Mr. Speaker, I thank my hon. colleague for his work on Bill C-253.
The Canada Marine Act, which the member would like to amend, calls for a statutory review by June 2003. Given that there are a lot of other items that would certainly need to be reviewed under the umbrella of the Canada Marine Act, it is our view on this side that his proposals would best be left for review, again to be concluded by June 2003.
Let me explain a little bit about the Canada Marine Act and why we feel the way we do, notwithstanding the good work he has done thus far and, no doubt, will continue to do.
The Canada Marine Act was passed in 1998. It was intended to and does help the Canadian port system to become more efficient, competitive and commercially oriented to commercialize the operations of the St. Lawrence Seaway and ferry services and to improve the operations of pilotage authorities. It marked the first comprehensive effort to increase competitiveness and to reduce costs in the marine sector. By making it easier for ports to operate according to business principles, it will make the marine sector even more competitive than it is now.
The benefits of the act are substantial. Ports benefit from reduced red tap, increased freedom to develop contracts and leases and to set tariffs and fees, and because funding no longer comes from the federal treasury, they will be free to pursue private sector capital to finance port projects.
The Canada Marine Act was a product of a lengthy and comprehensive review process. In 1994 the then minister of transport requested the House of Commons standing committee on transport to undertake a broad review of the marine sector in recognition of an inherent need to modernize Canada's marine system to ensure that the major ports and other marine infrastructures were in a strong position to respond to the demands in international trade, which is critical to Canada's growth.
In other words, there was a need for a port system that could serve both domestic and foreign shippers efficiently, one that was not only reliable and competitive but also one that could compete with the best in the world.
The standing committee issued its report in 1995 after hearing the views of provincial governments, municipalities, organized labour, shippers and other marine industry stakeholders.
In December of 1995, following a further round of consultations, we announced our national marine policy and our intention to bring in legislation containing comprehensive changes to the ports, the seaway, the ferries and the pilotage components of the marine industry.
The Canada Marine Act received royal assent on June 11, 1998.
The Canada Marine Act is a success story. Canada's major commercial ports are now competing on a level playing field for the first time. They have the tools they need to compete in the 21st century.
The St. Lawrence Seaway, which runs right past our Speaker's door in his riding, has been commercialized with control passing to a non-profit corporation controlled by the users of the system. It is saving money on operations. Ferry services have also been commercialized and changes to the pilotage regime have been implemented.
The Canada Marine Act provided the authority to dissolve the Canada Ports Corporation, which the government did on November 1, 2000. It was not long ago that the running of Canada's ports was being stifled by too much centralized government decision making, including the role played by Canada Ports Corporation.
To remain competitive with American ports, Canadian ports needed to reduce their transaction times and their overhead costs to make the kinds of local decisions that make commercial sense. The new port authorities have been a great success because control of the ports is now in the hands of those best able to adjust to competition and introduce greater efficiency in the marine sector.
This sector is vital to Canada's competitiveness in a global economy. It provides us with a key strategic advantage in the movement of key commodities for important industries such as steel and container traffic. It is also becoming evident that the marine mode is in a good position to benefit and participate in the growth of the worldwide tourism industry.
The cruise industry in Canada is witnessing a staggering growth on both the Pacific and Atlantic coasts in the number of visits being paid annually to the Canadian ports and in the amount this industry adds to the Canadian economy. Canada's cruise industry is forecast to continue its growth for some time to come.
It should also be noted that the world looks to the marine mode to provide leadership in terms of setting the standard for an environmentally sustainable and safe mode of transport. It is evident that the marine mode is not just important for economic reasons but because of the Canada Marine Act it has contributed to other aspects of our well-being.
The intent of the Canada Marine Act was to curtail the federal government's extensive involvement in port operations, to introduce a high level of commercial decision making, to encourage financial self-sufficiency and to reduce inefficiencies and overcapacity, which I believe are being achieved.
As well, under the old regime we believe that the taxpayers of Canada were not receiving an adequate return for the funding of many port development projects over the years. To date, as a government, we have created 18 Canada port authorities and will soon have 19 when the Hamilton port authority is created.
Canada port authorities are defined as federally incorporated, non-share capital, not for profit corporations with powers and responsibilities similar to corporations established under the Canada Business Corporations Act. Under this regime, which combines various aspects of the old port regimes, the Canada Marine Act has given Canada port authorities the autonomy and flexibility to operate according to business principles and to make investment decisions to the overall benefit of the port authority.
The proposed amendments contained in Bill C-253 will create a third class of ports which will receive automatic federal funding. These ports will be competing directly with Canada port authorities who are legally prohibited from receiving federal appropriations other than under a program of general application.
Under the Canada Marine Act, port authorities operate in a more commercial manner than under previous regimes. As Canada port authorities are not eligible for federal appropriation of funds, they are required to borrow funds from private markets. This gives port authorities the ability to make investment decisions to their overall benefit without government approval in advance, thereby allowing a quicker response time in the ever changing business environment of today.
In addition, the Canada Marine Act gives port authorities the ability to make their own operating bylaws and charge harbour dues without having to obtain governor in council approval. By making it easier for ports to operate according to business principles, cut excessive red tape and reduce overhead costs, it puts port authorities in a better position to meet their own needs and the needs of their customers. Also, port authorities now have increased authority to lease land and to determine priorities associated with capital expenditures.
If a new port class were to be created and were to receive subsidies, it would undermine the level playing field of the financial rules and authorities that have been created for ports coast to coast. The government's view is that the current proposal is unnecessary and would re-introduce the inefficiencies and overcapacity that existed prior to the Canada Marine Act.
Another main objective of the Canada Marine Act was to focus the Government of Canada's attention on ports vital to domestic and international trade. These ports have become or will become Canada port authorities. All other ports, except for those that serve the remote regions of the country, are to be divested to local or regional interests.
I believe that local users are in the best position to determine the level of service required at these ports and that the Government of Canada is prepared to negotiate a fair and reasonable transfer funding package to help ensure the long term viability of these facilities.
In that regard, the government has also established a $125 million divestiture fund. The purpose of this fund includes the following uses: bringing existing port divestiture up to a minimum safety or operating standard, covering a portion of the cost incurred by the transferee in complying with regulatory or insurance requirements, making a lump sum payment to facilitate the takeover of a port, assisting a group of communities or other interests to take over a collection of ports and to achieve cost savings by rationalizing infrastructure.
The intent of the fund is to facilitate port transfers and to provide a one time contribution to help ensure the port's long term viability.
A lot of good work has been accomplished by the government through the Canada Marine Act. Its five year review will be coming up by June 2003. I would encourage my hon. friend across the way to discuss his ideas with other stakeholders in the marine community and to make sure his ideas are brought into the mix during that review. We wish him well, nonetheless, with his work on behalf of his constituents.