Jim Silye

[Electoral Boundaries Readjustmentact, 1995, June 20th, 1995]

Mr. Speaker, on a point of order, in light of what has happened here this evening and in the light of restoring some decorum to the House of Commons and due to the confusion, I would humbly request that you do a revote on this issue.

[Cn Commercialization Act, June 20th, 1995]

Madam Speaker, the only comment I would make to the parliamentary secretary is that he underestimates the wealth in Canada. He underestimates the willingness of Canadians to take a risk and to invest. There is a lot of money in Canadian pocketbooks. The oil and gas industry has seen that in the past two years. Petro-Canada should be the next one on their plate. It should be done quickly. It should not be waited upon. The $1 billion or $2 billion that could get is all there-

[Cn Commercialization Act, June 20th, 1995]

Madam Speaker, I appreciate the hon. member's intervention and I respect what he said, because a lot of what he says has a lot of merit. Possibly even there could be two directors around the same table just having a difference of opinion on how to approach a problem.

I heard another comment. I promised I would never have rabbit ears, but there is a certain individual whose voice is so loud that I just have to say that when they tell me I do not understand, let me tell that hon. member that I do understand. I have been in business for a long time. I know what it takes to buy and sell businesses and how to make a profit and how to achieve a bottom line.

We have a railroader here debating with a businessman. Maybe he is the only railroader. I know I am not the only businessman, but along with the Minister of Finance and the member for Edmonton South I may be one of the few successful businessmen here whose comments are made in sincerity, not partisan politics. We are talking business here. We are talking privatization and how it should be done. I submit these suggestions on the basis that I feel that the government and the Minister of Transport should reconsider these issues.

On the question of Montreal, I did agree that there was some sense to keeping the headquarters in Montreal for the sake of stability. I would agree with that member that stability is important, that to allow a new purchaser to lift up, pull out, and do what they wanted initially would be a mistake. But that stability should have a time factor on it. It should not be in perpetuity. It should be long enough that the people who are running the company, the board of directors, can have five years. It could be three, it could be eight, it could be ten. I do not care about the number, but eliminate that forever clause.

They can try it and see whether leaving Montreal is in the best interests of the corporation. They can choose then where to move the corporation. Anybody who buys a company should have that freedom and flexibility. I believe that will attract and help those people who would be bothered by that and handicapped by that. It would eliminate that, which in the long run would be negative. In the short run it is a positive, but if you really want to attract investors you have to look at the long term, not the short term.

On the issue of control and the 15 per cent, I do not care what CP did. It does not matter to me whether there is 11 per cent or 10 per cent or 9 per cent. It does not matter. What I am suggesting here is that we have a quick and effective sale. The way to do that is to give Canadians the first opportunity. We know that the market is hot. The marketplace is hot right now. There are people willing to part with billions of dollars. There are investment funds, mutual funds, investors and dealers looking for places to place pension moneys. There is lots of money out there.

If there are individuals with an expertise in this area and they feel they could buy control and that 16 per cent would give them that control, let that sophisticated purchaser buy that 16 per cent, or whatever amount would be control.

By the very nature of how CP operates, nobody is going to buy 51 per cent. Nobody is going to buy that much. If they can figure out that by buying this amount they could get control, great. But let us give it first to Canadian corporations and give them an opportunity for a certain period of time and after that open it up. I will submit that at the end, if these suggestions were at least addressed and looked at, the sale would be quicker. The sale would come about. It would not be a bastardized deal like some of the other crown corporations we have tried to sell, where we only end up selling off half of it and not all of it. We end up in trouble and it lags there.

These are the things I am trying to recommend to the government. With respect, I tried to answer this as a businessman to a railroader who is also a businessman, businessman to businessman, to try to achieve a consensus. I still think we

should go after the Minister of Transport and get him to change his mind on a few of these issues.

[Cn Commercialization Act, June 20th, 1995]

Madam Speaker, I am pleased to rise today to discuss at third reading the bill concerning the privatization of the Canadian National Railway. Although Reform supports the government in this endeavour, there are some problems with this legislation that I feel must be addressed.

First, I would like to take a minute to look at the $96 billion that CN has cost the Canadian taxpayer over 70 years in combined losses and public subsidies in contrast to CP Rail which has cost the Canadian taxpayers zero in direct government subsidy.

Canada is $540 billion in debt, yet crown corporations like this one continue to run in the red without repercussions. Where can we find a deal like that in the private sector? We cannot. Companies go bankrupt and it is game over. Therefore, we support the government in getting out of the rail business.

