Mr. Speaker, my colleagues from western Canada were so exhausted by the advice they gave me that I told them not to worry, that I would carry the debate this morning and that they could come back this afternoon and have a repartee with the opposition. They have been remarkable. They have been up nights. The agricultural committee of the Liberal caucus and the northern and western caucus have been marvellous to work with. It has been one of the greatest experiences of my parliamentary life to have that give and take, that thrust and parry and to come forward with a consensus.
My colleagues are looking for changes in railway track access rules as a means to increase rail competition. As I say, it is a tough issue, especially in the rail sector where there are only two companies and obviously they dominate.
Justice Estey recommended enhancing running rights to allow any person to apply for the right to run on another railway's line. This change would effectively open up running rights to provincial short lines.
Mr. Kroeger suggested that further study was needed on all methods to increase competition, especially running rights. Other open access proposals came along late in the review process, including the idea of promoting a regional railway. We have listened to all these views, as we have listened to everything else, and have decided to refer this particular complex part of the equation of open access, including enhanced running rights and the regional railway concept, to the upcoming statutory review of the act which must begin no later than July 1.
We are now busy working on the terms of reference for this review. The terms of reference will state unequivocally that the issue of open access, joint running rights and regional railway concepts are to be examined on a priority basis with an interim report no later than six months after it starts.
I know that some people have said that we should deal with this right now. Let us not plunge into a system-wide experiment that may affect the reliability of our entire system just for the sake of saying that our industry is competitive. If we want to do what is right for our national transportation system and for the grain farmers, we need to examine this particular component closely in a forum that allows all stakeholders to express their views. Some stakeholders have already indicated they are looking forward to providing representation on ways to enhance competition in the railway sector.
While it is extremely important for farmers to have a logistic system that moves their grain quickly and inexpensively, it is also important that railways are able to make appropriate choices to cut costs and increase investment and productivity. Equally important is the ability of smaller operations to increase their chances at continuing business and to provide competition in the rail sector.
One of our objectives when we introduced the Canada Transportation Act in 1996 was to establish a regime that would see short line railways come forward. This has been really quite successful.
Eighty per cent of all the lines filed for abandonment under the 1996 CTA have been short line, including in western Canada. That of course is not satisfactory for those communities on those railways that have been abandoned and not taken up by short lines. However, I do not think anyone can dispute that there was a degree of overbuilding by the railways, especially in some parts of western Canada. There could be no economic justification, in our changing times, with access to motor vehicle transport and better roads, for some abandonments to take place. However, 80% of those that filed for abandonment by CN and CP going to short line rail is a pretty good accomplishment.
This bill addresses a number of problems that were identified during the grain consultation process. The amendments to the act will help to further encourage the establishment of short line railways in all parts of Canada. It will also help out communities that lose a grain dependent line by having the railways provide transitional compensation.
As an aside, I must say that I am very sympathetic to the members from western Canada who have drawn attention to this aspect of the 1996 act. This will be a focus in the first six months of the review because there are ramifications in other parts of the country, especially in large urban areas like greater Toronto, greater Vancouver and big cities like Montreal where the railways, by virtue of changing patterns and better highway system, are moving out of the core. They wish to abandon lines in the centre of these cities.
In my view, it is folly to rip up track if there is a potential use whether by a short line or a freight operator, as we have seen under the act, in parts of western Canada, Ontario, Quebec and elsewhere; or if those rights of way can be used for commuter and urban transit. A municipality in Halifax right now is considering the purchase of a line that CN wants to abandon. This would alleviate congestion in Halifax. The same thing is happening Toronto. It is the same in Vancouver with the Arbutus line which is a potential corridor from Vancouver airport to the downtown core.
This is something we have to be very sensitive to. I am certainly very cognizant of getting a better handle on the abandonment process.
The government does recognize that when we do abandon, especially trackage in western Canada, it puts increased pressure on rural roads. As a result, the Government of Canada will be prepared to make a contribution of $175 million over five years to help address this problem.
Not only do these provisions help us move toward a worldclass system but they will provide a better protection for communities. Too many communities in western Canada have suffered because their rail lines have gone. The way of life represented by these towns is an important part of the fabric of this country and must be preserved.
