Joe Fontana

[Railway Companies, November 6th, 1995]

Mr. Speaker, I welcome the opportunity to speak to the motion put forward by the hon. member for Beauport-Montmorency-Orléans.

His concerns reflect an appreciation for the approach advocated by the government toward rail line rationalization. The wording of his motion implies support for the line rationalization process set out in Bill C-101, the National Transportation Act.

The government has noted the widespread concerns expressed by several interested parties regarding the existing rail line rationalization process. Deficiencies have been recognized and we believe a remedy has been proposed through Bill C-101.

On October 2, 1995, Bill C-101 was referred to the Standing Committee on Transport. Committee hearings are currently under way.

Canada's rail network is overbuilt. Eight-four per cent of CN and CP traffic is moved over one-third of the network. Traffic density is only 60 per cent of the average of the top seven major railroads in the United States. It has been estimated that some 50 per cent of current CN and CP trackage is surplus to their needs. However, many of these lines could be successfully operated by short lines or regional railways.

Rationalization is under way but it is occurring slowing due to the complicated abandonment process contained in the National Transportation Act, 1987. There is widespread recognition that future rail financial viability will depend greatly on the railway's ability to accelerate plant rationalization and restructuring its networks.

Bill C-101, the National Transportation Act, is intended to streamline and modernize transportation regulations. In particular it will lift the regulatory burden on rail to increase its competitiveness in an increasingly continental market.

The bill contains provisions to streamline and shorten the current process for rail rationalization, making it commercially oriented, less adversarial and more conducive to the sale or lease of surplus rail lines to new operators. In conjunction with those provisions, the process for entry of smaller low cost rail carriers to operate in co-operation with CN and CP has been eased.

As demonstrated by the U.S. experience following deregulation of its railway industry in 1980 with the passage of the Staggers Act, railway rationalization need not result in the abandonment of track. In the United States since 1980, although 34 per cent of the total rail route miles were trimmed from the rail line railroad networks, less than half that track was abandoned. Almost 30,000 miles of track were sold to successful short line railways and saved from abandonment.

Today there are over 500 short line railway companies in the United States, of which 263 were created since 1980. In Canada only 10 new independent short lines were created since 1988.

Let me emphasize that the line rationalization process set out in Bill C-101 is not as radical as that in the United States. However one of its main features is that it will provide opportunities for any interested party to acquire lines surplus to the needs of CN or CP for continued use as rail lines.

In the event that there is a lack of interest in purchasing a particular line for rail purposes or a sale agreement is not reached, each level of government will have an opportunity to decide whether or not to acquire a line at net salvage value for public purposes.

Only after a railway company has gone through the process I have described and it has been unsuccessful in transferring the line to a new owner, whether it be a private company or a government, will it be able to abandon operations over the line and dispose of the land corridor and track assets. This will be a major improvement over the current process.

The current process has caused some parties significant concern. For example, some provincial governments have expressed their wish to preserve an economic rail line, even though they have not had any traffic on them for many years, in the event that some day there may be a need for them. However, it has been normal practice when lines are put forward for abandonment that the provinces do not take positive action to find a new operator or acquire the lines themselves.

Under the National Transportation Act, if a rail line is not purchased by new operators for continued rail purposes the onus is placed on governments at all levels to come forward and express their interest in the rail corridors by financing the cost of their acquisition at net salvage value.

Even if the government possessed the powers to comply with the action requested in the member's motion there would be no beneficial outcomes. Currently only five rail lines have been ordered abandoned by the agency. Three of them are scheduled for abandonment in 1995 and the remainder in 1996. Negotiations are under way for the purchase of one of the lines to be abandoned in 1996 and no interest has been expressed by anyone in the purchase of the others.

There is really nothing more to add except that on the strength of the motion I look forward to the hon. member's support of Bill C-101, the National Transportation Act. We should not delay the bill, as the hon. member has suggested, but should get on with, hopefully in the next two to three weeks, getting it through the House so that the process is improved and interested parties, be they short lines, governments or other interests, can take advantage of the opportunities presented by the new rationalization policy of the government.

[Route Canada, October 26th, 1995]

Mr. Speaker, I thank the member for his interest in the matter, along with a number of my colleagues on this side of the House who are very concerned about the question.

