Jim Gouk

[Via Rail, October 2nd, 1995]

Mr. Speaker, the federal government subsidizes VIA Rail to the tune of over $800,000 a day.

Last spring VIA ran a 50 per cent off special. The consequences of this action were twofold. First, privately run bus companies were forced to lay off workers due to the fact they could not compete with twice subsidized rates. Second, the Canadian taxpayer ended up paying for the 50 per cent cuts. Now VIA is at it again offering 50 per cent off rates for the winter and the fall.

My question is for the Minister of Transport. When will he do the responsible thing and put an end to this grotesque abuse of taxpayers' dollars?

[Pearson Airport, October 2nd, 1995]

Mr. Speaker, this fall is an anniversary of sorts for the Liberal government. It will be two years since the controversial cancelling of the Pearson airport contract.

For two years the government has claimed the process was corrupt and yet for the same two years it has not produced one substantive piece of evidence demonstrating its alleged corruption.

For two years the government has claimed it was not a good financial deal for Canadians in spite of government documentation to the contrary, and yet for the same two years it has not come up with an alternative plan.

For two years the government has claimed that failure to pass Bill C-22 has resulted in its inability to deal with the problem in spite of the fact there is no injunction standing in its way and the Pearson Development Corporation has not requested specific performance in its court action.

Witnesses under oath at the Senate inquiry made allegations which indicate the cancellation of Pearson is nothing more than a snit by the Prime Minister against the principal partner in the deal who had the audacity to donate to the Prime Minister's main opponent in his leadership campaign.

After two years the Liberals should not be celebrating; they should hang their heads in shame.

[Canada Transportation Act, October 2nd, 1995]

Mr. Speaker, when Bill C-89 was in committee I was told by the government's underwriters, Nesbitt Burns, Scotia McLeod and Goldman Sachs, that CN Rail had an accumulated debt of approximately $2.5 billion and that in order for CN to achieve an investment grade bond rating of BBB it would have to reduce its debt load to $1.5 billion.

They then went on to explain that CN had excess cash reserves of $300 million to $400 million as a result of recent subsidiary company sales and actual cash reserves, plus $400 million to $600 million in non-rail real estate assets. At the upper end of these figures was the amount by which the underwriters were telling us the debt had to be reduced. The lower value of these figures indicated that the government might be faced with a cost of up to $300 million in order to reach the debt reduction target that was stable.

It was the stated plan of the government to purchase CN's non-rail real estate assets. In response to my question on how the value would be set, government officials who also appeared before the committee testified that a full appraisal would be completed and that would set the price the taxpayers had to pay to purchase the assets from the company which they already owned.

The wording of the debt reduction clause in Bill C-89 concerned me in that it allowed the Minister of Transport to reduce CN's debt by any amount he chose. I attempted to have the legislation amended to tighten this arbitrary power of the minister but the amendment was defeated.

On May 17, 1995 I wrote to the minister requesting answers to a number of questions which were not clearly answered by the minister in committee. One of the most important questions was the amount of money the minister was going to give to CN to reduce its debt. In his response the minister stated: "The government will undertake only the minimum, if any, debt reduction necessary to facilitate an investment grade rating of CN's debt".

My concerns about the minister's real debt reduction plans were well founded. On August 28, 1995 the government announced that it would be injecting $1.4 billion into CN Rail to reduce its debt. This amount includes a $500 million payment for real estate assets with a book value of $235 million and no appraisals to the contrary forthcoming.

The government pushed Bill C-89 through the House and into committee after first reading. I supported this with the understanding this was meant to make it easier to examine and amend the bill in committee where it is theoretically less partisan. This turned out not to be the case.

I presented many amendments, none of which were accepted in spite of little argument against them. One of my amendments dealing with Atlantic Canada did have the support of one Liberal on the committee but was defeated by a tie breaking vote by the committee chairman.

