Mr. Speaker, the government's vision for the future of transportation is clear and attainable. Our commitment is to take Canadian transportation into the 21st century on a more viable, integrated and competitive footing.
We are commercializing federal airports, the air navigation system, Canadian National Railways, Marine Atlantic and the department's Motor Vehicle Test Centre.
We have introduced a new international air transportation policy and concluded a landmark Canada/U.S. bilateral air services agreement opening up the skies with our biggest trading partner.
The government will unveil this fall details of the new national marine and ports policy. This policy will set the stage for a more efficient, competitive and fiscally prudent marine transportation and port system and eliminate subsidies except where constitutional obligations require us to continues to pay for services.
We have already eliminated most transportation subsidies and greatly reduced the financial burden of Canadian taxpayers.
On June 20, we introduced Bill C-101, to enact a new Canada Transportation Act. The reason for introducing this legislation last spring was to encourage meaningful dialogue between industry and the government. We have had extensive consultation with CN and CP, other railway companies, shippers, and representatives of other transportation modes.
We have considered reports by the Standing Committee on Transport and, most recently, the recommandations of Task Force on Commercialization led by Mr. Nault, the member for Kenora-Rainy River, now the Parliamentary Secretary for the Minister of Labour.
The rail elements of the legislative package complement our strategy to commercialize CN, but they are far broader than that initiative. They are about enhancing the long term viability of the
entire Canadian rail industry. This bill will affect the operations of CN, CP and some 30 other railways that currently operate in Canada, and it will also benefit shippers.
Some shippers expect levels of rail service to be dictated by law rather than by the significant negotiating leverage they have in the market. They talk about competition but they insist on regulatory protection.
The extraordinary rights shippers had won through the National Transportation Act of 1987, the so-called competitive access rights, are retained. The NTA 1987 included the right to have rail rates regulated under certain conditions. It also included the right to final offer arbitration for a wide variety of disputes between shippers and the railways. This protectionism has benefited Canadian shippers and there has been a reduction in rail freight prices but there has also been a substantial erosion of CN and CP revenues.
Bill C-101 takes aim at regulatory red tape by shortening the length of the arbitration process by one-third, from 90 to 60 days. The bill extends competitive access rights to shippers located on any federally regulated rail line sold to a provincially based rail operator. U.S. shippers in the United States do not enjoy similar provisions.
While we have protected shipper rights we have made amendments to give more precise direction to the regulatory agency in its decision making process. The government's view is that regulated solutions should only be a last resort.
A shipper demand with which we did not agree was for the provision of mandatory running rights for provincially regulated railways. Unlimited running rights would undermine a major objective of the bill which is to foster the growth of a vigorous short line industry across Canada.
Every short line operator in Canada stated that unrestricted running rights were undesirable with the exception of one operator. In the United States, where unrestricted running rights are not available, a thriving short line industry has developed based solely on commercial agreements. There are hundreds of voluntary running right agreements now in effect in Canada, letting the marketplace decide.
The Canadian Pulp and Paper Association, the Western Canadian Shippers Coalition, the Canadian Industrial Transportation League and the Canadian Manufacturers Association have all been lobbying hard against certain elements of Bill C-101. Apparently they believe in competition based on protectionism, an interesting approach for the CMA which in the past aggressively supported open, competitive free markets.
Bill C-101 will modernize and streamline rail regulation to enhance the viability of our major carriers and thereby attempt to ensure rail freight service from coast to coast. Both CN and CP will benefit from a new, transparent, well-defined rationalization process that focuses on the sale of underused lines to other operators. The process will be free of archaic, adversarial and lengthy regulatory proceedings and government interference.
Shippers should benefit from more efficient, lower cost rail service and the entry of new participants in the railroad industry. The legislative package will clean up outdated regulations. It will reduce the number of matters which need to be brought to the agency by the railways by about 200 to some 40. For example, 10,000 confidential contracts per year will no longer need to be filed with the agency. This should reduce railways' administrative costs. It will help attract capital back to an industry that has suffered during the economic downturn by shippers to other transportation modes, particularly trucks.
Some provincial legislatures, B.C. and Nova Scotia among others, have recently passed legislation which significantly reduces provincial taxation on railways. The New Brunswick government has put in place a very simple mechanism for the establishment of a provincial short line requiring only an agreement between the transportation minister and the perspective railway.
The Ontario government has indicated its willingness to encourage the creation of short lines by repealing current statutory provisions that have so far discouraged short line operators setting up in that province.
Bill C-101 also removes unnecessary regulation of other transport modes. In future applicants to operate Canadian air services will have to meet minimum financial requirements as well as our stringent safety requirements before they can obtain a licence.
In the wake of deregulation of other modes, access to final offer arbitration has been extended to our northern marine shippers and operators of rail passenger and commuter rail services who must negotiate with mainline carriers for track usage and other services.
The new legislation will put in place a policy that is consistent, transparent and fair and will enhance competition. Canada's transportation system must be modern, dynamic and as unrestricted as possible while maintaining the world class safety record we have earned over the years.
I ask members of all parties to join with me and support the motion to refer Bill C-101 to the Standing Committee on Transport before second reading. This will give the committee an early opportunity to study the bill with its usual care and diligence.
The proposed Canada Transportation Act is one more step this government is taking towards modernizing this Canada's trans-
portation sector. It will enable Canada and Canadian businesses to compete worldwide in the 21st century.
