moved that Bill C-26, an act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.
Mr. Speaker, it is a great pleasure to be here today to speak on Bill C-26, amendments to the Canada Transportation Act and the establishment of the VIA Rail Canada act.
I rise in this House today to discuss a document entitled “Straight Ahead: A Vision for Transportation in Canada”, which I tabled in the House on February 25.
Throughout our history, governments have embraced a succession of bold transportation visions - national railways spanning the continent, an international seaway, the Trans-Canada Highway, and transcontinental air services.
Our national transportation system, linking every corner of this country, opened our doors to the rest of the world and to the commercial markets beyond our borders. As our nation has evolved, we have built a world-class transportation system.
Transportation practices in Canada have evolved over time, as required by the times and circumstances. Where required, we have brought in reforms and taken aggressive and innovative steps to improve the system and increase its efficiency.
Changes in the way airports and ports are managed, the commercialization of the air navigation system, the privatization of other infrastructure have all contributed to making the transportation system stronger and more dynamic. The results speak for themselves. The productivity growth in transportation over the past 10 years has been truly phenomenal. In fact, it has doubled in that period of time.
Canadian ports are forecasting $700 million of capital investment over the next five years. More than $5 billion of private money has been invested in airport capital projects since 1997. Also, price and cost trends in the transportation sector have consistently been lower than the rate of inflation, and we have also succeed in eliminating most transportation subsidies.
What this has meant for Canadians is better quality and greater choice in transportation services. Safety and security, accessibility, economic efficiency and environmentally sound performance have all become cornerstones of our transportation system, but we cannot become complacent with these very impressive results. We have to ensure that our policies continue to adapt in the face of new trends and new challenges.
In our policy document, “Straight Ahead”, we talk of the culmination of an initiative that began in 2001 to review the transportation policy for the next 10 years and beyond. “Straight Ahead” proposes a vision to guide the continued development of a sustainable transportation system for the country. It also conveys the government's response to the 2001 report of the Canada Transportation Act review panel.
The amendments to the CTA that are introduced in this bill are an important step in moving the vision forward. “Straight Ahead” reflects a careful consultation with the industry, users, provincial and territorial governments and of course, parliamentarians through the various committee appearances that I have had with members of the House and Senate Standing Committees on Transport.
It also reflects the results from earlier consultation efforts on the transportation table on climate change, Transport Canada's second sustainable development strategy and the millennium transportation conference, which I hosted in Toronto in the year 2000.
During these consultations, participants agreed that Canada's transportation policy is basically sound and headed in the right direction.
While it may not be necessary to overhaul the policy extensively, new challenges arise and our policy must adapt. Among these challenges are growing concerns about the impact of congestion on our quality of life.
The need for infrastructure in good condition to continue to support trade and the realization that our world-class transportation system is facing new challenges in a world where safety and security considerations force us to be more vigilant and to use new technologies.
The main sources consulted, which account for the proposed changes to the Canada Transportation Act, were general public information and research programs of the Canada Transportation Act Review Panel.
The panel received more than 200 submissions and held townhall meetings in every province and territory. Meanwhile, the research program called on experts to examine policy issues and options. The result was a series of well thought-out opinions on the state of the transportation policy, future challenges and options for efficient intervention.
All this activity shaped the deliberations and recommendations of the panel. In addition to this, I convened a number of round tables across the country where I met with key members of the transportation industry, both the big companies and organizations, and representatives of the smaller transportation companies. I met with shippers, professors and academics who were concerned about transportation policy. My officials have been engaged in dialogue as well, not only with stakeholders but also with the provinces and territories.
Policy directions were also discussed at the annual meetings of the Canadian transportation ministers in September 2001 and September 2002. By and large, I am very happy to note that provinces and territories have been supportive of the many changes proposed in “Straight Ahead”. Certainly they will reflect some of these changes within their own jurisdiction in their legislative and policy changes.
