Joe Fontana

[National Transportation Week, June 9th, 1994]

Mr. Speaker, as other members before me have done this week I wish to pay tribute to those involved in the transportation industry in Canada.

The transportation industry is a major contributor to the nation's economy, whatever region of the country you come from. Employment, jobs, salaries, wages and export sales are among the direct benefits.

Transportation serves a variety of functions. It extends Canadian sovereignty over an immense country, it provides links between regions and markets, and connects small remote communities to larger centres.

In the final analysis, transportation today is about moving people and goods efficiently and reliably. The theme of National Transportation Week, as announced by the Minister of Transport, is "Inter-modalism: The perfect fit". This theme and the week's activities complement the regulatory and policy initiatives government and industry are taking to promote smoothly interlocking transportation services.

The government believes that modern, improved, intermodal transportation systems will contribute to the long term economic growth by enabling Canadians to receive supplies and deliver goods to markets quickly and at a competitive cost.

[Supply, June 8th, 1994]

Mr. Speaker, I have a question for the proposer of the amendment. We acknowledge that VIA has done its part, but I am not sure how the member came up with this magic $20,000.

Is he suggesting that we cut service to his riding or any particular riding? Is that the contribution the Reform Party wishes to make to the subsidy? If that is what the Reform Party stands for, less passenger rail service in this country, perhaps the member can explain that.

[Supply, June 8th, 1994]

Mr. Speaker, the question is very appropriate. The member will know that the three governments, the federal government, the province of Ontario and the province of Quebec, have spent $6 million on a further study of the high-speed proposal. That high speed proposal will come before the House and before the government some time this summer, at which point the House and the government will have an opportunity to

look at the viability of high-speed trains through the corridor from Windsor to Quebec and Montreal.

We believe there could be a future for high-speed trains in the country provided there is a willingness for the partners to work toward that resolution, the partners being the provinces, communities, other modes of travel and the private sector investing greatly in infrastructure which may cost somewhere between $8 billion and $10 billion.

The member is right that the European communities and Japan have decided to go the route of high-speed trains. We believe this country should look at those opportunities, but we will have to await the report for that to happen.

Let me say another thing about VIA. The member is right that the Conservative government slashed services some three years ago but the ridership has come back. I can only say that it is not a question of whether we will have VIA in the future but what it is we can afford. I will give one example. A person can purchase a ticket from VIA for $78 to go between Jasper and Prince Rupert. The subsidy for that one passenger for that one trip is $701 to the Canadian taxpayer.

We believe we can have a viable passenger rail service, but we need to look to the communities, to passengers, to the labour and to VIA to come up with a viable and affordable system.

[Supply, June 8th, 1994]

Mr. Speaker, I am glad the opposition has raised this matter for debate. As all members know there are many pressing issues facing the railway industry and Canada is at a crossroads with respect to the industry's future.

Before dealing specifically with VIA I would like to put the rail passenger services into the larger context of the national transportation system. The hon. Minister of Transport set out a clear vision for the government's national transportation policy on June 3 in Thunder Bay.

Obviously transportation is as important now as it was in the past. We need a realistic achievable vision, and new partnerships to move the Canadian transportation system into the 21st century. We should respect the past but by doing so we must meet the challenges of the future.

We believe that the role and structure of crown corporations such as VIA Rail and CN must be reviewed. Because of the current uncertainty in the rail sector and concerns over its long term viability, the Minister of Transport intends to convene a meeting of industry leaders to discuss the problems railroads are facing and to search for solutions.

We must be pragmatic and focus on what will work. We must ensure that the common sense realistic needs and affordability are among the criteria driving Canadian transportation policy of the future. Passengers must have a multimodal transportation system that is safe, reliable and affordable. VIA has a role to play as we put the system in place.

Because of the need to reduce the government expenditures VIA has been required to operate within lower funding levels. Notwithstanding the fact that the funding to VIA has been reduced and its network restructured in 1990 we now have a streamlined and more efficient rail passenger carrier. The corporation has been able to complete cost studies of its operations that show where opportunities exist to make cost effective changes. Identification of such opportunities prompted VIA for example to introduce new service frequencies in the Montreal-Ottawa triangle while reducing further its requirements for government subsidies.

The government is pleased with what the corporation has been able to accomplish with the introduction of its silver and blue service on the western transcontinental trains. Public response has been outstanding. With both revenue and traffic increasing, on time performance is now at 90 per cent.

VIA has demonstrated that it is capable of meeting the challenge of subsidy reductions. That has been accomplished with the use of better equipment, improved productivity and a quality of on board services.

