GOVERNMENT ORDERS

CANADA TRANSPORTATION ACT

Mr. Paul Mercier (Blainville-Deux-Montagnes, BQ): Mr. Speaker, Motion No. 18 relates to clause 98, which reads:

98.(1) A railway company shall not construct a railway line without the approval of the Agency.

(2) The Agency may, on application by the railway company, grant the approval if it considers that the location of the railway line is reasonable, taking into consideration requirements for railway operations and services and the interests of the localities that will be affected by the line.

The first of these two elements is the environment. We are surprised to note that the legislation does not state that, before granting approval, the environmental impact must be considered, given that constructing a railway line will obviously change the urban or rural landscape and that an environmental impact assessment is therefore required.

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The second element that was overlooked-and this clearly reflects the general attitude of this government, which constantly overlooks the interests, priorities and jurisdictions of the provinces-as part of the process for granting the approval to construct a railway line is consultation, the mere fact of consulting the province or provinces affected before granting this approval.

Yet, land use planning is specifically a provincial field of activity, a provincial area of jurisdiction, either directly or by delegation, because the development plans are prepared by the provinces and approved by the provincial government under which the municipalities come. In particular, corridors may or may not have been provided or approved by the province in these plans for a line to eventually go through the area.

If the allowance, the right of way was not provided for in the development plan for a railway line to go through, it is obvious that changes will have to be made. It is really unthinkable that the federal government go ahead without even consulting the province concerned. This is typical of the way the federal government deals with the provinces, and that is why our motion adds that the granting of the approval to construct a new railway line shall also be subject to ``the obtaining of an environmental assessment and compliance with zoning by-laws in the municipalities in any province affected by the railway line''.

[English]

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, with regard to the Bloc motion, there is some merit in it in terms of environmental considerations however, on reviewing this, had it been worded a little differently it would have been easier to support. The way the motion reads it is a cumbersome process which would grind work to a halt. It is not workable.

Motion No. 19 is also connected in some way to what the Bloc raised, which were the concerns of municipalities within the various provinces affected by rail activity. Railways have property which must be crossed from time to time either by the municipalities for infrastructure work or by utility companies in order to supply service to the general public. Often permission is required to make these crossings, either with an overhead crossing or more often an underhead crossing.

The concerns raised by both the municipalities and utility companies are that in the event of rail line abandonment or selling off of the rail lines, they have no tenure on these crossings. They would like something put into the bill which would ensure the infrastructure would continue in the interests of the general public. Obviously, it would be a great hardship for a municipality if suddenly a water or sewer line which crossed rail property was ruled improper and had to be rerouted.

I suspect it will be suggested by the other side that it could be taken care of by getting an expropriation and that is right. The land could be expropriated which would of course mean going to court with lawyers and delays and uncertainty. This is not a company benefit or profit for an individual or an individual company. This is just something to address the needs of the taxpayers in the affected area. It is worthwhile. It is not something which will be a hardship to the rail lines. I ask that all members of the House give it serious consideration.

Mr. Paul Zed (Parliamentary Secretary to Leader of the Government in the House of Commons, Lib.): Mr. Speaker, I listened quite carefully to the amendment proposed by the member. I should say that the government does not support the motion because it is not consistent with the current environmental legislation regarding circumstances and responsibilities for conducting environmental assessments. While I understand where the hon. member is coming from, he should realize there is an inconsistency in the motion.

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With regard to the subject of local conditions, the hon. member should read section 98(2) again. We believe that the consideration of local conditions is already adequately covered in 98(2) and for that reason we do not believe that this motion should be supported.

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Motion No. 18 in Group No. 8. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

And more than five members having risen:

The Deputy Speaker: The recorded division on the motion stands deferred.

The next question is on Motion No. 19. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

Some hon. members: On division.

The Deputy Speaker: I think colleagues there were not sufficient members in the House at the time of the calling of the matter.

Mr. Gouk: Mr. Speaker, on a point of order. I do believe there may be more than five who have come in now, but at the actual time the fifth member was standing at the back by his desk.

The Deputy Speaker: There is no doubt at all. The member is right. There are more than five now, but unfortunately when there was the standing vote, there were not five and accordingly the matter would fail then on division.

Motion No. 19 negatived.

Hon. David Anderson (Minister of Transport, Lib.) moved:

Motion No. 22

That Bill C-14, in Clause 106, be amended in the English version

(a) by replacing line 24, on page 46, with the following:

``ment, bailment, mortgage or hypothec or as a lessor or'';

(b) by replacing line 31, on page 46, with the following:

``tions under the security agreement, bailment, mort-''; and

(c) by replacing lines 33 to 35, on page 46, with the following:

``(b) any event that occurred before or after the scheme was filed and that constitutes a default under the security agreement, bailment, mort-''.

Motion No. 26

That Bill C-14, in Clause 133, be amended in the French version, by replacing line 14, on page 61, with the following:

``sur ses lignes-et, le cas échéant, sur des dis-''.

Motion No. 71

That Bill C-14, be amended by adding after line 11, on page 94, the following:

``CN Commercialization Act

210.1 Subsections 3(2) and (3) of the CN Commercialization Act are replaced by the following:

(2) Nothing in, or done under the authority of, this Act affects the operation of the Competition Act in respect of the acquisition of any interest in CN.''

Motion No. 74

That Bill C-14 be amended by deleting Clause 275.

Motion No. 75

That Bill C-14 be amended by deleting Clause 276.

Motion No. 76

That Bill C-14, in Clause 278, be amended by replacing lines 26 to 37, on page 120, with the following:

``278. If this section comes into force before the day fixed by order under section 24 of the Budget Implementation Act, 1995, then the definition ``Agency'' in section 2 of the Atlantic Region Freight Assistance Act is replaced by the following:''.

Motion No. 77

That Bill C-14, in Clause 279, be amended by replacing lines 40 to 42, on page 120, and lines 1 to 6, on page 121, with the following:

``279. If this section comes into force before the day fixed by order under section 25 of the Budget Implementation Act, 1995, then''.

Motion No. 78

That Bill C-14 be amended by deleting Clause 280.

Motion No. 79

That Bill C-14 be amended by deleting Clause 281.

Motion No. 80

That Bill C-14 be amended by deleting Clause 282.

Motion No. 81

That Bill C-14, in Part I of Schedule IV, be amended by replacing, on page 135, the following:

with the following:

Motion No. 82

That Bill C-14, in Part II of Schedule IV, be amended by replacing, on page 135, the following:

with the following:

He said: Mr. Speaker, all these amendments are essentially technical. They are to bring the French text in conformity with the English and vice versa on a number of motions, that is Motions Nos. 22 and 26.

Furthermore, these amendments reflect the fact that other pieces of legislation in draft at the time this bill was first tabled before the House have now been proclaimed, for example the Budget Implementation Act, 1995 or the CN Commercialization Act.

Therefore there is a need to bring it into conformity with what has been passed, Motions Nos. 71, 74, 75, 76, 77, 78, 79 and 80. The final group, Motions Nos. 81 and 82, is to correct geographic references to branch lines identified in schedule IV of the bill.

[Translation]

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Motion No. 22. All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Agreed to by unanimous consent. I therefore declare Motions Nos. 26, 81 and 82 carried.

