Debates of June 1st, 2000

Committees Of The House

[Paul Steckle, Liberal, Huron—Bruce, ON]

Mr. Speaker, I have listened with a great deal of interest to what has been said this morning.

First, the member for Selkirk—Interlake commented about southwestern Ontario. As a primary producer in southwestern Ontario I find it offensive that some would suggest that we do not care about the farmers of southwestern Ontario. We care about farmers clear across the country.

I find it rather an oxymoron that a party that believes in cutbacks in all sectors would dare to say that the government has not spent enough or that the money is not reaching the farmers for whom it was intended. That party does not support supply management which has supported and served our farmers well across the country in both the feather industry and the dairy industry, an industry that has not come to the government trough looking for help. Yet that party says “We do not support supply management”. That party does not support the Canadian Wheat Board because it believes it is a monopoly.

If farmers in western Canada were allowed the option of going five years outside of the wheat board, and took responsibility for the crop produced in that five year period, would they be prepared to take responsibility for the crop and stay out of the system for five years even though they were not able to sell their crop? Who would they go to then?

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Mr. Speaker, both of the member's questions are very pertinent.

When it comes to supply management he is not reading our policy statement properly. We have never said to destroy supply management. This government has moved from a quota to a tariff base that is designed to come down over the next little while that will destroy supply management. That is exactly true. That is the government's policy.

Our policy is let us get the rest of agriculture up to that level. There has to be some return on the investment. We are not seeing that in any other agricultural sector. Good for supply management. They figured out the formula and they are trying to make it work. Good for them.

We have never said to do away with the Canadian Wheat Board. We have said to make it optional. If it is good it will continue to function. It is saying it will fall apart if it does not have a monopoly. No monopoly anywhere lasts forever. People will rear up and say they have had enough and will not go to it.

We see far less acreage dedicated to the Canadian Wheat Board now than we ever have before. We only have to look at its annual report which just came out. It shows that sales are way down and administration costs have gone through the roof. The wheat board does not have the anticipated acreage coming from producers that it had before. People are voting with their feet and growing different crops. We are seeing all sorts of things being developed to try to obtain cashflow.

We are also seeing organic grains being held back by the wheat board because it wants to control them but does not want the responsibility of marketing. There are many niche crops from which the wheat board could back off and allow these folks to fulfil, such as the pearling markets, the specialized feed wheats and all those types of things that could be grown.

We know they can do that. I do not know a producer who would not sign a contract to be taken out of the wheat board for five years. Producers will sink or swim on their own. They are doing that now.

[Lorne Nystrom, NDP, Qu'Appelle, SK]

Mr. Speaker, I have a very brief comment to make. We are now seeing from the Canadian Alliance something to which western farmers had better pay attention. It wants to get rid of the Canadian Wheat Board. It is also saying that it wants it opened up to competition to allow the Cargills of the world to get involved.

It is a matter of time before the wheat board disappears. The wheat board only succeeds if it is single desk marketing agency for Canadian grain. That is the way farmers in western feel. There is very strong support for the Canadian Wheat Board as a single desk marketing agency.

The Reform Party of Canada wants to destroy that agency for the farmers of western Canada. Western Canadian farmers had better realize that we have a throwback to the age of the dinosaurs and Neanderthals. They are coming out of their cage and they want to end the Canadian Wheat Board.

Canadian farmers fought for that year in and year out. They fought for it in the 1930s and 1940s. They fought to defend it against the forces of the extreme right. Those forces are now coming to the fore again. As a matter a fact there was a plebiscite on barley some time ago and over two-thirds of farmers wanted to market barley through the Canadian Wheat Board. What did the reform party do? It criticized farmers for supporting the Canadian Wheat Board.

[Gerry Ritz, Reform, Battlefords—Lloydminster, SK]

Mr. Speaker, talk about the Jurassic era. We just heard from it. The member talked about the thirties and forties. Agriculture has grown and changed since that time. People are marketing on their own now.

Has the member heard of crops like lentils, peas, canola, mustard, canary, spices and everything else? Those are not wheat board crops but they are doing very well. They are not having any problem marketing their products. They are not having any problem getting those products to port and not being charged demurrage on them.

There is definitely a need for a wheat board. We never said to destroy the board. We are saying make it open and accountable to the people it serves. There will be elections again this coming fall. We will see more open market people elected to that board.

[Derek Lee, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, following on that most interesting interchange, I move:

That the House do now proceed to the orders of the day.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it.

[Some hon. members]

On division.

[The Deputy Speaker]

I declare the motion carried on division.

(Motion agreed to)

Canada Transportation Act

[David Collenette, Liberal, Minister of Transport]

moved that Bill C-34, an act to amend the Canada Transportation Act, be read the second time and referred to a committee.

Mr. Speaker, in my view today is a landmark day for the entire grain transportation industry and for the producers of the country.

Only a couple of days ago we introduced Bill C-34, an act to amend the Canada Transportation Act. It will put in place competitive measures which will assist all stakeholders to move to a better and more efficient way of moving grain in western Canada.

I thank my colleagues on this side of the House, in particular my seatmate, the member for Wascana, the minister responsible for the Canadian Wheat Board, and the Minister of Agriculture and Agri-Food. We have worked on this file for nearly three years. It has been very difficult. Sometimes the debate has been arduous, but the end result is a balanced approach to a very complex issue.

I also thank members of all parties on the other side of the House who the emotional dimensions of this debate which go back a long time in Canadian history and reflect varying points of view which are at times quite extreme.

In life we do not always get our own way. Everyone in the system, all the stakeholders and political actors, have put water in their wine, so to speak. They have come forward with measures that will bring us forward in the new century to a more competitive grain handling system.

