GOVERNMENT ORDERS

SUPPLY

ALLOTTED DAY-FEDERAL TRANSPORTATION POLICIES

Mr. Antoine Dubé (Lévis, BQ): Mr. Speaker, as you know, we are discussing the motion presented by the hon. member for Kootenay West-Revelstoke, asking the House to condemn the transportation policies adopted by this government. ``Condemn''

may be a big word, but we can at least censure or severely criticize the policies of the federal Department of Transport. It is a pleasure to realize I will command the attention of the Minister of Transport himself, who is across the way from me.

Before question period, I touched on two subjects, and I have two left. They specifically concern the people in my riding as well as railway transportation.

I will illustrate the bankruptcy of the Liberal government's transportation policy, using examples that occurred in my riding, and I will start with the loss of jobs. My riding has a major railway centre called Charny. In fact, the name was selected to underline this community's strategic location as a railway crossroads.

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Over the past three years, CN's privatization and cuts have meant the loss of 100 out of a total of 500 jobs and the closing of one of the three railroad infrastructure repair shops. After we bombarded the Minister of Transport with questions in the House and he spoke to the media, we showed that the number of rail accidents had increased using statistics provided by the office of railway safety of Transport Canada and the department's own figures. The CN agreed to keep the Joffre shop open, but in a different way: by selling it to an Ontario company, CLN.

Thanks to the concerted action of the people of the community, to the interest generated by the media and to pressure on the government and CN, we kept 30 people employed fixing tracks, which are in ever worse shape because of a lack of resources. And now, the resources to maintain them are being cut.

The rehabilitation of the central Quebec rail line, which could have linked Quebec City with the south, is very important to us and to the member for Mégantic-Compton-Stanstead. The economy flows increasingly north-south, and it would be worthwhile rehabilitating this line. However, without the help of higher levels of government, including the federal government, it will be hard to fix what is broken.

Rail lines are being dismantled and abandoned. I would like to ask the minister some questions, but Oral Question Period is over. In my riding, there is an intermodal station in Lévis, which was renovated in 1986 at a cost of $3 million. Today, CN has sought permission to abandon the line along the St. Lawrence. However, instead of using this line, Via Rail asked for permission to back the train from the maritimes up a distance of three kilometres over the Quebec bridge and then, once the train reaches Charny, it would be backed up again as far as the Ste-Foy station. Meanwhile, they abandon a station that remains in good condition.

I could go on. These are incredible measures since Via Rail, a Crown corporation, is considering abandoning a station on which $3 million was spent in favour of a new one that could cost $800,000 or more, because the figure does not include the land. This decision should have been made two years ago. However, on February 22, when a decision is to be made, Via will recommend to the Minister of Transport this sort of mumbo jumbo of backing up the train.

I know people in Charny who are railroad experts. They have told me this makes no sense. Do you know that, up to a year ago, an employee caught backing a train up more than 300 metres was liable to a warning, which in certain instances could lead to suspension?

And now freight trains, not passenger trains, would be backed up over the Quebec bridge, for which we managed to extract a bit of money from the federal government for renovation work and which remains the symbol of the decrepit state of federalism in the Quebec City region.

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Fortunately, after many efforts by the opposition and by the coalition to save the Quebec bridge, we were finally successful. But the energy required to convince this government to do the right thing is unbelievable.

I am very short of time. Ten minutes is not enough. I have two minutes left to speak to marine policy. All the Liberal candidates promised there would be something for the Magdalen Islands ferry built by MIL Davie. Two years later, they are still bandying around the idea of refurbishing the old ferry still in service.

A summit was promised on future marine policy. Nothing has been done. No policy, no summit, nothing. Not a cent has been spent on defence industry conversion, because MIL Davie was a business that primarily handled national defence contracts. The federal government has not spent a cent on this business, on marine construction. It is obscene, and with the election approaching I would not let the Prime Minister or his ministers take credit for the wonderful things they have accomplished in the area of transportation. Yes, the member for Kootenay West-Revelstoke is right to criticize this government for its failure to act in the area of transportation.

Mr. René Laurin (Joliette, BQ): Mr. Speaker, with your permission, I would like to ask my colleague to expand on what he intended to tell us earlier, with further details on the way the transportation sector was managed, especially in his own Quebec City, since he was about to do so when you signalled that his time had expired. I would like to give him this opportunity to fill us in on the missing details.

Mr. Dubé: Mr. Speaker, I want to thank the hon. member for Joliette for his interest in the matter. I am appalled to see that the transportation sector does not seem to be very popular. Frankly, it is Thursday afternoon, and many members are in a hurry to leave. Unfortunately, it means that a member of my own party has to ask

the questions. That is a pity. This is a very important subject, and I thank the hon. member for Joliette for his question.

Before the Liberals took office, in the marine sector, under the Conservative government, if we compare spending on marine construction in the maritimes and Quebec, the ratio was 13 to 1, with 1 for Quebec. Of course there was Hibernia. But since the Liberals came to power, not a red cent has been spent by the federal government or the Department of Transport on marine construction. Not one penny.

There is a connection with the defence industry, because marine construction is marine transportation, but also includes ships ordered by the Department of National Defence. One example is the Preserver, a supply ship. Two shipyards submitted tenders: Lévis and Halifax. There was a difference, but since this was for repairs, the difference was in the Halifax shipyard's favour.

We asked to see the tenders. We asked the minister and the government but never received a reply, as usual. We used the Access of Information Act and found that 85 per cent of the 435 pages submitted by the bidder had been blacked out, as we saw in the Somalia affair. There was no way to find out the hourly rate or salary. This is an important point.

When we are talking about refitting a ship, we know that it always costs at least twice as much as expected. There are always some surprises. There is a clause called ``open and expect''. This clause is variable, and it is very important to know the salary, the hourly rate for overtime and how it will be done. So there was no way to get that information.

The only way to get the information, allowing of course for the lag after the election, is that once the job is finished, the public accounts committee headed by the hon. member for Beauport-Montmorency-Orléans, will be able to have access, but only once the invoices are in, which means in about a year and a half or two years.

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Until then, there is a total blackout on any information concerning the Preserver. Other than that, there is nothing on ship construction.

In the area of transportation, let us add the changes to the Coast Guard. This is a plan the government has found to divide its strengths. The Coast Guard, once the responsibility of the Minister of Transport, now reports to the Minister of Fisheries and Oceans.

In the St. Lawrence Seaway, they want to start charging for ice breaking, and they already charge for navigational aids. Step one: $20 million more. These charges apply to ships that put in at Canadian ports. But a ship that travelled all the way down the St. Lawrence Seaway to the United States without ever putting in at a Canadian port would not pay a cent for those same services. Yet we know that the Seaway is operating at a deficit. Because the ship does not put in at either a Quebec port or one on the Great Lakes, it would not pay a cent.

The government's inertia on shipping is scandalous, yet this may be the most economical means of moving freight. What is missing at the moment in Canada is an integrated view of all means of transportation, a national view of transportation.

Hon. David Anderson (Minister of Transport, Lib.): Mr. Speaker, it is with great pleasure that I rise in this House to explain the government's policy in the area of transport. It certainly seems necessary in light of the comments I heard. I am surprised to see that the opposition members do not really understand what the transport policy is all about. They do not appreciate the details and how transportation is Canada's lifeline.

[English]

Many hon. members this side of the House have eloquently explained today many aspects of the government's position. I would particularly like to pay tribute to my parliamentary secretary from Hamilton. He has done such an outstanding job with the legislation and in the debate we have just had in putting forward the reasoning behind many of the decisions on transportation. His service in the House and on the committee has been outstanding. He has explained in great deal and with great eloquence the progress that has been made in the House and by the government as a whole outside the House in modernizing the transportation system in Canada.

When we took office three years ago we were confronted with very serious problems in the transportation area. We had a transportation system that was overbuilt, over-regulated and oversubsidized. It was a system that despite previous successes of which there have been many was degenerating to the point where it could become a damaging factor to Canada's economic competitiveness and international trade.

As a result of a far-reaching modernization program which is under way we now have very beneficial effects in the tourism trade and in the job creation area in the transportation field.

The government is basically moving out of operations in the transportation sector which will allow us to focus on the proper role, that of policy making and safety regulation. At the government level, now that we are out of operations and the detail they led to, we can look at a bigger picture which for me means maximizing the benefits of a modernized transportation for Canadians. The benefits can be found in three key areas and our transport system is geared toward these three objectives.

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First, we need to use our modernized transportation system to improve our competitiveness in international trade. Second, we need to make sure that our transportation system boosts tourism in Canada. Third, a major interest of the government is using our transportation system to increase and strengthen our links with the Asia Pacific region.

By the end of this century, if I could spend just a moment on the last point, the Asia Pacific region may well be home to 60 per cent of the world's population, 50 per cent of global production and 40 per cent of world trade.

As the Prime Minister has said many times, the Asia Pacific region is important to Canada and Canada is a Pacific nation. This means there are real opportunities for the whole country but particularly in western Canada and in my home province of British Columbia, our gateway to the Pacific region.

We must improve the effectiveness of this gateway and maximize the advantages to Canada of this geographic opportunity. That and the other two objectives I outlined a moment ago work toward the overarching goal of the government of job creation for Canadians.