Given the lack of co-operation that we were led to believe this procedure of sending legislation to committee after first reading would provide, coupled with the deception that took place on the debt reduction, I would be very reluctant to trust Liberal intentions on transport issues in the future.

When Bill C-101 was first proposed I was approached by the parliamentary secretary to the minister seeking my co-operation in not only sending it to committee after first reading, but reducing the first reading debate time to one hour. At that point I had not yet received a copy of the bill nor was I aware of its contents. He informed me that it was not available yet but it was fairly straightforward and simple, essentially nothing more than enabling legislation allowing necessary changes to occur on an as needed basis. We now all know that Bill C-101 is a massive piece of legislation with major ramifications for both the rail and shipping industries.

It seems that this deception also continued into the summer. In a telephone conversation with the chair of the Standing Committee on Transport, I agreed to request submissions from interested

parties over the summer as long as it did not restrict anyone's access to testifying before the committee in the fall. I was assured it would not and that the intent was only to allow us to obtain some of the material during the summer instead of having it all bunched together when we returned in September.

Subsequent to this, several affected groups complained to me about the tight timetable for getting their submissions to the committee. I obtained a copy of the notice sent out from the transport committee under the signature of the chair advising that if they wished to appear before the standing committee regarding Bill C-101 they must send in 25 copies of their submissions to the committee not later than August 31.

At the end of August I sent the following fax to the committee chair:

It has recently been brought to my attention that the notice sent out to interested parties regarding Bill C-101 is written in such a way that has caused many of them to believe that August 31 is a cut off after which we will not accept any submissions. It also implies that if they do not submit a written submission within that time frame, they will not be allowed to appear before the standing committee on this issue.

Neither of these positions were agreed to by myself either as a regular committee member representing the Reform Party or as a member of the transport steering committee. You and I discussed early submissions by telephone and I agreed that it was not a bad idea to request early submissions to be made so that we might be able to review some of them during the summer. As it has turned out, if any such submissions were made, I have not received a copy of them. When I gave my agreement to this early start, it was with the clear understanding that this early submission request would not impede any party's right to appear before the committee.

I trust that this is a misunderstanding on the part of concerned parties and anyone wishing to appear before the committee and/or provide written submission may still do so. After all, we are attempting to determine all the facts and concerns available. Surely, we will not do anything to impede this information gathering process.

The reaction I received from the chair's office is interesting. Through follow up inquiries my office was informed by an assistant in the chair's office that they were preparing a response to my letter which I finally received on September 26.

Verbally and later in writing we have been informed that there has been a tremendous response which makes me curious why these were not forwarded to me as a committee member. I did receive a huge stack of submissions when Parliament reconvened, the very situation summer submissions were meant to avoid.

We have also been told that all stakeholders interested in appearing before the committee are welcome and not subject to a deadline. They advised that 800 letters were sent out, too many for a second letter to retract the false message that had been received and it was up to us to notify any parties concerned with the previously stated deadline and tell them it was not in effect.

As far as the bill is concerned it is long past the time that Canada's archaic rail legislation was revisited. To continue with the existing legislation is simply to ensure economic failure which will affect rail companies and shippers alike. We must move quickly to a market driven competitive system able to compete with the U.S. companies unencumbered by restrictive and uneconomical government regulations.

In the late 1970s the American rail industry was suffering from many of the same problems currently faced by the Canadian rail companies. In 1980 the U.S. Congress passed the Staggers act which deregulated the industry. Since that time the American rail industry has prospered.

Bill C-101 is a half Staggers bill which addresses some parts of the need to simplify rail line abandonment but does not address many of the other necessary components for rail industry prosperity with proper consideration for shipper needs.

The rail industry is quick to point out that we cannot compare ourselves directly to the United States because of differing taxation and labour laws. While that is not incorrect, our approach would be to harmonize these differences instead of bowing to them as unsolvable and tinkering with our problems instead of dealing with them head on.

