The system is very complex and involves a number of different stakeholders.

I would like to give a few statistics relating to the grain transportation and handling sector to help put things in perspective.

There are currently about 120,000 Canadian Wheat Board permit holders in western Canada. The average crop production is about 45 million tonnes, nearly 60% of which is exported. Farmers truck their grain an average of 15 miles. There are about 1,100 primary elevators located at about 900 shipping points in the country. There are over 13,000 miles of rail lines in western Canada alone, of which some 5,000 miles are grain dependent branch lines.

Prairie grain is exported through terminal elevators—and to prove my point about it being a national issue—located at Vancouver, Prince Rupert, Thunder Bay and Churchill. As well there are transfer elevators at a number of locations on the St. Lawrence River.

Grain transportation reform is one of several key transportation initiatives that have been implemented in recent years. There are four main reasons for reforming grain transportation policies.

There was a requirement to comply with the new world trade rules which impose significant dollar and volume restrictions on trade-distorting subsidies such as payments under the Western Grain Transportation Act.

Reform was necessary to create a less rigid and more responsive operating environment and encourage a faster, lower cost and more efficient system for the benefit of farmers, shippers and railways. Hardly an abandonment, I might add, of the prairie farmers.

There was also a need to eliminate the freight rate discrimination against value added production and processing, diversification and economic growth.

Finally, the government wanted to help reduce government spending in the battle against the deficit while re-focusing remaining expenditures on key growth oriented priorities.

There were five components to western grain transportation reform.

First, the WGTA subsidy payments to the railways were terminated effective August 1, 1995. Second, the overall legislative and regulatory framework was revised to encourage a more efficient system. Third, a one time ex gratia payment of $1.6 billion was made to prairie farmland owners in recognition of the impact on land values that may have resulted from the elimination of the subsidy. Fourth, a $300 million adjustment fund was established to provide assistance for improved agricultural infrastructure for farmers affected by seaway pooling and for the alfalfa dehydration industry. Fifth, new and additional export credit guarantees of up to $1 billion were provided for sales of grain and other agri-food exports to non-government buyers.

The role of the government in car allocation as well has been terminated and turned over to an industry body called the Car Allocation Policy Group. The government encouraged industry to include a producer representative on this group thereby introducing a private sector aspect to this policy.

Although the WGTA was repealed, the government continued to regulate maximum freight rates for former WGTA traffic.

In addition to western grain transportation reform, the government also commercialized CN and encouraged rail renewal through a new Canada Transportation Act. The CTA reduced or eliminated unnecessary regulations which impeded the railways' ability to compete. It created a more commercial environment for railways and shippers, including short line haulers.

The government implemented these extensive changes because it believed they were in the best interests of farmers, shippers and the railways.

One of the commitments when the WGTA reform was implemented was to conduct a statutory review in 1999 which will indeed assess the impact of the CTA provisions on the efficiency of the grain transportation and handling system and the sharing of efficiency gains.

The review will also examine whether or not the maximum rate provisions should be repealed.

There were widespread calls for the government to conduct an early grain review stemming in large part from the problems in moving grain which were experienced at this time last year. Some stakeholders feel that the difficulties in moving grain were symptoms of systemic problems which were not addressed by previous efforts at reform.

This government agreed that it was necessary to undertake an early grain review. The Minister of Transport in December, as we have heard, appointed the honourable Mr. Justice Willard Estey to lead this review.

Justice Estey has commenced his consultations with producer groups, grain companies, railways, the provinces and other interested and affected parties. He has received a strong and positive response and is looking forward to the ongoing co-operation of producer, industry and government representatives in identifying problems and working collectively toward constructive solutions.

In closing, I believe that the motion introduced by the member is indeed being responded to now. This government has done everything it can to support western grain producers and the transportation system. We are indeed implementing effective reforms.

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, I am really concerned about the reluctance of this government to declare a moratorium on dismantlements pending the outcome of Mr. Estey's study. I wonder if there may not be a message for us here that the study itself is being set up as a bit of a smokescreen to distract us all from what is going on while the dismantlements are taking place.

I do not believe that we should forget the famous blue ribbon panel which was set up by the then minister of agriculture to study grain marketing and the wheat board. When the results of that hand picked panel's work came back to the minister he promptly said “I don't agree with this stuff. Let us forget it. We will go our own way”.