Recent years have seen VIA management exercising greater flexibility and control over the planning, development and operation of rail passenger services. With our government that trend will continue.

The 1993 budget reduced VIA funding over a three year period beginning in 1994-95 from $343.4 million to $235 million in 1996-97. The recent budget exercise further reduced annual funding over the next five years by a total of $9.6 million.

As my colleague, the Minister of Finance, has already told the House, Canada has been building up a mountain of debt. We simply cannot allow this trend to continue. This was the reason behind our decision to confirm the VIA funding levels announced in the 1993 budget. VIA has met its challenges in moving to a more efficient customer oriented company.

This government is now asking the corporation to assist the government in reducing our national deficit. VIA's ability to meet this challenge is fundamental to its long term viability. The government's decision to confirm VIA's reduced funding was a necessary one and the right one for Canada. We cannot put the decision aside and look to the past. In my opinion that would be the wrong course. Rather we must now look to the future and forward building on VIA's successes.

There has been much discussion concerning the level of government subsidy to passenger rail service. In particular comparisons have been made with other modes of public transportation in Canada: buses, aeroplanes and the automobile. While the automobile and air modes have received more funding overall, each passenger on the rail mode receives a far greater subsidy than any other mode of transport.

Since its creation in 1977 the government has spent more than $7 billion on VIA's operating and capital expenditures. Despite these government subsidies rail passenger service retains only 1 per cent of the total Canadian intercity passenger traffic. In comparison the air mode has a market share of 6 per cent. The automobile enjoys the lion's share of the market at 89 per cent. Even the bus mode enjoys a greater share of the market at 4 per cent.

These figures reveal that Canadians have a definite preference for passenger modes other than rail and they have sent a clear signal of that preference.

Like all Canadians we must ask ourselves what is it that we can afford. We must make choices based upon utility and value. We cannot say to Canadians: "You must continue to pay more and more for something you rarely use".

I would encourage the opposition to recognize that we must face the reality of our economy, of our modes of travel, in particular the cost and benefits of rail passenger service.

If I may, I would like now to address the issue of where VIA is today. At the outset it would be helpful to briefly review some of the facts on VIA's performances in 1992. For the system as a whole the operating subsidy was $332 million. This translates into an average total subsidy of $92 per passenger. For the corridor, the most heavily travelled segment of the network, the operating subsidy was $171.8 million for an average subsidy of $56 per passenger.

As we move to the other categories of service we see that the level of subsidy rises dramatically. For example, it rises from an average of $254 per passenger for Trent Continental service to $454 per passenger for services to the remote communities.

It is also interesting to look at the level of cost recovery. It ranges from a high of 38 per cent on the corridor to a low of only 8 per cent on the remote routes. Nevertheless, VIA has not stood still since the 1993 budget announcement. To help meet the funding targets it embarked on a major restructuring of its corporate and management expenses last November. We as a government must respect the taxpayers' ability to pay. That is an important first step.

Unfortunately, with even bigger streamlining and a pared down corporate structure VIA cannot achieve viability unless at the same time it addresses its cost base. For example, labour costs represent approximately 46 per cent of the corporation's operating costs. These are in fact the largest single cost items in VIA's budget.

The decisions facing both VIA and its labour unions in the current contract negotiations will be difficult. At the same time it will be necessary for them to work together to find a resolution of their differences which is within the final financial constraints.

VIA is currently evaluating the effect on its operations of the budget funding cuts. As well, the negotiations between VIA and its employees will have a significant impact on future levels of service.

In addition, the corporation is reviewing every aspect of its operations to maximize all expenditures which do not impact directly on services to the travelling public.

In conclusion, I believe it is important to tell this House and Canadian taxpayers, who are in fact funding VIA to the tune of $323 million this year, that a resolution and a solution can be found. It lies within VIA itself coming up with some additional efficiency gains and the workers and labour components of VIA working co-operatively with the company to ensure greater efficiencies. Passengers and the travelling public who have a great desire for using passenger rail service-at least that is what they tell us-at the same time jump in their cars and drive down the 401. Ninety per cent of passengers do that.

I think the solution for passenger rail service, and there is no doubt that there is one in this country, lies with the passengers utilizing VIA more, the labour component part helping, and VIA looking for greater efficiencies. We believe that we can have a viable affordable passenger rail service in this country.