A central theme of our transportation policy for the last number of years has been to modernize the transportation system by commercializing some institutions, providing more local control, reducing subsidies and updating legislation. Bill C-34 is no exception because it presents the legislative portion of a larger initiative that modernizes the graining handling and transportation system for the benefit of prairie farmers and the transportation system as a whole.

It represents three years of work. After two years of consultative studies and a lot of effort by my colleagues, we have a plan for change that will make a real difference in the lives of prairie farmers.

I talked about the co-operation I received from both of my colleagues, the minister of agriculture and the minister for the wheat board. As the lead minister on this file, I will be engaged in the debate today. The other two ministers will not speak, but the minister for the wheat board will be present for the rest of the day. He will certainly reply to questions this afternoon and engage in some debate if necessary. I believe the minister of agriculture will also attend at some point.

I thank both former Justice Willard Estey and Mr. Arthur Kroeger for their dedication and hard work on this very important issue. In my view their work is seminal. It has given us a thorough understanding of the issues and diverse opinions associated with them.

With this bill the government is initiating changes to an industry that exports $6 billion worth of grain each year to markets all around the world. Unfortunately the system that moves the products from country elevators to ports suffers from periodic breakdowns, bottlenecks, inefficiencies, and quite frankly a lack of accountability and some may say a lack of credibility. That was demonstrated in the winter of 1996-97 when the system completely broke down in western Canada.

If our system is to be world class, if Canada is to be taken seriously on the world stage, we must have a means to transport grain that gives farmers the ability to take advantage of opportunities provided by the global marketplace. As a result we must be able to move grain from gate to port cheaply and efficiently. When things go wrong, lines of accountability need to be clear so that problems can be resolved.

Unfortunately, the system at the moment lacks clear lines of accountability, with the result that those involved point the finger of blame at each other rather than work together to resolve problems.

When the system breaks down, this lack of accountability obliges grain growers to bear the brunt of the problem.

Our grain handling and transportation system cannot utilize the latest techniques of logistics, such as just-in-time delivery. Grain takes too long to move from farm to port, and ships all too often have to wait for the grain. Worse yet, grain sits in storage facilities monopolizing them until it can be sold. All of these problems have cast doubt in the minds of some of Canada's clients on its reliability as a supplier of grain.

The aim of this bill is to improve the system of grain transportation in western Canada, but not just there, because we are very interested in the transportation of this commodity in Ontario and Quebec as well.

Before telling the House where we are going, it is important to know where we have been. In 1997 when I was appointed to this position it was quite obvious that we had a massive problem as a result of the breakdown in the transportation system I described earlier.

I went to Winnipeg with my colleagues and we met with all the stakeholders. That was an interesting meeting because the grain companies, the producers, the railways, the ports and other interested parties were represented. All stakeholders were represented. Everyone came to the same conclusion: that the system was broken, that we had to fix it, and that any delay or lack of action would be disastrous to everyone involved in the transportation system.

They also said that we needed a reference point. We needed some individual whose reputation was such that he or she could effect an impartial analysis and come forward with recommendations. This is important because there is a lot of hostility, a lot of division, which goes back 100 years or more in western Canada among the various stakeholders.

I have been around this place off and on for quite a long time. I had the honour to sit as vice-chairman of the transport committee between 1974 and 1978. I listened to the debates in that committee with people like Don Mazankowski, Jack Horner and Les Benjamin from three different parties. Jack Horner crossed the floor to the Liberals. At the time he was a Tory but then he saw the light and came to us, and he paid for his sin. They were giants on the stage in the House. They understood western Canada. They understood the enmities. They understood the disparities. They understood the need for accommodation on the part of everyone.

I learned a bit as a guy from Toronto about this issue, the divisions, and how sensitive one must be to finding an equitable solution. That is why we appointed former Justice Willard Estey. No one disagreed with that appointment. He is someone of incredible reputation, born and bred in Saskatchewan. He understood the needs of producers, practised corporate law, and had been on the bench. He came forward with a report, the basic thrust of which we endorsed.

It was a report that was well based on consultation. He met with a thousand or more stakeholders. He convened 147 meetings. He listened to people. He applied his intellectual and physical energies basically full time to this issue. He submitted 15 recommendations on commercializing the grain handling and transportation system, and the government endorsed his vision.

That was not enough. It is one thing to have the conceptual framework. It is another thing to have the practical steps to implement a concept. Therefore I asked Arthur Kroeger, former deputy minister, again like Justice Estey a recipient of the Order of Canada and someone of high repute, to take the concepts and the recommendations of Justice Estey, flesh them out and try to put them in a manageable form so that we could implement the concepts.

Mr. Kroeger was well suited to this. Not only was he a former deputy minister of transport, but he was from a small town in Alberta near the Saskatchewan border and grew up with this issue. We had two individuals who knew the west, knew the history and had the intellect to deal with a very complex problem.

Mr. Kroeger was able to reach a consensus on a number of issues, which was quite an achievement given the difference of opinions expressed by participants. However no agreement could be found on the starting level for the annual cap on railway revenues, on the transportation role of the wheat board and on ways to achieve enhanced railway competition. In the end, Mr. Kroeger completed his terms of reference last September by providing his own recommendations for the three unresolved issues. I do thank him for that degree of initiative.

What we announced on May 10 was the government's response to the broad range of advice over the entire consultation period. As I said earlier, I realize that this has dragged on and that the introduction of legislation took longer than some people wanted. I truly regret, from the point of view especially of the members of the opposition, that the timetable is so short that full debate in the House will not be possible.