I will quickly go over the progress in these areas. We have taken major strides in modernizing the transportation system. In the air transportation sector, for example, we are commercializing Canada's federal airports. Under the national airports policy announced in June 1994 we have begun leasing Canada's largest and busiest airports to local control. This policy has been very successful and has been embraced by communities right across the country that recognize the economic potential of their areas depends upon their maximizing the advantages their airports present and in turn having those airports best serve the requirements of their local communities and economies.

To date 17 regional local airports have been transferred to local control and some 40 others are in the process of being transferred. Under the same policy 11 small airports have been placed under local control and a further 23 are in the process of being transferred to the local community.

I found interesting-and I listened with great care-the comments of the opposition with respect to Pearson airport. Thanks to the government's airport policy this airport is now like the other major airports of this country: Montreal, Vancouver, Edmonton, Calgary and others. Thanks to that policy Pearson is now managed by a local not for profit corporation representing local interests of the greater Toronto area.

The Greater Toronto Airport Authority which now runs Pearson recently announced plans to invest $2 billion in upgrading the airport. This will, in turn, turn that airport into the premier gateway for the European traffic of the whole of the central heartland of North America.

I certainly applaud the vision of the airport authority and the energy with which it is applying itself to achieving that goal. I might point out that the investment it has proposed is substantially higher than that which was originally proposed by other airport management groups in the past.

In addition, we have transferred the air navigation system of Canada to Nav Canada, another not for profit corporation. This transaction put $1.5 billion into the federal treasury to reduce the deficit in that year and the debt as well. Safety will continue to be monitored by Transport Canada. That will be the highest priority of Nav Canada.

Two years ago we signed an agreement with the United States known as Open Skies which created a whole new area of opportunity for transboundary traffic. It was part of our new liberalized air transportation policy that the airlines themselves could choose what cities they would fly between, at what price, at what frequency and at what times. The benefits of open skies have been enormous. In the 14 months following that agreement there was a greater increase in traffic with the United States than in the previous six years.

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The agreement has created well over 100 new links between American and Canadian cities. Let me point out it is not just between major airports, but also smaller airports, smaller communities. Cities in the 100,000 to 250,000 population range also are getting the direct links. Indeed some cities that are smaller than that are having direct links established with American cities to the south of the border.

Vancouver and Toronto in particular have benefited tremendously from open skies and the open market that exists now in transborder air travel. Of course, hundreds of thousands, millions of Canadian travellers have benefited as well.

Let us not forget that when I talk of airports, when I talk of airlines, when I talk of rail, when I talk of ships, when I talk of any transportation mode or system, I am talking about the consumer, the user who takes advantage of those systems. That is what the systems are for and why it is so important that they be efficient.

Let me quickly point out that other areas of air travel have come along. I should mention Greyhound which is now flying in Canada and provides low cost travel between Vancouver and Ottawa. That was an innovative proposal put forward by Greyhound and its partner Kelowna Flightcraft Air Charter Ltd. This has expanded travel options and has reduced costs for Canadian travellers throughout the year.

With respect to marine transportation, let me say a quick word about Marine Atlantic. Marine Atlantic is having its subsidies reduced year by year. What was previously an organization which took very large amounts of taxpayers' money is becoming leaner and a great deal more efficient. It is providing equally effective service as it did in the past.

We have taken the strides to modernize the marine sector. I would point out the Canada Marine Act was in this House not so long ago, in fact last year. The Canada Marine Act will implement this country's new marine policy. The policy which was announced in December 1995 calls for the modernization of the marine management and regulatory regime, less red tape and greater efficiency and effectiveness in the marine transportation sector.

It will bring local control, local decision making and private sector involvement to Canada's ports. It is much the same approach as we have taken in the air sector.

The policy calls for commercialization of the operations of the St. Lawrence Seaway. In July last year Transport Canada signed a letter of intent with a group representing the St. Lawrence Seaway's major shippers and carriers. The goal is to establish a not for profit corporation which will operate the seaway more efficiently than the current system. Decisions with respect to the seaway will be made at a level which is more appropriate, namely the users of the seaway, the people who are affected by the operations and the efficiency of the operations and obviously the costs that are charged for use of the seaway itself.

On a separate track I should add we are also in touch with the Americans. We are creating a more efficient binational co-ordination group to manage seaway problems which are of a binational nature. It is my belief that working together Canada and the U.S. can better co-ordinate seaway management, reduce the duplication of facilities and ultimately save both countries, not to mention seaway users, substantial amounts of money.

The marine policy calls ultimately for the modernization of marine pilotage and the commercialization of ferry services.

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I mentioned the bill was in the House. I trust it will be back in the House very soon so we can all proceed with it. As there are members of the opposition here, I will say that I really appreciate the work they did at the committee stage.

There were two committee stages for the bill, once before the bill was put in and once after the bill was before them. They worked hard. The ultimate report was unanimous, which shows that we had very good co-operative spirit, which sometimes people watching on television what goes on in this House do not fully understand. At the committee level, my friends in the Bloc and in Reform get together with friends from this side of the House and work effectively in the interests of improving legislation.

I pay tribute to the opposition members who took part co-operatively, constructively and effectively. When the bill finally comes back and members see it, they will see that the suggestions they have made have been given full consideration in the final writing of the legislation.

I will turn to rail transportation. We must have port activity co-ordinated with transportation that reaches beyond our country's waterways. That means grain transportation in particular, which is often handled by both rail and marine modes of transportation. One reason our government is working so hard to ensure the rail sector becomes more efficient is our concern over the impact of rail costs on bulk users such as those dealing with grain, potash and many other commodities.

The new Canada Transportation Act brought in last year gives railways the flexibility to compete by reducing costly excessive regulation and red tape. The new act cuts the number of railway actions or decisions that require government approval from 200 down to 40. I am not happy with having 40 still on the list. I would prefer to have that number come down even further. Such reduction in red tape, bureaucracy and delay will benefit not only the railways themselves but obviously their customers through lower rail rates.

We will again be looking at regulation in the railways in the year 1999. It is scheduled to take place at that time. Once again I expect we will have a valuable discussion on that in the light of the experience we have gained since the introduction of the new transportation act last year.

The new act shifts the focus from rail line abandonment, which we had in the past, toward the development of a healthy shortline industry. It is not generally known that Canada has some 31 functioning railroads, not just the big two that we hear about. Many of those 31 are small railroads established as a result of a group of local people taking over a line that was abandoned by the majors because with their cost structures it was no longer economic to run it.

Canadian National Railways is now a private and dynamic company. I believe it has the tools it needs to compete. Putting CN in the private sector was a very important step in our plan for modernizing rail transportation. It puts CP and CN, the two major systems, on a level playing field. Most important, it subjects CN to the discipline of the marketplace.

This will help ensure, and I think it will guarantee the survival of the railway. The gross proceeds of the sale of the shares has brought the Canadian taxpayers a little more than $2 billion. It has similarly reduced the debt and deficit as was the case with the Nav Canada sale.

Much has been made today by my hon. friends opposite about subsidies. I do believe they should check the record of the government over the last three years. Since coming to office we have eliminated close to $700 million in subsidies to the transportation sector.

As my parliamentary secretary, the member for Hamilton West, so ably pointed out in response to questions and in his presentation to the House this morning, VIA Rail will see its annual subsidy chopped virtually in half by fiscal year 1997-98. I might add, that is substantially less than it was a few years before.

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With respect to VIA Rail hon. members should know that I have examined very carefully VIA Rail's application to expand service through the Rocky Mountains. I am well aware of the concerns that have been raised about the possibility of VIA Rail competing with Rocky Mountain Railtours which is a private sector company.

I have listened to and I have read what the members of the Standing Committee on Transport have said on the issue. I have had discussions with my parliamentary secretary on numerous occasions and also with members of the Liberal caucus from British Columbia and elsewhere in the country on the subject. I might add that I have received hundreds of letters from all parts of British Columbia and elsewhere on the subject. I have also met with representatives of VIA and of Rocky Mountain Railtours, both of whom made excellent presentations, both of whom made presentations more than once. I have listened very carefully to all points of view and I will be announcing my decision on the matter very soon.

This country was built by transportation. In the 203 years since Alexander Mackenzie first crossed the continent from Montreal to the Pacific tidewater, we have built this country on our transportation system.

Our government has changed the Canadian transportation system and it has changed it for the better. But one thing will not change. One thing which Transport Canada and myself as the minister put above all others is safety. We not only want efficient transportation systems in every mode, we not only want systems which lock in together in a seamless web, we at every level in every area want to assure Canadians that they have the safest transportation system that we can provide, the safest that is, within all reasonable expectations. That is where we see our role as being critical. I can assure all members of the House that safety will remain Transport Canada's major objective in the years ahead.

[Translation]

Mr. Antoine Dubé (Lévis, BQ): Mr. Speaker, the minister had a few good words about the opposition regarding our work on the committee. I must say that the current Minister of Transport is always very kind and courteous.

The fact remains, however, that some situations can be quite dire. As you know, I represent the riding of Lévis. It saddens me to see a shipyard that once employed up to 3,000 workers, a prosperous industry, the leading shipyard in Quebec, stop building ships because of a decline in shipping. This decline is the result of policies that discourage shipbuilding, the building of a Canadian fleet of merchant ships.