Rail transportation is essential to get Canadian goods to their markets and to get supplies and materials to Canadian companies. Likewise, economic survival of these same Canadian companies is essential to the rail companies.

Many years ago I remember seeing a cartoon dealing with nuclear war. A single picture showed the president of Russia and the president of the United States both with their heads in guillotines each holding the release rope of the other. If either of them released the rope the blade would fall which would cause the other to release his rope in the ultimate no win situation. That is similar to what would happen in Bill C-101 if the legislation does not consider both sides fairly and pushes them into hard adversarial roles.

Shippers' products must be able to compete internationally with those of their competitors from the United States. A significant component in their cost structure is transportation. If their cost component for transportation is substantially higher than that of their American competitors, shippers are operating under a severe handicap. The potential is that these shippers will use the American shipping system affecting the Canadian economy through job losses not only in the rail sector but at Canadian ports as well,

moving their operations to the United States, or folding their operations if they are unable to market their products at a profit.

The first thing the bill should examine is the reduction or removal of unreasonable cost factors to rail companies. This includes such items as federal fuel taxes, lengthy capital cost allowance terms, application and renewal fees and cabinet authority on rail line abandonment.

We must also address problems at the provincial level. Provincial fuel and property taxation as well as labour legislation impact on the competitiveness of federal rail lines and their ability to divest themselves of low density lines without loss of that rail infrastructure. This issue will not be resolved by ignoring it.

The other main problem with the bill is the lack of a clear sense of direction. The ultimate goal of rail deregulation is to establish a market driven and market regulated industry which can compete with the United States. I recognize this may be a huge single step but Bill C-101 not only fails to allow the market to be the final arbiter over price decisions, it also attempts to block access to the present arbiter through clauses like 27(2) and 34(1).

I could provide much more detail on the deficiencies of this bill and solutions for the problems faced by both the rail industry and Canadian shippers, but the action of the Liberal government to eliminate second reading debate severely restricts the amount of time available.

Be assured I will deal with these solutions in detail at committee hearings and I will ensure that all interested parties have the opportunity to bring their concerns before their elected representatives. I call on the Liberal members to co-operate with this process and agree to deal with the needs of the Canadian transportation industry instead of their own partisan agenda.

[Manganese Based Fuel Additives Act, September 26th, 1995]

They cannot make it in the United States either.

[Manganese Based Fuel Additives Act, September 26th, 1995]

Mr. Speaker, as members of the House will recall, during the June session we heard the government's reasoning behind the proposed ban on MMT. According to the hon. member for Davenport, the government is proposing Bill C-94 to ban the interprovincial trade of the fuel additive MMT in order to protect human health, protect car warranties, and to take advantage of technological change.

This may sound on the surface to be reasonable. However, a closer examination of the stated reasons is certainly merited. It is my objective today to seek clarification on the purpose of Bill C-94, a trade sanction bill introduced by the Minister of the

Environment, allegedly to protect the warranties offered customers purchasing new cars.

First, looking at the health issue, allow me to refer to the Canada health study published in late 1994. I quote: "Airborne manganese resulting from the combustion of MMT in gasoline powered vehicles is not entering the Canadian environment in quantities or under conditions that may constitute a health risk. All the analyses indicate that the combustion products of MMT in gasoline do not represent an added health risk for the Canadian population."

During our last discussions on this bill, the government produced facts from the U.S. EPA that indicated the EPA suggests tests be conducted on the potential health effects of MMT. The interesting thing is that the government appears to be predicting that the results of this testing will support its position to ban MMT, certainly a very premature action on its part. It seems ironic that the government chooses to discount scientific findings of the EPA testing programs on the impact of MMT on vehicle emission systems, the results of which clearly indicate that MMT has no adverse effect on the emission systems of cars, while speculating that the studies to be conducted on health will support its position.

One may also ask why the government wants to see EPA testing results on health impacts of MMT when its own agency, Health Canada, has clearly demonstrated that Canadians experience no adverse effects from the level of airborne manganese that results from tailpipe emissions. It appears the government is prepared to discount scientific findings in favour of speculation that the results of the EPA's proposed testing on health effects of MMT will prove to be negative.

