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.