I know this also concerns the Minister of Industry, but why was the promise made in the red book not kept? A Canadian shipbuilding summit was to take place in the first year following the election of the Liberal Party. Why did it not take place?

Why does the government not draw inspiration from American policy, the Jones Act for instance, regarding shipping? Why not follow the same policies as those of other countries, particularly Scandinavian countries, on this subject? Why has the Liberal government not done more for shipbuilding? To this day, it has done nothing.

Mr. Anderson: Mr. Speaker, regarding shipbuilding, the hon. member must realize that the Canadian government has had several ships built for the Canadian Armed Forces.

After this program, which involved the construction of 12 ships, was completed, this government went on to have another 12 ships built; these ships were smaller than the big frigates built during the 1980s.

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We are continuing this program, which, incidentally, comes under National Defence and not under Transport Canada, as well as programs administered by Industry Canada to ensure a shipbuilding capacity is maintained in Canadian shipyards.

It is true that we do not have the equivalent of the Jones Act he referred to. The Americans themselves are currently considering the possibility that the Jones Act may no longer be relevant, that it may no longer be useful to them or to the merchant navy.

This is a very important issue and I do not think that we can just follow the American example; the Americans themselves may well feel that exportation costs are too high because of the Jones Act and that the time may have come to amend the act.

[English]

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, I appreciate the opportunity to put a question to the minister, specifically with regard to VIA.

The minister said he will be coming to a decision soon. I trust he has given due consideration to the input he has received and that he will make the right decision. In my opinion, that decision is against

allowing VIA to expand to compete against the very company that it sold.

The minister mentioned that he had received a tremendous amount of input. I have seen much of that input. The only input, I believe and understand other than from VIA, which supported this application, is from the CTC which is in an incredible conflict of interest position.

The minister also mentioned that he understands the committee's position. I would like the minister to know the position that the chair of the committee agreed to with the Reform Party. In a message in writing from the chair of the Standing Committee on Transport he states: ``As to your suggestion regarding VIA and Rocky Mountaineer I have no problem supporting your request''.

A follow up to my request in writing to him states: ``that VIA Rail not be permitted to expand its service to compete in any way against the business it sold to the Great Canadian Railtour Company, the Rocky Mountaineer''.

In his written response dealing with VIA Rail the chair writes: ``I want you to know that I agree with the position that you have advanced on this matter and I will support you when it comes up for discussion in the final report of transportation, trade and tourism. ``Furthermore, I have spoken with-and I will not name the member-the parliamentary secretary to the minister who has also agreed to support your position as you have stated it''.

I have faith in the wisdom of the minister. I know he will do the right thing. To decide in VIA's favour would be devastating to Rocky Mountaineer, to British Columbia, to the tourism industry in British Columbia and most specifically to the town of Kamloops. I trust he will make the right decision.

Mr. Anderson: Mr. Speaker, this is very pleasant afternoon. I have had kind words from the Bloc and now I have the kinds words from the spokesman of the Reform Party who says he has faith in the wisdom of the minister and he is certain that I will make the right decision. I can assure him that is true, I will make the right decision. I will make that announcement very soon.

However, I should point out that the chair of the committee, who is a very hard working member from Winnipeg South, is not necessarily speaking for the minister in communications. We like to have free and open discussion in committees, be it my parliamentary secretary or the committee chair or member of the Liberal caucus who happens to be there. We know that members can make up their own minds what they do and how they vote. We have a very lose, open system in the Liberal Party, not one that is dominated by any authoritarian rules. I would be happy to have a discussion with him face to face rather than through intermediaries at any time that he wishes.

Mr. Lee Morrison (Swift Current-Maple Creek-Assiniboia, Ref.): Mr. Speaker, the minister in his remarks made reference to Bill C-14 as having made it easier to develop short line railways. We know quite a number of grain dependent subdivisions in western Canada that would make great short lines. However, all that Bill C-14 has done is it has expedited the ease with which railways can do an abandonment.

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I do not see where it has helped with the creation of the short line. I would like him to elaborate a little on how short lines will be created, how Bill C-14 helps. In particular, could he elaborate on how potential buyers of short lines are going to be able to deal with the question of successor rights which, right now, is the really big stumbling block?

Mr. Anderson: Mr. Speaker, the hon. member has raised a very good question, namely how has the situation improved.

The situation has improved in this way. Previously, before abandonment, with the heavy and very complicated mechanisms that were laid on the railways, they had to show it was an uneconomic route. Once they had showed it was an uneconomic route, sometimes we suspect, occasionally on certain lines they tried to help to make it look bad, no one was interested in buying the short line.

With the new system, there is an opportunity of having the route given a fair chance of being analysed by some potential buyer, being put forward and turned into a functioning railway.

The previous system deliberately discouraged the type of entrepreneurship of which, I hope, the hon. member's party is in favour.

[Translation]

Mr. Maurice Bernier (Mégantic-Compton-Stanstead, BQ): Mr. Speaker, I thank you for allowing me to put a question to the minister. Unfortunately, I am not as optimistic as he is regarding his government's transportation policy, particularly as regards airports.

I have a concrete example and I would like to get the minister's answer regarding airport transfers, more specifically the transfer of the Sherbrooke airport, in my riding, which has been delayed since the government implemented its new policy. This transfer is simply not taking place, because those who are prepared to take over the airport, and who have already taken steps to that end, are asking that the facilities be in a reasonable shape. In order for these facilities to be in a reasonable shape, they are asking that, before giving up its responsibilities, the federal government provide $1 million in assistance to repair the runway.

My point is, and I will conclude-

The Deputy Speaker: I am sorry, but your time is up. I must give the minister time to reply.

Mr. Anderson: Mr. Speaker, it is true, the pessimists are on the other side of the House, and the optimists are here on the government side.

With respect to small airports, such as the one at Sherbrooke, that is what we want to do, to run airports with local input, which is very important, local enterprise, and local energy from the people on site. That is very important.

As for money, we have set aside several tens of millions of dollars, approximately $35 million in all, I think, for the transfer of airports. Yes, there are times when people from the region, the particular city, say that $10 million is needed. The department says that is a bit too much, that it can give a lower amount.

These are the negotiations we go through for each airport. It depends on the condition of the airport, and also on what was spent in previous years. Often an airport is in very good condition, and the last time any money was spent on it was maybe ten years ago.

What is needed is to look closely at each airport, and we must have some flexibility in our approach. But I can assure you we have transferred several airports.

[English]

The Deputy Speaker: The hon. member's time has expired.

Mr. Lee Morrison (Swift Current-Maple Creek-Assiniboia, Ref.): Mr. Speaker, I will be dividing my time with the member for Comox-Alberni. Unfortunately that will only give me 10 minutes to discuss a national transportation system in shambles. I will not bother to get into the question of the Pearson airport mega-mess or the St. Lawrence pilotage rip-off. Instead I will deal with two problems which are of immediate interest in my specific riding, Swift Current-Maple Creek-Assiniboia.

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The most pressing is the sudden, unexpected shutdown of most of our branch railway lines. Early this month the two railways announced that service would be suspended on almost all branch subdivisions in western Canada, including nine in my riding with 600 miles of track. Actually this was a bit anticlimactic. They said that there would be no service for three weeks, with those three weeks to expire some time around the end of this month, but service had been de facto abandoned on several of these lines for three weeks before they had even made the announcement. We have rarely seen a train since Christmas time.

Right now west coast grain shipments are at their lowest level in over a decade. Forty-six ships are sitting at the west coast waiting for grain. They are rolling up huge demurrage charges. Some of them have actually been there for a month. It is the farmers, the producers of the grain, who are going to have to pay for all those demurrage charges which at this point have already reached about $15 million.

This morning the minister of agriculture admitted that it is unfair that farmers have to carry the entire demurrage burden. Unfortunately, as is his habit, he did not offer any solution to the problem which he had identified. He always gets half way there. He says: ``Yes, there is a problem. Yes, we will deal with it'', but when an interested party says: ``But Mr. Minister, will you please tell us how,'' he suddenly loses his renowned eloquence.

The minister of agriculture loves meetings and he loves reports which he can ignore if he so chooses but he has little taste for constructive action. He is having another soiree tonight in Calgary. This will probably result in yet one more stillbirth.

What it the problem? That is probably what they are going to try to figure out at this meeting tonight. According to the railways the problem is that they are short of locomotives. If this is true, I would suggest that perhaps usurious provincial and federal taxes and silly requirements for locomotives to be depreciated over a 21 year period could have something to do with it.

However, locomotives can be rented. I understand the CPR has rented some. But it was poor planning on the part of both the railways and the Canadian Wheat Board that got them into the bind that they are in right now. We cannot blame it on the weather. Yes, it has been a hard winter. We have a lot of hard winters. They should have had their act together months ago and they should be sitting panting at the bar ready to go again. But they have completely mismanaged the system. That is why 46 ships are sitting in Vancouver harbour.

It is not just demurrage that the producers are going to lose. They are also going to lose about $50 million because of the falling markets that they are going to get into by being unable to ship right now.

A lot of this is due to historic inefficiency. We know that. But these historic inefficiencies are not addressed in the new amendments to the Railway Act, Bill C-14. There is nothing there to prevent this sort of thing. There is no pain or penalty to the railways if they do not organize their business and get the grain out when the ships are sitting there waiting for it. They get their money regardless of when they ship. They could haul that grain a year from now and they would still get the full freight rate on it. There is no pain, no penalty.