(Motions Nos. 22, 26, 81 and 82 agreed to.)

[English]

Mr. Zed: Mr. Speaker, I wonder if there would be unanimous consent to have that vote applied to Motions Nos. 71, 74, 76 and 78.

[Translation]

The Deputy Speaker: Does the whip for the Bloc Quebecois agree?

Mrs. Dalphond-Guiral: Agreed.

[English]

Mr. Gouk: Agreed.

Mr. Althouse: Agreed.

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Motions Nos. 71, 74, 75, 76, 77, 78, 79, 80 agreed to.

Mr. Vic Althouse (Mackenzie, NDP) moved:

Motion No. 23

That Bill C-14 be amended by deleting Clause 112.

Motion No. 24

That Bill C-14, in Clause 112, be amended by replacing line 20, on page 49, with the following:

``must be commercially fair and reasonable to all parties.''

This is not something that I alone was concerned about in the House. The hon. member for Kindersley-Lloydminster had also attempted to move a similar motion, hence the support by my hon. friend from Lisgar-Marquette.

The problem is that the provisions of this clause are to provide an interpretive direction to the Canadian transport agency when it is setting rates or conditions of service as they apply to carriers.

Since the clause now reads ``a rate or condition of service established by the agency under this division must be commercially fair and reasonable'', a lot of the witnesses who were before the transport committee, including the prairie pools, the National Farmer's Union, the three prairie provincial governments, indicated they could not support such a provision because there was no clear definition as to what constitutes fair and reasonable.

It was also indicated that clause 113 was to serve as a general guideline for the NTA. If that were the case, this kind of guideline should be conveyed to the agency through means other than legislation.

In their submission to the transport committee the three prairie governments stated clause 113 provides yet another potential avenue for railways to delay the process and to appeal rates established by formulas for interswitching and competitive line rates.

Since a large number of the people who will be affected by this clause think it should be dropped, I am in agreement and propose this amendment to strike this clause from the legislation.

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, we support this amendment because of the overwhelming request for that by all the people who intervened at the committee level.

As I said earlier in debate, I do not see why the Liberals would hold committee meetings, paying for interpreters, paying for all the technicians, paying for the research people, the clerk and all the others who come before the committee if they are not prepared to listen to those who come.

One of the people who came before the committee was Mr. Ashley from the National Transportation Agency. I specifically asked him the meaning of ``commercially fair and reasonable''. His response was there is no specifically defined position since it may mean rather than it would.

This was to cause a lot of uncertainty for shippers who wish to bring their cases before the agency. It also means a great boost for the law profession, as it argues the two opposite extremes of this definition.

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It was not there before. The vast majority of people who came before the committee do not want to see it there now. We have not seen any evidence to suggest it serves a useful purpose. We would like to see that taken out and we are very happy to add our support to the hon. member for Mackenzie in his attempts to have this removed.

Motion No. 24 ties into the same thing. It is an amendment to what is now clause 112. It is not necessarily a good amendment. It would be ideal to have the clause removed completely, in which case Motion No. 24 would simply disappear.

If the government intends to use its majority to push through a decision that was unpopular among shippers, among the majority of people who came before the board, and that was not even supported by the National Transportation Agency, with great reluctance we will probably support Motion No. 24 because it is the equivalent of losing only a finger or two when you had been threatened with losing your entire arm. I do not think it is that good. It is probably more like losing it above or below the elbow. That would be a more appropriate analogy.

Motion No. 24 does not make much improvement. If the Liberals are condescending enough to allow us to have that little crumb and will not do what is right, we will have to take whatever is left over.

Hon. David Anderson (Minister of Transport, Lib.): Mr. Speaker, I appreciate the words of my friends opposite, although I believe we should put this in the context of the examination that has taken place in committee.

It is true that our committee members, including opposition members, are bound to listen to and consider any position brought forward. However, this is the difference between this side of the House and the other. It is not simply the weight of people who arrive as witnesses that determine the outcome.

We do not believe we can have our role as government, as representatives of the people of Canada somehow suspended because a group of people, a large number of people, come on one side or the other. We have to analyse the merits of what is said and not simply count up the number of people who oppose or support a particular measure.

With respect to Motion No. 23, the committee did that. It considered the representations made and it came to the unanimous conclusion that this section of the bill did not require immense substantive amendment. In its view a regulatory decision must be accepted as being in good faith and must be considered fair and

reasonable. We cannot accept the intent of this motion which implies the opposite if we have any confidence whatsoever in the regulatory bodies the House sets up.

We do not support this motion, although I can assure hon. members it was carefully considered. The intent put forward is taken care of by the wording of the current bill.

With respect to Motion No. 24, the words listed are ``must be commercially fair and reasonable to all parties''. Obviously this is a government motion which we support for the following reasons. The provision gives guidance to the agency when it takes over from commercial negotiations between the parties so as to impose a rate or a level of service on the railway.

It is assumed that at the point when it takes over the commercial deliberations between the two parties have broken down. At that point the agency must have the guidance of this section, and it will. It must look at balance to ensure that when it examines the rate it will be fair and reasonable to all the parties.

Some stakeholders have said this phrase is unclear and will create excessive litigation. I do not believe so at all. In my view the average person in the public, the average person watching the televised proceedings of the House today will have pretty good idea in their own mind of what is fair and reasonable.

I think excessive use of the courts to get the lawyers to argue something which is not fair and reasonable, not the common sense meaning, would not succeed when we have a good regulatory agency such as the NTA.

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Some litigation is inevitable with any new piece of legislation. It happened with the major transportation bills in 1967 and again 20 years later in 1987 and it will happen with this one. There will be challenges, of course. It happens every time there is a legislative change.

As to the claim that there are going to be hundreds of cases, let me just observe that the costs of litigation make that prohibitive, costs not only in terms of dollars but also in terms of time. These costs fall on all parties. Railways and shippers know that after one, two or three key cases they will have all the clarity they need from the NTA and the courts. What we will get as a result of the change are more successful commercial agreements for the rail service, which is the objective, where both parties and the entire Canadian economy wind up as the winners.

Clause 112 in the Canada Transportation Act, that the rate imposed by the agency be commercially fair and reasonable to all parties, is important and indeed vital for rail renewal in Canada which is obviously in the interests of producers and shippers as well. This will help put the required new balance into the formula for the benefit of all Canadians. Therefore, we definitely support Motion No. 24, just as we must oppose Motion No. 23.

Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, I would like to speak to the amendment by my colleague from the NDP and to the support he has received from the Reform Party.

This is an important discussion. I sat on the committee and from my railway experience I can say that this is obviously something that has stacked up against the railways for a number of years. If we are going to have a successful railway industry and a transportation sector which will deliver the services required, there must be a significant balance.

In 1987 when the Tory government brought in the NTA, it brought in some regulatory changes but stacked them on top of each other. Because of that stacking there were some problems with the act which these amendments are trying to change. The rationale is that if we are going to go to a more commercially driven transportation sector, the process must be in place for it to be successful.

Most intriguing is that on the one hand the Reform Party has continually said that governments should not get in the way of free market enterprise and allow companies to make decisions on their own. We all know that commercially fair and reasonable means that agencies are given the objective of making decisions on behalf of two complainants. For instance when a shipper disputes what the railway would like to charge there must be some form of criteria laid out in order for them to make decisions and arrive at a result. The process in the amendment the minister has added which affects all parties is intended to make sure that the parties are relatively successful in Canada.