The second reason the government offers for a ban on MMT is to protect car warranties. For those of you unfamiliar with the motivation for this legislation, let me remind you of the carmakers' claim that MMT in gasoline causes problems for onboard diagnostic systems in new model cars made in the U.S. According to the industry minister, the federal government has said it wishes to ban MMT so that "Canadian consumers will be protected by ensuring that they are afforded the same warranty coverage as automobile owners in the United States". Another reason is because the Motor Vehicle Manufacturers Association states that it has research that indicates MMT causes failure of onboard diagnostic systems. The MVMA has elected not to make that research public, however, after a recent review of scientific evidence collected as part of the U.S. Environmental Protection Agency evaluation of the auto industry's claims.

The U.S. court of appeals stated in its judgment of April 14, 1995, that MMT would not cause or contribute to the failure of any emission control system or device. According to the U.S. EPA, and I quote: "MMT does not cause or contribute to a failure of any emission control system or device". The decision goes further to state: "The administrators' analysis of data submitted by Ethyl was careful and searching. The American Automobile Manufacturers Association did not come close to proving that the administration's analysis of data was arbitrary or capricious."

We should also note that automobile makers have experienced significant technical difficulties complying with the onboard diagnostic requirements in the United States as well as in Canada, despite the fact that MMT is not currently used as an octane enhancer in American gasoline. In fact, difficulties with certification of onboard diagnostic systems in the United States have prompted the U.S. EPA to state in the Federal Register that automobile manufacturers have expressed and demonstrated difficulty in complying with every aspect of onboard diagnostic requirements and difficulty appears likely to continue in the 1996 and 1997 model years.

Despite these facts, the Canadian government appears not to have noted that vehicle manufacturers have failed to achieve onboard diagnostic certification in the U.S. for most new model cars and then chooses to conclude that those same problems in Canada are somehow attributed to MMT.

The government's third reason for the proposed ban of MMT is a desire to take advantage of technological change and to enable Canadian consumers to reap the benefits offered by onboard diagnostic systems, which the hon. member for Davenport describes as contributing to pollution prevention. Unfortunately the member for Davenport does not appear to realize that onboard diagnostic systems merely notify the driver when there is a pollution emission problem. They do not control or reduce emissions. The onboard diagnostic is in fact a light on the dashboard of the car, which when illuminated suggests difficulty has been sensed.

The problem the automakers are experiencing with the onboard diagnostic system, both here and in the United States, is that the OBD has been malfunctioning and lighting up when in fact there is no emission problem. This is causing vehicle owners to take their cars in for service when none is required. Since most of these visits are covered under warranty, the result is that the automakers must pay for the service visit.

The government's confusion on the role of MMT is further exemplified by the notion that removing MMT from gasoline will contribute to pollution reduction. The member for Davenport tells us that scientists in his community have informed him that MMT in gasoline is contributing to greater pollution in the form of smog, carbon monoxide, and hydrocarbons. Again, the facts prove him wrong. All scientific studies on nitrous oxide reductions attributable to MMT in gasoline conclude the same thing: MMT in gasoline reduces emissions of nitrous oxide, a leading contributor to the formation of urban smog. In addition, the use of MMT in the refining process reduces emissions of carbon monoxide and of

hydrocarbons, not to mention emissions of benzene, which is a no-tolerance carcinogen.

We should also note that MMT is compatible for use with alternative fuels. In fact the use of MMT enhances emission benefits of oxygenates such as ethanol and MTBE. For example, EPA test results indicate that MMT with a 10 per cent ethanol blend lowers nitrous oxide emissions by slightly more than 30 per cent and lowers ozone potential by 29 per cent. When MMT was added to an 11 per cent MTBE blend, nitrous oxide emissions were reduced by 25 per cent and ozone potential was reduced by 18 per cent. Not only does MMT contribute significantly to lower Canadian nitrous oxide emissions, but use of MMT enhances emission benefits of oxygenates.