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The Minister of Transport and the Minister of Agriculture and Agri-Food have referred to short line railways. There is only one short line in Saskatchewan and that is in my riding. It is operated as co-op. It does a good job because the producers run the thing themselves. They are not stuck with the costs of picking up union successor rights from previous operators. But thanks to the successor rights it would be difficult, if not impossible, for small

corporations specializing in the business to operate these subdivisions which are now at risk.

A few minutes ago when I asked the Minister of Transport about this issue he neatly ducked and dodged and did not reply so to date I have not had an answer. I do not know what the intention is.

Mr. Hermanson: They may not have a plan.

Mr. Morrison: My hon. friend says there is no intention, they do not have a plan.

I would like to shift gears to another problem in my riding and that is the deterioration of the national highway system. Members opposite beat their breasts about our national obligations to bind this nation together. However, when we start talking about the national highway system, they retreat behind spurious claims that highways are solely a provincial responsibility. That is a red herring. Most highways are provincial responsibilities but the national highway system is a joint federal-provincial responsibility. It is national and I will provide a dictionary for any Liberal member who does not know what a national highway system is.

In my riding of Swift Current-Maple Creek-Assiniboia, a 113 kilometre stretch of the wonderful Trans-Canada highway from Gull Lake to the Alberta border is winding and hilly. It has not been twinned. Since 1979 that short stretch of road has claimed 31 lives. There has not been a year when someone has not been killed on that little stretch of road. There have been more than 350 personal injuries.

I live very close to that highway. I never, unless I have no choice in the matter whatsoever, drive it in bad weather or at night because it is a death trap.

This morning the minister of agriculture made reference to his claim that the province of Saskatchewan has never asked to have that particular piece of highway twinned. I presume he also meant the section from Indian Head to the Manitoba border. That is nonsense.

In the fall of 1994 the department of highways of Saskatchewan had its money on the table to pay its share of the $35 million cost of twinning that one little section of highway in my riding and the federal government, after saying it would do it, reneged on its promise. What else is new?

Then the minister of agriculture decided that we should debate Saskatchewan highway conditions, not the national system, but Saskatchewan. He said that no highway work had been done in Saskatchewan since the Liberal government of Ross Thatcher 25 years ago. I wonder if he ever heard the expression, Thatcher's patchers, which is how they referred to the Saskatchewan department of highways 25 years ago.

Yesterday's committee report confirmed what Canadians already know: the Trans-Canada highway system is substandard. The government collects billions of dollars in fuel taxes and yet last year it could only find $292 million for the entire national highway system from sea yea unto shining sea. This is chippy. This is unacceptable.

(1605 )

Mr. Gordon Kirkby (Parliamentary Secretary to Minister of Justice and Attorney General of Canada, Lib.): Mr. Speaker, I am happy that the hon. member for Swift Current-Maple Creek-Assiniboia is defending the NDP in Saskatchewan. The Reform and the NDP in many ways seem to get along quite nicely.

He is decrying the fact that the federal government has spent $292 million, or whatever the figure is, on highways. I wonder where he would get the money, seeing as the election promise of the Reform Party is to cut the deficit to zero in three years. How would he come up with more money for highways?

Mr. Morrison: Mr. Speaker, I am glad he asked that question. If he would read the fresh start program he would see where we would cut $15 billion of unnecessary government spending.

To cover the $292 million by a multiple of three, I will give him two highly desirable cuts. One would be to stop giving money away to Liberal friends like Bombardier. That would amount to $87 million. The other one would be to privatize the TV portion of the CBC. That would amount to at least $700 million. We are already over the threshold, so I do not need to get into the entire $15 billion.

As far as me being a defender of the NDP, I am a defender of my province, unlike the hon. member opposite who is also from Saskatchewan but because he is a member of the Liberal government has forgotten it.

Mr. Bill Graham (Rosedale, Lib.): Mr. Speaker, I listened with interest to the hon. member's observations about 46 ships in Vancouver harbour running up demurrage charges. We all agree that is a very unfortunate situation.

I was curious, given his known propensity for privatization and for respecting private industry as a way of dealing with these issues and his reticence to have subsidies deal with them, exactly what he would propose to enable the railways to move the grain faster, without giving them a subsidy.

He seemed to suggest that the legislation should impose huge penalties on the railways, as if they were not already being penalized by the fact they are not getting the grain to the harbour. I

am sure that if we asked a railway person they would say that they are anxious to move it because they could make more money by doing that.

What exactly is the member proposing as a concrete solution to this problem which would not involve either a subsidy or some form of government interference in private industry which he generally finds so offensive?

Mr. Morrison: Mr. Speaker, I am sorry, but the railways are not paying any penalty. That is the problem. They have a captive market. They can haul grain at their leisure, whenever they please. They are not going to lose a dime. If that grain does not get hauled until the next crop year, which is a possibility, they will still get their full tariff. The farmers will lose not only through demurrage charges, but also because they will have declining markets as they get into the new crop year. They will lose about $50 million in revenue as well.

If there were contractual arrangements which obliged the railways to move the grain according to a specified time, then there probably would not be a problem. That would be an incentive for them to get their act together.

It is a regulated industry. We say it is deregulated, but there is a freight cap. It is a semi-deregulated industry.

(1610 )

Mr. Bill Gilmour (Comox-Alberni, Ref.): Mr. Speaker, to bring the House up to speed, the motion we are debating reads:

That this House condemn the government for its approach to federal transportation policies, and in particular, the cancellation of the Pearson airport deal, the continued neglect of Canada's national highway system, costly inefficiencies in the grain transportation system, and the ongoing subsidization of VIA Rail at the expense of taxpayers and private sector passenger rail and bus operators.

I do not think we have to travel very far across this country, in whatever province we are in, to recognize that the national highway system is in a mess. It needs to be addressed but that is not being done.

I would like to take the time to compare our highways to the American model. Anybody who has travelled in the United States recognizes that its highway system is excellent. It is superb. Why is that? The American system is excellent because they dedicate fuel tax revenue to the highway system. I believe that is a notion that needs to be looked at because in Canada the fuel tax revenues go into a big bin and governments, being governments, tend to draw it out. We are now in a huge mess financially because no directions are given to the government.

If one or two cents per litre of gas was dedicated back into the highway system we would get what the driving taxpayers want, their taxes going back into the highways that they finance.

Another area of concern in British Columbia is the B.C. ferries. People have to pay to take the ferry from the mainland to Vancouver Island. It is paid for by the B.C. taxpayer and the province of British Columbia. The real rub is that people are saying: ``This is part of the national highway system''. Highway 1 goes across to Vancouver Island. It does not even cross Vancouver Island, it goes to Victoria whereas the west coast is Tofino. It truly is not a Trans-Canada highway because it does not go to the west coast. There should be some form of revenue to address British Columbia ferries, which is a huge ferry fleet simply because we live in a maritime climate.

I could go on and on, but I want to leave some of my time to address VIA Rail. My colleague has addressed the situation where Rocky Mountaineer was sold to a private enterprise company which has been extremely successful and is doing very well. What is going to happen or potentially happen is that the government, through VIA Rail, could go into competition with the very outfit that it sold.

What have we got? We have a private enterprise that bought a business and has done extremely well in turning it around. What is the government going to do? It is now going to go into competition with it with taxpayers' dollars. That is absolutely wrong.

My colleague mentioned that the chair of the Standing Committee on Transport agrees with my colleague that the government should not be going into competition. He stated that in writing. However, the minister, just a few minutes ago, stated that the chair for the transport committee does not speak for the minister. I find that rather odd because whenever a Reformer says something, boy, we speak for all Reformers. However, when it fits the government, it says: ``No, this really is not going to fit. The fellow was just speaking out of context''. That just does not fit.

I hope the minister sees fit to make the right decision. I would also like to remind the minister that we are going into an election. The transport minister is the key minister for British Columbia. If he is going to wander into an election abandoning British Columbia, he will pay the political price. I would just like to remind him of that.

Another area I would like to deal with concerns the Esquimalt and Nanaimo Railway in my riding. A little history is required here. VIA Rail runs it at the moment but the E and N Railway goes back to 1883 when British Columbia was entering Confederation. It was part of the Trans-Canada Railway, part of bringing the rail head to the west coast.

(1615)

The original E and N Railway was to go across Seymour Narrows and down Vancouver Island to Victoria. That was changed and almost caused British Columbia to withdraw from Confederation. The terminus was changed from Victoria on Vancouver Island to Port Moody on the mainland.

Representatives of British Columbia went to Queen Victoria and said: ``This is a key issue. If the terminus is going to Port Moody we are considering withdrawing from Confederation''. British Columbia did stay in but it was a key issue.

The E and N Railway was built in 1883 by the Dunsmuir family. It went from Victoria to Nanaimo. In 1912 it was extended from Nanaimo to Courtenay. The key point is that CPR bought out the E and N Railway in 1905.

Part of condition of building that railway was huge land grant, two million acres of timber and land. To give a rough idea, it is a stretch of land about 150 miles long by 30 miles wide. This tremendous chunk of ground was deeded to E and N and hence CPR.

