Madam Speaker, I listened to my colleague from the Bloc with great interest. I think he has chosen an unfortunate day to talk about the disparity between Quebec and the rest of Canada given the news about sponsorship of money and where moneys are going from the government. I am talking about the fact that on a province by province basis, some 71% of the money is going to la belle province. As the newspaper suggests, the money is going into Quebec by the truckload and into the rest of Canada by the teaspoon.
We are here today to speak about the grain transportation bill. I am pleased to take part in this debate on behalf of our caucus. Before I get into the thrust of my remarks, I want to acknowledge the fact that the Minister of Transport paid tribute to three former senior members of parliament who knew a lot about grain transportation, one of them being Les Benjamin, a 25 year member of parliament for the New Democratic Party. I am sure Mr. Benjamin is watching this debate at his home in Regina this morning.
Three weeks ago and a day, the Minister of Transport and his colleagues announced some changes to the grain handling and transportation system, a number of them at a news conference across the street. They included replacing the rate cap with a revenue cap and reducing railway revenues by 13.5% per tonne. They actually said that it was 18% but it is only 13.5%.
The Canadian Wheat Board control over transportation and logistics has been sharply curtailed. It must tender at least 25% immediately and 50% by the third year.
Madam Speaker, I apologize for not informing you at the beginning of my speech, but I will be sharing my time with my colleague, the member for Saskatoon—Rosetown—Biggar.
A number of other things were contained in that press release: $175 million for prairie roads and highways; changes to final offer arbitration when shippers and railways cannot agree; the CTA was being amended to facilitate branch line transfers to short lines; and monitoring and reporting, by as yet an unidentified private sector third party, to assess all of these impacts.
Bill C-34, as it was drafted and presented to us this week, does not deal with a number of issues. Money for prairie roads was alluded to by the Minister of Transport earlier in his address. We have been advised that a memorandum of understanding is being negotiated separately between the minister responsible for the wheat board and the wheat board itself and that this agreement will be in place when the legislation takes effect on August 1, if the government gets its way.
I should say, just as a quick aside, that we in this caucus are concerned about moving to at least 50% of transfer to the wheat board. This may be too much too fast.
I think everybody has exhibited some frustration over the timing involved. We have talked about Mr. Estey's report which came out in December 1998. We have talked about Mr. Kroeger's recommendations in September 1999. Absolutely nothing happened on this file between September and May 10. Even then, it took the government 22 days after the major announcement to actually bring forward legislation for parliamentarians to look at and consider. Despite that, its intention is to ram the bill through and have it ready for the new crop year. With great respect, it is contemptuous not only of producers but of parliamentarians as well.
Aside from the arbitrariness of the government's actions, we have some significant concerns with the bill as it is drafted. There is no productivity sharing formula. I will take a minute to explain what that means.
Before 1992 farmers shared in efficiencies with the railroads. In other words, when we had more fuel efficient locomotives and larger hopper cars, when the railroads laid off staff, when we built inland terminals and had unit trains, windfall profits accrued. Those prior to 1992 were shared with the producers. They have not been shared with them since 1992. The estimate, and nobody seriously disputes it, is it is about $700 million in windfall profits. There is no suggestion in this legislation that that productivity gain sharing, either in the past or in the future, is about to be shared with the producers. We have a major concern with that.
A second concern deals with the rate differentials between the branch and the main lines. As I understand the bill, the differential rate cannot exceed 3% between a single car on a branch line and a single car on a main line. The question that needs to be asked is how many single cars are likely to be loaded on a main line? The answer is not many. As a result of that, we are fearful that the costs on the branch lines will be uneconomical and will accelerate branch line abandonment. In our opinion, the rate differential should be no larger than the actual differences in the costs. As an aside, we also say that the short lines will unlikely be able to negotiate fair revenue sharing with the railways. This too needs to be addressed.
Lower freight rates should have been developed immediately after the Kroeger report came down in September. Grain transportation is an extremely complex subject, as the Minister of Transport readily acknowledged in his address. Yet this is being rushed through in the dying days of this session of the 36th Parliament. It is impossible for us to assess this legislation when we do not even know for example the details of the wheat board tendering process.
How can anyone say this is good or bad until we see what the government has in mind on railway competition? Since before Saskatchewan and Manitoba existed as provinces, we had the Crowsnest Pass freight rate agreement which came into effect in 1897. It came into effect because the Canadian Redpass region was a long way from tide water. Governments, at that time and subsequently, recognized that if we were going to take advantage of it we had to provide subsidies to offset the long distances and the high costs of transportation.
The government and the current minister responsible for the wheat board put the final nail in the Crow coffin in 1995 and paid out on what it thought was a one time basis. Of course last year it had to augment that because the input costs and the transportation costs are so significantly high for ravaged western Canadian farmers.
The bill does not involve the government any longer in helping the producer. It says it is up to the private sector, the railways and the grain companies, to do that. If I may be permitted an old adage, it is a little like putting Dracula in charge of the blood bank. It is unlikely to be a good outcome for producers.
The bill also fails to address what will happen if and when Canadian National and Canadian Pacific are acquired by U.S. rail lines. If it was not for the Surface Transportation Board in the United States, we already know that a merger would be in place between Canadian National and Burlington Northern Santa Fe Corporation. CN refers to it as a merger, but it is really gobble-ization by Burlington Northern.
What happens if we end up with two Americanized railways? We already have the American flag on the Canadian Pacific locomotives and on a couple of grain companies. How will that result in any effective competition that farmers can take advantage of in order to access the best price?
We are concerned about NAFTA. Time will not permit me to deal with that, but we certainly are going to be dealing with it.
Let me sum up this way on the bill. Over the last decade the federal government has eliminated the Crow, repealed the Western Grain Transportation Act, altered the car allocation policy and privatized Canadian National. In each announcement there were soothing words by the government that this was in the best interests of the producers, that it would benefit them. The reality is that in each of these four instances and others, farmers have been hurt.
The minister spoke this morning about everyone having to compromise and everyone having to mix a little water with their wine. I can say that the farmers were deluged by the water and the grain companies and the railways have enjoyed most of the wine.
Our position is why should producers and opposition politicians believe the government this time after having been disappointed so many times in the past? We are about to embark on 48 hours of virtually non-stop hearings on the bill beginning next Monday. We think there are a number of improvements that can and should be made. We will be introducing those amendments and we hope that they will find favour.
Just by way of conclusion, while we will not be obstructionist and hold up the bill, we are not prepared to support Bill C-34 as it appears now.