The bankruptcy trustee and the RCMP conducted extensive investigations into the company's conduct. Charges and sentences have followed. I take this opportunity to ensure members of the House and former employees of CN Route Canada that the rumours their pensions and pension benefits are at risk are wrong.

If they need additional information I encourage them to call the CN pension office. I assure them that their pension benefits have been protected by the government and that other issues will be looked at.

[Referendum Campaign, October 26th, 1995]

Mr. Speaker, the member should know that under the National Transportation Act, air carriers are free to set their own rates with regard to servicing Canadians going from one point to another and that is exactly what they have done.

[Canada Transportation Act, October 2nd, 1995]

And the parliamentary secretary.

[Canada Transportation Act, October 2nd, 1995]

Mr. Speaker, let me assure the hon. Reform Party critic that it is the intention of the government and the committee to get some positive and constructive comments from the Reform members who seem to always criticize and have absolutely nothing good to say about anything.

I rise today to lend my support for Bill C-101 and the Minister of Transport's motion to refer Bill C-101 to the Standing Committee on Transport before second reading.

This is an important bill. Transportation touches all our daily lives and has far reaching ramifications in today's business world. The government is advancing a comprehensive program and a vision to overhaul the large unwieldy framework of regulations, outright ownership and specific involvement in transportation particularly as it pertains to rail. While the bill deals with all modes, there is no doubt that the most talked about provisions deal with the rail industry, so I will address myself to that aspect in particular in these remarks.

In this regard I see the 30 or so railways now operating in this country as being at a critical juncture. CN and CP are two mainline carriers that dominate the rail freight sector and have, as have other railways, managed to weather the recent economic downturn.

CN and CP have done this by introducing new marketing initiatives and operations more closely tailored to the 25,000 shippers they serve. They have also expanded intermodal links with the trucking industry and have implemented new technology and operating methods.

Stringent cost cutting measures have been taken and since 1983 CN and CP have abandoned 20 per cent of their rail lines. Total employment has decreased by 40 per cent.

To move into the 21st century, however, I believe CN and CP must further adjust to changing trends, increased competition and the need to reduce costs. CN and CP cost cutting efforts have been stifled by the regulatory hurdles they must jump in order to tailor their rail line networks to their core markets. While the Minister of Transport has made reference to the proposed rail line rationalization process, I will build on his comments.

Like shippers' rights, rail line rationalization can be controversial. I will first set the issue in the context of the current rail environment. The main line rail network is vastly over built. Even after efforts by both railways in recent years to reduce trackage, 84 per cent of CN and CP traffic travels on one-third of the network.

The adversarial nature and the length of the process can deter the sale of underutilized lines to short lines and some say can lead to the downgrading of a marginal line on purpose. A line must be uneconomic or near so for abandonment to proceed. It is the creation of short lines that we wish to foster in the legislation now before us.

The process for sale of a rail line under current legislation can be long and drawn out. In one instance the owner and the potential purchaser had agreed to the sale, in other words the continuance of a line, but under the existing NTA process with its convoluted regulatory approvals the prerequisite abandonment proceedings took two years with a cost of $10 million per year to CP before the sale could be finalized.

In the U.S. the sale of a line, not an abandonment, to another operator can be accomplished in as little as seven days. Purchasers are required only to prove public need and that they have the financial capability to purchase and operate the line.

The most important means by which the federal government can help our rail carriers to reduce their cost is through regulatory reform, and that is what we intend to do.

The new proposed Bill C-101 will do this and will focus on the encouraging of the sale of rail lines to other rail operators. The process will require a railway to set out for all interested parties its intention for its network in a three-year rolling plan.

The owner railway will not be allowed to abandon a line unless it has made every effort to negotiate the sale of the line for rail purposes. The negotiating phase has a finite limit of seven months. This phase could take as little as two months if there is clearly no buyer interest.

If no private sector buyer comes forward, governments at each level will in turn have 15 days to exercise an option to buy for public purposes. They will have had ample notice of the possibility through the plan at the start of the whole process.

No abandonment of a rail line will take place unless no one, neither the private sector nor governments, is interested in acquiring that line.