CPR, through VIA, does not run a decent railway on the island. Islanders are saying: ``Come on, there is a wonderful potential for tourism''. Actually rail freight works fairly well, yet the federal government and the British Columbia government do not have the political fortitude to pressure CPR to run the service well. CPR pops it off on to VIA but the point is that CPR received a huge land grant, a fantastic opportunity. It took over a billion dollars worth of timber through the years. They have sold through their Marathon Reality Agency a fantastic amount of real estate and it loses money. It loses $2 million to $3 million a year. That is why it got the land grant in the first place. The government must force CPR through VIA to run a decent railway.

CPR's point of view is that it needs a subsidy, some more money. The minister was talking about a VIA subsidy. In my mind not one cent of subsidy should be going to the E and N Railway because it was dealt with in the land grant. The Supreme Court has said the E and N Railway does not constitutionally entrench British Columbia, that British Columbia did not enter Confederation as part of the railway. That was dealt with by the Supreme Court. It was a side issue.

The contractual issue still remains. The contractual issue is that CPR must run that railway successfully through VIA. Yet the government refuses to push CPR. I wonder why it will not do it.

I would like to leave some time for questions and comments. However the issue my colleague was addressing about the Rocky Mountaineer is heated by today's discussions. The minister must make the right decision. The government cannot sell off a railway to private enterprise and then turn around a few years later and have VIA Rail compete against that private enterprise using taxpayers' dollars.

Therefore I would like to move:

That the motion be amended by adding immediately after the word ``operators'' the following:

``and most specifically, even considering allowing VIA Rail to re-enter the market to compete against the business it sold to the private sector''.

(1620)

Mr. Geoff Regan (Halifax West, Lib.): Mr. Speaker, I will be splitting my time with the hon. member for Leeds-Grenville.

I am pleased to rise today to participate in the opposition day debate on federal transportation policies. The government clearly outlined the role of the federal government through the 1994 national airports policy and set itself to ensure provision of a safe, efficient, accountable and locally sensitive airport network.

The first objective of the national airports policy is to maintain the existing high levels of safety at Canadian airports. The first order of business of anybody concerned with the air transportation industry is safety. The government is accomplishing this by focusing on the careful certification of all airports and the development of regulations after thorough consultation with the industry and by establishing the airports capital assistance program to ensure the provision of some capital at the local communities that might not otherwise have been able to provide the necessary safety infrastructure.

The second objective is to ensure the efficiency of the airport network across the country. The ability of Canadian business to get to market, the need for Canadians to travel the country and the accessibility of the transportation network to tourism interests all call for an efficient network of airports.

The government has accomplished this goal by ensuring the operation of the country's larger airports, the national airport system, through the operation of Canadian airport authorities; by recognizing that the location of smaller airports is more of a regional nature and more of a regional matter; and by recognizing local and regional governments are better able to make appropriate decisions concerning regional and local airports.

The federal government is phasing out its operation and subsidy of such airports over five years to ensure an orderly transfer of responsibility. It has ensured efficiency by establishing annual cost reduction targets for every Transport Canada airport for as long as they were operated by Transport Canada.

Efficiency improvements were required and the national airports policy implementation is well along to achieving its goal of at least $100 million in annual savings by the year 2000. In addition,

airport charges are based on local site specific forecasts bringing the discipline of user pay user say to the operation of Transport Canada operated airports. This has been done over a four-year period in a time phased fashion to ensure time for adjustment.

[Translation]

The third objective is to get the authorities responsible for managing airports to be as accountable as possible for their activities. There is some degree of competition between airports, whether within Canada or for transborder traffic with the U.S., but we all acknowledge that the airports may have a considerable monopoly.

In Canada, we have chosen not to regulate airport charges, but to ensure that the communities are aware of what is being done, via organizations with jurisdiction over this, and via good administration.

My hon. colleague, the Minister of Transport, has adopted a broader range of stringent principles of accountability for Canadian airport authorities, in order to ensure the transparency of decisions taken via appointments to committees, public meetings, operational audits and financial reports.

(1625)

These changes will be included in current leases when they are modified: to ensure that the local authorities responsible have the opportunity, first of all, to assume ownership and operation of their regional, local or small airport; to support the continuation of airport operating committees made up of airport users, as was the case with airports operated by Transport Canada in order to ensure that local decision makers receive concrete feedback from users.

[English]

The fourth objective is to improve the sensitivity of airport management to local needs. Decisions made in Ottawa, however well intentioned, cannot take the full range of local conditions into account. Any responsible government has to look at an airport from a transportation perspective. Local communities can incorporate tourism objectives or other local priorities. Local communities will decide in conjunction with airport users what level of service best suits that community.

In addition, the federal government has undertaken to ensure a provision of airport services to remote communities where the federal government has an existing involvement and there are no alternative forms of access.

We are doing more for airports and the Canadian air transportation industry to implement a successful national airports policy. Canadian airports will benefit from the new Open Skies agreement. Results to date have been as follows.

The number of services and the total seat capacity in the trans-border market are up substantially. Competition has increased and Canadian and U.S. airlines are participating almost equally in the growth. Seat capacity has increased faster than traffic but this was to be expected in the early development of markets.

Business, tourism and trade interests of Canada and the U.S. are far better served than they ever were before and the greater activity permits more economic development in and around Canadian airports. Traffic improvements are not all due to the Open Skies with the U.S. Canada's airlines and airports are also benefiting from a number of recent successes in the renegotiation of international bilateral agreements, that is to say new or amended agreements between Canada and Japan, the Philippines, Malaysia, Korea and China.

[Translation]

Canadians' degree of confidence in the new methods of airport administration set out in our national airport policy can be gauged by the rate at which communities are taking over administration of their airports.

The figures speak for themselves. Today, more than 80 per cent of Canadian air passengers use airports that have been turned over to the community. By the end of 1996, the current government had turned over, or was nearly finished the process of turning over, 52 airports, including the national airports in Toronto, Winnipeg and Ottawa, 26 regional and local ones, 12 small ones and 11 Arctic airports.

By next March, the total will be 75, which represents a vote of confidence by numerous Canadian communities. I am sure that the process will continue and communities will continue to take over administration of their airports.

[English]

The government prefers that our largest airports be operated by not for profit organizations. This approach has proven its worth in Vancouver, Calgary, Edmonton and Montreal. These airports are pursuing their commercial potential by using innovative financing for capital works.

The new Vancouver international terminal and runway, the improvements to Calgary and its successful management of a high rate of growth, the focusing of Edmonton's scheduled traffic at the international airport and the improvements to the airports in Montreal, all attest to the success of the airport authority model in the management of major airports.

(1630 )

As the member for Halifax West, I look forward to that kind of success once the Halifax international airport has completed its negotiations to move to a national airport authority.

The national airports policy is a success story of the federal government. I am advised as we approach the end of fiscal year 1996-97 that we are ahead of the track set in 1994 to achieve the goal of at least $100 million in annual savings by the year 2000. This national airport system continues to play a vital role in the growth and development of Canada.

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, it was enjoyable hearing the hon. member give us his thoughts on the Liberal policies on the national airport program.

No doubt the hon. member has heard the word skimming before and is well acquainted with the meaning of the word skimming, to take something off the top. With regard to the national airport program, the program he says is doing so well with these 26 national airports, is he aware that some of those national airports are already financially insolvent? They are financially insolvent because of the fee the federal government collects from them. That fee structure is based on deemed revenues and deemed profits, not what they really make. The government said: ``We will calculate it based on this projection and that projection, you will bring in this much money and it will in turn give you this much profit and we want it''.

At least two of the airports, Calgary and I believe Edmonton, are already financially insolvent. The hon. member mentioned Halifax. Halifax is well aware of this and has hired the same financial consultants because they know that this is an absolutely unworkable formula.

With regional airports, which the hon. member also mentioned, there is another form of skimming. I will use my province of British Columbia as an example but this problem exists in every province. My home airport, Castlegar, feeds six flights a day to Vancouver and two flights a day to Calgary. The same thing happens throughout my region, at Cranbrook, Penticton, Kamloops, Williams Lake and all those other airports. The big airport that is part of this national airport plan, Vancouver airport, relies on these small airports.

In the case of Castlegar the federal government used to spend $800,000 a year to operate Castlegar bringing in only $300,000 in revenues. The government says: ``We still need the flights coming from Castlegar because that is what makes our national airports work, but we are not going to give it any funding. We will help it if it needs to rebuild a runway or a taxiway, but in the general day to day operation of the airport, even though it was costing us 100 per cent more than the revenues, we will not give any money. We will phase it out and make it stand on its own''.

That is not turning it over to local decision making; that is turning over financial burdens. The government should have allowed a larger portion of the profits coming from the national airports that make huge profits to be put into the regional airports on which the national airports rely to supply them with passengers. Likewise the federal government has to redo its formula to ensure fairness for the national airports so that they can survive and grow so that we will have as good a system as the hon. member would like to think we now have.

Mr. Regan: Mr. Speaker, before I go to the substance of these questions, it strikes me as fascinating that the Reform Party, the party that always calls for faster and deeper cuts and says we are not going fast enough in making cuts in government, is the same party that when it comes to things in their backyard Reform members say: ``Not in my backyard. Make your cuts somewhere else, but not in this area''. I have heard this over and over in this House. On every topic they say: ``But do not cut here''. If we were to add it up we would never cut at all.