One thing the opposition has failed to bring forward so far in the discussion but which came forward in committee is that since 1987 the line rates and the cost to the railways have increased 30 per cent. In fact railway companies in this country have had significant problems in making a profit. I know the NDP are suggesting this but I am quite surprised that the Reform Party is in agreement. If they are suggesting that the government bail out the railways every time they do not make a profit, we can then go back to the regulatory system which is in place now.

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People would go to the agency only for one reason. The agency would make a decision on whether it is fair and commercially viable for the railway to up its cost per commodity. Under the present system, that has not taken place and therefore, there have been problems with it all along. The intent of these new regulations and changes is to put the balance back where it belongs. It is the same argument with labour-management relations. If there is not a good balance then it does not work. The same thing occurred with the 1987 amendments. Of course, the grain farmers and shippers in

western Canada are opposed to this. There will be stronger, businesslike discussions and debate which will go on before they go to the agency.

I reiterate that when I was in committee not everybody agreed that this was a bad thing as the member who spoke previous to me suggested. There were different groups of thought. If we go to a commercially based industry and system and if the government stops subsidizing the railway industry, it would have to have the means and the capability to be successful. That is what this rebalancing does.

The amendment the government has proposed will prove over the years that this is good for Canada in the long run. It is not going to be successful if we use the short term arguments of the opposition. We will be revisiting this as we did in the 1920s, in the 1940s and in the 1970s and bailing out railway industries because we have not allowed them the tools to be successful. That is why this amendment is so important to the overall viability of the industry itself and of course to all of us who need to get our products to market.

[Translation]

The Deputy Speaker: Is the House ready for the question on Group No. 10?

Some hon. members: Question.

[English]

The Deputy Speaker: The question is on Motion No. 23. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

And more than five members having risen:

The Deputy Speaker: The recorded division on the proposed motion stands deferred.

Mr. Vic Althouse (Mackenzie, NDP) moved:

Motion No. 56

That Bill C-14 be amended by adding after line 39, on page 68, the following new clause:

``146.18 On the coming into force of this Division, sections 268 to 270 of the Railway Act shall apply to the provision of passenger-train services only in the following circumstances:

(a) the passenger train service have been determined by the Agency to be in the public interest; or

(b) the Governor in Council has declared a route or segment of a route of Via Rail Canada Inc. to be a protected route.''

Mr. Bernier (Mégantic-Compton-Stanstead, BQ): On a point of order, Mr. Speaker. Are you talking about Group No. 12 or Group No. 11?

The Deputy Speaker: Group No. 12.

We considered Group No. 11 last Friday, at which time we also deferred the division on these motions.

[English]

Perhaps I should read the motion. It is in the same group.

Mr. Zed: Mr. Speaker, on a point of order, could you advise whether we dispensed with Motion No. 24 in Group No. 10?

The Deputy Speaker: The matter of Motion No. 24 will be disposed of after the deferred vote.

Mr. Zed: Motion No. 24 as well?

The Deputy Speaker: Motion No. 23 was deferred and its rise or fall depends on what happens with Motion No. 23.

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Mr. Vic Althouse (Mackenzie, NDP) moved:

Motion No. 70

That Bill C-14, in Clause 185, be amended by replacing line 16, on page 86, with the following:

``(2) Sections 264 to 267, 344, 345 and 358.''

While Motion No. 70 lists a bunch of numbers, essentially it would make the proper corrections. Since this amendment would deal with sections 268 to 270 of the Railway Act, Motion No. 70 would simply drop those numbers from the succeeding clause in the bill because that would no longer be necessary. Motion No. 70 is simply housekeeping contingent upon Motion No. 56 passing.

The question here is whether a fully deregulated system can in fact perform a function for isolated areas. I note that some witnesses from the coalition for service to northern Ontario began their commentaries by saying that they began their work over a year ago believing strongly that they would seek market driven solutions to the ills that plague transport rather than once again looking to governments to save the railroads.

This spring however the coalition reluctantly came to the conclusion that when it came to rail passenger service, services in northern Ontario were no different from rail passenger services elsewhere in the world and that specifically, northern Ontario services understood that the passengers by themselves were not in a position, nor were they willing to pay for the full cost of such rail based service. Someone other than the fee payer would be needed to pay the difference in cost. They went on to point out the amount of subsidy which has been paid to maintain some of the lines in northern Ontario. I suspect we would find subsidies being paid to maintain service in other parts of the country as well when it comes to rail passenger service.

The intent of this amendment is to recognize that there are some places which will not be able to pay for the service on a user pay basis, that those parts of the country are important and that therefore we all should pay a little bit in order to maintain access to those regions for the people who live there. That is after all what a country is supposed to be about. It was the original rail service requirement in the Constitution to link the various colonies and regions of the country together.

Even though we are going to a deregulated system, there will always be some parts of the country in which full deregulation will make absolutely no sense, such as the many communities in northern Ontario. This particular amendment would require the agency to take that into consideration before it decided whether to provide a service.

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Mr. Robert D. Nault (Parliamentary Secretary to Minister of Human Resources Development, Lib.): Mr. Speaker, I am going to speak against this motion for some very obvious reasons. The NDP are still stuck about the 1920s. Its members do not seem to have been able to take a good look at what this bill intends to do.

The bill is intended to take the public interest out of a mode of transportation. It treats railroads just like truckers or shippers or anybody else. That is not to suggest that the agency is the final arbitrator of the public interest.

The legislation states that if there is something in the public interest it can be taken to members of Parliament. They are there to fight for a particular rail line if it is being subsidized. It will be a transparent subsidization that will be dealt with based on the merits of a certain region.

To send it to a non-elected body which on the one hand looks at the commercial side of issues but on the other hand what Canada's public interest is and what the beliefs are of the government of day, suggests to me that it is skewing the whole process of having successful transportation systems.

Section 48 permits the minister to enter into support agreements for the continuation of rail passenger service. From my experience and knowledge, that is what has been done in northern Ontario. I take offence at the member's suggestion that all of a sudden the government is going to leave northern Ontario in the lurch.

The other issue is one I have mentioned before. I believe the people who should deal with the public interest are those of us in the House. The agencies are there to make sure that the transportation system functions and runs properly. That is why the public interest scenario has been taken out of the bill.

I suggest to members that we get into the modern age and understand what is the intent of a rail transportation system. It is to get product to market as quickly and as cheaply as possible. Rail transportation, as far as passenger service is concerned, is a different issue and should be dealt with in a different arena which happens to be this one here.

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Group No. 12, Motions Nos. 56 and 70. All those in favour of the Motion No. 70 will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

I declare Motion No. 70 defeated on division. Therefore Motion No. 56 is defeated.

(Motions Nos. 56 and 70 negatived.)

[Translation]

The Deputy Speaker: We now go on to Group No. 13.

Mr. Paul Mercier (for Mr. Guimond) moved:

Motion No. 57

That Bill C-14 be amended by deleting Clause 147.

Motion No. 58

That Bill C-14 be amended by deleting Clause 148.

Motion No. 59

That Bill C-14 be amended by deleting Clause 149.

Motion No. 60

That Bill C-14 be amended by deleting Clause 150.

