Mr. Speaker, let the record show that the previous speaker from Brandon—Souris did not answer the question. It does not come as a great surprise to me.
I will be splitting my time with the distinguished member for Waterloo—Wellington. I am very pleased to take part in this important debate. I wish to bring another perspective to the discussion.
Canadian farmers produce some of the safest, highest quality and most affordable food in the world, but having the best product at the best price does not do a lot of good unless there is an efficient, cost effective way to get product to the market.
This is what the government's grain handling and transportation reform is all about. It is the issue I will speak to today. This is an important issue for the bottom lines of western farmers. It is also an important issue for the thousands of Canadians whose livelihoods depend on a robust farm economy.
Before I talk about the ongoing consultations and the decisions that lie ahead I would like to give some sense of the history of this very complex issue. The difficulty of transporting grain across vast expanses of land to deliver it to port for export is an issue that is multifaceted and that has prompted endless discussion. The severe backlog of grain shipments and ships waiting in the port of Vancouver during the winter of 1996-97, particularly in February of that year, hurt producers in the pocketbook. As a result the government's resolve to tackle the problem hardened.
During that winter, extreme weather conditions and railway infrastructure problems caused disruptions that affected every part of the grain transportation system. The then agriculture minister convened a meeting in Calgary to which he invited all participants in the system: railways, grain companies, the Canadian Wheat Board, the Canadian Grain Commission and the car allocation policy group. They turned their efforts to finding solutions.
All agreed that it was time to concentrate on building a grain transportation system in which there would be more accountability and reliability, where there would be rewards for those who overperform, penalties for those who underperform and a system with incentives built into it to make sure grain gets to where it is supposed to be and on time.
In July 1997 the Minister of Transport, the Minister of Agriculture and Agri-Food and the Minister responsible for the Canadian Wheat Board again convened a meeting of all stakeholders to develop strategies to ensure grain moves efficiently throughout the crop year and to further discuss industry calls for an early review of the grain handling and transportation system rather than wait for the 1999 statutory review under the Canada Transportation Act.
Several months later in December the Minister of Transport announced that Mr. Justice Willard Estey was to head a major review of the grain handling and transportation system.
His mandate was to come up with recommendations for, first, a responsive, efficient, customer oriented logistics system that would enhance the competitiveness of producers, shippers, carriers and ports; second, a system where all stakeholders including producers would share in the rewards of productivity improvements and would also share in the appropriate direct consequences for activities that detract from system performance; and, third, a system with well defined accountability for all elements of the grain logistics system to encourage high performance levels by each participant.
Justice Estey consulted with industry stakeholders in the early part of the year and provided a preliminary report at the end of April 1998. His final report delivered at the end of last year contained 15 recommendations. These recommendations constituted a blueprint for a less regulated, more accountable and competitive grain handling and transportation system
The government agrees with Justice Estey's vision that the western grain handling and transportation system should be made more efficient, more accountable and beneficial to farmers. We want it to move to a more contract based, commercially oriented environment with appropriate safeguards for all stakeholders.
Justice Estey set out key principles to be followed in solving grain transportation issues but there was still work to be done to put the operational details in place. To achieve this the Minister of Transport appointed Arthur Kroeger, a former deputy minister of transport, to involve western stakeholders in developing those operational details.
Over the course of this past summer Mr. Kroeger held extensive consultations among grain industry stakeholders on 12 of the 15 recommendations included in the Estey report. He headed a steering committee which set up three working groups that concentrated on rates, revenues, commercial relations, competition and safeguards. Mr. Kroeger was asked to provide recommendations on any issue that was not agreed upon by the stakeholders during the process.
When he delivered his report to the government last month he indicated in a letter to the Minister of Transport that there was still a dispute over the issue of eliminating regulated grain freight rates and replacing them with a cap on revenue for each railway. The point of a revenue cap is to provide a safeguard to ensure that producers are not paying too much to transport their grain and that as savings are achieved throughout the transportation system farmers get to benefit as much as anyone.
The main dispute was the starting point for a revenue cap, which Mr. Kroeger recommended should be set at 12% below the 1998 level. This would be a reduction of $3.73 per tonne or a total of $112 million below the 1998 level based on a total grain volume of 30 million tonnes. This means that shippers of grain would benefit to the tune of $112 million in the year 2000. I assure the House that many farmers are holding for greater savings than those.
In his report Mr. Justice Estey recognized the mutual dependence between the railways and grain producers, and I quote what he said:
—the efficiency and economic health of the rail system is of prime importance, ranking next in importance to the economic well-being of farmers. The railway and the farmers cannot do without each other. Mutual survival dictates that efficiencies and economies must be shared between the two.
I could not agree more. The prosperity of our producers depends on it. Mr. Kroeger also recommended that the federal government assess the results of these reductions at the end of a five year period. If at the end of that period the results were found to be unsatisfactory we would have other options open to us such as developing further measures to increase competition. In the meantime, however, the revenue cap would provide safeguards against excessive rate increases to grain producers during the trial period.
All the issues in the report and Mr. Kroeger's letter will be very carefully studied before we move to any consideration of new legislation.
We recognize the important role that grain handling and transport play in the costs and incomes of farmers and in the strength of the rural and agricultural economy of the west. I am confident, though, that through changes to the grain transportation system Canada's grain sector will become more competitive, which can only help western Canadian grain producers.