moved that Bill C-14, an act to continue the National Transportation Agency as the Canadian Transportation Agency, to consolidate and revise the National Transportation Act, 1987 and the Railway Act and to amend other acts as a consequence, be read the third time and passed.
Mr. Speaker, I rise today at third reading of Bill C-14, the proposed Canada Transportation Act. This is an important bill. It introduces new framework legislation that touches every transportation mode. It represents the culmination of several years of effort on the part of the Department of Transport.
It has been at times, as all hon. members know well, a controversial bill. One of the first tasks that I set myself this year as the newly appointed Minister of Transport was to review the proposed legislation and assess for myself whether or not an appropriate balance had been achieved between the varied interests that are affected by the elements of the bill.
After careful consideration and an analysis of the bill, I have concluded that it is a balanced piece of work. It clearly reflects the hours of consultation and careful analysis that have been invested in it over the past few years.
On that basis, I am very pleased to move this bill forward today. It is an act which will truly bring the Canadian transportation industry into the 21st century.
I think it is also important to set this bill in a broader context. It really lies within the scope of our government's policy strategy, which is to streamline and modernize our transportation industry.
Given the importance of transportation in the Canadian economy and for Canada's competitiveness on the world markets, this bill will enhance the nature of trade, viability and competitiveness of transportation.
In drafting this bill, the government took into consideration reports from independent commissions, previous work of the Standing Committee on Transport and the report produced by a task force on marketing headed by the hon. member for Kenora-Rainy River, whom I wish to thank for his great work.
To develop Bill C-14, the government asked itself what those concerned could and should do on the market, which issues would better be left in the hands of the regulatory body and which should be debated by elected representatives.
The opinions weighed as part of this process were many and varied. Finally, the government decided on what it felt should be a new balance, a balance between regulatory protection and trade negotiation as well as between supervising an agency and giving transportation companies more freedom in managing their own business.
Over the summer, the government heard from many stakeholders, who were concerned about certain aspects of the bill. Recognizing that any legislative enactment can always be improved on, it identified several potential changes.
Then, the Standing Committee on Transport carried out an exhaustive review of the bill. It also heard evidence from many stakeholders at this stage. Nearly 100 testimonies were submitted, and I understand that an even large number of briefs were received. All those who took the time and made an effort to take part in this complex process deserve our thanks.
I would like to emphasize the huge contribution made by the members of the committee and many other members who also participated in the bill's consideration during 55 hours of direct evidence.
As evidence of this effort, over 80 amendments to Bill C-14 were made. Some were technical changes. Others were complex and in some instances they reflected differing and difficult choices among competing stakeholders' points of view. However, in all cases, these amendments reflected the careful thought and deliberation that members brought to the legislative process.
As this effort indicates, it is an important bill. It updates or removes economic regulation of transportation modes. For example, alternative means of transportation have made additional regulation of northern air services unnecessary.
We are also modifying the degree of regulatory oversight on northern marine services and regulation of commodity pipelines has been transferred to the National Energy Board.
Turning to the rail sector, I must emphasize that enhancing the viability of the rail industry is a key objective of the legislation. It will set in motion the steps necessary to ensure an effective and viable rail system in this country.
The rail elements of the legislative package complement the strategy of commercializing the CN but they are far broader than that single initiative. They are about enhancing the long term viability of the whole Canadian rail industry. It is important to note that this bill will affect the operations of approximately 31 railways currently operating in Canada.
When the government took office two and half years ago, the two national railways were suffering the effects of a number of structural problems: low labour productivity, under capitalization, excess trackage, to name a few. This had occurred despite considerable work by both railways to reduce costs by various belt tightening measures. Despite being hampered by onerous regulations, both railways have managed to rationalize, reorganize and downsize since 1993.
Outmoded employment security provisions were changed by an arbitration decision rendered last June. Some provincial legislatures have helped out, like my home province of British Columbia, among others. British Columbia recently passed legislation which significantly reduced provincial taxation on railways. Ontario has eliminated its successor rights provisions which applied to the sale of former federal track. I applaud those initiatives.
The federal government decided that it also had to act decisively to put the railways on a more secure financial footing. Commercialization of CN and more important, regulatory reform are directed to this goal. We are moving on this to ensure that we have a viable coast to coast system. In a country reliant on the export of resource materials, a healthy rail sector, the principal carrier of bulk commodities, is an extremely important key to our trading future. A healthy rail industry best serves all stakeholders, not just the railways themselves.
The current system is overbuilt. CN and CP cost cutting efforts have been stifled by the regulatory hurdles that they must jump over to tailor rail line networks to their core markets. At the same time, there have been few incentives in the existing system to market little used lines to the newer short line railways.
Railways must reduce trackage if they are to regain their true financial health. Eighty-four per cent of CN and CP traffic travels on one-third of their networks. It is estimated that some 50 per cent of current CN and CP track is surplus to the main carrier needs as they move to serve their core markets.
The traffic density of the Canadian rail network is presently much less than that of the top seven United States railroads. This means that by moving to similar densities in the range of the United States companies, our major carriers could generate significant savings.
One of the key objectives of this bill to put in place measures to streamline the current regulatory process in relation to the sale, lease or abandonment of lesser used lines. An equally important objective will be the incentive effect it will have on the legislation to establish shortline railways at a lesser cost on many of these lines.
The dramatic increase in the number of shortline railways in the U.S. is one of the major economic achievements of the 1980s. Nothing stops this scenario from being repeated in several regions of Canada, once those elements of the railway transportation legislative framework that did not foster the creation of shortline railways have been removed.