We had wanted this issue to be more fully aired but by agreeing today to have one speaking time per party, the opposition has shown that it wants to get this into committee quickly. I am prepared to go to committee next Monday to answer questions and deal with this bill in detail if the House chooses to agree to give it second reading today. I believe that is where the real discussions should take place. In regretting the fact that we do not have enough time to give the members the say they would like in the House, I would hope that we could somehow obviate that in committee.

The government believes that when a policy is required in complex matters more consultation is the best option and an open dialogue is important. That is why we did not rush decisions. We worked diligently on the details until we found the right balance, one that will benefit all system participants. There was a range of views on this side of the House, it is no secret, as there is a range of views on the other side of the House. I personally met with many stakeholders a number of times over the last two years. Everyone really has been consulted and whatever one's position is on the bill and the proposals that we have announced, no one can fault us for at least consulting those affected.

We have heard the voices of the farmers, the grain companies, the wheat board and the railways. I know that this proposal and the bill does not please everyone but we have to start somewhere. We had to break the logjam and that is what we have done.

When we announced the policy framework on May 10, we focused on six main issues that would improve the system. I will outline these issues because they are very important.

I mentioned earlier that dealing with cost is one of the important steps to reach a worldclass grain logistics system. It is an area where Canada needs to improve. Currently the producers are facing escalating freight costs and not enough sharing by the railways and grain companies of productivity gains.

As a result, the government is repealing the maximum rate scale in section 147 of the Canada Transportation Act and replacing it with a cap on annual grain revenues earned by Canadian National and Canadian Pacific. A revenue cap in our view will promote price flexibility while safeguarding producers from rate increases. The change will see an estimated reduction of $178 million from the estimated effective rate 2000-01. That is a lot of money and that is money that will find its way into the pockets of the people who need it, the grain farmers in western Canada.

Some people have argued that this reduction is only $124 million because of the 4.5% inflationary adjustment that the Canadian Transportation Agency recommended some weeks ago. I want to remind those critics that should this bill not be implemented by August 1, less than three months from now, then the 4.5% rate increase would be very real to the farmers in western Canada.

All of us in the House have to make sure that this $178 million decrease in railway freight revenues goes forward. I cannot believe anyone would stand and say that they would block an initiative that would give farmers money.

I listened to the earlier discourse by my friend from the Canadian Alliance, the agriculture critic from Manitoba, on a previous motion. He was talking about the farming crisis in Canada, especially in western Canada. Accepting the premise of his arguments that these are tough times for farmers, then let us do something about it. Let us start to improve the grain transportation system and let us put money on the table that the farmers desperately need.

I am not trying to imply in any way that there will be any attempt by members in the House to deny farmers the early passage of this bill so the money can start flowing on August 1. I do think everyone has to realize that this is extremely important.

The government feels that it is important for all farmers to have the opportunity to experience the cost reduction because the new revenue cap provisions we have announced will be monitored by the Canadian Transportation Agency. If a railway violates the revenue cap it will be forced to repay the excess revenue plus a penalty.

To further protect against possible price gouging on branch lines, we have introduced protection for these shippers in the form of a rate limit tied into grain rates on nearby mainlines.

Everyone in the House would agree that farmers deserve a break. They need a logistic system that will move their grain to market at the lowest possible cost.

We are also looking to the wheat board to help accomplish the task of triggering new competition. The question was how this should be done. The role of the wheat board is one of the more divisive issues in western Canada. Seeing it from afar, I can understand both sides of the argument.

Our friend from the New Democratic Party, in a comment he made during the previous debate on the motion, talked about the lessons of the 1920s and the depression, and the genesis for the creation of the wheat board in, I believe, 1943. Friends from the Alliance were saying that times have changed. Well, they are both right.

It is pretty tough for a Liberal to stand in the House of Commons and say that both the Alliance and the New Democrats are right on the same issue, but we cannot lose the lessons from the past. We cannot ignore what the New Democratic member was saying about the terrible deprivation and struggles that farmers had during the 1920s, 1930s and 1940s but, on the other hand, times change. There are modern technologies and new systems for logistics. The entire world has changed. The global trading patterns have changed. In that sense, the Alliance is right.

What we have done in this bill, perhaps not to the liking of the Alliance and some others, is that we are now starting to move the wheat board. We are moving to the recommendation of Justice Estey who said that the wheat board's role in transportation should be reduced. In fact he said it should be eliminated, but we can eliminate something by reducing it in various ways.

The question is whether or not, in the long run, the wheat board will still have a role in transportation, as Mr. Estey recommended, or whether there is some middle ground which takes into account the concerns raised by my friends on the New Democratic side and, quite frankly, the members on our side of the House, in particular my two colleagues from Winnipeg who are well versed in this subject and have been immeasurably constructive in this whole debate.

We are starting to move with the wheat board. Some have argued that the wheat board should be removed entirely, as I have said, Mr. Estey and others. Others have argued that we have just moved to democratize the wheat board and therefore it needs time to prove it can deliver benefits to farmers. We listened to both sides, weighed the pros and the cons, and identified a level of change that will allow the grain handling and transportation system to move forward.

The wheat board, through the introduction of a tendering activity, will drive costs out of the system. This increased competition between grain companies and railways will be beneficial. They will be held accountable and made competitive for logistic services provided for tendered grain. The change will allow the grain companies to better control their own assets and will increase overall efficiencies.

The details of this part of our reforms will be contained in a memorandum of understanding to be signed between my colleague responsible for the wheat board and the board before Bill C-34 comes into force. The MOU is a firm commitment from the board to introduce a more commercial system and once in place it will be made public at the earliest appropriate date.

It is my hope that we can make this public tomorrow so that the members on the other side can have the weekend to look at it before I go to committee on Monday. That is not a promise but that is something on which I have been working with my colleague responsible for the wheat board, because in fairness, the members on the other side whose role is to criticize the government must have the tools at their disposal.