“Straight Ahead” lays out the basic principles that will guide transportation policy development and for future planning and activities affecting the sector. They include the highest practical safety and security of life and property, guided by performance based standards and regulations when necessary; the efficient movement of people and goods to support economic prosperity and a sustainable quality of life based on competitive markets and the targeted use of regulatory and spending interventions; a clear focus on environmental issues with specific measures, such as promoting vehicles and fuels that produce few emissions, increased use of alternative modes of transportation for passenger travel and more efficient transportation of goods to support the government's climate change plan; user pricing that better reflects the full costs of transportation activity and transportation infrastructure decisions that meet user needs based on governance models that provide for stakeholder involvement and transparency; reasonable access to the national transportation system by Canada's remote regions; accessibility in the national transportation network without undue obstacles for persons with disabilities; and finally, partnerships and integration among the jurisdictions and with the private sector.
These principles will guide our action in five broad areas: safety and security; marketplace frameworks; infrastructure; the environment; and innovation and skills.
Let me now turn to some of the specifics.
Having a safe and secure transportation system has long been a central objective of our transportation policy and the number one priority for Transport Canada. By virtue of the co-operation of transportation stakeholders, Canada has one of the safest and most secure transportation systems in the world. That is particularly germane at this point in time given the difficulties that we have faced since September 11, 2001, and the ongoing unsettling atmosphere that we have because of pending hostilities in the Middle East.
However I can assure Canadians that not only have we taken exceptional safety and security measures in the system in the last 18 months, but we have adopted new measures that will be and are being put in place as the current situation evolves.
I would like to turn to some of the specifics on the issue of marketplace frameworks. With regard to rail freight, we will make remedies more easily accessible for shippers by removing the requirement that the Canada Transportation Agency must be convinced that shippers would suffer “substantial commercial harm” before relief can be granted. We will expand the availability of final offer arbitration and we will improve the conditions under which a shipper can ask for traffic to be transferred to another railway. At the same time we will maintain all other existing remedies.
I should say that we did not accept the view of some to enhance the current running rights provisions within the Canada Transportation Act because we felt that it would place an undue burden on the system, that it would be unworkable and, certainly, that it would have the obverse reaction to the one that would be desired.
A series of legislative amendments will be proposed in the legislation that will strengthen publicly funded passenger and commuter rail services, including giving publicly funded passenger rail operators, such as VIA, Go Transit, West Coast Express and others across the country, recourse to the Canadian Transportation Agency when commercial negotiations are unsuccessful with respect to the terms and conditions of operation on federal rail lines.
You may remember, Mr. Speaker, the controversy over the last couple of years with West Coast Express, which was subsequently resolved, between the operator and Canadian Pacific Rail, but at that time no remedy was available for West Coast Express. This now says that publicly funded passenger rail systems will be able to seek adjudication from the Canada Transportation Agency.
Another measure is to make contracts of publicly funded passenger rail services public to improve transparency and to maintain the integrity of rail corridors for possible public transit needs by improving the rail line discontinuance process in urban areas.
We think these legislative amendments support rail as a viable choice for passengers, thereby contributing to both the government's climate change and the cities' agenda.
In support of passenger services, VIA Rail's existing mandate and powers will also be confirmed in new legislation. Unlike the majority of other crown corporations, VIA Rail did not have its own legislation. I feel particularly badly about that because in 1977 I was vice-chairman of the House of Commons standing committee on transportation and communications, as it then was, and was one of the proponents for the government to take the CP and CN passenger operations, the losses for which were 80% funded by the federal government, and put it in a dedicated company. The minister of transport at the time and the government did that. Unfortunately they did not go the extra step. They did not give VIA its statutory base. I believe VIA has suffered as a result over the last number of years.
Therefore we want to make sure that the statutory base will ensure that if there are any substantial changes to VIA's service in the future they will be the subject of public debate in the House. I think all members should applaud that. In fact, this was one of the recommendations that came from the Standing Committee on Transport a few years ago in its landmark report “The Renaissance of Passenger Rail in Canada”.