As part of this discussion, we must consider the fact that nitrous oxide increases resulting from the elimination of MMT from Canadian gasoline are projected to add 41,000 tonnes per year of nitrous oxide to the Canadian environment. That is a 16 per cent increase over current levels.

In conclusion, the government's rationale for this bill is inconsistent. It blatantly disagrees with scientific findings regarding MMT effects on health, vehicle pollution control equipment and the environment. It therefore seems to be in the best interests of all constituents that we move to disregard the proposed bill. I move:

That the motion be amended by deleting all the words after the word "that" and substituting the following therefor:

Bill C-94, an act to regulate interprovincial trade in and the importation for commercial purposes of certain manganese based substances, be not now read a second time but that it be read a second time this day six months hence.

[Pearson Airport, September 25th, 1995]

Mr. Speaker, from the beginning the Pearson airport contract has been a conflict of allegations and facts.

The latest allegation is that the Prime Minister discussed Pearson and solicited funds from Jack Mathews. The facts are that as soon as the alleged evidence of the Prime Minister's involvement surfaced an offer worth $325 million more than Terminal 3's value was floated, which if accepted would conveniently end the newest allegation.

My question is for the Prime Minister. Does he not agree that this latest allegation is serious and that paying off people without a full public inquiry, which I have been requesting since the beginning of this fiasco, would lead to an assumption of guilt?

[Pearson Airport, September 22nd, 1995]

Mr. Speaker, two years have gone by since the Liberals formed the government. There is no injunction against the government by the Pearson consortium to stop any plan of action by the Liberals. They simply do not have one.

If the government is planning to use $800 million to compensate Claridge's partners, why is it paying this money only to the Bronfman controlled company and expecting them to bail the government out of its Pearson mess? Obviously the cheaper they do it the more money for them.

Will the Prime Minister admit the obvious? He is playing the same old game of Liberal patronage that he accuses the Tories of playing.

[Pearson Airport, September 22nd, 1995]

Mr. Speaker, the Liberal government has claimed in the past that failure to pass Bill C-22 has inhibited its ability to resolve the problem. The truth is it has no plan.

The current Liberal course of action is costing 4,700 jobs, $72 million in tax revenues, leaves Pearson with a potential passenger shortfall of two million passengers a year, and has caused Air Canada to look at a $525 million expenditure, which it can ill afford, to prop up its operation in terminal two. The government still has not provided any kind of plan.

Will the government not agree this is nothing more than an attempt to get out of a mess that is ever worsening, particularly in light of the Prime Minister's former law partner softening his refutal of the accusations that have been made?

[Pearson Airport, September 22nd, 1995]

Mr. Speaker, the odour surrounding the cancellation of the Pearson airport contract continues to get worse. The government is now planning to use the taxpayers' money to buy its way out of a mess it created. It claims it will be an arm's length purchase by the greater Toronto airport authority, but what private sector lender provides 175 per cent financing?

The Prime Minister continuously slams the actions of the former Tory government but continues to practise the same old style politics that blurs any distinction between the lines of the two old parties of the past.

My question is for the Prime Minister. Will he admit that this questionable deal is nothing more than an effort to buy his way out of an embarrassing problem and with taxpayers' money?

[Marine Atlantic, September 20th, 1995]

Mr. Speaker, I thank the minister for his positive response to my question.

It is unfortunate for those in southern Nova Scotia that it takes an advocacy other than their elected representatives in order to bring this matter to the minister's attention.

Marine Atlantic's lack of response to market needs and ministerial direction coupled with Liberal strongarm penalties for MPs is interfering with the economy of southern Nova Scotia.

Will the minister agree it is now time to start the process of privatizing Marine Atlantic so it can be controlled by market needs instead of some unknown internal or political agenda?