We are working around the clock to get the consultations done. I hope my colleague responsible for the wheat board, in response to speeches a little later, will be able to clarify that. In a perfect world I would like to see my colleagues on the other side go home tomorrow afternoon with some weekend reading, which would be the MOU between the government and the wheat board.

Both the revenue cap and the new role for the wheat board deal with commercializing grain institutions that until now have been run as administrative and regulatory solutions. The government also wants to ensure that shippers are protected from the exercise of unfair market power to buy the railways. As a result, we are introducing changes to the final offer arbitration provisions.

The shipper community has stressed that the final offer arbitration is too long and expensive. At the same time, shippers have said that they would not support changes that would harm the effectiveness of this particular dispute solving mechanism. Again, we listened to the complaints and we are amending the appropriate provisions of the act to allow for simultaneous exchange of offers and a summary process that is shorter, less costly and will assist small shippers.

Many people, including my colleagues in the Liberal caucus from western Canada, are looking for changes in railway track access rules.

[Some hon. members]

Where?

[David Collenette, Liberal, Don Valley East, ON]

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.

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

Mr. Speaker, it is not often that the minister would lead off a debate on a bill like this one, which is probably more important to the people in western Canada than the finance minister's budget speech because they have been waiting for this since 1996.

I want to do something which is rare and congratulate the Minister of Transport. The minister admitted that he does not always get his own way. We in western Canada, all of the farmers in western Canada, wish that he had gotten his own way because the minister tried to bring about what Chief Justice Estey along with Mr. Kroeger recommended. That was denied to him by his seatmate, the minister in charge of the wheat board, and a few Liberals from the city of Winnipeg. That is a fact and it will not be missed by the people of western Canada.

I congratulate the minister for his vision. A minister from the great city of Toronto could see the problems in western Canada, but the minister in charge of the wheat board and other hon. members refused to look at the future.

We are in the year 2000, but this bill in many ways will take us back to the 1950s. Hospitals do not use 1950s X-ray machines. We do not see farmers running around with Massey-Harris 17 combines. We do not see a DC Caterpillar building roads. With this bill the Canadian Wheat Board will be empowered with a role it was never designed to have in the first place. The wheat board will now have a dual role. It will be involved in a more intricate way with transportation.

I watched what happened in 1996 with the railways. For the record, the instructions given by the government to Chief Justice Estey were “To ensure that Canada has the most efficient, viable and competitive grain handling and transportation system”. He did just that. However, when the report came back indicating that there would be more openness and more competitiveness which would allow the grain industry in western Canada to let the wheat board play a role in direct negotiation with the railways, the Minister of Transport got shot down by his own party.

The minister in his speech referred to hundreds of meetings during a two year period. Mr. Estey and Mr. Kroeger never changed their reports. These learned gentlemen recommended in language which everybody understood that Canada needed a commercially driven system. These learned gentlemen were not interested in protecting the status quo. That had failed. They were not interested in protecting an institution. They brought back a report which would ensure that Canada had the most efficient, viable and competitive grain handling and transportation system. These gentlemen were not out to penalize the railways. They wanted the cheapest freight rate possible to deliver grain to market.

I can assure the House that this will not last. This issue will come back to us in a few years. We will have to go through this whole issue again simply because this does not meet the needs of this century.

Mr. Speaker, I forgot to inform you that I will be sharing my time with my colleague from Selkirk—Interlake, if that is permissible.

[The Deputy Speaker]

That will take unanimous consent because the hon. member is seeking to split a 40 minute speech. Is there unanimous consent to permit the hon. member to split his speech? I assume it would be on an equal basis.

[Some hon. members]

Agreed.

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

Mr. Speaker, this bill will not bring grain transportation into this century. As a matter of fact, I would suggest that this bill demonstrates the failure of the government to honestly look at the recommendations of Estey and Kroeger. It has really put those recommendations through the shredder. It has paid little or no attention to them.

It is bad enough for the farmers in western Canada, who are fighting a subsidy war, to have their input costs driven up 98%, but I want to look at a few other figures to demonstrate what has happened in the last 15 years. Grain elevation costs are up 52%. Canadian Wheat Board costs are up 56%. With all due respect to the big bad railways, their freight rate has actually decreased, due to other measures, some 5%.

I mentioned one time in a speech in the House that when a person is in grade six in Saskatchewan they have to take as part of the curriculum a course to learn to hate the railways. Again, that is a very popular theme. However, let us say that both Canadian Pacific and Canadian National are not so irate as the minister mentioned because of the forced 18% reduction. What they are irate about is that they are being forced into a contractual agreement not with the elevator companies, not with the grain companies, but with a government agency. That is what is wrong.

Would the minister of minerals interfere with potash or coal? Would the minister interfere with the shipment of those products to market? No way. That is exactly what Justice Estey and Mr. Kroeger recommended. Get out of it. Both the CPR and the CNR would tell us “Give us a completely commercialized system and we will show you further freight rate reductions”. That is what Justice Estey said.

What happened? His report was put through the shredder. I have given credit to the transport minister. However, he had to concede to his colleagues, and that is too bad.

I suggest to everyone in the House that the amount of money which will be saved because of the 18% reduction will be short lived. I also suggest that in a few short years we will be right back discussing this issue in the House again.

I acknowledge what the minister said about the memorandum of understanding. I would have liked to have had that sooner. If the Canadian Wheat Board is to enter into the negotiation process through the ports of Vancouver, Prince Rupert, Thunder Bay and Churchill, then I want to get into the age-old problem of who decides which port. It has been said that wheat is 16% protein and the rest is politics. Now it will become more politics, not less.