The process advanced in Bill C-101 is not as radical as that adopted in the United States but is instead a made in Canada approach that gives every interested party ample opportunity to acquire the line. It allows CN and CP to rationalize their track within a specified time frame. It allows for a more planned approach to the future of the Canadian rail system, which will be a benefit to the railways, shippers and communities alike. It also promotes the creation of a short line industry which will benefit all and which is key to keeping the most extensive network possible.

The experience in the United States under its deregulated environment has shown the high potential for rail lines to be acquired by short lines, providing hundreds of jobs.

Today there are over 500 short lines in the U.S., of which 263 were created since 1980. Conversely, there are only 12 Canadian short lines in operation. I believe under our proposed new regulatory process many more will emerge. Short line railways typically operate under a less burdensome cost structure than the main line railways and pass much of the savings on to their customers.

In addition, through more focused marketing and closer tailoring of services to customer needs, short lines can both recover traffic previously lost by the main line railway and generate traffic that was not previously present.

It is in the interest of main line carriers to sell to other railways rather than to abandon. The main lines get both the proceeds from the sale and a new partner that can act as both a generator and a feeder of traffic.

The proposed legislation not only eases exit but makes getting into the railway business less onerous. In future all railways under federal jurisdiction will simply require a certificate of fitness to either operate or perhaps even to construct a railway. Shippers and railways agree this is a significant improvement over the process now in place.

While no one can guarantee continued rail service in every corner of the country, the law will create the right environment so that wherever possible service should be maintained it will be maintained.

Rail is the only mode of transportation in Canada whose business decisions can be easily and often delayed, varied and sometimes even reversed by public authorities. Everything from sales to bookkeeping is subject to regulatory permission, sanction or appeal, with some regulations dating back to the turn of the century.

Under the proposed legislation, treatment of the rail freight industry will be brought more in line with other Canadian transportation businesses and U.S. rail counterparts, thereby enhancing competitiveness.

Transportation has historically been highly and intricately regulated. I was amazed at the mass of the build up on the economic side. For rail alone it filled over 1,000 pages of statutes spread over eight different acts.

With the passage of Bill C-101 we have the opportunity to help our railways, large and small, and ultimately their customers in their efforts to improve competitiveness.

Under the proposed amendment to the Transport Act, regulation of non-safety matters will be condensed into just over 100 pages. This reduction in volume alone will make the regulatory burden less onerous and costly, fostering a more commercially oriented basis for the provision of rail service. It will also make the legislation governing transportation much more logical and understandable.

I hope I have not given the impression that the bill is good only for the railways. On reflection I believe listeners will recognize that what I have outlined for the railways can easily be seen to benefit shippers as well. Once the railways have their house in order, the benefits will surely flow to their customers.

The Minister of Transport has made it clear that the bill preserves key rights now enjoyed by the shippers. A balance between the needs of shippers and railways must be found or our railways will continue to suffer. That outcome ultimately will not serve their customers either.

The sweeping nature of the regulatory housecleaning for all transportation modes will necessarily have an effect on the National Transportation Agency. The proposed legislation defines a streamlined and more focused regulatory body and renames it the Canadian Transportation Agency. Its role and powers will be clarified and brought into line with the reform of rail regulation and changes to the other transportation modes.

In future the agency will concentrate on core quasi-judicial and administrative functions such as the issuing of licences and the setting of regulated rail rates. Regulation is always a poor substitute for market discipline. We need regulation only when there are no practical transportation alternatives.

The federal government is aggressively examining the way it does business on all fronts. It is regulating only where needed and leaving the private sector to activities it can do better and at less cost to taxpayers. Regulatory reform in the transportation sector is one very important part of all these efforts.

[Jesse Davidson's Journey, September 20th, 1995]

Mr. Speaker, I would like to pay tribute to a courageous young man from London, Ontario, Jesse Davidson.

We all know that Jesse paid his respects to the House yesterday along with his family. Jesse is afflicted with Duchenne muscular dystrophy and is confined to a wheelchair. He, his father John and his family have been travelling across the province raising money for gene research.

Their brave journey began at the Ontario-Manitoba border on May 20, 1995 and ends today, September 20, in Ottawa. They have travelled over 3,300 kilometres and have raised over $700,000 toward scientific research of gene based disorders.