That is why we are giving communities a new chance to take a direct involvement in the operation of their local branch lines. That is why we want to improve grain roads to assist these communities and to keep them thriving.
It is no good if this country ends up having all its population living in Halifax, Montreal, Ottawa, Toronto, Winnipeg, Calgary, Vancouver and other large cities. Rural Canada is an indelible part of who we are as a people and it must be preserved. The Liberal Party will preserve it and this bill does preserve it.
In this type of environment, it is important that the benefits of reforms are seen by all system participants. That is why we are introducing a monitoring mechanism. Continuous monitoring will be designed and implemented by an independent, private sector third party that will measure and assess the impact of reforms on farmers, on the wheat board, on the efficiency of the system, including the ports, and on the overall performance of the grain handling and transportation system.
This mechanism of monitoring will help the government determine if changes are making the appropriate impact. As I have said, the grain industry is too important to Canada's economy and to our way of life for us not to monitor these changes closely. The fact that it is being done at arm's length will put paid to any notion that somehow this is an inside evaluation done by the government for its own nefarious reasons. We would never do that. The fact that this will be independent, arm's length monitoring underscores our sincerity. I know the hon. members on the other side understand that the government is sincere about continuous monitoring.
Clearly, the wheat board, the grain companies and the railways will have to work together to develop new industry procedures that reflect the changes. If they choose to compete and if they choose to manage the system effectively, then the system will reach its full potential and farmers will benefit.
The government has introduced this bill which is the main part of a reform package that will modernize the grain handling and transportation system. If we want a worldclass grain logistics system, then we need to move forward. We need to make the system more accountable, more efficient and more cost-effective. The package within this bill is part of a move to bring us closer to that goal of efficiency and competitiveness. Canadian farmers deserve this type of system. They need it to maximize their advantages in the global marketplace.
I am aware that we have a narrow window of opportunity in terms of the parliamentary time to get this package in place. Again, I want to thank the members on the other side for their support and co-operation in getting this bill through. I truly believe that by embarking on this step we will see competition improve in the years to come.
As a member from outside of western Canada, if I can make the observation, I think there is an element of fear based on history and past practices of stakeholders that inhibits the embracing of total reform. That is understandable. When people have been at the mercy of the elements and at the mercy of big institutions, like the railway companies and the grain companies, they know that the farming they are engaged in is always fraught with difficulty.
I think it was U.S. President Roosevelt, going back to 1932-33, who said that the greatest fear is fear itself on the part of the people. I understand that fear. I understand those people who say that the wheat board is their only guarantor of fairness and equity. It is the only one that will be there to regulate the system.
The wheat board has an important role and will continue to have an important role in the marketing of grain, but what is at issue in this debate is its role in transportation, logistics and to what degree it should remove itself in the name of greater competitiveness. It is not inconceivable that once we start along this path those people who had fear in the past will see that their fears are now assuaged in a way that will permit them to introduce even greater flexibility and competitiveness down the road. I really believe that.
I think there is a dynamism in western Canada and in the farming community that is really quite admirable, especially among younger farmers going into other crops, into lentils, peas, barley, soya and all these various non-grain crops. There is now more food processing being done in western Canada.
Back in the old days, when I was first a member, it was always the point that we had to change the Crow and make changes to the transportation regulatory system so that competitive forces could be unleashed and secondary manufacturing processing could be done in western Canada. That is now happening. Diversification of the farming community and greater processing is being done, and we welcome that. Meat processing is not done in the stockyards in Toronto on St. Clair Avenue anymore. It is done in places like Calgary and other cities in western Canada.
Not only is that right from the point of view of economics, but it is right from the point of view of social equity as a nation. For too long too much of the production was done in the large centres in the east. Now we are seeing a greater diversification and a greater equality in the economic activity across the country.
In that vein, this act, if passed, and I hope it will be passed expeditiously, will be another landmark reform that enables producers, other interested parties and stakeholders in western Canada to gain better economic solidarity, better prospects, become more prosperous and ensure Canada's reputation as one of the greatest farming nations in the world and certainly one of the greatest grain producing farmers in the world.