We think the new VIA Rail act accomplishes all of the goals that the committee members set out and, combined with other initiatives, will demonstrate the government's continued support for inner city passenger rail services across the country.
I should state that we are also working on some other initiatives, which have been commented on frequently in the news, with respect to making VIA services in the Quebec City-Windsor corridor faster. I would hope to be able to say something more substantial on that at a later time. However the fact is that we are committed to enhancing passenger rail and providing that option for Canadians.
We are also introducing two initiatives that are multi-modal in nature. We are proposing to adapt and expand to all modes the mergers and acquisitions process that currently applies for the air industry.
The House will remember that in 2000, after the merger of Canadian Airlines and Air Canada in the then Bill C-26, we brought forward a merger and acquisition strategy that covered the merger of Canadian Airlines and Air Canada.
We propose to adopt that particularly ethos and apply it to other transportation industries. Frankly, this really came about because we realized a few years ago, when Canadian National entered into a partnership merger, as it was called, with Burlington Northern Santa Fe Railway, that there was no statutory base upon which to review that merger outside of the Competition Act.
While the Competition Act is important for obvious reasons, there are other public interest issues that need to be addressed when we have mergers of such magnitude, including the impact on communities and the impact on workers. We found the odd situation of Canadian shippers having to go to Washington to make submissions to the surface transportation board, which was then reviewing the proposed merger under U.S. law. What kind of a ridiculous situation was that when the sovereign country of Canada was not able to have its own process and its shippers had to go to a foreign country to make their case?
Once we pass this bill that will not happen if we see in the future, as I think we will, further mergers in the rail industry within North America. The Canadian national interests will be addressed by virtue of the statutory changes that we have brought forward.
One of the most interesting files I have had over the last number of years is the evolving one with respect to air policy. I remind members of the House that in an earlier version of Bill C-26 in the year 2000 there was support from all parties in the House for the concept of a made in Canada solution to develop competition to Air Canada.
That policy, supported by all members on both sides of the House, was working on September 11, 2001. We had Canada 3000 at the time with its largest booking day in its history the day before. Of course we know that with the tragic events, the entire society was impacted, but nowhere was it more impacted than in the transportation sector and particularly the aviation sector. As a result, Canada 3000 went bankrupt. Air Canada's market share went from 82% at the time of the merger to around 65% on September 11, 2001 and then bounced back up to 78%. Since that period in time, Air Canada's domestic market share has declined. Some will say it is in the low 60% range and at some point it will bottom out.
Of course there are issues facing Air Canada which have to be settled by the unions, the workers and management. There are issues the government can be helpful with and we are prepared to play our part. We emphasize that at the moment there is a process going on with respect to the airline getting its costs under control.
Certainly with the restructuring that is going on, I would hope that we will be in a better position to have a more viable national carrier, Air Canada. Of course it is one of the world's great carriers and has been faced with the same problems as other great carriers in the world. I think Air Canada has done a much better job in handling the challenges than many of the other carriers, including the ones in the United States.
We are proposing some amendments to the CTA that would facilitate market entry for carriers. Through these measures a dominant carrier would be required to interline and agree to joint through fares with other carriers on domestic services and permit ongoing access to its frequent flyer program on reasonable commercial terms. This is not just targeted at Air Canada; it is targeted at any dominant carrier that reaches that position. Certainly with the fluidity we have seen in the industry, we will see other entrants come forward and have the critical mass that will provide viable competition to Air Canada.
We are proposing amendments that would ensure that the advertising of air fares is transparent and accurate. That is something that has really frustrated a lot of travellers. People in the House are much more knowledgeable about the air industry than are ordinary Canadians and therefore we are perhaps more circumspect when we look at the advertising. Ordinary people just open the newspapers or look at television and the price they see is the price they think they have to pay, but of course it is not. That is why we are proposing amendments to deal with that in this legislation.
Current ownership rules are not going to change. The raising of the limit from 25% foreign ownership is not an answer. It is not really required. In fact I am told that Air Canada's largest foreign stakeholder owns less than 10%, so where is the thrust?