On the topic of Calgary, if Calgary has problems, the biggest problem in Calgary is congestion. It has too much success. It is the growth of that airport and the authority is working to meet this demand. The government is taking a flexible approach on this.

(1635)

One of the problems with Edmonton is that traffic has moved from the Edmonton municipal airport to Edmonton International Airport. That has changed the circumstances. The federal government is working with that authority to deal with the changed circumstances and it will change the lease accordingly.

It is important to be flexible and to recognize that as things change we must change the leases, we must look at the circumstances and act accordingly.

However, I find it remarkable how the Reform Party is always after us to spend, spend, spend, except when it comes time for the budget.

Mr. Jim Jordan (Leeds-Grenville, Lib.): Mr. Speaker, it is a pleasure for me to speak to the opposition motion today. I am going to speak to one aspect of the motion, the reference to the national highway system. The motion suggests that the government should be condemned for its continued neglect of Canada's national highway system.

Yesterday the Standing Committee on Transport tabled a report in the House which made several recommendations for the federal government to consider with respect to the renewal of our national highway system. It is a coincidence that we were talking about

those recommendations yesterday and today the third party is condemning us for not taking any action.

I want to congratulate my colleagues on the transport committee for coming forth with the recommendations in the report. Indeed, I want to congratulate the hon. member for Kootenay West-Revelstoke. He is a well valued member of the transport committee. I have enjoyed working with him under the chairmanship of the hon. member for Winnipeg South.

When the Minister of Transport met in Charlottetown last October with the provincial transport ministers, he received unanimous support for the idea that the federal government would participate in a study in which all transport ministers would get together to see if something could be done to address the deteriorating condition of Canada's national highway system. He received tremendous support for the idea of moving forward with the study. We have been encouraged by the kind of inspiration and attitude shown by the provinces.

The federal government is concerned with the national highway system. It must be adequately maintained and properly expanded to meet growing Canadian demands. Trade is associated with a good transportation system. The highway system is also important to the Canadian tourism industry.

The federal government has a long history of supporting the provinces and territories in developing the TransCanada highway system and other highways. The first federal contribution to highways occurred back in 1919. Ever since that time succeeding federal governments have provided an uninterrupted level of support for highway construction and maintenance.

That should not surprise anyone. I believe we are open enough to realize the importance of a highway system. It is too important to say that it is a provincial matter and therefore we should not become involved. That is not the attitude I have sensed in the years I have sat on the transport committee. Of course, there is all-party participation on that committee.

Highway transportation accounts for almost 95 per cent of intercity passenger trips and about 75 per cent of all freight that moves in this country. That is how important it is to all Canadians. I personally think it is too important to be left exclusively to the provinces.

(1640)

Most of Canada's interprovincial trade moves by highway, as do 60 per cent of Canada's exports and 80 per cent of Canada's imports. There is no question about the need for a national commitment to something that involves our lives to that degree. About two-thirds of the 25 million U.S. tourists who come into Canada each year use the highways.

The federal government already spends a significant amount of money on highways with an expenditure of $292 million on highway development under the federal-provincial agreement's 1996-97 commitment. In addition, approximately $100 million is spent each year on federally owned bridges and roads.

Within just a few miles of here in the last year the government has committed $42 million to construct a highway in which I have particular interest since it goes through my riding. It connects the nation's capital with the 401, the busiest highway in Canada. I have been here for a few years and people may have thought that this is all I have been concerned with.

Indeed, a good deal of my energy has gone into that project because I can see the need for it. I can see the need for the federal government to get involved because a good deal of the traffic on that highway is there because this is the capital of Canada. Most of us would be fairly embarrassed if the old highway were the best we could do. Most Canadians would feel very embarrassed if a visitor to Canada from another country had to travel on highway 16, which hopefully will be highway 416.

It is not just a question of congestion. Highway 16 has a horrid record. Three weeks ago there was another fatal crash. A father and his son were killed. Dozens of people have been killed on that highway in the past six years. I am not speaking of that loosely. When travelling that highway I have had some personal experiences of accidents that have occurred. We speak very often of those who were killed. Usually if an accident is serious enough to kill people, there will also be injured people.

Notwithstanding the federal contribution, it has been clear for some time that a massive and focused effort will be required to maintain and upgrade the national highway system. Analyses conducted by Transport Canada in co-operation with the provinces and territories showed that Canada's highway infrastructure is aging. It is thought that the age of a highway is 30 years. Over half of Canada's major highways are approaching the maximum age limit for highways. It is a very serious problem.

Highway infrastructure requires increased financial resources to maintain them because we have more traffic on our highways now than we did 30 years ago. It is no more complicated than that. Highway infrastructure is experiencing growing congestion in certain parts of our nation. My colleague mentioned in and around some of the western cities. My colleague from the Reform Party was interested in that aspect of it too. We all know there is more volume on our highways today and of course that will reduce the age in which the highways can be of service to the Canadian people.

Despite the identification of highways by several premiers at the conference I mentioned earlier, there are still some provinces that have not regarded highway construction as a pressing economic need. We all have an understanding of the reason for that but we

still think as a nation that all provinces should come together under the guise of the federal government to carry on with the massive reconstruction of our highways.

Someone has said that instead of the weather being the major topic of conversation among Canadians, now it is the condition of our highways about which we initiate conversations. I believe that more and more. Nearly everyone is commenting on the condition of Canada's national highway system.

(1645 )

The hon. member who introduced the motion before us today takes great umbrage with the focus of the standing committee's report on private-public partnerships for highway infrastructure. I want to draw the attention of the House to the committee's own conclusion that there is widespread agreement among the users and builders of the highways that we must get into public-private financing on a partnership basis if we are ever going to see any real and meaningful reconstruction of our national highway system.

It is not my recollection that the transportation committee in its investigation of the relationship that existed between transportation, trade and tourism, decided to focus on the paramount need to renew the national highway system. I thought that was what all committee members agreed to do. Indeed, throughout our discussions over the past several months, I thought even the member from the third party was on board in relation to that.

I know my time is coming to a close, but I want to mention that there is no more basic, fundamental way, in my view, to reach our goal for the future growth of this country than to start immediately with the very pressing problems associated with the deteriorating conditions of our highways nationally.

The government is aware that this will have to be a major financial commitment. Although it is largely a provincial matter, the government is willing to work with the provinces and others to try and correct the network that is in need of immediate attention. It is a massive undertaking but we must address the problem. So much of our economy depends on an adequate transportation system.

Mr. Jim Gouk (Kootenay West-Revelstoke, Ref.): Mr. Speaker, I appreciate the words of the hon. member who just spoke. I have enjoyed working with him the past three years.

I just want to clear up one point. I gather he is under the impression that I oppose involving the private sector through public-private partnerships. I do not. I think it is a good idea. What I objected to specifically are two points.

First, the implication that things like shadow tolling are alternate funding sources. They are not. There are ways to save money and do the job more efficiently at which I think we should be looking. For that aspect of it, I applaud the committee. However, the report suggests that it is an alternate source of funds and it is not. It is simply a cost efficiency and to imply otherwise is extremely misleading.

Second, if we are going to involve the private sector obviously there has to be trust between the government and the private sector. We heard the specific example of highway 401 where the builder-operator of the highway said that it was necessary to negotiate an agreement with the government that it would not upgrade to a freeway standard the other portion of the highway that parallels the one the builder-operator built. Otherwise, no one would travel on the first one if it was not brought up to full highway standard and obviously the company would never recover its money. That trust and agreement had to be made as well which is understandable.

The Parliamentary Secretary to the Minister of Transport went into a small tirade but when it was explained to him he understood the wisdom of it and withdrew his objection.

My concern is with the deal that appears to be coming up with Rocky Mountaineer and VIA Rail. If the government allows VIA to go back and compete directly against the very company it sold, it sends a bad message to the private sector. I would specifically point out that the Canadian Council on Public-Private Partnership, the parent organization for that entire movement which is looking to build co-operation between the government and the private sector wrote the minister and specifically said: ``Please, do not do that with VIA Rail because it sends a bad message''. That is the concern that I have.

The other point is that he said we need to invest more in highways. We heard a huge number of witnesses ask for dedicated revenues. The federal government spends $292 million but it takes in $5 billion from gasoline taxes. Some want dedication of the total amount and others said two cents out of ten cents. That is only 20 per cent. It still allows the government to keep 80 per cent of those revenues for other purposes. This money could be put into a dedicated revenue fund so there is an absolute commitment for long term planning. The funding could not be interfered with.

(1650)

I would ask for the hon. members' comments. Just before he answers because this is such an important issue, I would ask, Mr. Speaker, that you seek the unanimous consent of the House to make this motion votable.

The Acting Speaker (Mr. Milliken): The House has heard the proposal of the hon. member for Comox-Alberni that the motion be made votable. Is there unanimous consent?

Some hon. members: No.

The Acting Speaker (Mr. Milliken): I am sorry, there is no consent.

Mr. Jordan: Mr. Speaker, I thank my hon. friend for the question. We do need to develop a trust when we are embarking on something different. We have dabbled a little bit in the private-public way of doing things, particularly with road construction.

I am pleased, assuming the member speaks for his party, that it will support this private-public membership for highway construction. If I misunderstood that, I apologize.