Motion No. 61

That Bill C-14 be amended by deleting Clause 151.

Motion No. 62

That Bill C-14 be amended by deleting Clause 152.

Motion No. 63

That Bill C-14 be amended by deleting Clause 153.

Motion No. 64

That Bill C-14 be amended by deleting Clause 154.

Motion No. 65

That Bill C-14 be amended by deleting Clause 155.

[English]

Mr. Vic Althouse (Mackenzie, NDP) moved:

Motion No. 66

That Bill C-14, in Clause 155, be amended by replacing lines 17 to 21, on page 72, with the following:

``(2) The Minister shall lay before the House of Commons a report concerning the review made under subsection (1) within thirty sitting days after the review is completed.''

Mr. Paul Mercier (Blainville-Deux-Montagnes, BQ): Mr. Speaker, I will defend Motions Nos. 57 to 65 together. They have the same purpose, are related to clauses 147 to 155 and are not intended to amend them. The sole purpose of the motions is to delete these clauses from the bill.

These provisions are back, with special benefits for Western grain transportation. We are opposed to such benefits. Let us remember that just a few days ago, in this House, the hon. member for Frontenac expressed his disagreement with the fact that dairy subsidies had been eliminated, with no compensation for dairy producers, while the same had not been the case for Western grain transportation and production.

These clauses deal with the introduction of a maximum rate and special conditions for the transportation of Western grain. These provisions were introduced in the 1987 legislation, when the Western Grain Transportation Act, the so-called WGTA, was repealed and the subsidy eliminated. But Western farmers were generously compensated, to the tune of close to $3 billion, for the elimination of the subsidy and the WGTA. In this bill, the government is reintroducing the provisions introduced in the 1987 legislation.

Western farmers have been very well compensated, unlike their counterparts in Quebec, as I have just mentioned. They should therefore be able to cope with the new conditions for transportation in the West, and to adapt to a rail system operating on a strictly commercial basis, as is the case here.

Treating Eastern and Western shippers on an unequal footing can only result in an inequitable development of the rail system by adversely affecting the resources that shippers in the Eastern network can invest. It is for these reasons that we are asking that these clauses be deleted from the bill.

[English]

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, I would like to make a couple of short observations.

If this motion is passed, it will negatively impact on western grain transportation. If Bloc Quebecois members were to rise in the House and say that they are a regional party, interested in specific partisan points within the province of Quebec, then their motion would be perfectly understandable.

However, for them to say that they are a national opposition party, the official opposition, and vote on such partisan views is totally unacceptable. We will not be supporting this motion.

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Mr. Vic Althouse (Mackenzie, NDP): Mr. Speaker, the grouping of the motions includes one from me. It states that Bill C-14 on page 72, section 155, requires a review where:

-the minister shall, in consultation with shippers, railway companies and any other persons that the Minister considers appropriate, conduct and complete a review of the effect of this Act, and in particular this Division, on the efficiency of the grain transportation and handling system and on the sharing of efficiency gains as between shippers and railway companies.

This is quite common and normal for reviews structured under acts of Parliament. I presume it was an error on the part of the government and it was simply missed. I expect that the government will be supportive of this since it has a similar kind of clause in 48 which deals with extraordinary disruptions to the system and those extraordinary disruptions are reported to the House of Commons. As well in clause 43, the minister tables the annual reports of the Canadian Transport Agency.

On such an important issue as this review of whether the whole system of deregulation has or has not worked, it is obvious that the House of Commons would and should be interested. I am sure it was simply an oversight on the part of the government and I expect the motion will be supported at the time of the vote.

[Translation]

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Motion No. 57. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

And more than five members having risen:

The Deputy Speaker: The recorded division on the motion stands deferred. The deferred division will also apply to Motions Nos. 58 to 65.

[English]

Mr. Althouse: Mr. Speaker, a point of order. I understood that you had included Motion No. 66 in the last group. It was not decided how to deal with it.

The Deputy Speaker: The question on the member's motion will only be put depending on how the vote comes out on motion No. 57.

Mr. Vic Althouse (Mackenzie, NDP) moved:

Motion No. 67

That Bill C-14 be amended by adding after line 25, on page 72, the following new Clause:

``155.1(1) After consultation with such participants as the Agency deems appropriate, the Agency shall, on or before March 31, 1997, on the basis of the most recent calendar or crop year for which appropriate costing information is available, complete a review of and determine, for that year, the volume-related variable costs of the railway companies for the movement of grain and the line-related variable costs of the railway companies for grain-dependent branch lines as designated by the Agency pursuant to section 41 of the Western Grain Transportation Act.

(2) In carrying out the review and making the determination referred to in subsection (1), the Agency shall

(a) take into account all costs actually incurred that are directly related to the provision of an adequate, reliable and efficient railway transportation system that will meet future requirements for the movement of grain;

(b) compute the costs of capital and adjust that cost by any amount it deems justified in light of the risks associated with the movement of grain;

(c) exclude the costs of capital and depreciation in respect of branch line assets provided under the Prairie Branch Line Rehabilitation Program and in respect of railway cars that have not been funded by the railway companies;

(d) exclude the costs incurred by the railway companies in providing for and holding public meetings referred to in section 56.1 of the Western Grain Transportation Act;

(e) reduce the additional costs directly attributable to the joint line movement referred to in sections 49 and 50 of that Act by an amount equal to the additional revenues derived by the railway companies pursuant to those sections; and

(f) reduce the additional costs directly attributable to the acquisition by the railway companies of railway cars for the movement of grain other than box cars or hopper cars by an amount equal to the additional revenues derived by the railway companies pursuant to sections 51 and 52 of that Act.

(3) The Agency shall, on or before March 31, 1997 and on or before March 31 of every fourth year thereafter, complete a further review and determination of costs in accordance with subsections (1) and (2) on the basis of the most recent calendar or crop year for which appropriate costing information is available.

(4) In carrying out the review referred to in subsection (1) and further review made pursuant to subsection (3), the Agency shall assess the appropriateness of the level of the contribution to the constant costs of the railway companies referred to in paragraph (b) of the definition ``estimated eligible costs'' in subsection 34(1) of the Western Grain Transportation Act and make recommendations to the Minister thereon.

(5) In assessing the appropriateness of the level of the contribution referred to in subsection (4), the Agency shall be guided by the following objectives:

(a) to ensure that the overall revenues of the railway system are adequate to meet its long-term needs; and

(b) to ensure that the contribution to constant cost provided by the movement of grain is fair in relation to the contribution provided by other commodities.''

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It will be very difficult to do a proper job of the review in 1999 if there is no base study done now. This sets up the opportunity for the agency to conduct such a base study. It will clearly establish the real costs of the system as of this coming year. When we have the review in 1999 we will know whether progress has been made and whether the act is a success or a failure.

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Motion No. 67. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it. I declare Motion No. 67 defeated.

The House will now proceed to the taking of the divisions at the end of report stage.

Call in the members.

The deputy whip for the government party has requested a deferral until 6 p.m. tonight. Is that agreed?

Some hon. members: Agreed.

* * *

CIVIL AIR NAVIGATION SERVICES COMMERCIALIZATION ACT

March 14, 1996-The Minister of Transport-Second reading and reference to the Standing Committee on Transport of Bill C-20, an act respecting the commercialization of civil air navigation services.