I know there are some who will say, “Who cares whether we have an airline with a flag on it and it is called Air Canada?” They are entitled to their view, but I beg to differ. I believe Air Canada is one of the great symbols of this country. It is our flag carrier around the world. It brings us pride. It takes Canadians around the world.
The government is committed to keeping the Canadian air industry owned and operated by Canadians, so current ownership rules will not change. Perhaps something will occur in the future to change our minds, but we do not think it is a solution that is required right now.
On the international front, we will continue to work with other countries to gradually liberalize Canada's bilateral air agreements using as a model the successful open skies agreement that we had in 1995 with the United States. A lot of people say that we are not prepared to broaden the agreement with the U.S. Of course we are. I have told this to my counterpart, Mr. Mineta in Washington. I have told Ambassador Cellucci that we are prepared to sit down with the U.S. any time to talk about the broadening of the current open skies treaty. People often confuse that with the issue of cabotage, the ability of a foreign carrier to take passengers from point to point within a foreign country; Air Canada could take passengers from New York to Los Angeles, or American Airlines could take passengers from Toronto to Vancouver.
This is an issue that has cropped up in the last few years. Everybody thinks it will be the panacea for competition and that it will better the Canadian flying environment. The fact is the large foreign carriers, especially the Americans, once they get reorganized, will only be interested in the major core routes. They will not be interested in serving smaller communities, unlike a company like CanJet that goes into Deer Lake, or Jetsgo that is now going into Charlottetown and Timmins. They would not be interested in those smaller communities, so where is the advantage?
We already have significant competition in the major markets. The biggest and most profitable one is Toronto-Vancouver and then Toronto-Calgary, so why do we have to do it? In any event, it is a moot point. I raised it with Rodney Slater, the Democrat secretary of transportation in the Clinton administration. I raised it two or three times with Norman Mineta, who is the current secretary of transportation. Mr. Mineta, who has served 20 years in Congress, said, “Look, just do not bother talking about this because there will be no appetite in the U.S. Congress to allow cabotage”. I will tell you why, Mr. Speaker, because in the U.S., the U.S. unions view Air Canada as a high quality, low cost operator that will be a significant challenge to them.
Also, if they did it, they would have to extend that same kind of privilege to airlines in other countries, for example, British Airways, Air France, KLM and Lufthansa, so it is just not on. I am prepared to discuss anything, including that, but when the other side does not even want to discuss it, there is not much I can do about it. People just do not seem to get that message.
With respect to infrastructure, this has been the subject of some debate, certainly since the budget. This country now has a transportation infrastructure second to none. That does not mean to say it cannot improve, but we see the new airports being built. We see the ports improvements. We see the fact that the federal government is recommitting money to major highway projects across the country. We see the infrastructure programs that we have had with provincial and municipal governments since 1993. Some $800 billion has gone in there.
In the budget announced a few weeks ago there is $3 billion that my colleague, the Minister of Industry, will oversee. There is another $3 billion in the Kyoto envelope for the Minister of the Environment. Much of this money can be applied to transportation initiatives and transportation infrastructure in the country.
I know there are some who wanted more money, particularly the municipalities. I have to say quite frankly that when the municipalities reacted to the budget, they did not read the document. They did not read the fact that there is $6 billion for infrastructure in that budget. They did not realize all the other initiatives, whether it is housing, for which I have responsibility, or the homeless, for which the Minister of Labour has responsibility. There is an increase in moneys for affordable housing for the SCPI program and for the RRAP home renovation program. All of this helps Canadian cities.
On the transportation front there are moneys available. In fact a couple of weeks ago the Minister of Industry and I, along with the Minister of Justice, announced in Montreal the A-30 autoroute. The A-30 autoroute has often been raised in the House, particularly by my friends from the Bloc. This is a major piece of infrastructure that is national in significance, because it will allow trucks and cars to bypass the downtown streets of Montreal. That was done under the auspices of the infrastructure program.
