Madam Speaker, I will be dividing my time. I would like to begin my remarks with a brief reference to the propensity of the government to pass laws without due regard for the law of unintended consequences. Government members rush out and put together huge omnibus bills like the Canada Transportation Act, and then a few years down the line they say this is not what we really intended at all. By that time it is too late.
When the Canada Transportation Act was passed in 1996 it was actually the death knell for the primary grain collection system in western Canada, for dozens of rural communities, and for a service oriented grain transportation system which is now in the process of being replaced with a grain transportation system designed for the convenience of railways and grain companies. With the new regime under the new CTA the abandonment process was certainly simplified as it was supposed to be. However, it was supposed to encourage the development of short line railways, and the outcome has been quite the opposite.
The problem, as pointed out by Mr. Justice Estey in his report on grain transportation, is that there is absolutely nothing to prevent a class one railway from serving notice of abandonment of part of a branch line while retaining profitable sections, which destroys the economic cohesion and potential viability of the entire unit. Estey called this sort of activity a breach of the spirit of the law. I submit that the CTA must be amended in the public interest to close that loophole.
In this regard I have submitted a private member's bill to prohibit a railway company from actually physically dismantling an abandoned line until three years after its discontinuance. This would thwart the “death by a thousand cuts” principle of abandonment by ensuring the short term preservation of the infrastructure while giving potential operators adequate time to negotiate purchase terms with owners and to arrange for financing.
Unfortunately, although I introduced this bill in the House on September 21, 1998, the chance that it will be debated in this parliament are slim. Meanwhile, the piecemeal abandonment can proceed as the railway companies see fit.
It has to be understood that allowing a shortline railway to operate might not always be in a class one railway's best interest. They are faced with the inconvenience of liaison with the shortline railway coming up to their service, and also there is this big problem that continued movement of grain on a branch line would hamper the plans of grain companies to consolidate their facilities on the main lines.
Rail companies and grain companies have no vested interest in providing customer service because their customers have no choice except to take whatever is presented to them. They are captives.
The original grain collection system on the prairies worked very well. It was designed by practical people and it was used to provide real service to the people who used it. With the appearance on the scene of small farm trucks in the 1930s and 1940s, followed by the appearance of all-weather market roads in the 1960s, the grain companies began to consolidate their operations, so that by the 1980s about half of the grain delivery points in western Canada had been abandoned.
This did not cause great hardship to the producers because they were still generally within 20 or 30 kilometres of a delivery point. It did, however, create problems for other people. Scores of villages disappeared. The village where I attended school used to have a couple of general stores, a couple of restaurants, a couple of service stations and a hotel. Now it is a ghost town. There is not even a 7-Eleven, even though the surrounding land is now more productive than it ever has been. Farmers routinely have to drive 100 kilometres or more for their supplies, and now the pressure is on to shut down the elevators so that they will have to actually deliver their product to anything from 80 to 100 kilometres away.
There is intense pressure to remove these remaining elevators from almost all of the branch lines and tear up the tracks. I would not say that the grain companies and railway companies collude, but they certainly share a common interest.
New high throughput concrete elevators are springing up all along the main lines and both the railways and the grain companies will benefit if the branch line system is shut down and farmers are forced to deliver their grain to distant central points.
Even where local delivery points are still operating, some producers are already taking their product by long haul truck to the main lines, to the big delivery points, because the small country elevators are often plugged for weeks on end and producers who have to have income are forced to bypass them.
The reason for this is fairly clear. If a grain company has already decided to eliminate an elevator, it makes no serious effort to get hopper grain cars. Meanwhile, elevators in neighbouring villages may have cars loaded, but if there are not enough loaded cars available on a subdivision to justify the assembly of a train, nothing moves.
The final result is that less and less grain moves off of the affected branch lines, railway companies lose progressively more money on the service and then this is used to justify line abandonment.
I expect that if branch lines disappear the freight incentives at the large elevators which are now being offered will also disappear. The direct cost to farmers, nevertheless, may remain below the cost of shipping on the branch lines because the trucking industry, unlike railways, is intensely competitive. However, the producers will pay in other ways.
First, they will see their taxes rise to build and maintain market roads able to accommodate a steady stream of 36 to 55 tonne loads. Second, farmers and villages along abandoned rail lines will also see their property taxes increase because the railways and the grain companies will no longer contribute to the tax base. Some small villages will lose up to 30% of their revenue.
Because the government lacks the vision to relate increased road requirements to the deterioration of the railway system, it contributes virtually nothing to roads and highways. For example, in the period 1987 to 1997 the average federal contribution in the province of Saskatchewan to roads was $4.7 million. It is now $30 million from the strategic highways improvement program and the grain transportation adjustment fund, but annual federal taxes suck out of that province $125 million on fuel tax.
Canada urgently needs a program similar to that which is in the United States of America where dedicated fuel revenues are put into a federal fund that cannot be used for anything except road construction. It amounts to $26 billion a year, which on a per capita basis works out to $970 a year. An equivalent annual expenditure would be $2.9 billion in this country. That is far less than the more than $4.3 billion which is siphoned out of the provinces in annual fuel excise taxes.
I see that I have used up my time. This is a subject which I generally speak to for at least an hour and I thank you, Madam Speaker, for your consideration.