That Bill C-20, an act respecting the commercialization of civil air navigation services, be referred forthwith to the Standing Committee on Transport.

It is customary for the underlying principle of a bill to be debated before it is referred to the committee. That debate usually occurs at second reading. However, in the case of this legislation the debate has taken place over the course of the past two years, and a very extensive debate it has been.

The government first announced it would study commercialization of the air navigation system in the 1994 budget. Hon. members debated the merits of commercialization at that time.

The not for profit model set out in the legislation was chosen by an advisory committee composed of users, unions and other stakeholders. The committee studied seven different options for commercialization. It consulted with interested parties across Canada. Many Canadians from coast to coast debated the merits of commercialization during the consultative process. I pay tribute to the energy and dedication displayed by members of the committee from all sides of the House in that exercise.

The government announced its decision to proceed with commercialization of air navigation in the 1995 budget. Hon. members were again afforded the opportunity to debate this decision. There has been already considerable debate on the underlying principle of this bill. Because so many have been given the chance to contribute there is today broad support for this piece of legislation.

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As the House knows, Nav Canada was incorporated in May 1995 under the part II of the Canada Corporations Act for the purpose of developing, operating and maintaining the air navigation system. Highly successful negotiations have resulted in an agreement in principle between the government, Nav Canada and the involved unions. Under this agreement Transport Canada will transfer the navigation system to Nav Canada for $1.5 billion. This will make a significant contribution to the government's deficit reduction efforts, efforts to which the governor general in the speech from the throne paid tribute a few weeks ago.

Subject to the review and the approval of Parliament and the receipt of royal assent, this transfer is set for July 1 this year, a very significant date in Canadian history.

Nav Canada will receive all the assets used by Transport Canada in the provision of air navigation services. This includes land, equipment and other items required to ensure the system's continued safe and effective operation.

After the transfer Nav Canada will be responsible for providing all of the air navigation services currently provided by Transport Canada including air traffic services, community aerodrome radio services, aeronautical telecommunications, aeronautical information services and aviation weather services.

Transport Canada will be responsible for ensuring the continued safe provision of these services. The new safety regulations developed specifically to address the commercialization of the air

navigation system will be in place before the transfer happens. Transport Canada will monitor and enforce these regulations in much the same way it now does with the air carrier industry.

Nav Canada will be required to have an internal safety management program. In addition, the corporation will not be permitted to reduce the service it provides where it would jeopardize safety. Furthermore, the Aeronautics Act which establishes the regulatory framework to maintain safety in the aviation industry will always take precedence over the commercialization legislation.

I mentioned a moment ago that we have reached agreement in principle with all parties in this project. I underline this includes unprecedented support from the very people who will be most affected by commercialization, the employees working in the system itself. Their support is outlined in a memorandum of understanding between Transport Canada and the employee bargaining agents. Under this memorandum, which was signed last September, current collective agreements will continue to apply. Bargaining agents will have successor rights until Nav Canada and its employees reach their own agreements between each other.

Those who use the air navigational system have likewise endorsed this legislation, and no wonder. The government projects that costs will come down, possibly within two to three years, as private sector management principles take hold of the system, as subsidies are phased out and as the regulations governing the air navigation system are streamlined.

There are concerns of isolated communities and they are reflected in this legislation as well. The act ensures continued provision of air navigational services to northern and remote communities. It also includes a process to involve provincial and territorial governments should any service reductions be proposed by Nav Canada in the future.

Following established practice and in keeping with Nav Canada's national role, the provisions of the Official Languages Act will also apply throughout Nav Canada as if it were a federal institution.

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Nav Canada must maintain services to humanitarian or emergency flights in the event of any work stoppage that might occur.

The commercialization of the air navigation system is a key part in the government's efforts to modernize the Canadian transportation system. It complements our other transportation initiatives including the commercialization of federal airports, seaports and harbours, the privatization of Canadian National Railways, the commercialization of ferry services and the conversion of Transport Canada's motor vehicle test centre to a government owned but contractor operated facility.

Commercialization of the air navigation system is consistent also with international trends such as those in Australia, New

Zealand, Germany, South Africa and Ireland. All those countries have opted for some form of commercial air navigation during the past decade.

This transaction is one of the largest commercialization initiatives undertaken by the federal government. It is a model of the co-operation required between public and private sectors. It is also a very visible demonstration of the government's commitment to streamlining its operations and reducing its expenditures as well as its determination to stop providing services that can be better provided by the private sector.

That is a good deal for all Canadians, for taxpayers, by making a $1.5 billion contribution to reducing the federal deficit. It is good for the industry by maintaining safety while increasing the system's ability to respond to changed demands and new technologies.

It is good for users by providing more efficient and cost effective operations. It is good for the system's employees by offering them the opportunity to continue to work and contribute in a new and challenging work environment. It is also good for Nav Canada by setting the stage for it to operate one of the world's best run and safest air navigation systems.

I urge all hon. members to approve the motion to refer the civil air navigation services commercialization act directly to committee. Let us speed up the process of ensuring continued safe, efficient and flexible air navigation services for Canadians.

[Translation]

Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): Mr. Speaker, I am pleased to speak on Bill C-20, which is before us today. Our position is clear: we are not, opposed to the principle set out therein, that is to say providing the public with better and more affordable service. In today's difficult times, I believe this principle must be everyone's objective.

We are, therefore, in agreement with the principle of Bill C-20, but we have many questions on the way the government has drafted it, has worded the underlying principles.

For instance, it is all very well to say that Nav Canada is to be a not for profit corporation. Fine, no problem with that. Now, if we look at who will be on the board to preserve the rights of users, we find there will be 15 representatives of the aviation sector, both commercial and non commercial, the unions, the federal government, plus independent members. Here again, I find this praiseworthy.

When we thoroughly examine who those members will be, however, we find they will be only the major carriers. The small ones will not be represented, although a number of those consulted by the members of the task forces on this intended government

measure expressed a wish to see small carriers hold at least one seat on the board.

They did not get it in the legislation, for all practical purposes. Is that a sign of how things will be later on? I hope not. Surely they will have the chance to remedy this, and we will stress that point when the bill goes to committee.

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Therefore, we support the principle, but we have some questions about the wording. We have some concerns about safety as well.

I heard the minister introduce this bill at this particular stage, and he said we would have to leave it up to the agency to check the homework the government had done to find ways to save money, and all with the aim of user safety. I do not think the bill stress safety enough. I agree that savings have to be made, but, as far as safety is concerned, I do not think anyone, especially in the field of aviation, is going to ask the government to make savings at the risk of safety.

The preamble to this bill should make the message very clear to the agency that will be managing these things in the future. Safety is vital, and, at this point in time, I think the bill is lacking in this regard. We will also make sure the matter comes up for discussion in committee.

There is the matter of employment as well. The agency, which currently manages all navigational services, has some 6,400 employees. It is therefore very important in terms of the jobs in this agency that legislation be passed by Parliament to promote or attempt to keep as many jobs as possible, while lowering costs.

I heard the minister earlier assuring the House that union members had been consulted, that there was no problem continuing labour contracts and that everything would go smoothly. Yes, for the time being. However, there is a series of collective agreements to be renegotiated between March 1997 and October 1998, I believe. If the objective is to save money, some jobs will certainly be lost in the process, whether we like it or not.