Let us not buy this phony argument that somehow the federal government is not involved in providing for federal infrastructure improvements. We are doing it through policy changes that allow local authorities, whether it is the ports or the airports, to borrow on the open market. We do it directly, like the subsidy to VIA Rail of an extra $402 million, or we do it through infrastructure programs as I have just described. As more money becomes available, it will be applied to transportation. I think that 60% or 70% of the money that came out of the 2001 budget that we are working on with officials at Industry Canada is applied to transportation projects.
I am not going to say anything about airports today because I am about to introduce another bill very soon that will deal with providing a statutory base for Canada airport authorities across the country. In the 1994 national airports policy, this was done under existing statutes and the Financial Administration Act and another statute, but there was no statutory base for these airports. We are taking the 29 largest airports and making them come under a new statute that will have as its goal improved accountability, improved transparency and improved governance. When people see the bill, in a matter of days hopefully, they will see that we are trying to put our airport authorities on a very sound footing.
As an accompaniment to that, we have been reviewing the issue of airport rents. We hope to have that review completed very shortly. We are also reviewing our policy on remote airports which will include the viability of regional airports. We want to make sure that smaller airports do not get left out in the cold. We did it right in broad terms in 1994 with the national airports policy, but there are a lot of loose ends. The loose ends require a statutory base for the big airports. For the smaller airports it requires further reflection and study and perhaps assistance.
There are other issues that will come up in committee and will be raised in debate here about user charges and how they affect the airline industry and the airport charge and all the rest. I will be pleased to answer those questions when we get to committee.
We are also having a review of the Canada Marine Act. Members may remember that in 1998 we passed the Canada Marine Act. It was somewhat controversial but has been a great success. It has enabled the creation of 19 Canada port authorities across the country. It allows them to borrow money. It allows them to manage their own affairs and to dictate their own marketing strategies. The results are incredible for big ports and for small ports.
For the big ports it has been truly remarkable. The three great ports of this country in terms of volume, Vancouver, Montreal and Halifax, have done incredibly well. Business has increased. Efficiencies have been made. Money has been made and ploughed back because facilities like airports are still owned by the people of Canada.
Vancouver, for example, is the single most successful port on the west coast of the Americas. My friend over there from British Columbia, who I know is going to speak after me, should be happy about that. It beats all the American ports on the west coast and any other ports south of the United States. Halifax and Montreal have similar competitive advantages to many ports on the east coast of the United States.
We will have the marine act review completed shortly. Then we will probably begin statutory changes to the Canada Marine Act. The bill we are introducing today is the precursor to the airports act and amendments to the Canada Marine Act.
We are not only interested in our ports, airports, and putting more money into highways. We have announced highway extensions in New Brunswick, Quebec, Saskatchewan, British Columbia, and I am sure there will be many more across the country under the infrastructure programs and the program that we administer at Transport Canada.
However, we are also concerned about the need for new bridges or tunnels to the United States. That is one of the reasons why we have amendments in this bill to establish a clear approval process for the construction of new international bridges and tunnels to ensure they meet the trade and transportation needs of the Canada of the future.
I want to make a few more points with respect to our overall policy.
Future strategic investments in the transportation sector will focus on reducing urban congestion and bottlenecks along trade corridors. At the same time, these investments will ensure we reach our climate change and clean air objectives.
We also intend to work hard to find alternative delivery models for public transportation infrastructure in the areas of marine navigation, highways and public transportation.
Our infrastructure must also service Canada's remote regions. An important part of the national transportation policy has always been and will continue to be guaranteeing that remote regions have reasonable access to the national transportation system, with respect to their circumstances, size and particular location.
I am fully aware, Mr. Speaker, that you have an opinion on this policy because you represent a large remote riding. It is very important for us to ensure that our policy addresses the problems faced by remote regions throughout the country.