[Air Safety, May 27th, 1994]

Mr. Speaker, I thank my colleague for bringing this matter to the attention of the House. I take this opportunity on behalf of the Minister of Transport to assure the House and, more important, the travelling public that the systems are in place to handle all air traffic completely safely. It may be slower but it will be safe.

I also advise that the transport management is in contact with CATCA which will be meeting with the union tomorrow morning. The union is trying to be helpful in getting the controllers back to work.

I should also point out to the House that the severity of such unwarranted job action must be looked into, in the fullest extent of the collective agreement.

[High-Speed Train, May 24th, 1994]

Mr. Speaker, I want first to congratulate the member for Brant on her hard work in promoting the needs of her area, especially the transportation needs of the people of the riding of Brant and elsewhere.

I can also say that we share a common vision with regard to the role that passenger rail service should play in the country. Some of the suggestions she put forward are obviously ones that the government and the minister are considering.

I should point out, though, with respect to her specific question that it is premature for the government to look at specific service cutbacks or service routes at this time. I believe the member alluded to the fact that VIA is currently conducting some negotiations with its workforce. Those negotiations hopefully will be fruitful so that in fact VIA can meets its fiscal requirements as mandated by the government and essentially be able to maintain a viable passenger rail network across the country.

I should also point out that not only are the workers part of the solution. We have always said in the House that passengers must be part of the solution. As well as other interested parties, municipalities and provincial governments, passengers need to be part of the solution for a new invigorated VIA.

People have to use trains. People talk about the value of trains. They want high speed trains. They want to use train services. The reality is that they jump in their cars usually by themselves and travel from point a to point b . We have to do much more to encourage people to use this mode of transportation. That is very fundamental.

Let me point out to members that there is a unique opportunity for all parties to work together toward a solution, including the municipalities and provinces, as they have between Brantford and Toronto. They have helped subsidize that particular route. That is an opportunity for everyone to work together to ensure that we can maintain a passenger rail service in the country.

[Supply, May 5th, 1994]

Mr. Speaker, I appreciate the question of the hon. member. He should realize that we have only been in government six months. We understand and our commitment to jobs has not wavered at all. In fact, some of the announcements that we have already made as a government with respect to the infrastructure program or support for small business or support for research and development will pay big dividends in terms of job creation.

Our commitment to jobs is not any less today than it was before the election. Our red book talked extensively about a change in the economy. One of the changes in the economy is with respect to the defence sector. I think historically we should realize, and I tried to point this out in my speech, that in terms of what is happening in Europe and in the United States, Canada in fact is facing some of the same challenges.

I hope the member is not suggesting that we close down the whole defence industry in this country because that is thousands

and thousands of jobs. We realize there is a need for defence industries and we have some of the best in the world right here in Canada, including in London, Ontario where we have many.

In Quebec and B.C. we have great industries. They are serving a useful purpose. Whether or not that purpose is still justified 10 or 15 years down the road no one knows. I think our red book says, and I would point this out to the member, that defence conversion consists really of three points: (1) redefining Canada's defence policy and the role of the military. As he knows there is consultation now on what that defence policy should be; (2) the rationalization of defence infrastructure, and that means looking at how we can assist these industries, communities and workers. As I said, these workers are very highly skilled, in high paying jobs. We need to look at how we can have adjustments for these workers; (3) the conversion of the defence industrial base to reduce the dependency on defence sales. I think that is important. We cannot cast out those industries and those workers just like that. We need to work with those companies, utilize their highly skilled workers, utilize their high technologies and be able to look for commercial applications of those things.

The member should realize, as I tried to define in my speech, that certain materials and certain parts produced by certain companies are not only defence related industries. They, in fact, serve a dual purpose. We ought to take advantage of making sure that this country faces the new economy by relying on the high skilled jobs that the defence industries have and also their technology.

We are prepared to work with those members and all members to ensure that we provide employment in this country.

[Supply, May 5th, 1994]

Mr. Speaker, I appreciate this opportunity to speak on this topic which is so important to a large number of Canadians.

I thank the hon. member opposite for focusing attention on the future of the defence industry. It is an industry which over the years has provided much employment across Canada and will do so in the future.

The future prosperity of the defence industry is vital to the future prosperity of Canada. As a vibrant part of Canada and North America, its industries can keep pace with global change and technological advancements.

I applaud the interest of members in raising this question and I would like to speak for a few moments on this matter.

European markets for defence sales have dropped remarkably leading to a loss of 150,000 jobs over the last three years. That is 10 per cent of the workforce in the aerospace and defence sector.

In America the experience is similar with large reductions in military procurement matched by significant job losses, more than 300,000 jobs in the last three years.