This bill should perhaps include a detailed list of what the government would like the corporation to keep. Now is the time to do it while we are reviewing this bill and setting up this organization. We as legislators and members of the House of Commons will set the guidelines, and I think it is important to do so right away.

I look forward to hearing union representatives testify about these collective agreements before the committee and explain to us how they see the future in terms of privatizing, so to speak, all civilian air navigation services. This is a very important point.

I have another point to make that is extremely important, especially for some regions. I represent the riding of Berthier-Montcalm, which unfortunately does not have a major airport although there are some on the outskirts. My colleague from Trois-Rivières, for his part, is lucky enough to have a major airport in his riding. I think it would be important, in this bill, to make the regions feel secure, to help small airports get equal, if not special, treatment because local economies are often directly or indirectly linked to transport facilities, including airports.

However, in its drive to save money, the non-profit corporation may not see things the way I do today. It will not necessarily think about the regions in deciding to eliminate or modify jobs or even to close air transport services. Now is time for us, as the legislators now considering this bill, to include in it some very specific provisions outlining what we as parliamentarians want from this non-profit corporation.

The corporation will buy this for $1.5 billion. This is all well and good, but then if there are problems or if the regions encounter some difficulties, we will not come out ahead in return for $2 billion.

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It is time that to stand up for the regions, because they are important. They are important to Quebec and to Canada as well. Nowhere in this bill do I see any assurance that these services will be maintained.

Another important element is small air carriers. There is a direct link between small carriers and small airports. Small carriers and major carriers view things quite differently; take for example, in Part III, the air navigation charges set by NAV CANADA.

Major air carriers would like fly over fees to be lower than landing fees, which is quite normal. On the other hand, small carriers are calling for just the opposite. Why? Because they are not on as strong an economic or financial footing as major carriers.

If we want small air carriers to be able to survive in their regions, this point must be stressed in the legislation. Nowhere in Bill C-20 is this philosophy, this attitude of the government regarding small carriers reflected.

We get the distinct impression that the bill was dictated by major carriers and that it is intended to serve their interests. Granted, It is for reasons of economy and to have better service in the future. But we know that the signal was sent by the major carriers.

It is important for small airports and carriers, as well as for the regions, to send the message today, through Bill C-20.

Bill C-20 is complex because it deals with a number of issues. However, many terms used are vague. A principle of law provides that, when drafting a piece of legislation, the legislator must be clear. It uses terms that are as clear as possible, to facilitate their interpretation by the courts.

However, some expressions in this bill are quite vague, including three in clause 2(4), which will have to be improved on, hopefully in committee. There are expressions such as interested party, persons designated by the minister, demonstrable consensus and transparency. These expressions are not very clear in the bill. In the end, we do not really know the purpose of this legislation.

These things will have to be clarified in committee so that we can support this bill. In principle, we agree, but we must also end up with an act which will mean something and with which we can agree.

[English]

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, I will start by telling the government I am recommending to my party that we support this bill going to committee after first reading, which is contrary to our normal policy.

When the House first started the concept of sending legislation to committee after first reading, it sounded like a great idea. It was supposed to be easier. Nobody would get their back up in the House before the bill went to committee. However, we were blind sided by that because once a bill got to committee, we found that it was treated in a very autocratic manner.

I opposed Bill C-101, which later became Bill C-14, going to committee after first reading. Of course the Liberals used their voting might to ram it through. In all fairness at committee level, notwithstanding the fact there were still things in the bill which I did not like, it was dealt with in a much more open handed manner than had previously been the case.

I see no advantage in debating the bill at this point. Debate does not answer questions. It postulates each of the various positions, but it does not answer questions. I have some questions which need to be answered and this can best be done at the committee level. I would like to see the bill go to committee so we can start dealing with the real questions that have been brought up. Before I proceed, I would like to put the government on notice on some things I am concerned about and will be looking for answers to in committee.

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I would like to comment on one of the remarks made by the member from the Bloc Quebecois. He talked about his concern that the anticipated formula will charge more for aircraft landing than it will for aircraft overflying. I should tell the hon. member that unfortunately for him, he does not seem to know very much about the air traffic control system.

An aircraft that overflies, probably in the high level air space, stays under the control of a series of sectors but in one spectrum of the air traffic control system, high level control. Where an aircraft landing may have started in high level control when it came into the air space but had to descend through low level control, then into terminal control and then ultimately airport control, there is a much greater workload, more people involved and more equipment requirements. Therefore, there is a rationale for this.

If the member has small airlines or operators who are concerned about this, if he cares to share those with me, I would be happy to talk to them. I have talked to a lot of large and small operators as well as all the other players in this and I have not found this particular opposition. It does not mean I am not open to hearing it if he has something to bring forward.

The minister in his opening remarks talked about this great windfall of $1.5 billion that is going to come in. He suggested that it will be used to reduce the deficit. If he does I just hope he keeps in mind that it is not going to come in every year. It is not going to do much for deficit control. It is just a little short term thing. The reality is that it is probably not going to be used for the deficit at all. It is probably going to be used to try to buy off some provinces where they are signing on to the new GST scheme.

I am in favour of a lot of things about the program as it stands now, for example the not for profit corporation as opposed to the crown corporation which I had the impression the government was pushing and pushing rather hard at the beginning. In fact, I could see a lot of senior bureaucrats jockeying for a high level position in the new crown corporation.

I am very pleased to see that the various users involved in this did get their act together and sat down and presented a united front to transport and did manage to bring in the not for profit concept. I am sure it will work much better than a crown corporation ever would. It is good to get it out of government hands, not only out of transport but out of the crown corporation concept as well.

Under the previous government control we have seen something known as RAMP, the radar modernization project. That has been on the go for a decade and it is now way behind schedule. It is over budget. After over 600 software applications, it is still not fully operational. That is a good example of government efficiency. I hope to see much better being done by the private sector.

A number of questions need to be answered and I will just touch on a few. One of the things the new corporation is banned from compensation for is anything the government does by way of an international agreement. I do have some concerns there. We can certainly expand on this in committee. I raised my concerns at the briefing we had on this and I will be taking this further.

I have a concern that the corporation had a very vested interest in taking this over. It is their own organization that impacts on it more than anyone else and consequently they want to have a say in this new operation. Therefore, it was incumbent upon them, one way or another, to ensure that they were successful in taking over this privatized or commercialized air traffic control entity. I have some concerns that they may have been in a situation of negotiating with a gun at their heads as several of the airport authorities did and

now find after the fact that they do not have enough capital to operate properly.

In talking about capital, the Nav Canada corporation has advertised that it is now going to go for a bond issue, seeking possibly as much as $2.5 billion to $3 billion. One question I have not heard answered is about the pension fund the government has turned over to Nav Canada for the pension earnings and positions of all those people who have current pension time earned. That pension fund has to be invested if it is going to grow and continue to have enough revenues in it to pay the pension obligations that the various employees have earned. Can that pension money be invested by Nav Canada in the Nav Canada bond issue? A lot of employees in the organization would like to know the answer to that as well.

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I have concerns about a couple of other areas. One is northern operations. When and under what conditions can Nav Canada be required to continue to operate in the north when it seems to be no longer practical to do so? If it is ordered to continue when there is no commercial sense in being there, will there will be any compensation, and if so, in what form?

