Madam Speaker, your father must be very proud of you in your elevation to the Chair. I congratulate you and wish you well.
I will take a different slant on this issue. I will try to point out why some of these ports are probably not profitable and why we need more cost effective transportation or handling of these ports.
My hon. colleague from Souris—Moose Mountain gave me some stats from the Canadian Grain Commission. They really tell the story of what has happened to many of the ports. The dates for all of these ports range from 1987 to 1996.
The Atlantic coast ports decreased from 552,000 tonnes in 1987 to 73,000 tonnes today. That is quite a decrease. The ports along the St. Lawrence have had an even bigger decrease. In 1987 they handled 11.8 million tonnes of grain. Today they are only handling about 4.4 million tonnes. We can see that the flow of traffic as far as grain is concerned has been diverted to some other transportation systems.
Thunder Bay has done a little better. It has actually increased from 1.1 million tonnes to 1.4 million tonnes, possibly because of the grain going to the U.S. being loaded in Thunder Bay and then unloaded at Duluth. Churchill, which my hon. colleague from Dauphin—Swan River talked about, used to handle about half a million tonnes or better of grain in 1987. In 1996 they were down to 227,000 tonnes. As we heard today that has increased to about 400,000 tonnes, which is a good trend for Churchill.
The Pacific coast has actually stayed very stable at from 60 million tonnes in 1987 down to 40 million tonnes in 1996. Because of market trends in shipping products to Asia, west coast ports have done better than east coast ports.
Why is that? One of the big reasons is that the costs at some of these ports have become almost unbearable for the shippers, especially grain farmers.
In 1990 the St. Lawrence Pilotage Authority negotiated a new wage contract that gave a 32% increase in wages over three years, which was unheard of in those days for other industries. Why these people were able to leverage this kind of a contract I have no idea.
In a nine month period pilots earn from $115,000 to $156,000. We were told during the hearings in Thunder Bay that they did not want to prove or disprove after nine months of operation that they still qualified for unemployment insurance. Their yearly earnings were fairly well looked after.
This brought to light other things. I am looking at some of my notes. Mr. Kennedy, one of the town fathers of Thunder Bay, pointed out that the cost of a tonne of grain going down the St. Lawrence Seaway on a 20,000 tonne freighter would be $2.50 per tonne just for the pilotage. That is more money to be paid by farmers than all the fuel taxes on a tonne of grain being shipped across the country. We can see the additional costs.
For a laker coming up stream with another type of freight it would be about $1.25 a tonne or about half. It is still very high and adds to the cost of operating the port.
He also pointed out that a 10 day trip from Montreal up through the Great Lakes to Thunder Bay and back would cost shippers $53,000 just for the pilot. That is as much as the total wage bill for the crew of the ship. We can see that something is wrong in the pilotage authority that should be addressed in the bill.
In 1995 we were led to believe that this was one of the most important issues and that it would be dealt with when the marine bill was brought forward. However it has been deleted and that really bothers me.
People will have to begin realizing that if grain transportation costs are not brought down there will not be much grain going through some of the ports. The sooner we recognize that, the better off we will be.
When I looked at some of the figures that the grain companies gave us, it was astounding what property taxes were doing to some of these ports and terminals.
Cargill has a terminal in Duluth which is a third bigger than its terminal at Thunder Bay. It was paying $27,000 property taxes at Duluth and $1.25 million at Thunder Bay. It is about the same for west coast ports. They are somewhat lower but the property taxes on some grain facilities are unbelievable. That will have to be addressed, or we will begin to see things happen such as what is taking place in rail transportation now.
Going back to figures the hon. member for Souris—Moose Mountain gave me, direct shipping to the U.S. by rail in 1987 was 60,000 tonnes. In 1996 it was 1.889 million tonnes. We see that these ports are interfering with the shipment of grain, in which direction it should go, because of the costs.
The Canadian Wheat Board, one of my favourite friends, tried a number of projects to ship grain down the Mississippi. It was quite successful. It would take grain up to Minneapolis, barge it down the Mississippi and export it.
Those things are happening. The government will have to realize it better do something to address the costs of ports or they will totally lose the business. Once the business is gone it is pretty hard to bring it back, except it can be attracted with lower costs that are feasible and reasonable.
I was astounded by what the pilotage did to shipping on the Great Lakes. A Canadian ship owner who testified before the hearings had five vessels in the seaway system. In 1994 he estimates he could have saved $475,000 on pilotage costs if they were in a competitive environment and operated on commercial rates. That was half a million dollars for four ships. When 10 or 12 million tonnes of grain are taken through the system, we can be seen how it affects shippers.
Why is the Government of Canada allowing these things to happen? As the whole transportation system was developing there was so much government interference in the system that they do not know how to rectify it. It is so far out of whack compared to the U.S. system.
While freight costs are a little higher as far as rail is concerned in the U.S, if I ship a load of grain through the handling system from my farm in Snowflake, Manitoba, to Seattle, I can save $16 a tonne just by elevation and handling charges in the grain handling system. These are items that we have to address.
I have a little story to finish up the whole debate. In the 1930s during the Bennett buggy days car tops were taken off, shafts were put on the wheels and cars were pulled by horse. In those days one of my neighbours who was shipping a carload of barley to Thunder Bay got a bill for a number of dollars and the price of the barley did not cover the freight.
The station master sent him a bill. He went to the station master and said “Sir, I haven't got any money. I can't pay this freight bill. The barley didn't cover the cost of it, so you are just out of it”. Things being very tough in those days, the station master said “Bring me a rooster and we will call it even-steven”.
About a week later the farmer came back to town and brought two roosters with him. The station agent said “Sir, I only asked for one rooster. Why would you bring me two?” He said “Well, sir, you have forgotten I have another carload of barley to ship”.
That is about the way we are running our transportation system today. It is becoming so costly that shippers cannot survive with it. Sooner or later it will die. If we have to pay it in roosters, the chicken industry in Ontario will also fold.