Let me give the House an example. If we have a sale of No. 2 milling flour for the Asian market, it is then up to anyone who has any degree of responsibility to move that shipment and the tonnage required through the port which will represent the least cost. If it should happen to be that the least cost would be to ship it through Prince Rupert, that is where it should go. If, for instance, they are servicing the South American market and that same grain can be moved at a reduction in the freight cost through Port Churchill, then that is where it should go. That has not happened in the past and I do not think it will happen in the future. I know that is not in the best interests of those who produce the grain.

It might be of interest to know that the same union which handles the facilities at Lakehead is the same union that handles the facilities at Port Churchill. They hate each other now. They do not want each other to have any more grain. Where is the biggest interest? I see my colleague from Thunder Bay. There is more interest in Thunder Bay. There are more MPs. There are more votes. That is where politics gets into grain, and it always has.

No requirements have been specified. There is nothing within this bill in respect of the conduct of the Canadian Wheat Board in the process of tendering or operating under the contractual system. We have some questions.

The wheat board is taking on a new role. It is getting into the shipping business. I would like to ask these questions. Will the wheat board fall under the Canada Transportation Agency? Will it fall under the agency that deals with fairness in competition? To whom will the wheat board report? Certainly not to the House, because information we want from the wheat board is protected under the Privacy Act. It and CSIS are the only two institutions which are so protected.

Will the producers, the grain companies and the railways know outside the tendering process what the implications will be? I understand from the railways that they are going to have to provide to the wheat board certain information which is strictly confidential to the railway's operation, but the wheat board, in turn, does not have to provide that information to the industry. We have a real problem with this.

I would like to talk briefly about the regulatory powers to control car allocation. Gone are the days of the order book. In three years the old block ordering of cars will be obsolete. We are in a brand new era. The wheat board knows exactly what elevator, what commodity, what grain and what type of grain is in every elevator in Saskatchewan and across the west.

All it has to do is provide those elevators, those companies that have the grain, with the shipping order. Let them bid and see who can get the cheapest rate to get that grain to market. That is what the report said. That is what Estey said. That is what Kroeger said. They wanted to bring Canada into this new century. Unfortunately that is not going to happen.

I know that the Minister of Transport's colleague would like us to say that the Canadian Alliance is going to oppose the bill. That is what he would like but he is not going to fool anyone. We are going to oppose the bill through motions in committee. We will support the bill because it is the end of the crop year and because of the August 1 deadline. It is a temporary measure to save the farmers some money but it is not the answer. We will be back and back until they bring us into this century to provide us with what Kroeger and Justice Estey recommended.

I am sorry the minister did not get his way on this. I wish he had. Certainly the people in western Canada wish he had. They feel very much betrayed by the minister in charge of the wheat board and those ministers opposite who live in the city of Winnipeg. They will not forget this. It will be forever on their minds. I will do my part as a representative not just of my party but of my constituency and those across Canada to let them know that once more the thousands of dollars that went into the report literally went through a paper shredder.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, I am pleased to speak on probably one of the most important issues to affect western Canada and in effect the whole country with the reform of the rail transportation pertaining to grain handling.

As the minister said, all those involved in the western grain handling and transportation system agree that the system is broken and it must be fixed. This includes farmers, grain companies and yes, even the regulators like the NFU and the Canadian Wheat Board. They agree that something has to be done because the system is not great.

The western Canadian grain industry however has not been well served by the legislation that is being brought in today. The problem is not the consensus among the farmers and the farm community. The problem is clearly the difference between those who highly regulate the grain industry and farmers through the use of monopolies and those that would use the democratic free market system to attain the most efficient and effective grain transportation system. Clearly that is what the debate is about. It is sad to see that once again the regulators held sway with the Liberal government.

When we talk about who speaks for farmers, we should make one quick point that the farmers own two grain companies, the Saskatchewan Wheat Pool and Agricore which represents Alberta and Manitoba. Also, farmers are on the board of directors of the United Grain Growers. Representatives of private industry are primarily James Richardson with Pioneer, Cargill, Louis Dreyfus and the Patterson grain company out west.

These people and organizations identified very clearly to the minister on behalf of farmers, the very people that would make or break from changes to the grain transportation system, that the whole system has to move to a commercial contract system of moving grain. They did not ask to move an inch. They did not ask to move a foot. They asked to move the whole yard to the goal line. That is why I say today that this solution will not work in the best interests of farmers in the long term.

As my colleague said, the Canadian Alliance will support this legislation only with the recognition that the Liberal government is only capable of dealing with the western grain industry through regulation and cannot see its way clear to move to the marketplace to have it improved.

The current system is rigid, unaccountable and does not efficiently serve the needs of the participants including farmers. Severe systemic breakdowns in the handling and transportation system which recur every few years are demonstrations of this need.

The system does not just cost farmers. When the problems reach the news it costs them money every day. The inefficient use of our grain handling and transportation system means that every day farmers pay far too much to get their grain to port. It is not because of the fact that there is not enough regulation, it is because there is too much regulation.

Because of the control the Canadian Wheat Board exerts over the system, grain companies and railways cannot manage their facilities and equipment in the most efficient manner. For example, railways and grain companies have tried to set up regularly scheduled grain trains that would cycle between primary elevators on the prairies and the terminal elevators at the ports. These types of dedicated trains would be able to bypass railway switching yards, would make more efficient use of railway and grain company staff and would allow grain companies to better plan the arrival of ships and save farmers millions of dollars.

The minister referred to just on time deliveries. The rest of the Canadian economy has moved to that system. A regulated system is being imposed on the western Canadian grain industry when the rest of the country is benefiting.