I come to the AWOS, the automated weather observation system. I assume this will come, at least partly, under the parameters of the new Nav Canada corporation. I am very concerned about how this will be handled. AWOS is a dangerous piece of equipment. It has been installed in 60 locations. The former Minister of Transport acknowledged that it has problems and decommissioned it at two airports, but still left it in 58 others.

Why are the lives of the people at two airports where it was taken out more important than the lives of the people at the other 58 airports where it is still in service? How does Nav Canada fit into the AWOS system and what are its plans for it?

There is also the matter of the Hughes contract. This new computerized concept of radar is way behind schedule, away over budget, but the government rewrote the contract so that it is now in theory back on schedule and back on budget. It did that by giving a considerable time extension to Hughes, along with an increase in what it is going to pay for a system that is going to have most of its major features removed.

The government cannot stand up and say the Nav Canada corporation loves this because it is paying $1.5 billion. These were gun at the head negotiations and someone has to speak on its behalf. I will be raising that issue in committee.

I will give the government the opportunity to prove that it is being more open minded, that it is going to follow with the intent that it stated when it brought up the original concept of going to committee after first reading. I trust that it will be as open in committee this time as it was to some degree under Bill C-101. If it is, then perhaps we will support going to committee after first reading several times in the future.

On the other hand, if the government does what it did on Bill C-89, which was to ignore all the input, all the amendments and ram the bill through the way it was, then I can assure the House that this will be the last time that we support this concept.

Mr. Glen McKinnon (Brandon-Souris, Lib.): Mr. Speaker, it is a pleasure and an honour to speak in support of this motion being referred to the Standing Committee on Transport.

As my colleague opposite mentioned, not necessarily today but also in committee, air navigation technology is changing rapidly. I have just returned from New Zealand and I met some members of Canadian companies on that tour that are involved in the transition of the New Zealand navigation system. It is attempting to privatize but also to upgrade navigation technology.

My report to the hon. member and to this House would be that things are going very well. We have agreed to stay in touch and hopefully we will get some reports on this side of the Pacific on what and how that is all unfolding.

This is a very important bill, putting into place a crucial element of the government's overall strategy to modernize Canada's navigation and transportation system. It comes at a time when governments around the world are getting out of the business of providing services and concentrating instead on setting policy and enforcing safety. That has to be of paramount concern to all of us in this House.

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It also comes at a time when governments are recognizing that they can no longer meet all of the needs of modern air navigation. Many user groups, such as the Air Transport Association of Canada, the Canadian Air Line Pilots Association and the Canadian Air Traffic Control Association, have all said that the current government operated air navigation system does not meet the needs of the aviation community and its expanding role.

There is no doubt that the time for a government operated civil air navigation system has passed. Once there was a need for governments to be involved in every aspect of air transportation. The present system had its beginnings in wartime when in 1944 member countries of the International Civil Aviation Organization, ICAO, signed the Chicago convention. Article 28 of that convention called on all members to provide airports, radio services,

meteorological services and other air navigation facilities to facilitate international air navigation.

In Canada, the Department of Transport, known today as Transport Canada, assumed responsibility for the operation and maintenance of the principal airports and the non-military air navigation system. For over 50 years the department met the responsibility of developing aviation facilities and, in particular, providing air navigation services to civil aviation.

Starting in the seventies and continuing today, governments in the developed world began to reconsider their involvement in providing services that could be better provided by the private sector. As a consequence, many government began to reduce their involvement in various sectors both as regulators and as owners.

With government downsizing and public sector restraint in full swing both here and in other countries, there is no longer any justification for a government operated air navigation system, just as there is little justification for governments to own railroads or airports. The aviation sector is mature. It no longer needs extensive government involvement to grow and prosper.

Canada has undertaken its review of the role of government in the aviation industry. As a result the federal government has eliminated much of the economic regulation of commercial aviation. It has divested itself of ownership in the airline industry and in the aircraft manufacturing industry and is moving away from operating airports.

The government's review of the air navigation system showed a number of reasons to change: the present system is not flexible enough to respond to changes in demand, and greater efficiency, lower costs and increased accountability are needed.

Safety, once seen as the justification for state control and management of air navigation systems, is now viewed as an integral part of managing the system. This, combined with the increasing fiscal pressures on governments, has led to the conclusion in Canada and around the globe that the system can be run along commercial lines, subject to appropriate government regulation.

Consequently, the government has acted decisively to alter its role in providing air navigation services. The current bill provides the legal means to transfer Canada's civil air navigation system from Transport Canada to Nav Canada, a private non-profit corporation, for $1.5 billion.

Canada, in its leadership role in the aviation industry, is at the forefront of many changes. Many countries, such as New Zealand, Australia, Ireland, Austria, Portugal, Germany and Great Britain have already commercialized their air navigation systems. This bold move has been carefully planned and developed to meet Canada's unique needs in aviation requirements. The separation of government will provide the commercial freedom necessary to meet customer needs and increase system efficiency.

The challenge however is to be able to maintain a functional system in the remote parts of Canada that are lacking in some of the resources required to keep a safety component very reliable.

Nav Canada, as a user oriented corporation, will be able to respond efficiently to the needs of the system with effective government regulation and maintain the high, established level of safety. Transport Canada is sharing the experience gained in this project with other countries, departments and agencies. Its experience will serve as a model both nationally and internationally. The commercialization of the air navigation system is a key element of the government's comprehensive strategy to modernize and prepare for the next century.

The commercialization of the air navigation system will provide many important benefits: first, for taxpayers, by making a $1.5 billion contribution to reducing the federal deficit. This was the amount that the previous speaker mentioned. Second, for the industry, by maintaining safety while increasing the system's ability to respond to changing demands and new technologies; third, for users, by providing more efficient and cost effective operations; fourth, for the system's employees, by offering them the opportunity to continue to contribute to a new and challenging work environment; and fifth, for Nav Canada, by setting the stage for it to operate one of the world's best run and safest air navigation systems.

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I ask that all members support the motion to refer the bill to the Standing Committee on Transport before second reading. This initiative has already been the subject of extensive consultation across the country, as well as internationally. It is in the interests of all Canadians that we move forward with due speed.

[Translation]

Mr. Paul Mercier (Blainville-Deux-Montagnes, BQ): Mr. Speaker, with respect to Bill C-20, I would like to begin by pointing out the scope of its proposed reforms.

Air navigation services are delivered via seven regional control centres. There are 44 control towers and 86 flight information stations. It is important to point out the human element: 6,400 people are currently involved in supporting the air navigation system.

There is a very general agreement in favour of commercialization, and we too are in favour. It was recommended by independent studies, a departmental task force and the October 1992 Royal Commission on National Passenger Transportation, and supported by those working in the field, air carriers, private operators, the air controllers' union and so on.

I shall begin with a word about the corporation created by the bill. The bill provides the framework for handing over Transport Canada's civil air navigation services to NAV CANADA, a not for profit corporation incorporated under Part II of the Canada Corporations Act. This is a follow up to the agreement in principle signed December 8, 1995 by Transport Canada and NAV CANADA, selling the air navigation system for $1.5 billion.