It is through efforts like these that cures are found and dreams are realized. Their days have been long and miles many, but their dedication and commitment has never waned.

This courageous endeavour exemplifies how hard work and devotion can improve the lives of fellow Canadians. That is the mark of a great Canadian caring for others.

I would like to congratulate Jesse and all the dedicated team members behind Jesse's journey for their outstanding efforts and congratulate each and every member who participated.

[Explosives Act, September 19th, 1995]

Mr. Speaker, while my remarks may have addressed Transport Canada's concern with regard to the absolute necessity that we have this legislation in place, it is important to note-and I assure my colleagues in the House as well as the public-that Transport Canada has the ability and the equipment which are important at our airports to ensure we can detect plastic explosives.

It is in place now and we will continue to review any improvements required to ensure the travelling public at our airports that the aviation security regime is in place and is at the forefront of detecting these plastic explosives.

It is important that all nations ratify the convention. Our borders are open and Canada deals with every country in terms of trade, as well as tourism. It is important to ensure Canada take this leadership role today and move on with the legislation so that hopefully it will encourage other nations to participate.

To answer the question of the parliamentary secretary, through him to the public, Transport Canada has the equipment and the confidence that we are able to detect any plastic explosives introduced in the aviation regime.

[Explosives Act, September 19th, 1995]

Mr. Speaker, I thank the hon. member for his offer. I believe the parliamentary secretary to natural resources will take his suggestion under advisement. Perhaps there is a way to expedite the bill. I am pleased to speak on Bill C-71, the marking of explosives for detectability.

I congratulate the parliamentary secretary and the member for Moncton for his fine words this morning on the urgent need to essentially deal with an important piece of legislation concerning the security of Canadians, at the same time hopefully making it possible for us to deter terrorists from using plastic explosives to undermine the social fabric and security of the country.

There has been some experience around the world with plastic explosives being used by terrorists against civil aviation targets. The roll call of terrorist acts which have resulted in the deaths of innocent people on aircraft and the destruction of those aircraft as the result of sabotage by plastic explosives is a tragic one.

Unfortunately the world as we know it continues to have its dangerous and uncertain elements and conditions remain ripe for the emergence of people who will take the law into their own hands and cause such tragedies and suffering. Canada and all like minded nations must continue to be diligent in order minimize the chances of such acts of depredation occurring in their countries or be visited on their citizens.

The legislation before us to date cannot solve the problems of the world that give birth to terrorism. It can however enable us to put another brick in the wall which governments are building to reduce

the ability of terrorists to act against the peaceful interests of states and their people.

As has been described so clearly by my colleague, the bill is designed to ensure the so-called marking agent is inserted in plastic explosives. This action will improve immeasurably the ability to detect these explosives using the right equipment. This is an essential step in the development of a system which will provide Canada with the capability to respond effectively to terrorist threats of sabotage using plastic explosives.

It should also be a matter of some pride that Canada has played such a pivotal role in developing the international framework for marking and controlling plastic explosives. Canadian scientists and technical experts have been world leaders in solving the technical problems associated with putting markers in explosives in a way that ensures their detectability while in no way jeopardizing either the essential function of legal explosives or degrading their safety or environmental acceptability.

Both the government and the Canadian explosives industry recognize that Canada must continue to be in the forefront of developed nations ensuring all reasonable actions are taken to thwart the activities of terrorists. Our passage of this legislation will send a clear message to other countries including the United States that we are committed to improving the framework for combating terrorism and that we are taking positive steps to ensure this happens earlier rather than later.

We must continue to remain aware that the legislation represents not so much an end point of a process but rather a point along a continuum of actions which must be encouraged and nurtured to ensure Canada and other nations remain vigilant in the fight against would be saboteurs.

In consequence of this approach the government is extremely mindful that along with the ability to make explosives more easily detectable is the requirement to have the right equipment in the right places to detect terrorist activities. The sad history of terrorism demonstrates clearly that the air carrier industry has been a target for the such activities. We are confident the equipment in place at airports today is appropriate to the threat and the risk that prevails in Canada.

Let me assure members of the House as well as the public that we have the capacity today to detect plastic explosives. That does not mean the government is complacent about aviation security, far from it. For its part Transport Canada keeps it aviation security regime under constant review in order to ensure it is properly configured to respond both to the situation which prevails today as well as to any change in threat that might arise.