What assurance do we have from this government that that is not the game plan for the work of the Estey commission as well?

[The Speaker]

The time provided for the consideration of Private Members' Business has now expired and the order is dropped from the Order Paper.

Privilege

[The Speaker]

Before I go to orders of the day, I see the member for Prince George—Peace River is with us and I would like to give my ruling.

I am now prepared to address the matter raised on Tuesday February 3, 1998 by the hon. member for Prince George—Peace River concerning anticipation of the decision of the House on the report stage motions on Bill C-4, an act to amend the Canadian Wheat Board Act.

I want to thank all hon. members who spoke to this issue. I also thank the hon. Minister of Natural Resources and the Minister responsible for the Canadian Wheat Board for returning to the House on Thursday, February 5 and presenting his view of the events.

The hon. member for Prince George—Peace River claimed that the minister and his officials had shown contempt for the House by holding a meeting to discuss the implementation of Bill C-4, thus anticipating a decision in the House as well as showing contempt for earlier rulings of the Chair on cases of anticipation.

For his part, the Minister denied anticipating the disposition of Bill C-4 and claimed that when discussing the bill, he had tried to make it clear that the proposed legislation was still before the House and that no final decision had been taken.

Having heard both sides, I find myself confronted with the disagreement over facts. On the basis of the arguments presented and in light of the minister's response, I must therefore rule that while there may exist a matter for debate, it does not constitute a prima facie breach of privilege.

The House resumed from November 20, 1997, consideration of Bill C-4, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts, as reported (with amendment) from the committee; and of Motions Nos. 4 to 19.

Canadian Wheat Board Act

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, I rise on a point of order. When the debate on the Group No. 4 amendments to Bill C-4 adjourned on November 20 of last year there was an agreement with all parties that an order of the House deemed all amendments would be found in order, to have been read by the Chair, to have been duly moved and seconded and to further provide that when there is no further debate the amendments will be deemed to have been put and a recorded division requested. At that time there was unanimous consent from the House given and that was the process we were operating under in November.

I just wanted to be sure that was the situation as we move forward and complete debate on the amendments in Group Nos. 4, 5, 6 and 7.

[The Deputy Speaker]

The hon. member is quite correct. The House order that was adopted on that occasion applied to this bill for the report stage and will apply to the proceedings that continue on the report stage today. That is the Chair's understanding and the Chair intends to operate on that basis.

Pursuant to an agreement made on Wednesday, November 19, 1997, all questions on motions in Group No. 4 are deemed put if no one else is rising to debate on Group No. 4.

[Jake Hoeppner, Reform, Portage—Lisgar, MB]

Mr. Speaker, before I speak to this bill I would like to rise on a point of information, privilege or whatever it is. Maybe you can guide me along on what I should be doing.

As members know, I have had the wheat board send me some nice friendly letters. I have always appreciated them. I am in a situation where the issue is that we have a whole bunch of area farmers in my constituency losing a whole pile of money on issues of freight and elevation and stuff being cleaned off their cheques.

On the class action suit these farmers said that Parliament should deal with it. Parliament has not dealt with it but now we find out that in a court case on November 11, 12 and 13 in Manitoba, the wheat board, under oath, admitted it should not have deducted freight, elevation or cleaning charges on these farmers.

This amounts to about $358,000 that has been deducted. As members know, this bill transfers the liability from the government to the pooling system. What do I do to get this issue resolved properly?

The courts have now found out that these farmers have had these fees deducted illegally but still nobody will deal with it. How do I handle that?

Also, during that court case, this farmer is charged with forfeitures for transporting grain illegally without an export permit to the U.S.

On February 2, 1996 one of the farmers in Saskatchewan filed an action against the minister of revenue and customs on the same issue. The government failed to file a defence.

It says very clearly in this document it is required to file in the registry of the Federal Court of Canada in the city of Ottawa at the local office or court its defence against this. It was never filed. It admitted it had no case.

The government is still prosecuting farmers under this same rule. How can we pass a bill in the House when the liability is transferred from the government to the farmer pool itself?

I do not know how to debate this bill, whether I should first of all make a citizen's arrest of the Speaker or the government or whether I should lay criminal charges. How do we deal with a bill that is actually in contempt of court? The government has not filed a defence but is still prosecuting farmers.

I would like Mr. Speaker's learned wisdom on how to deal with this.