The fact that this corporation will be one of a kind places it in a monopoly situation of concern to us. The federal government will need to monitor its performance, but abuse of monopolistic power must be avoided.

The new corporation must ensure that those with little if any representation on the board, such as the small carriers or the general aviation sector, are not discriminated against. New companies must not be at a disadvantage either. It would appear at first glance that NAV CANADA has not respected the wishes of the small carriers, for only the big ones are represented on the board. There is, for instance, no representation of the Association québécoise des transporteurs aériens.

In committee we will be proposing amendments relating to better safeguards against arbitrary power and to maintaining services to outlying areas.

Where safety is concerned, Transport Canada has established security regulations and standards that will apply to the new corporation, and operations will be monitored to ensure compliance. It would be important, however, on a more general level, to ensure that public safety takes priority over profits. The bill does not include any safety standards. It would be important to include in the preamble the point that safety must take precedence over profits, and that passenger safety will always come first, ahead of any commercial considerations, whenever the two are in conflict.

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We must also ensure that those who will be designated to implement the legislation will not be chosen arbitrarily. We are told it will be established by the minister, but on whose recommendation? Nobody is saying. Who should be consulted? Whose advice should be taken into account? Nobody is saying. For our part, we want to be sure there will be no political patronage in the selection of employees and that the more active union leaders will not be left on the shelf because of their activity, and we will make amendments in this regard.

In addition, some changes will have to be made to the legislation in favour of remote areas, whose economic performance, naturally, could be considered less significant.

The minister can designate northern or remote services which will be given special treatment under the legislation. That is excellent, but we feel there must be a list first approved by the standing committee of the House, which will hold public hearings on this. Accordingly, small airports such as Sept-Îles or Rouyn-Noranda will be able to make representations if they need to to protect their interests. It would be just too easy for the new corporation to cut services for reasons of profitability in remote areas.

Still on the subject of remote areas, the legislation provides that the corporation may, despite rejection of the proposal by a provincial government, change or close northern or remote services. This is not acceptable. It must take the opinions of the provinces into account.

Big and small carriers do not share the same opinions on charges for air navigation services, as my colleague for Berthier-Montcalm pointed out a few minutes ago. Major carriers want the cost of overflights to be less than the cost of landing, and the small carriers want exactly the opposite. In view of the importance of regional transport in the regions and in Quebec, we cannot agree with the way the legislation deals with this.

On the other hand we agree with the principle in Part IV on employees. At first glance, there is no employer-employee problems. The working conditions will be the same as those in the public service for the life of the collective agreement, which terminates on a date set by regulation, as approved by cabinet.

However, with the closures anticipated and the cuts in service, there will probably be lay-offs in a few years. It would therefore be appropriate to have the union leaders appear before the committee, in order to get their opinion on the matter.

In conclusion, we agree with the legislation in principle and will support it if the amendments we will propose in the spirit I have just described are considered. Furthermore, we do not oppose its being sent to committee.

[English]

Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, I am pleased to speak in support of this motion to refer Bill C-20 to the Standing Committee on Transport before second reading. Before I proceed, I want to speak to the comments made by the hon. member for Kootenay West-Revelstoke in which he made reference to ramming something through. I understand his frustration but it is with democracy and not with this place.

In any event, the bill carries out the decision taken by the government as announced in the February 25 federal budget to commercialize the air navigation system. It provides for the legal means to transfer Canada's civil air navigation system from

Transport Canada to a private, not for profit corporation called Nav Canada. I would like to take the opportunity to reiterate to the House that safety will not be compromised with that transfer.

Canada's civil air navigation system is a network of air traffic control services, flight information services, aviation weather services and air navigation aids that allow for the safe and efficient movement of aircraft. This system handles more than six million aircraft movements a year. Its annual budget is about $550 million for operations and maintenance and $250 million for capital improvements for a total budget of some $800 million.

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Transport Canada has managed this system well for more than 50 years during which time air travel and air navigation have modernized becoming evermore complex and evermore necessary. Times have changed and governments everywhere are finding it increasingly difficult and less necessary to operate transportation systems.

Transport Canada's mission is to provide for a safe, environmentally sound national transportation system that is consistent with a competitive economy and the achievement of Canada's goals. However, the new Transport Canada is moving away from operating the system to focus on setting the standards and regulating for safety and security. The department has been receiving strong messages from many quarters that the air navigation system needs improvement. It is unlikely these improvements can ever be made if the system stays under the government's wing.

The potential of commercialization to improve efficiency and maintain the safety of the air navigation system has long been recognized. In 1992 the Royal Commission on National Passenger Transportation recommended commercialization of the system.

Nevertheless, change is always unsettling. Some may feel that as government withdraws from operating the system, safety may be compromised. Nothing could be less true. None of the changes that are being made to Transport Canada and the Canadian transportation system will ever compromise the department's commitment to safety. Safety and security will always come first and Transport Canada will continue to ensure that the high standards of safety and security that Canadians have come to expect will in fact be maintained.

Safety was identified as the highest priority when commercialization was first considered in early 1994. Transport Canada's position was then, and continues to be now, that operations under Nav Canada must be as safe as the current system. This is not just a case of good intentions. When it comes to the air navigation system, safety is an integral part of its management.

Nav Canada will be responsible for providing all the air navigation services currently provided by Transport Canada. Aviation safety and the safety of the public will remain the responsibility of the Minister of Transport. This responsibility will be exercised through the Aeronautics Act and regulations made under that act. To do so the department is establishing safety regulations and standards that will be monitored, audited and enforced in much the same way as the department regulates air carriers, airports, aircraft manufacturers and other commercial aviation enterprises.

The new regulations developed specifically to address the commercialization of the air navigation system will form part VIII of the Canadian aviation regulations. Under these regulations Nav Canada will be required to have an internal safety management program. In addition, the corporation will not be permitted to reduce the services it provides if doing so would jeopardize safety. The Minister of Transport has the authority to direct Nav Canada to provide services in the interests of safety.

Consultation on the new regulations has begun through the Canadian Aviation Regulations Advisory Committee. They have been published in part I of the Canada Gazette and should be enacted into law early this year.

The Aeronautics Act which establishes the regulatory framework to maintain safety in the aviation industry will always take precedence over the Civil Air Navigation Services Commercialization Act. Far from compromising safety, the new arrangement is our guarantee that Canada will continue to have the safe, effective, modern air navigation system it needs.

One of the reasons for commercializing the air navigation system is to ensure that the system has the resources it needs to continue to provide the highest level of safety possible. There is no doubt we must have a modern air navigation system to ensure the safe and efficient movement of aircraft, whether domestic or international, in Canadian managed air space.

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Governments cannot respond effectively to the modern needs of air navigation. The downsizing of government services and public sector restraint is incompatible with the dynamic needs of the air industry. Outside of government the system will be able to operate more efficiently. By increasing the system's ability to respond to changing demands and new technologies, we will help to ensure its continued safe operation. That means the system will have the resources it needs to provide the best system possible and, with the federal government overseeing safety and security, that means the safest system possible.

In closing, I ask that all members support the motion to refer Bill C-20 to the Standing Committee on Transport before second reading.

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

The Deputy Speaker: I declare the motion carried.

(Motion agreed to and bill referred to a committee.)

The Speaker: It being almost 2 p.m., we will now proceed to Statements by Members.

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