Mindful of the gains to security that might be available as a result of the improvements to the detectability of explosives which will arise in response to this new legislation, and keeping in mind constant improvements in detection technology, Transport Canada in co-operation with industry and other interested departments will soon begin an in depth review of its equipment deployment strategy at airports. Once the review is complete the Minister of Transport will be looking to see what refinements might be needed to ensure Canada remains in the forefront in terms of our ability to respond to terrorist threats where and when they exist.

This legislation is an essential part of the mosaic to respond to the scourge of terrorism. It has been developed in close collaboration among many departments and is fully consistent with the overall approach among many countries. The principles contained herein have been embraced by the industry which it affects.

This collaborate endeavour should be enough to convince the most skeptical of observers that Canada is fully committed to combating terrorism. I entreat all members to demonstrate their personal commitment to this effort by voting for this legislation.

[Cn Commercialization Act, June 20th, 1995]

Madam Speaker, the hon. member indicated a number of employees live in his riding. As well, in London, Ontario there are a number of CN employees.

We have through the CN privatization bill encouraged them to be involved in the ownership. We believe that will be good for the new corporation. Each employee will be able to buy shares in the company which will give them a more meaningful role in the affairs of Canadian National.

We wanted to ensure the employees knew their pensions would be protected in a number of ways. The Pensions Act and a number of safeguards Parliament has passed over the years will ensure each one of those pensioners and the people who work for CN now and in the future will have guaranteed pensions.

The hon. member is right, the privatization of Canadian National was not in our red book. What was in our red book was to build an efficient, affordable and integrated transportation system, be it in air, in marine or in rail.

We believe CN does not have to serve the public policy role. That is for governments to deal with in terms of regional economic development and so on. A railroad is a railroad and should be allowed to function as a railroad so it can provide the services it must to its customers.

We believe a privatized CN will be better for the country, better for its employees and better obviously for its clients. It will be stronger and able to manage a number of things without the encumbrances of government.

Therefore the deregulation package we put forward in the House today will ensure a viable rail industry for CP, CN and the creation of short line industries. Unless the country can move its goods and services in the most efficient and cost effective manner, we will not be able to deliver or export our goods and nobody will have a job. We need an efficient and affordable transportation system. That is what CN privatization is all about and that is what the deregulatory process is all about.

The member spent some time talking about the Quebec bridge. If he had spoken to his colleague he would have known CN has an obligation to maintain that bridge. A letter from Mr.

Tellier to the Quebec transport minister indicates the bridge is in need of repair, but there are studies which indicate it is safe.

It also has indicated that perhaps the province of Quebec ought to pay its fair share for the maintenance of the bridge. While it is very important for rail traffic, 75 per cent of the traffic on the bridge is vehicular, which comes under the jurisdiction of the provincial government.

We heard from people in committee who talked about the historical significance of the Quebec bridge. We believe in that as well. They are prepared to raise money. They are prepared to look at ways of restoring its historical significance.

I wonder if the member has heard from the minister of transport in Quebec as to whether Quebec is prepared to pay its fair share for the bridge to ensure it is safe and properly maintained for historical and transportation purposes. Has he heard from the minister or will he undertake to the House that he can use his good offices to talk to the PQ about paying its fair share?

[Cn Commercialization Act, June 20th, 1995]

Madam Speaker, I have a short question if I could.

I respect this member as a business person too, but the effect of what he is suggesting would cause the exact reverse. His colleague put forward an amendment indicating that we should offer it to Canadians first. We agree that in order to effectively get the value of shares for Canadian taxpayers for CN we need to have a broadly based offer in North America. We know there is not enough capital in Canada. To suggest that Canadians are lining up to buy 15 per cent, which is worth at least $200 million, I do not know of many pension funds and individuals who can afford to pay 15 per cent.

The second thing is that if in fact we want to achieve a 100 per cent sale and maximum value for Canadians, we cannot impose restrictions to say let us sell it to Canadians first and then let somebody else buy the rest. It is impossible to achieve that. We agree. And we want to achieve the maximum value.

The board of directors for CP, a private corporation, have decided that Montreal should be its headquarters and 70 per cent of its business is also out west. How does he rationalize that?