Despite these massive losses, however, CN managed in the past year to earn a $245 million profit which is a drop in the bucket when we consider the overall picture. CN's debt is currently about $2.5 billion. Industry representatives say that the debt must be reduced to $1.5 billion to achieve a triple bond rating and be able to sell it.

I found an interesting article in Alberta Report dated May 29, 1995 which states: ``CN's debt is unacceptable. Even if CN dumped its non-rail assets, its debt to capitalization ratio would be 45 per cent. The U.S. railway average is 30 per cent. In addition, U.S. railways have improved operating cost to revenue ratios from 90 per cent to as little as 75 per cent. CN is still at 90 per cent''.

The transport minister has the power to reduce CN's debt to any amount he chooses which could mean an amount well below the amount for which taxpayers would see a return. How this debt is reduced is of great concern to companies like CP Rail, its main competitor whose president stated before the transport committee that CN would get an unfair advantage if Ottawa paid off some of its debt.

Moody's Investors Service issued a credit watch on CN's large debt in early May. I cannot believe how much we keep hearing the name Moody's these days in relation to finance with respect to this government. As we all know, a downgraded debt rating will make it more difficult and more expensive for CN to borrow the $2.53 billion it wants to buy new equipment by 1999.

I am going to dwell on another issue for a little bit longer than normal. It is an important issue. The bill requires that the headquarters of CN be located in Montreal permanently. I could understand placing a restriction to keep the headquarters in the city of purchase for a period of time, say five years, to see if that is the best place to keep it and the best place to run the business out of, but no, this has to be in perpetuity which is not the way to sell a company. In today's marketplace, the stipulation of the permanent location of a head office is absurd and makes a mockery of a bill that has a serious intent.

I respect the Minister of Transport. He has intestinal fortitude. Only a short year and a half ago the Prime Minister was against deregulation and privatization of the rail system but the minister has convinced him otherwise. Having said that and giving him that compliment, why is he placing this restriction on the sale? It is political.

I was reading an interesting article that represents the view from the west. It was written by Mr. Ted Byfield, the founder of Western Report , Alberta Report and B.C. Report magazines. He submitted the article to Saturday's Financial Post . I will quote from what he wrote. I will use the technique the chief government whip used all the time while in opposition of giving lengthy quotes and testimonials of key and intelligent people who add and shed some light on a subject. That is what Mr. Byfield does. The article states in part:

Why, you have to ask, must the purchaser of Canadian National be required to maintain the head office in Montreal?

Such is one of the conditions the federal government has attached to the sale and the reason is purely political.

Something like 70 per cent of CN's business is done west of the lakehead and the western share has been increasing for the last quarter century. CN is, in other words, essentially a western Canadian company.

I will skip a little piece and go down a couple of paragraphs:

Perhaps true, Ottawa would reply, yet from its inception 75 years ago CN has been headquartered in Montreal, and such historical associations matter more than where most of the business is actually done.

How different is this case to the one made when it was proposed to move Trans-Canada Airlines, ancestor of Air Canada-

-a problem which the Prime Minister was very much involved in-

-out of its traditional headquarters in Winnipeg.

At that time, westerners argued that by tradition TCA was a Winnipeg based company, which indeed it was. Ah yes, said Ottawa, but we must face the fact that more and more of TCA's business is in eastern Canada. So piece by piece the company's head office operations were moved to Montreal.

When tradition favours the west, tradition does not matter; what counts is where the business is done. But when tradition favours Quebec, where the business is done does not matter; what counts is tradition.

It is just the opposite. Mr. Byfield goes on to say that Montreal will not even be part of the same country in which CN does most of its business if the separation issue is settled by a yes vote.

Based on what I just read by Mr. Byfield, is the Liberal government forcing CN to stay in Montreal because it does not want to be seen as promoting the loss of a major Montreal head office on the eve of a vote on separation? Do the Liberals feel that Quebecers and Canadians outside of Quebec are that naive that they do not know it is a political move? Do they feel that Canadians are so ill informed that they would not see what this is?

Do the Liberals not see as a government that the best way to sell a company is to allow the potential owners to do what they want with that company once they make the capital investment to buy it and take the risk to run it, a company that has lost $96 billion since its inception? Does that not make sense?

Why in heaven's name would they impose these restrictions in light of the need to get out from under the continued government subsidy of the crown corporation? What are the Alberta Liberals doing to represent the interests of their constituents on this matter? What are the the Liberal members from Edmonton doing to exert any influence over the Minister of Transport, to try and talk some sense into the minister who, other than in two or three areas of the bill, is missing the boat? He is on the right track but why not do it 100 per cent right? Why jeopardize the potential sale of this asset which is so import to sell. In order to sell it the right factors have to be in play.