It reminds me of the famous free trade debate. Ontario and Quebec were most fortunate over the years to have had the auto pact agreement and eventually the free trade agreement which included the rest of the country. Here again, why can western Canadian grain farmers not be included along with the rest of the industries of this country?

After the debacle in the winter of 1997 former Justice Willard Estey was asked to review the western grain handling and transportation system and to recommend changes to the government. Much to the government's surprise, he did exactly what it asked him to do and recommended changes to improve the system. The underlying theme of Justice Estey's 15 different recommendations is the need for a more open, market based grain handling and transportation system.

One of the key recommendations from Justice Estey involved the role of the Canadian Wheat Board. I would like to point out that neither Justice Estey nor Mr. Kroeger nor the Canadian Alliance is recommending that the Canadian Wheat Board be disbanded. In the case of these amendments to the Canadian Transportation Act the recommendation, including our position, is that the Canadian Wheat Board should be at the port level doing what its job is, marketing grains on behalf of farmers and doing the best job possible. That is where it can increase the farmers' income.

The Canadian Wheat Board reduces the farmers' income when it arbitrarily, for decision making purposes known only to it, uses rail allocation to maintain control of an industry with no market signals coming in whatsoever indicating to it where efficiencies could be gained, should be gained, and how to do a more effective job.

It is like a government sitting in Ottawa trying to micromanage the Canadian economy. That is what the government is trying to do through the wheat board with the Canadian grain industry. One cannot run a grain industry from the backrooms of parliament.

If the recommendations Mr. Estey put forward were implemented, the Canadian Wheat Board would hire the grain companies to move grain to the port through an auction process, a tendering process, and the grain companies would be responsible for arranging freight with the railways. Producers would sign contracts with grain companies for the delivery of the grain. This recommendation is required if we are to replace the current centrally planned system with a commercial contract driven system. However, as I pointed out, the Liberal government did not like the recommendations which would have softened the Canadian Wheat Board's ironclad hold on western grain farmers.

I will just say one last thing about the Canadian Wheat Board. The farmers should be able to have a vote with the delivery of their grain to the marketer of their choice. It may be according to the Canadian Wheat Board in particular that all the farmers, knowing the big advantages the wheat board puts out, would continue to market the farmers' grain, but let us let the farmer decide that for himself based on his own farm's best interests.

Mr. Kroeger appeared before the Standing Committee on Transport. He stated, “My conclusion was very much along the line of Justice Estey's, that unless you went to a more commercial system, you could not really achieve major improvements”. Mr. Kroeger gave the federal government a progressive report that if implemented, would be a step toward a more efficient, commercial, accountable western grain handling and transportation system.

At some point I have mentioned all the grain companies, the railways, many farmers, and the two gentlemen who did special studies and held massive consultations across the country. To me the evidence is overwhelming as to where we should have moved as a country and where this legislation should be today, but it is not.

Western farmers repeatedly said that freight is one of their major costs, approximately one-third of the expenses in most cases. Over and over again farmers ask why they are the only commodity group where the producer pays the freight and is responsible for the condition and any added cost for the product throughout the shipping network. The farmer consistently ends up holding the bag in this whole system. That should have been changed, could have been changed, but it has not.

The Prairie Farm Commodity Coalition estimates that reforms to the current grain handling transportation system could have saved farmers over $300 million annually. That figure can be argued either way a bit, but it is certainly more than the estimated $178 million the minister is talking about.

I would like to point out that the figure of $178 million is based upon the idea of about 30 million tonnes of grain delivery in a year. The fact is that in 1998, the figure was only about $26 million. Once again, just like in the AIDA program, the government is throwing out figures that sound great and glorious, but when it comes down to the final crux and the farmer sees his final bill, we may see that the saving to farmers is not the $178 million the government is putting out to the newspapers.

The effects in the long term and even in the short term of two or three years may soon come home to roost and show that this legislation has done little or nothing for farmers, as they see the loss of exports, if this system does not improve. I question that this will improve the system sufficiently for our customers to consider us to be a reliable exporter.

The government is claiming that the system will be more commercial and accountable because it is reducing the role of the Canadian Wheat Board in grain transportation. Sadly this is not the case. Key to the government's plan is a memorandum of understanding that will detail how the Canadian Wheat Board will carry out the tendering process.

We should remind everyone interested in the debate who is listening, including many city people, that the Canadian Wheat Board is simply an arm of the government. It is directly under the control of the resource minister and the Canadian Wheat Board minister whom I call the Regina minister. We have recently found in this debate that we have the Toronto minister. Now we also have the Regina minister. I do not know exactly what handle has been attached to the minister of agriculture yet, but we will wait and see.

We hope to see the MOU entered here. We have asked and had conflicting statements from the ministers with regard to it. I think we will find it difficult to pin down the triumvirate of the agriculture minister, the transport minister and the wheat board minister as to who will be the real spokesman. I encourage the Prime Minister to allow the transport minister to be the spokesman for this legislation and to have the minister of the wheat board step back and let the responsibility fall where it should with the transport minister.

I do not believe that the Canadian Wheat Board will draft any proposal that will reduce its ironclad control over the grain handling and transportation system. Under the MOU the Canadian Wheat Board will likely still be directly negotiating with the railways for hopper cars, even for the 25% of grain movement that will be tendered to the grain companies.

In short, nothing has changed. The Canadian Wheat Board is still between the grain companies and the railways. This system is neither commercial nor accountable. The Liberal government's decision comes after the Canadian Wheat Board launched an estimated $200,000 advertising campaign against the changes proposed by Justice Estey and Mr. Kroeger.