I have some difficulty with the simplistic way Reform is looking at it. The hon. member is saying that two cents a litre is collected as a tax on gasoline, why not take the two cents and put it back into road construction? However, how far do we want to go?

Where would the money for health care be generated if everything is designated? What is out there in the marketplace that is generating money which could be designated to health or education? That is the difficulty with the argument. I heard it when we travelled with the committee. It sounds like a very simplistic way of doing it but there is nothing wrong with that if it would work.

The difficulty I have is projecting it a bit and asking how far we want to go with it. Do we want every dollar collected by the government to be directed into a specific area? If we do that the government's hands would be tied. It would have no money for the services Canadians demand and want for which there is no money being generated. Would the hon. member propose to use the money generated for highways and for no other purpose? This is the problem I have with the member's position.

[Translation]

Mr. Maurice Bernier (Mégantic-Compton-Stanstead, BQ): Mr. Speaker, I wanted to take part in this debate on the Reform motion criticizing the Liberal government for its transportation policy, if we can call it that.

After listening to the remarks made by the Minister of Transport in this debate, I too wanted to say a word or two. I ventured a question to the minister, but I will come back to that later, because I was not satisfied with his attempted response. The people in my region who are interested in airports in the Eastern Townships will not be satisfied either.

I would like to raise two points. First, I would like to address airports, because, to listen to the minister, the Liberal government has resolved just about every problem there may have been in that area, when the reality is, to say the least, quite different, especially nowadays.

Just look at what is happening in airports, particularly in Montréal, where there is a real farce being played out; this is the only way this situation, which has jeopardized the future of airport operations in Montreal and has had a negative impact on all of Quebec, can be described.

(1655)

Where has the Minister of Transport been doing during this time? What has the Liberal government been doing about the situation in Montreal, with people in the industry quarrelling over whether Mirabel or Dorval airport should be maintained? They ended up in court, where a judge made a questionable decision resulting in delays the magnitude of which we do not know but which, I repeat, could have untold negative consequences on the future of airports in Montreal.

What did the Minister of Transport do? He washed his hands of the whole thing. That is the policy of the Minister of Transport and the Liberal government on airports. At least, that is what it is in Montreal; they are washing their hands of it. So, I wonder how the minister can rise in this House and rave about the decisions that he and his predecessors made.

Let me give you another example of the kind of policy that this Liberal government boasts about. The minister's predecessor, who is now the defence minister, is known for his ability to casually destroy what is in place, as can be witnessed on a daily basis during question period and in light of the decisions he has made in every sector for which he has been responsible. We can see how the former transport minister, namely the current defence minister, did not care either about the real impact of his decisions on those concerned.

Let me give you a specific example which involves the Sherbrooke airport. You will remember that, a few years ago, this government decided to give up its responsibilities in the airport sector, particularly as regards regional and small airports. This decision was made primarily to dump the Liberal government's deficit on the provincial governments and on regional authorities. Not only did this government offload its responsibilities onto others, but it did not even bother to make sure the facilities which it wanted, and still wants, to get rid of, are in good enough shape to be used by those interested in taking them over. This is exactly what is happening with the Sherbrooke airport.

I raised the matter in the House. I questioned the former transport minister and the Secretary of State responsible for Regional Development on this issue, and we are still waiting for a decision that would ensure the runway is in reasonable shape before local authorities take over the Sherbrooke airport.

What are local authorities asking for? What is needed to repair this runway so that it is adequate? An amount of $1 million is necessary. Again, we have been waiting three years for a decision. This is the type of policy favoured by this government, which, as we have seen in other areas, simply offloads its responsibilities

onto the provinces, without looking at the real consequences of these decisions.

In the case of the Sherbrooke airport, I am convinced we will get a positive answer, because an election will soon be held. I am also convinced the Secretary of State responsible for Regional Development, who is the member for Outremont, will visit the regions in the coming weeks, probably right after what will certainly be a pre-election budget, to announce that the government will give a $1 million subsidy to repair the Sherbrooke airport's runway.

But why did the government wait for three and a half years to make this decision, considering that the stakeholders have had to wait all that time before proceeding with other improvements? Let the government make its decision.

(1700)

This is what is being passed off as policy in the area of transportation. In the meantime, while they are refusing minimal assistance of $1 million for the Sherbrooke airport, they are going to spend millions of dollars on the Montreal fiasco in the hope of arriving at a logical, intelligent decision, not to mention the tens, even hundreds, of millions of dollars that the Pearson deal will cost.

We must not forget that, during the 1993 election campaign, the present Prime Minister, who was the challenger at the time, promised to cancel the contract the Conservatives had struck with their friends who had contributed to their campaign coffers and who wanted to take over Pearson and make huge profits.

The Prime Minister said: ``I am telling you, if you go ahead with this deal, we will cancel it after the election''. That is what they did, but how did they do it? They did it in such a way as to still be able to do everything the Conservatives would have liked to have done, which was to benefit their own friends.

The Pearson affair is still dragging on through the courts, and we are going to find ourselves footing a bill that will easily top hundreds of millions of dollars. Here again, I am sure we will not learn the results during the election campaign. We will have to wait, just as in the case of the events in Somalia, until after the election to really find out what went on.

In the meantime, the present Minister of Transport is telling us that one of the factors in his policy is to recognize that a large percentage of trade is towards the Asia-Pacific region, and that rail transportation in the direction of the Port of Vancouver must therefore be improved.

It is obvious that there has been unbelievable growth in the Asia-Pacific region. It is even more obvious that the Port of Vancouver is located in the Minister of Transport's home province. On the eve of an election, this is the kind of coincidence that can be helpful when meeting with future voters, those who will decide whether or not to renew his mandate; to go and tell them that all funds will be directed towards his province will probably be of help in an election campaign.

Members will also recall that the former Minister of Transport pulled a very similar stunt when he cut the Crow rate for rail transportation, literally throwing western farmers not just millions, but billions of dollars in compensation. The bill has been estimated at something like $3 billion, while an amount of only a few hundred millions of dollars has been mentioned for all of eastern Canada as compensation for ending the program of transportation subsidies. The double standard is obvious.

Meanwhile, what is going on with the railways in eastern Canada? It is obvious that improvement was called for. For years, we have seen CN, a public company, and CP-supposedly private one, listed on the stock exchange, but it thumbs its nose at its stockholders, or so I would say-both doing everything in their power to discredit shipping by rail.

How did they do so? They provided their customers with no service whatsoever, which eventually gave them the opportunity to say that the customers were abandoning shipping by rail in favour of shipping by road. Once that finding was made, there was only one decision that could be made, of course: to abandon a rail line.

I will give you the example of a situation that occurred in my riding. When I was told about it, I could hardly believe what I was hearing. I had to go there to find out for myself. A lumber business in Lac-Mégantic, Industries manufacturières Mégantic, is a major purchaser of American wood. Naturally, it used to used the railway connection with Maine to get its supplies.

(1705)

When its carloads of lumber arrived in Lac-Mégantic, they were left at the rail yards and another work crew with an engine, working out of Sherbrooke, a hundred kilometres or more from Lac-Mégantic, had to come bringing other employees to pick up the car or cars that had been left there and take them to the company's yard, although this could very well have been done by the other train on its route. This was, supposedly, not possible because of the collective agreements involved.

When they had put up with this for years, with the enormous costs it entailed, the tremendous delays, it is not surprising that decision makers in the industry took another tack. Anyone would have done the same. When we see that a company is not capable of giving us the service we expect, we take our business elsewhere.

It is crystal clear that the sole purpose of this approach was to downgrade railway transportation. Finally, they got much what they wanted. Today the network is being dismantled. We should realize that it was our taxes, the taxes of everyone in this country which for years helped to finance the development of this railway network throughout Quebec. We should also realize that the global trend is not toward eliminating but increasing the use of railways

for the transportation of goods, since people have realized how expensive it is to keep trucks on the roads.

According to estimates by the Société d'assurance automobile du Québec, a single truck did as much damage to the road face as 24,000 or 28,000 cars. When we consider the hundreds and thousands of trucks on our highways, the cost is enormous.

Surprisingly, this is the responsibility of the provinces, so here in Ottawa, they could not care less how much it costs to maintain our highways, since they do not pay for road maintenance. If we really wanted a genuine transportation policy, I heard a Reform colleague put a question to the Minister of Transport about development of networks of SLR or short line railways, which will take the place of the companies I mentioned earlier, CN and CP.

When we consider that this government came to power three and a half years ago and is supposed to have a transportation policy, it is amazing that when the following question is put to the Minister of Transport at the end of this government's mandate, ``how will your SRL policy work'', the minister cannot give us an intelligent answer. This is proof positive that they do not have a transportation policy. What will be the consequences of this appalling lack of vision?

Today, old branch lines are being abandoned, I see this in my own region, and my Bloc colleagues have seen this as well. Hundreds of kilometres of tracks are being abandoned without any indication of being salvaged for further use. Meanwhile, our highway system will deteriorate even more.

When, 10, 15 or 20 years from now, we have to decide to rebuild our railway network because we realize it makes no sense at all to leave trucks on the road and that we should use our railway lines to better advantage, we will have to spend millions and even billions of dollars to correct a situation this government has allowed to deteriorate.