Let me get back to another comment made by Mr. Byfield in his article in the Financial Post :

Then, too, you wonder about that select set, the four Liberal MPs from Alberta. All four are from Edmonton. And if the CN head office with maybe a thousand jobs attached were to move out of Montreal, where would it go? Where is the CN's centre of operations in the west? Edmonton, that is where. So why haven't these four, at least within caucus, protested against that provision? Maybe they have.

We do not know because we are not privy to the Liberal caucus meetings except what gets leaked on integrity and cracking the whip and voting the party line. We hear about those things. But no such objections have been reported.

And what about Edmonton city council members who tirelessly talk of their diligent labours to bring industry into their city and who wail so piteously every time another business departs for Calgary? What have they done? Delegation to Ottawa, maybe? Nope. Pressure on the Liberal MPs, perhaps? Nothing. For every buck CN makes in and around Montreal, it probably makes 20 in the Edmonton region.

I submit for that reason and that reason alone the person who will look at these assets and at the cash flow of this company is going to look at where the revenue is derived, where the business is. As I said earlier, I do not mind if they maintain the head office in the city of Montreal for a minimum period of five years, but after the owners should be given the flexibility to run the business the way they want to. A permanent location for their head office should not be imposed. That is completely ludicrous and ridiculous. Any business person would agree with that comment.

There will be no restrictions on foreign ownership of CN shares, but no individual shareholder either domestic or foreign will be able to own more than 15 per cent of the shares outstanding. Personally I think that is ridiculous.

I was in the business sector for about 25 years before I became a politician. I have purchased a lot of companies and I have looked at the assets of a lot of companies. One of the things that business people look at, the people who want to run successful corporations, is control. If they do not have control they cannot run a successful company. A corporation run by people who do not have a vested interest, a significant interest, and who do not have a lot at risk, at times do not care enough to pay attention to all the details to make proper decisions in the best interest of the corporation.

I have a suggestion rather than limiting ownership to 15 per cent. There are ways to help the Minister of Transport whom I truly respect. I am trying to make it a better bill or a better way to sell the company. This is serious. The corporation is for sale and we need to raise $2 billion. We must have the right ingredients at work or at play to achieve a quick and effective sale. The longer it drags out the worse it gets and the more it hinders the government and hurts Canadians, because we will have to continue to subsidize the rail line.

Why not offer the shares to Canadians first? Why not set a time limit of 60 days for an unlimited number of shares? Then we could put them on the global market. If the majority of shares are not picked up by Canadians or people from Canada, if less than 60 per cent are sold, Canadians have no right to come back on the government to complain.

I am giving the government a suggestion to satisfy Canadians, Canadian content, the right to buy Canadian, and the right to participate as Canadians. If Canadians do not step up to the plate, if they do not want to take the risk and if they do not want to invest, so be it. However they should be at least given the first opportunity in return for the $96 billion they have subsidized the company for over the last 70 years. They deserve at least that much. Wherever the percentage falls it should then be offered to the global market. If only 30 per cent or 40 per cent have been sold to Canadians, we should let other people buy control or control it. Canadians cannot then hold the government responsible or accountable for doing that.

We need to have many people available to purchase the corporation. We need to make it available to as many people as possible, but I maintain Canadians first and a lifting of the 15 per cent limit.

In all cases sell or make control available. However, by making the shares available and control available the government can still impose restrictions on the competition for making the shares available to the competition so a monopoly cannot be achieved. That can be done through government regulation.

That is what the purpose of government should be. It should pass good regulations to ensure fairness and competitiveness in the marketplace, to create an open and competitive marketplace, to have regulations in place that do not allow monopolies to exist in the business sector, and to allow the private sector to operate openly, freely and competitively but not in a family compact way where one corporation is allowed to buy up everything and there is no competition.

Any government on that side of the House must always protect the interest of all Canadians. It must always have competition as its first priority.

I should like to touch upon the Official Languages Act as well. It says in the bill that CN will remain subject to the Official Languages Act as if it were still a government agency. Will the people who want to buy the company, the eventual directors of the company, not know where to advertise in two languages, where to advertise in one language, or where to have people on the rail lines who are bilingual or unilingual? These people have enough intelligence, if they put that much money at risk, to know what is in the best interest of the corporation and how to increase sales and service.