At the recent Liberal policy convention, the Liberal delegates overwhelmingly passed a motion calling for the Canadian Wheat Board's continued involvement in the grain handling and transportation system. Instead of listening to Canadian farmers, the Liberal transport minister has listened to Liberal delegates, the majority of whom come from outside western Canada. He has listened to the Canadian Wheat Board lobby.

The big players, the players that are actually being affected by the legislation, were relatively unanimous. From the level of farmer through to the grain companies and the railways, those who were direct players in this system were not listened to as we see from the legislation.

Many farmers are appreciative of having regulated freight rates lowered. I have stated already that I agree it will be beneficial to have those rates lowered, but I do not think that many farmers totally agree with the Liberal caucus and the Canadian Wheat Board.

The ad hoc coalition for transport reform actually represents 14 farm organizations in five provinces. There are officials from the grain industry. I did not mention this, but the people at the ports of Vancouver, Prince Rupert and Thunder Bay are also concerned. The government of Alberta is involved. The Canadian Industrial Transportation Association and the Northwest Corridor Development Corporation are involved in advocating on behalf of this system. The coalition stated:

We are firmly convinced that reforming the grain handling and transportation system will lower transportation costs to farmers, increase competition and make Canada's grain delivery system more effective for our farmers. But a balanced package is needed. If the government only acts on the railway issues, it will accomplish nothing and could make the system even worse. That is why we want the government to take immediate action on the most important issue and to end the role of the Canadian Wheat Board in transportation.

I do not know how much more overwhelming it could be to the government than all the documentation it has received from the coalitions, grain companies, farmers and many others. Surely the weight of opinion should have carried the day. Even someone not knowing anything about the grain handling system and talking pure economics would have told the minister that regulating a commercial enterprise was the most inefficient way of doing it.

We need only look at many crown corporations. I think of the B.C. ferries and the wonderful things governments have tried to do in the area of commercial enterprise. It does not work.

We need only look back to when the government owned Canadian National Railway. Why oh why did our grain not move in the most efficient and cost effective way when the government owned Canadian National Railways? It was because when the government owned that railway it was highly regulated. There were no market signals to bring efficiencies into it. Every time there needed to be a wage settlement, pay raises and that kind of thing, there was no relation to market forces. It was just that it was the government and it had taxpayer money. The government could take that money from taxpayers whether or not they wanted the government to have it.

As a result, we ended up with Canadian National Railway dragging down Canadian Pacific Railway into the same mediocrity. That is what is wrong with the whole regulated system. If it could have worked, it would have worked when the government owned CN Railway.

With those comments I think I have made the point quite clearly that the highly regulated system being imposed on Canadian farmers, the rail industry, the grain companies and the ports will not work.

I will leave this last message. We in the Canadian Alliance will be continuing to advocate and pressure for the real changes needed to make our western Canadian farmers economically self-sustainable and for the whole industry to prosper and contribute to the well-being of Canadians across the country.

[Odina Desrochers, Bloc, Lotbinière, QC]

Madam Speaker, it is with pleasure that I rise today to speak to Bill C-34. My remarks will focus on the following three areas.

First, I wish to immediately say that the Bloc Quebecois is opposed to Bill C-34 for the following reasons: as we see it, this bill authorizing financial assistance to western producers is a form of subsidy in disguise. I will explain why.

Second, we believe that the government's timing in introducing Bill C-34 is nothing but a play for votes in western Canada, where the Canadian Alliance has a strong base.

Third, I will show that this government is inconsistent and that there is no link with Canada's transportation policy because the measures in this bill address western issues only.

I will, if I may, give a short background. A few minutes ago, the Minister of Transport said that there had been broad consultation and that he had worked closely with Justice Estey and reviewed the Kroeger report. However, there seems to be a real dichotomy between what this report says and the results we saw a few weeks ago.

First of all, on October 5, 1999, the Minister of Transport thanked Mr. Kroeger for his great effort in trying to solve the problem of grain handling in Western Canada. He also said that this report would be followed up with a study and that he was going to address the 12 to 15 recommendations contained in the report. After the report was tabled, three public information sessions were held. Finally, the federal government's policy was released a few weeks ago.

I will address one of the recommendations of this voluminous report. This report was submitted to the three ministers who announced the federal government's intentions a few weeks ago.

It was submitted to the Minister of Transport, the Minister responsible for the Canadian Wheat Board, and the Minister of Agriculture and Agri-Food. At that time, the three of them said that they were going to take into consideration all of the recommendations made in the report in question.

I will read the first recommendation contained in the report's conclusion. It says:

The Estey report urges special measures be taken to revitalize some of the ports in the grain handling and transportation system; the Ports of Prince Rupert and Churchill, and the St. Lawrence Seaway.

The report in question is the one from October 1999.

The same three ministers turn up again on May 10, 2000—the same three tenors, namely the Minister of Transport, the Minister of Natural Resources responsible for the Canadian Wheat Board, and the Minister of Agriculture and Agri-Food—to announce to us that the policy will apply to the ports of Vancouver, Prince Rupert, Thunder Bay and Churchill.

The St. Lawrence Seaway was forgotten, yet it is, as hon. members are aware, an important link for the economy of Quebec. How can the Minister of Transport come this morning to announce to us with great fanfare that he was acting on the Estey report, when one of its recommendations is not even included in the May 10, 2000 press release?

I wondered if there had been a mistake, if perhaps the three ministers had not read certain parts of the report. I like to point out the things the Liberals do. Often, by putting documentation together, we can see that things get lost.