(1710)

Mr. Mac Harb (Ottawa-Centre, Lib.): Mr. Speaker, I was very interested to hear my opposition colleague's viewpoint. I am sure he will agree with me that the federal government's transportation program was outstanding. It was well planned, well executed and attuned to the needs of Canadians.

The Department of Transport's decision to transfer the Macdonald-Cartier airport to a non-profit corporation indicates that the federal government has decided to give regional municipalities direct authority. They will be able to plan their own economic development and promote economic growth. The region will also be in a position to establish the type of airport and air services it wants.

The government has done the same thing with Pearson, Dorval, Vancouver and all the airports in the country. Would my colleague not agree that the government has planned its transportation matters well?

Mr. Bernier (Mégantic-Compton-Stanstead): Mr. Speaker, I do not think, unfortunately, that you will allow me to repeat my entire speech, but I would have to do so to explain to our colleague that, no, I do not agree with his claim that the government's planning was marvellous and resolved all the problems in the area of transport.

Quite the opposite. I have shown that the government has no transportation policy and that its decisions served simply to transfer responsibilities to other levels of government.

When our colleague for Ottawa Centre says we must trust in the community and that it is a good decision to allow local people to decide the future of their equipment, I agree with him. However, it must not happen any old which way. The government has resolved its budget problems on the backs of the provinces without regard to the consequences.

I repeat the example of what is happening in Montreal at the moment. A court handed down a terrible decision yesterday. Huge delays will result from this decision preventing the local community from restructuring Montreal airport services.

The Minister of Transport was questioned outside the House. In response to a question on what he intended to do about ADM's situation in Montreal, he said it was not his business, that he had set up a local group and that decisions were to be made by these people. This is typical of this government's policies: it transfers responsibility without regard to the consequences.

No, I do not agree with my colleague's assessment. On the contrary, I think real policy should be formulated on co-operation with all levels of government and take financial consequences into account first, to ensure the future of transport.

Mr. Harb: Mr. Speaker, my colleague is not in agreement with the government's decision in this regard. There is another example. The federal government has launched a Canada wide initiative under the infrastructure program. There are three partners: the federal, provincial and municipal governments.

(1715)

This initiative has created over 100,000 jobs across the country and was supported by almost every municipality in Canada. Many mayors, including some in Quebec, applauded the federal government.

Now, the federal government has put up $425 million for another initiative under its transportation and infrastructure policy.

Does my colleague support this extraordinary federal government infrastructure policy, including the latest announcement of $425 million in funding? Does he support this initiative and is he not in agreement with this kind of intelligent policy on the part of the federal government in the area of transportation?

Mr. Bernier (Mégantic-Compton-Stanstead): Mr. Speaker, I have two points to raise. First of all, the results of this infrastructure policy, or rather program, to which our colleague from Ottawa-Centre alludes, are not necessarily what he says they are, as far as job creation is concerned. One might challenge the figure of 100,000 jobs created by the infrastructure program.

But I do not want to get into that, for I have just two things to point out. First, of course the infrastructure program has had a beneficial effect, but it has been a limited effect, both in the number of jobs created and, especially, in their duration. The jobs were created for very short periods, that is the length of time it took to construct or renovate certain infrastructures.

As for the proportions, that is the regional distribution of infrastructure spending, here again, Quebec did not get the share it was entitled to expect, as is the case for all federal spending. I would say that, if the action of the federal government were fair and equitable for Quebec, we would not need an infrastructure program, modern programs of various public works. We would have the jobs Quebecers really need, quality jobs, permanent jobs, to ensure that our families can develop and live decent lives.

That is what we expect of our governments and, unfortunately, that is not what we have received from the federal government.

[English]

Mr. Joe Fontana (London East, Lib.): Mr. Speaker, I express my appreciation for being given the opportunity to comment on federal support for VIA Rail.

The Reform opposition motion before us condemns the government's actions with respect to a number of its transportation policies. I do not have the time to get into all of them but I want to spend a little time speaking about our government's support for VIA Rail. The motion is another indication, especially by the Reform Party, of how out of touch it is and how little it understands about the country.

Over the past two or three decades Canadians have supported their national passenger rail service. For the Reform Party to suggest in its blue book platform that VIA Rail should be privatized, which would mean the abandonment of VIA Rail services to hundreds of communities across the country, surely does not point to a national party that supports the needs of the passenger transportation of the country.

(1720)

There is something bizarre about the motion of the hon. member for Kootenay West-Revelstoke. The Reform transport critic said on June 4, 1996, as reported in the Hill Times: ``I have agreed with the concept behind all the government's transport bills over the past two and a half years, with the sole exception of the Pearson airport cancellation bill''. We have heard this song and dance before with regard to Pearson. He said on June 4, 1996 that he supports all policies, save and except that one of the government, but his motion today condemns what the government is doing.

I like the member for Kootenay West-Revelstoke. He has been a very active member of the transport committee as I and my colleagues have been. For the most part he puts forward some very positive viewpoints and has been in agreement with the government in most cases. I find rather bizarre that all of a sudden today he decides that he is against everything he stood for just the other day.

Liberal governments of the past and of today are governments that supported passenger rail service. When the Tories had power for those gruesome eight years and put this country through pain, it was the Liberal Party from 1988 to 1993 that fought for the retention and enhancement of VIA services.

The government believes that every community needs a national passenger rail service. It also recognizes that the transportation system needs to be an affordable, integrated and efficient system.

Everything we have done since 1993 was to put in place certain efficiencies that do not destroy the transportation systems but enhance them and ensure that Canadians have them, not only businesses but people who rely on our transportation services.

I compliment VIA and its employees. They have not had a very good time since 1989 when Mr. Mulroney and the Tories slashed the VIA network by 50 per cent.

In 1993 the government had a deficit to deal with. It had to impose certain cutbacks on VIA as was done with other departments. What was made clear, thanks to the hard work and dedication of the men and women who work for VIA, the management and employees, was that they were able to do so without cutting one service to the country in the past three and a half years even though their subsidy levels were falling by over $200 million. They did that in a very pragmatic, orderly way making sure that VIA service was available to Chatham, Toronto and all other parts of this great country.

It is also clear that VIA remains committed to looking for opportunities and efficiencies to enhance services by working with their workers, by working with communities and by working with

other partners. It is looking for the opportunity to better serve Canadians from coast to coast with the best passenger rail service.

It has moved to improve the attractiveness of rail service by making certain infrastructure upgrading to permit 100-mile per hour operation of trains on the Montreal-Quebec routes and 95-mile per hour operation on the Toronto-London-Windsor route. The Montreal-Senneterre, the Montreal-Jonquière and the Jasper-Prince Rupert train schedules were revised to provide daylight services for local residents and development of tour packages.

To reiterate, VIA is always looking at ways of enhancing its passenger base. VIA has worked at combining a series of fare increases with special promotion fares and plans to develop year round markets for its services.

As a result of these service initiatives revenues have increased by 26 per cent and the number of passenger miles increased by 16 per cent between 1990 and 1996. Over the same period the number of passengers increased by 5 per cent. The higher increase in the number of passenger miles is because the average trip taken by each passenger increased from 221 miles to 246 miles between 1990 and 1996. It is further indication that Canadians support and want passenger rail service.

(1725)

The best measure of VIA's success has been the steady increase in its cost recovery levels. Something we would expect from every corporation and in all our operations is that they move toward cost recovery. Between 1990 and 1996 the cost recovery ratio increased from 26 per cent to 44 per cent. This marks the first time ever that VIA's cost recovery has been over 33 per cent.

Under the National Transportation Act, 1987, the government subsidized the operation of three uneconomical passenger services because it believed in treating all regions of the country in a fair and equitable way. Therefore the railways that the government supported and continues to support, the Quebec North Shore and Labrador Railway, the Algoma Central Railway and the Ontario Northland Transportation Commission, is a further indication of its commitment to passenger rail service.

The new transportation act was passed by the House within the last year. It states that the new Canada Transportation Act maintains the government's commitment to remote areas along these routes by having the Minister of Transport enter into special agreements with the railways to provide financial assistance but to give them greater autonomy in how best to provide those services.

It is clear and I do not know why the Reform Party does not get it. The country is a national federation, a country where we need national infrastructure. VIA is the national passenger infrastructure to provide services across the country. Four hundred communities depend on passenger rail service. For Reformers to suggest in their blue book privatization and the depriving of Canadians of passenger rail service, or for them to suggest in their platform book, their new fresh start 1995, the total disbandment of the transportation ministry and the $750 million, indicates that they do not believe in the national government having any role in national transportation.

This is bizarre. I have listened for the last few hours to the Reform Party suggesting that we ought to do more. The fact is that the government is doing more. I do not understand how Reformers can stand and say we should be doing more when their blue book and their fresh start say that we should be doing less or should not be involved at all.

In conclusion, we continue to believe in VIA. We continue to believe that there are opportunities to have VIA work in a most efficient way and to ensure that Canadians have passenger rail service from VIA. We ought to continue to support VIA in its attempt to modernize and in its attempts to provide more service. VIA ought to be given the mandate and the opportunities to enhance its passenger ridership in all parts of the country.

The Acting Speaker (Mr. Milliken): Order. It being 5.30 p.m. it is my duty to inform the House that proceedings on the motion and the amendment thereto have expired.

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