These past 10 months, the concerns raised by shippers and by our two main railway companies have been at the centre of the debates on the transportation bill.
The bill before us today is the product of the contributions made by various stakeholders-officials, interested parties, my colleague the former Minister of Transport, and more recently, the members of the standing committee-toward striking the right balance between their respective interests.
Have they succeeded? This is a question I have asked myself in reviewing this very complex legislative initiative in the two months since I became minister.
First and foremost, Bill C-14 preserves all the key shipper rights won through the National Transportation Act, 1987. These rights are unique to the rail mode and are more extensive than the rights available to shippers in other jurisdictions, particularly in the United States.
To illustrate, the bill keeps regulated rates for captive shippers and adapts them for short line railways. The bill keeps the statutory right of a shipper to final offer arbitration, shortening the process at the shipper's request and extending it to cover rail passengers and commuter service. This bill keeps the provision for confidential contracts between a railway and a shipper.
The decrease in railway prices-nearly 30 per cent since these rates were introduced in 1987-show how much shippers have benefited.
In addition, the bill preserves the traditional obligation of carriers to provide an adequate level of service, or what is commonly referred to as mass transit conveyance obligation, specifying the duties to be fulfilled by a railway in terms of traffic accommodation.
If a complaint is filed, the agency can always order the railway to take corrective measures. No other mode of transportation has this kind of obligations.
The bill also preserves the statutory right of a federal railway to operate on tracks other than federal tracks. This right enhances even more the competitive access of shippers.
Still, in spite of all these measures, shippers have asked the government to make more changes to the bill.
It is well known that shippers wanted section 27(2) deleted, whereby the agency would take into account whether a complainant would suffer substantial commercial harm in deciding whether a regulated remedy was warranted. Because many shippers objected to this provision, the government advanced amendments which replaced the term "significant prejudice" which was formerly used with the term "substantial commercial harm". Other amendments clarify the intent and application of the new terminology. These were two main concerns of the shippers.
Shippers also wanted section 34(1) deleted. This section stipulated that any party to a dispute, which would include railways, must pay the costs if the complaint or behaviour during the conduct of the proceedings was found by the agency to be frivolous or vexatious. Again amendments were made to address the shippers' concerns.
Section 27(2) was rewritten and clarified by government members of the committee and was subsequently adopted unanimously by the standing committee.
Section 34(1) was dropped.
Shippers also wanted section 113, which is now section 112 of Bill C-14, to be deleted whereby the agency would be required to set rail rates and conditions that are commercially fair and reasonable. I find it very hard to accept any argument that a regulated result should not be commercially fair and reasonable. This section however was subsequently clarified to specify that the result must be commercially fair and reasonable to all parties.
Initially, some shippers also wanted to extend to provincial railways the compulsory and mandatory running rights. We have concluded that this was both problematical and unnecessary, and could hinder the development of shortline railways.
I am convinced that this long process has provided an opportunity to review carefully all shippers' concerns and that action was taken regarding several of these concerns. I think that the outcome will be profitable to shippers as well as railways.
We must bear in mind some of the principles underlying the bill. Regulation should be a last resort, since solutions that are freely and mutually agreed upon are the best. A balance must be struck between sometimes incompatible concerns.
Railway companies have one main goal: viability, a goal which is also in the best interest of shippers and-I must say-in the best interest of Canadians as well.
Our common goal is to have a viable railway system, consisting of main carriers and shortlines, which will ensure that railway service will continue to connect as many communities as possible across the country.
To sum up, the objectives for rail which the bill meets successfully are: to promote the long term viability of railways; to foster the creation of short lines; to preserve key shipper rights; to preserve rail service to communities to the extent possible; and to reduce the regulatory burden on railways. It has been an enormous undertaking.
In easing the regulatory burden that had been placed on rail in the past, over 1,000 pages in various statutes have been reduced to just 100. In doing so the bill lifts regulatory intrusions into the railways' day to day business affairs. Most important, the bill streamlines the rail line rationalization process. This is the most effective legislative means of bolstering the railway's efforts to cut costs.
This way, if a buyer comes along, a railway can sell one of its lines without delay to another railway, which will continue to operate it. In the absence of an immediate buyer, the bill provides for a simple process to dispose of surplus rail lines, by encouraging their sale or lease to shortline railways.
However, if sufficient notice has been given and no private or government buyer wants to buy the line, the railway will be authorized to sell it as it pleases.
All concerned, including main railway lines, will benefit from efforts to foster the creation of shortline railways.
The public interest will be protected since the government will have the option of buying a line that no one else wants to operate for rail purposes. This is indeed the best way to promote the continued operation of a viable system from coast to coast.
During the committee's review of the bill, concerns were raised by some about the length of time for governments and others to react when a line might be discontinued. These concerns have been addressed through amendments to lengthen somewhat the time lines at the beginning and the end of the process. For instance, each level of government will now have up to 30 days to purchase a line rather than 15 days in the original bill. Amendments such as the example I have cited demonstrate the government's flexibility and resolve to make this important piece of legislation both effective and fair.
I feel that the bill as now drafted represents an admirable balance. The standing committee and all its members from all parties in the House is to be commended for its excellent work. It is an example of how well the standing committee process can work and how it can handle extremely complex legislative tasks.
The bill will now be considered by the Senate and I look forward to the outcome. Bill C-13 complements other transportation reform initiatives that the government has introduced. The Canadian transportation system must be dynamic and as unrestricted as possible if it is to meet the demands of our changing economy. This legislation, once passed, will achieve this. I am proud to have had a part in its progress at the third reading stage.