Another area of concern of course is the environment. I would be very remiss if I sat down and did not say anything about the environmental impacts that come from transportation. We must keep this issue at the top of mind. In fact, we debated this in the House for many months and the work still has not been concluded.
We have now adopted the Kyoto protocol and made a commitment to Kyoto, but now the tough work has begun with respect to ensuring that we meet those objectives. Clean air, clean water, improved fuel efficiency standards and increasing the awareness of Canadians are among the many elements of our strategy to contribute to the government-wide environmental agenda.
Transportation, as members know, is the single largest producer of greenhouse gas emissions in the country. It is about 28% versus about 33% or 34% in the United States, so progress on Kyoto will require real gains in transportation. Transport Canada will provide leadership in the sector and encourage the development of innovative solutions.
We will work with industry to better understand the social costs of transportation because understanding these costs is the first step in reflecting them more accurately in the prices paid by users. As a clear signal of our commitment to the environment, we will enshrine the principle of respect for the environment in the national policy declaration section of the Canada Transportation Act.
Another area that is very important, and I cannot underscore this enough, is the need to deal with innovation and skills requirements of our transportation industry. Success in the areas of marketplace frameworks, infrastructure, environment, and safety and security will depend upon the sector's ability to innovate and develop the skills of its workers.
After all, transportation moves $1 trillion worth of goods a year in Canada and is a key enabler in many sectors. Innovation in transportation will enhance Canada's competitiveness and contribute to meeting broader social and economic goals, such as reducing congestion and limiting environmental degradation.
Our efforts will focus on fostering innovation and intelligent transportation systems and logistical systems that support the efficient and seamless movement of people and freight. We will also work with the sector to increase the awareness of high skilled requirements of the transportation system of the future.
We have gone through a period of time in the last 30 or 40 years, certainly in the period when I was growing up in the late fifties and early sixties, where people assumed that a better job was always an administrative job, a white collar job, a desk job, and that somehow those people that serviced planes and trains, that laid the ballast or the track for the rail or worked on the ships, or worked below deck in the boiler rooms, that these people somehow were doing work that was less acceptable and less relevant to society.
I come from the school where every job in society is of equal value. Not everyone can be the Prime Minister of Canada. Not everyone can be the president of Canadian National or Air Canada. People have to do what they are comfortable in doing. Whether it is sweeping the streets in our cities, driving a bus or working computers in the control centres of Canadian National or the airlines, all of these jobs are very important.
An interesting thing has happened in the last few years. Transportation has become high tech in its own way. Has anyone sat in the cab of a modern truck to see the instrumentation that is available? It is not as complex as a cockpit of a plane, but that instrumentation is much more sophisticated than it ever was before.
Global positioning systems are now in operation by big trucking companies. Technology has permeated the industry. We invested a lot in high technology, in the innovation and technology agenda in the last number of years. There was always a view that if we did that it was enough. It is not enough.
We can invest in all the telecommunications, all the technological systems that we want, computerization, and we can be on-line nine ways to Sunday, but unless we can get goods from point to point and unless we can get people from place to place it does not matter what kind of technology there is in the planning of the transportation system.
We need roads, rail and the seaway. We need good ports, airports and rail yards. We need good crossings at the border with the United States. We need all of the physical attributes required to make a transportation system truly competitive.
The policy document I have brought forward enunciates the government's intention to continue to build on the many successes already evident in our transportation system. It embraces our objectives that show the true course for the future.
The amendments that we have today are the first part of the menu, the first course. The second course will be the airports bill and the third will be amendments to the Canada Transportation Act some months down the road.
Certainly, I would hope that members, although they may differ in some degree with the philosophical directions, would at least say that the government has come forward with a concerted, comprehensive transportation framework that addresses the transportation needs of Canadians in the years ahead.
I look forward to answering questions in committee. My officials look forward and I know stakeholders will come to the committee. I believe this is a major piece of legislation for the government. The policy document was a major policy document of the government that was outlined in the throne speech last fall. We are living up to the commitments of continuing to build the best, safest, most secure, and most efficient transportation system in the world.