[The Deputy Speaker]

The Chair is not to be involved in a legal dispute. I am sure the hon. member and his constituents are getting sound legal advice from a very capable source and will maintain obtaining that legal advice.

I assure him that Parliament will not be acting in contempt of court in dealing with legislation. If he would like to debate the merits of the bill, I am sure I would happy to give him the floor for that purpose.

[Jake Hoeppner, Reform, Portage—Lisgar, MB]

Mr. Speaker, I appreciate your advice. I am just wondering whether this is recorded and will be taken into account when the bill is dealt with later.

It does deal with the liability of the bill and transfers it from government to farmer pools. You are really being liable yourself with illegal procedures whether civil or criminal.

That is what I wanted to bring forward in this House to make sure you were aware of it. I knew you could give me some learned experience on that. With that I will turn to my debate on Bill C-4 when this is recorded and you will take note of it.

Business Of The House

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I rise on a point of order. I wish to seek unanimous consent for the two following motions. The first one is as follows:

That, until otherwise ordered, on allotted days pursuant to Standing Order 81, members shall speak in the manner provided for in the special order respecting allotted days made on September 26, 1997.

This is a motion required for the sequence of speakers on the opposition day tomorrow.

(Motion agreed to)

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, there has been a consultation and I wish to propose the next motion to the House for unanimous consent to be passed without debate:

That on Monday, February 9, 1998 at the ordinary time of adjournment, proceedings pursuant to Standing Order 38 shall not be taken up, but at that time a motion to adjourn shall be deemed to have been proposed and the said motion shall be debated under the following conditions:

(1) Members wishing to speak shall address the question of the invitation to Canada by the United States of America to participate in possible military action in the Middle East;

(2) No member shall speak for more than 20 minutes with no period being allotted for questions and comments, and two members may share one 20 minute period;

(3) No dilatory motions or quorum calls shall be received;

(4) When no member rises to speak, the motion shall be deemed to have been adopted.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, perhaps a bit of further clarification. The hon. member said consultation had been undertaken. Are we to believe that there is all party agreement on this process and the way in which the debate will be conducted this evening?

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, it is my belief that we have that, and that is why I am seeking it, but members can react individually. A meeting of House leaders was held approximately an hour ago.

[The Deputy Speaker]

Does the hon. government House leader have the unanimous consent of the House to put the motion to the House at this time?

[An hon. member]

No.

[The Deputy Speaker]

There is no agreement. Resuming debate, the hon. member for Portage—Lisgar.

The House resumed consideration of Bill C-4, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts, as reported (with amendment) from the committee; and of Motions Nos. 4 to 19.

Canadian Wheat Board Act

[Jake Hoeppner, Reform, Portage—Lisgar, MB]

Mr. Speaker, I rise to speak to Group No. 4 amendments to Bill C-4 dealing with the election of directors, the number of directors and the duty of the directors.

Why do farmers not trust the partially elected board? I think that is the number one question in western Canada. I would say it is mainly due to one simple reason, that the minister and this government have not listened to western Canadian farmers. They have prepared a bill they feel should be put on the backs of western farmers so they can control the destiny of western Canadians farmers for another half century probably, and that is something farmers violently object to.

The minister does not listen. Why? That is one question I have not been able to answer. We know this minister spent at least a year and a half establishing the western grain marketing panel which was supposed to do a job of listening and then give the minister recommendations on how to deal with this bill.

As I have watched this thing unfold in the House and in the public, none of those recommendations was really ever accepted or implemented into Bill C-4, and that has what has caused farmers to react bitterly to this bill.

We wonder why the minister is not listening. It does not make sense. I was listening to his presentation the other day to counteract the point of privilege the member for Prince George—Peace River put forward.

The straightforward meeting with farm leaders which I held on January 21, which is Reform's sole source of complaint in the alleged question of privilege, was part of that open, inclusive and transparent effort to gain the benefit of producer input.

According to reports on that meeting, the minister told these producer groups what was in the bill and what they would have to accept. That is more or less why those people from the producer groups walked out on that meeting. I do not think too many people stayed at that meeting to listen to the minister or to have their concerns brought forward.

To me that is not listening, it is dictating. It would be wise for this government to accept the premise that we are here to represent our constituents and not to represent Ottawa to the grassroots people in our home constituencies.