Both European and American industries have been faced with a serious industrial adjustment program. In various countries governments have responded in various ways. It is tempting to look at solutions such as those proposed in the United States for the problems facing our industries.

I believe we can learn from others. I am confident that some of the lessons which we might learn from others in defence/industrial conversions are universally applicable.

The term defence/industrial base defies easy definition. Companies that make military products are obviously included but it is important to consider the broader picture. These are many firms that market commercial and dual-use products in addition to the military sales. Of course the military itself uses many of these products. For example when our peacekeeping troops needed a soft desert boot, not a normal item in the Canadian forces supply system, we bought commercial products.

Another reason the defence industrial base is hard to define is that like all products military ones are composed of many components. When you get down to basics these components are pretty small, things like screws, nuts, bolts, washers, and rubber gaskets. One would not normally think of these as defence products but in fact we could not build military products without them.

Having made these cautions I would like to provide a brief overview of Canada's defence industries. Canada's defence industrial base is quite small by world standards. Depending on how widely it is defined it contributes about 1 per cent to 1.5 per cent of Canada's GDP and about 70,000 jobs. That is about 1 per cent of the Canadian labour force.

A large majority of the firms are small or medium in size, having sales below $100 million per year.

The defence industry is largely foreign-owned, about 60 per cent, especially the larger firms.

This is not to say that the defence industry is not important. While small it nevertheless contributes to Canada's economy in important ways. The products it produces generally fall within the realm of high technology, many of these at the leading edge.

As a consequence it generates highly skilled, highly paid jobs which are not only nationally important but which also make a substantial contribution to both regional and local economies.

Another main benefit derives from the fact that these companies are highly export oriented. These revenues help our balance of payments. The defence industry is highly specialized in niche markets such as subcomponents in aerospace, electronics and communications sectors.

Our companies are well respected in specialized fields such as major aircraft components, flight simulators, satellite subsystems, unmanned air vehicles, armoured vehicle fire control systems and magnetic anomaly detection systems. Their successes in both the civilian and military markets improve the overall competitiveness of the Canadian economy.

Along with the aerospace industry defence firms perform more R and D than the rest of the Canadian industry although somewhat less than their competitors in other major western nations. One finds defence industries throughout the country and the regional distribution has been slowly changing over time.

The munitions sector is a small sector which produces excellent ammunition and small arms. Companies involved in this sector include SNC and Expro, Bristol Aerospace, and Diemaco in Ontario. This sector is naturally highly dependent on DND purchasing. Exports and export potential are modest. Reduced spending in this sector by both Canada and the U.S. presents a special challenge in this sector.

In conclusion, Canada's defence and defence related industries are small but a vital sector of our economy. While the defence industry could never be considered to drive the economy it does make an important contribution in crucial high tech sectors.

While Canadian shipyards have historically focused on the domestic market, St. John's Shipyards is currently exploring other marketing opportunities. In addition to its expertise in the commercial sector St. John's Shipyards has acquired valuable expertise in constructing naval vessels as a result of its contract for the Canadian patrol frigate. This expertise will assist the company in its search for offshore sales.

The military vehicle sector is a very small, highly specialized, subset of the Canadian automotive sector. Two companies are currently producing vehicles for DND. Western Star located in Kelowna, B.C. produces DND's fleet of light trucks. In the great city of London, Ontario the diesel division of General Motors

produces light armoured vehicles, the best in the world, with huge export markets.

Efforts to market these vehicles internationally have been very successful. They are being sold in the United States and Saudi Arabia and further exports are likely.

On the aerospace side it is estimated that the top four companies, Bombardier, Pratt and Whitney, Bell Helicopter and Spar, account for some 45 per cent of production. Defence sales represent about 25 per cent of their revenues. On the defence electronic side it is estimated that 80 per cent of the output is exported. There is significantly greater reliance on defence sales for revenue.

This sector, particularly the aerospace side, is well positioned to survive reductions in defence spending. The defence electronic side is less well positioned and smaller companies with limited product lines and a high dependence on defence sales face greater challenges.

The shipbuilding repair and marine equipment sector relies mainly on government procurement. There are few commercial opportunities. Despite the rationalization of shipyards in Ontario and Quebec and rationalization currently under way in B.C. excess capacity still exists in Canada.

Historically, due to population density and patterns and the need for concentration of manufacturing for the war effort Canada's defence industries were highly concentrated in Ontario and Quebec. The defence industrial base is generally conceived as consisting of four main sectors. The largest sector is the aerospace and defence electronic sector which produces complete aircraft, various aircraft components and parts, navigation and space equipment and other defence electronic equipment. This is the most diversified sector by producing a mix of commercial, dual use and military products.