On May 29,2000, the Minister of Transport introduced a bill to reform legislation on grain. Once again, the minister said he had consulted and acted on the Estey report and that this was all being done in collaboration with his colleagues. Here is the conclusion of the press release that explained in broad terms the content of Bill C-34, which we are debating today:

A memorandum of understanding between the Canadian Wheat Board (CWB) and the Minister responsible for the CWB will be in place by the time the legislation takes effect.

We are at second reading today.

The memorandum will provide for the phasing in of more competitive tendering by the CWB for logistical services for its grain shipments through the ports of Vancouver, Prince Rupert, Thunder Bay and Churchill.

Once again, the government has forgotten the first recommendation of the report, which said clearly they would be through the ports of Prince Rupert and Churchill and the St. Lawrence Seaway.

Do members know what that means? It means that once again the Liberals opposite are ignoring the existence of Quebec. The entire policy turns on the people in the west.

In the short term, for the entire economy of Quebec and the ports that operate along the seaway—Montreal, Quebec City, Baie-Comeau, Port-Cartier and Sept-Îles—this means major economic losses. In the short and medium terms, it means the government wants to eliminate the seaway and follow other avenues, so as once again to put Quebec at a disadvantage.

Today, we are considering Bill C-34, the grain bill. But all what this government has done with respect to transportation since 1997 is close control towers in small airports and hand back aging ports requiring major investments to municipalities, without throwing in any interesting subsidies.

This government promised to return ports to municipalities and other paramunicipal agencies, but the ports it is giving back are in terrible shape. With this policy, it is actually further reducing the effectiveness of these five ports, which underpin the economy of the St. Lawrence Seaway.

There is talk of savings and development. This decision even hurts Ontario, because the Great Lakes will now be bypassed. There are also ports on the Great Lakes.

What does this government want? The crisis now facing western producers is also related to the rules of international trade. We know that these rules are strict and that they do not allow any leeway for governments trying to provide support.

The Canadian government promised the WTO to reduce export subsidies and domestic measures and, at the same time, open up the market. What are they doing with Bill C-34? They are taking $175 million, sending this amount to help with grain transportation, and this becomes a subsidy in disguise designed to placate western producers who are mad at the federal government.

The federal government has always turned towards western Canada. If this government had used the normal means of intervention to help these people in crisis, the World Trade Organization would have said “You are not entitled to do so”. With Bill C-34, this government, which specializes in camouflage, managed to use a disguised subsidy of $175 million to help westerners.

What did that same government do when the Quebec pork producers were in crisis? Nothing. It hid behind the framework agreement between the federal minister of Agriculture and his provincial counterparts. What did the federal government do to help Quebec sheep producers with the scrapie situation? Nothing. What is it doing now to help the very many cranberry growers in my riding? Nothing, once again. On the other hand, it managed to find $175 million to help western producers.

When I hear this government talking about its national vision, its vision from east to west, I find that the vision of Bill C-34 starts at Manitoba and runs west to the Pacific, with the entire eastern part of the country having been left out.

As well, they are attacking the port infrastructures of Quebec by not even including in this bill the St. Lawrence Seaway, which directly links Ontario and Quebec with the United States and beyond. It does not take an advanced course in economics to understand that things do not operate east-west, but that what needs to be developed is north-south.

Once again, this government continues to repeat its historical errors. It has no national vision. That is why the Bloc Quebecois is opposed to Bill C-34. It is a vote-seeking bill. There have been election rumours for the past few weeks. The Bloc Quebecois is dying to get out there against the federal Liberals. The Bloc Quebecois is eager to settle its accounts with them.

We saw this in the case of the Young Offenders Act with the Minister of Justice including standards in the legislation, once again in deference to the west. Today, with Bill C-34, we see the Minister of Transport is continuing the same practice in an effort to mollify the west. But Quebecers will not be taken in by the pre-election manoeuvring of the government opposite.

The Minister of Transport should reread the entire Estey report, especially the first recommendation. The Minister of Transport should also think nationally—one policy from east to west and not one for just four provinces.

His colleague, the Minister of Agriculture and Agri-Food, should be made aware of the problems of Quebec producers, take his courage in hand and help them too—which he has not done.

I can understand the third member of the trio, obviously. He is one of the few Liberals from western Canada who is established in his riding and, in addition, he is responsible for the Canadian Wheat Board. I understand he supports this and that he is happy to have the Minister of Transport and the Minister of Agriculture and Agri-Food support Bill C-34.

All we have seen since the report is a sort of process in which this government is once again neglecting the east and forgetting Quebec.

I would also like to point out what this means for transportation. This week, the Commissioner of the Environment and Sustainable Development came down quite hard on the current Minister of Transport. I am going to talk about the Minister of Transport's policy. I am no longer talking about the agricultural sector, about grain, or about ports, but about the airlines.

This minister does not even have the courage and leadership to sit down the two parties involved, Canadian International and Air Canada, so that they can try to harmonize the various collective agreements governing their employees. What do we have right now in airports all over Canada? Complete chaos, and the frustration can be seen in employees' eyes. Who is getting hurt? Consumers, the people using the airlines.

This shows that this government and this Minister of Transport bungle everything they touch. We know that the airports are in a mess right now. The St. Lawrence Seaway is being ignored. The government is introducing western-oriented policies. Eastern Canada and Quebec are being forgotten. It is high time that this Minister of Transport started paying attention to these issues and finding solutions.

In conclusion, the Bloc Quebecois is opposed to Bill C-34 and I will again give the reasons why.

We feel that $175 million for western producers is a form of subsidy in disguise, a way to get around the rules of international trade. It is also nothing more than a play for western votes.

In addition, the bill completely ignores the reality of Quebec's economy, and the first recommendation in the Estey Report, by failing to address the issue of the St. Lawrence Seaway.

[Dick Proctor, NDP, Palliser, SK]

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.