To impose rules like these make it negative. The owners should be given the option. They will not be people who have never made a dollar before. They will not be people who do not know how to market. Obviously they will be people who know how to make a dollar and what it takes to make a dollar. They will satisfy the needs of the people they serve. Be they francophone or anglophone or a combination, they will be able to project and present their rates, their trips and their packages in the language they feel is necessary to offer the services. A rule like this one is a restriction. It is not something that helps, aids

and facilitates the sale. It restricts, hinders and hurts the potential sale.

Reform Party policy on privatization and corporations is that we support placing ownership and control in corporations in the private or public sector that can perform their functions most cost effectively with the greatest accountability to the owners and the least likelihood of incurring public debt.

If it is a public corporation the taxpayers own it and they entrust the government, the people they elect, to look after it. But it does not. Most of the crown corporations we have end up being arm's length, quasi-judicial or whatever claptrap they talk about where ministers will not take responsibility.

The minister of heritage will not take responsibility for the CRTC. The minister of immigration will not take responsibility for the IRB. I will find something the Minister of Justice will not take responsibility for; I have not thought of it yet. However I am sure there is something on which he can stand and say that it is not his fault because it is an arm's length body, and the taxpayers are the ones who are paying for it.

We have a situation where we believe the sector that can look after taxpayers' dollars the best and the sector that can achieve the highest profit and run the business the best could be the private sector. We believe 85 per cent to 90 per cent of the time it will be the private sector but not necessarily. Therefore we need some rules for crown corporations and some elements that ensure taxpayers' dollars are looked after.

The Reform Party compliments the Minister of Transport for recommending and convincing cabinet to go forward with Bill C-89 and the privatization of CN Rail. However, as I have outlined in my speech today, we would like to see some of the roadblocks removed from the legislation, just as was wanted with the bill of the Minister of Justice on gun control. We gave him innumerable recommendations. He could have been the most popular justice minister in the country if he had split the bill. It was a very simple recommendation. There could have been the bill on gun control, punishment for the criminal misuse of firearms, and a discussion on a national registration system. The Liberals never promised registration in their red book; they promised gun control. The minister delivered on half of his promise and introduced a completely brand new element.

I do not know how the minister drafted Bill C-89. Our transport critic has already mentioned that when the Prime Minister was on this side of the House he said that he was astonished at the Conservative recommendation of deregulation in the rail industry. How quickly they change colours. How quickly red becomes blue. How quickly the little fish in the bowl that are blue and red get together and suddenly become one colour when they are on that side of the House. It does not matter what they say on this side; they change when they go on that side. Unfortunately it will come back to haunt the government.

I wrap up by saying I compliment the government on its attempt to privatize. I hope it listens to the abolishment of the headquarters in Montreal and the 15 per cent rule. It should open it up to real business people and entrepreneurs.

[Income Tax, June 20th, 1995]

Mr. Speaker, the Liberal government has shown its true colours, confirming its position that stay at home parents are second class citizens in Canada.

In response to an Alberta government proposal for tax relief for stay at home families, the Parliamentary Secretary to the Minister of Finance answered no, stating that the aim of the tax system is to help people work, not stay at home. What an insult. This member obviously fails to recognize the contributions made by stay at home parents, who make both personal and professional sacrifices to raise their children.

The government is continuing with the policy that parents who choose to stay at home are second class citizens and contribute nothing to society. What hypocrisy. What a total lack of understanding. What a total lack of vision.

Reformers offered the Liberals a tax deduction for stay at home parents and they turned us down. The Alberta government has just offered the Liberals a tax credit for stay at home parents and they turned it down too.

The question that begs to be asked is what, if anything, have the Liberals turned up to recognize the plight of stay at home parents?

[Alternative Fuels Act, June 19th, 1995]

Mr. Speaker, I think you will find the vote we just had can be applied in the same way. If members of the party agree, I agree.

[Alternative Fuels Act, June 19th, 1995]

Mr. Speaker, most members of the Reform Party will vote no except for those members who wish to vote otherwise.

[Agreement On Internal Trade Implementation Act, June 19th, 1995]

Mr. Speaker, the Reform Party members will vote

yes, except for those members who wish to vote otherwise.

[Canadian Dairy Commission Act, June 19th, 1995]

Reform Party members will be voting yea, except for those members who wish to vote otherwise.

[Code Of Conduct, June 19th, 1995]

Mr. Speaker, Reform Party members vote no, except for those members who wish to vote otherwise. I would like to be recorded as voting yea on this motion.