I think it is important to note that this government's commitment is to ensure that the high skilled, high tech jobs that we have in the defence industry are maintained, that in fact we work toward transition of those industries where possible. But we must not forget that Canada needs a strong defence industry. Where applicable and where appropriate we will continue to do what we can to maintain that, but at the same time look at opportunities to be able to move into transition for those defence related industries which may find lesser and lesser markets in the future. We must make sure that we have adjustment programs for the workers, adjustment programs for the industries and take advantage of the great high skills that the workers have, as well as the high technology that the defence industries now have.

We welcome this opportunity to debate this very important issue.

[Railway Safety Act, May 4th, 1994]

Mr. Speaker, on behalf of the Minister of Transport, I want to thank both parties for the quick passage of this very important bill.

It does show that when an important piece of legislation needs to be put through the House in fairly quick order all parties can move, and I want to thank them.

[Railway Safety Act, May 4th, 1994]

Mr. Speaker, I am very pleased to rise today to present for second reading a bill to amend the Railway Safety Act. I understand there is agreement that we do all three readings hopefully before the hour of adjournment.

The bill, which will help reduce accidents and fatalities associated with Canada's railway system, will create an offence for trespassing on federally regulated railway property.

A similar prohibition in the Railway Act was revoked by proclamation of the Railway Safety Act in 1989. By reintroducing the prohibition we will put teeth into the Railway Safety Act by giving railway companies a strong deterrent.

Effective and enforceable legislation in conjunction with public education should help reduce trespassing related incidents on railway lands. The three e s to enhanced railway safety are education, engineering and enforcement. I am pleased that this enforcement initiative will enable law officers, especially railway police who are empowered to enforce federal legislation, to charge trespassers found on railway lines.

This legislation is clearly in the interest of public safety. Trespassing on railway property is one of the most frequent causes of fatalities and injuries related to railway operations. The incidence of accidents to trespassers is increasing. In fact, last year for the first time the number of trespassing fatalities surpassed the number of lives lost at level crossings in Canada.

An estimated 100 people are struck by trains each year while trespassing on railway right of ways. Almost half of these people are killed and the remainder are seriously injured. Many of these people are habitual trespassers, and an unfortunate number of accidents involve young children and students. These are tragic statistics.

The government has introduced this bill as a means of reducing the terrible consequences that can result from trespassing on railway lands. Trespassing commonly occurs near schools, parks, recreational facilities and commercial or residential locations which have high pedestrian traffic, urban areas such as Montreal and Toronto.

The reasons for trespassing include shortcuts to commercial establishments, schools and residential areas, and the use of railway tracks by children as play areas. Unfortunately a railway right of way is a dangerous time saver and far too often becomes a deadly playground for young children.

There is also a major problem of homeless people using railway property as living or resting areas. Many trespassers make use of railway property with total disregard for their personal safety and this is of major concern to Transport Canada.

Fencing and highly visible signage put in place by railways have not been sufficiently effective in discouraging trespassers. Let me emphasize that the penalty provisions contained in the act are broad enough, up to $5,000 on summary conviction, to create a major deterrent to repeat offences.

Reinstatement of the prohibition against trespassing will assist police in reducing the incidence of this dangerous practice on railway property and hence the number of accidents and fatalities. The onus for enforcement would rest with the railways through their police forces and there would be no demand on government's resources as a result of this amendment.

The original anti-trespassing provision in the Railway Act was not included in the Railway Safety Act when the latter legislation was proclaimed in January 1989 because it was felt the matter could be addressed effectively through subsequent regulations.

A review by the justice department has determined that due to the nature of the prohibition, the provision should be established as part of the legislation itself and not as a regulation. Transport Canada has worked with railways to improve safety in areas of heavy trespass; measures such as increased railway policing, barbed wire top fences and other steps to discourage trespassers have been introduced as a result.

The amendment will not affect individuals such as native people and prospectors in remote areas who may need to cross tracks on a regular basis to reach trap lines and mineral claims. The purpose of the amendment is to enable railway police forces to take action in areas of continual and dangerous trespasses.

In conclusion, let me emphasize that the federal government is committed to working with the railways to reduce accidents and fatalities associated with Canada's railway system. This addition to the Railway Safety Act strengthens this important piece of legislation and in conjunction with public education should help remedy the problems of trespassing on railway lands.