The minister went on to say: “In his intervention last Tuesday, the member for Yorkton—Melville admitted that he had done just that the very next day and after my meeting. The member for Portage—Lisgar has had meetings about the details of Bill C-4 and many other Reformers have done the same. The extraparliamentary meetings to discuss Bill C-4 while that bill is pending before the House are not a breach of privilege, they are not in contempt and neither am I”.

The Speaker has just ruled that is the case, but I want to talk about the meetings I attended in Saskatchewan and Alberta. There were 600 people at the meeting in Weyburn. The minister was invited to participate and to bring forward his concerns or his ideas but he did not show up.

When the question was asked of how many in the audience wanted a single desk selling system, not one hand went up. Eighty to ninety per cent of the farmers said that they wanted a dual marketing system or a voluntary wheat board. Nothing in this bill promotes a voluntary wheat board. That is why this minister has a tremendous number of problems with listening to farmers and getting this bill through the House.

After the meeting in Yorkton—Melville a producer wrote to the minister to explain that it was one of the best and most informative farm meetings he had ever seen held in that area. He said that he supported that type of meeting.

Because the minister did not attend and did not want to listen, they held a vote to see how many people at that meeting thought the minister should resign for not listening to the producers. Over 80% lifted their hands to say that the minister should resign for not representing the interests of western farmers. They used to call this area the red square. This gives us an idea of how much attention he is paying to this issue.

I do not know why the minister does not want to listen, why he would rather prosecute farmers.

In 1994 a group of farmers made a presentation to the minister on the frozen wheat issue. They wanted him to look into why Sask Pool or the wheat board dumped grain into Montana at half price. He did not respond after the meeting. He never did anything about it. This is what the minister did.

The minister threw a huge forfeiture against a farmer who during a protest here two years ago had loaded 50 pounds of wheat in a pick-up truck, took it across the border and donated it to a 4-H club in Montana. The farmer did not know what was going on and he used the pick-up truck to transport his kids to hockey games in Montana. He also has some interest in some land there. They kept jacking up the forfeitures. He has $132,000 worth of forfeitures against this half ton pick-up truck.

This is how the minister is treating these western farmers. It is causing a lot of animosity toward the minister and this government. It is a sign that democracy in Ottawa just is not working. When I see farmers fined for taking 50 pounds of barley across the line in protest, then I see people smuggling marijuana and cocaine on the streets without fines or imprisonment, something is wrong.

All that these farmers have been doing is trying to get a better price to bring more bucks into the economy and to be able to have a better standard of living on the farm than before, and they are getting fines for it. That is what this bill is about. It is a bill which is supposed to change the wheat board to give farmers more democracy and more choices. It is exactly the opposite.

One of the former wheat board commissioners was interviewed and he said that it is becoming more secretive. On the old wheat board the commissioners at least had the authority to refuse certain recommendations made by the minister or parliament. Today he will have the power to fire and hire on the will of his desires. That is democratic? That is the way this whole government is going.

It is very important that the government not just listen to western farmers. If this is the type of a marketing system that we can be controlled by, where the government states “You have to turn your grain over, you have to take the price that we dictate to you”, why will it not do it to our RRSPs? It is the same thing.

Any marketing system is at risk if this type of a bill is allowed to pass this House. It is of utmost importance that this bill gets defeated, but with the Liberal backbenchers being controlled by the front benches or the cabinet, I do not see much hope of that happening. It means one thing, that in the next federal election western farmers have to make sure that they do not have a Liberal government or else they will be indebted to this type of bill for the next half century.

That is why there is such a big protest to this bill in western Canada. It is not just a bill about marketing grain, but it is a bill about freedom and property rights. It surprises me when I look at some of the western provinces. They are prepared to go to court on gun legislation to protect the right whether you should register your gun or not, but they have not had the guts to stand up and say to the federal government “This is property, this is grain that the farmers grew. This is something they have the right to enjoy. This is something they have the right to sell for the best price that they can get”.

Democracy works in this fashion. Democracy works from the bottom up. Democracy works when the elected parliamentarians listen to the people. Dictatorship is the reverse. Dictatorship works when government dictates to the constituents what they have to do and how they will do it.

Mr. Speaker, I hope you have listened and I hope you have taken it to heart. I hope you can vote against your government and do what is right.

[The Deputy Speaker]

I am sure the hon. member would not want to urge the Speaker to indicate a preference one way or the other.