TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, March 31, 1998

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[English]

The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)): I call the meeting to order. Thank you, everyone, for being with us this afternoon.

We welcome today members of the CAW to share with us their positions and views on our study for passenger rail in Canada. Of course, we know you have a vested interest and we understand that. We are very interested in what you have to offer, and everything you will share with us will be recorded and considered.

We ask you to make a presentation of 15 minutes. When I say 10 they take 15, so I'll say 15 and you'll probably take 20. But keep in mind that we would like time for questions and answers from members. If you run out of time, you can always incorporate your presentations and the answers in the future.

Having said that, I'll ask you to please proceed and identify yourselves and your members.

Mr. Tony Wohlfarth (National Representative, National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW)): Thank you very much, Mr. Chairperson. My name is Tony Wohlfarth and I'm a national representative with the Canadian Auto Workers. I want to take this opportunity to thank the parliamentary committee for this invitation and to introduce our delegation.

With me is Mr. Bill Coolen. Bill is the secretary-treasurer of the CAW-Canada National Council 4000 operating out of Halifax, Nova Scotia. Also with me is Mr. Pierre Rouleau. Pierre is the vice-president of the CAW-Canada National Council 4000 and his base is Montreal, Quebec. Also with me is Ms. Gail McDonough. Gail is a grievance officer with our local 4004, which is also based in Montreal.

I want to bring to the committee our regrets on behalf of our national president, Buzz Hargrove, who could not be with us today. What I now want to do, Mr. Chairperson, is turn the microphone over to our director of transportation, Mr. Gary Fane, who will make the presentation on behalf of our union.

Thank you very much.

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Mr. Stan Keyes (Hamilton West, Lib.): The cameras can't stay.

The Chairman: My position is that they are allowed to come into the room unless the members object. If the members object, I will ask them to leave.

Mr. Stan Keyes: I object.

The Chairman: Let's have a show of hands as to whether they stay or not.

(Motion agreed to)

The Chairman: I allow them to stay. I would appreciate that they stay beyond the end of that table, though. Of course, members, you will want to discuss this in the future. Personally, I have no objection to the media provided they don't disrupt the meeting. That's why we have in camera meetings. We don't want them in.

Mr. Fane.

Mr. Stan Keyes: Mr. Chairman, I have a point of order. Is this a rule committee by committee or is this a rule of the House on cameras in committees? I wonder if I can get the clerk's opinion.

The Chairman: If there is a rule.

The Clerk of the Committee: Usually cameras are allowed in before the gavel goes down and after the gavel goes down at the end of the meeting.

Mr. Stan Keyes: I recall, Mr. Chairman—I don't think it's just up to us to decide—that the House of Commons recognizes that live cameras or active cameras can't be allowed in the room, because there's been a big discussion.... That's why we have televised committee rooms in the House of Commons, in Centre Block, to allow cameras to be in committee.

The Chairman: There's no problem. They've left. We've discussed it long enough. I apologize for our witnesses. Really you shouldn't have to be enduring this, but in your field of work you do this all the time, I know.

Mr. Stan Keyes: I have nothing against the media, Mr. Chairman, since I was in the media for 16 years, but it can be very disruptive. One's not bad, but if you get 15 of them in here when you have a popular witness it's a pain in the ass.

The Chairman: Stan, the committee will discuss it in future business.

I apologize. Please proceed.

Mr. Gary Fane (Director of Transportation, (National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW)): Mr. Chairperson, members of the committee, MPs, first, thank you for giving us the opportunity to be here today. I know someone told the media that Buzz Hargrove couldn't make it, because if not, there would probably have been a lot more.

I will try to put forth our union's position as well as he has. I do give you his apologies. It was something personal that came up so that he could not attend, but he had planned to be here.

In our organization, we represent about 215,000 people. In transportation, which consists of both national airlines, trucking, busing, CN rail, CP rail, BC Rail, the Ontario Northland Railway and the marine, we have about 33,000 members.

On my way over here, somebody asked if we had a conflict of interest because we're here to talk about ensuring that we have a passenger rail service in Canada, and in Quebec, to ensure that VIA survives. That's what we're interested in. We don't find it a conflict of interest at all. A big chunk of our members are auto makers and they make cars. That's why it's called the CAW, of course.

So we don't find it a conflict of interest. As a matter of fact, we find it in our influence to make sure there's a balance between all the modes of transportation, which dictates a need to have good public policy as the country is so broad.

I'm not going to read our brief word for word, but I'm going to pick some specific points out that I think are important.

Everybody here knows that VIA was created in 1977, and it was recognized as a nation-wide Canada mode of transportation, something that would hold the country together. It has been operating for many years now and it doesn't particularly have a mandate. We started to think it was something in Transport Canada that was at the bottom of the page when the cabinet was thinking about how it was going to spend its money or, if it didn't have money, how it was going to not spend its money.

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Most people are familiar with the fact that VIA has had many cutbacks. For our union particularly, we had about 4,600 employees, but now we have about 2,300 employees who are members of our union. The company as a whole has continued to shrink. As it has done that, we have had a debate going on about what happens to the service of the railway.

I'm not going to spend a lot of time talking about the past, because we're really more interested in the future. We think it's really important that we have a national railway service, and for numerous reasons.

One, the travelling public should have choice. It shouldn't be that you get in the car, that if you can't afford to get in the car then you have to go by plane, and that if you don't have plane fare, well, maybe you shouldn't go. We think choice has to be there for the customers.

We think the railway holds together this country. Many people travel on the railway, but equally important is the fact that it provides a very important service for numerous remote areas that don't have other services. For British Columbia, it's Prince Rupert. For Manitoba, it's the question of Churchill. In Quebec, it's the Gaspé. This is what holds our country together. I don't know how you tell people that this isn't important any more. There was a Liberal cabinet member who was the Minister of Transport, and he said too often that trains don't make his heart go pitter-patter. He's not with us any more.

Mr. Stan Keyes: He got a better job.

Some hon. members: Oh, oh!

Mr. Gary Fane: Pardon me, sir?

Mr. Stan Keyes: He took a better job making many times the money.

Mr. Gary Fane: I don't know if there could be a better job than representing Canadians in the Houses of Parliament, sir, but I trust that you might be right.

Mr. Stan Keyes: Trust me.

An hon. member: No, don't trust him, Gary.

Mr. Gary Fane: We've had numerous conflicts with the administration of the railway. Mr. Ivany was given a mandate and a continuing reduction on how much money he was to have. People know those numbers. The workforce has been reduced. The operating expenses have been reduced from $487 million to $390 million.

The biggest problem jumps out when you talk about a reduction in operating budgets: the capital equipment has been going down. I believe it was about $20 million last year, when they used to average about $45 million. Quite simply, if you don't have the equipment, the trains will not run. They can't continue to keep fixing old trains. Sooner or later you're going to need new capital equipment, which means that you're going to need new trains sooner or later.

If you have five or six years of continuous negativity, meaning that we're reducing the budget and we're laying people off—and we're not happy to see anybody lose their jobs, union or non-union—you put a lot of pressure in the workplace. You put pressure on the collective bargaining table.

As a matter of fact, the last time I had the pleasure of appearing here, Mr. Tellier from CN had locked out our members and there was legislation in the House. Quite candidly, the legislation was directed at commercializing or privatizing CN and gutting collective agreements. Anyway, all that is the past. The legislation was passed. CN did very well, and so did CP. The problem is that VIA didn't really get anything from that process. The legislation that was passed three and a half years ago talked about the viability of the railway. The legislation was first drafted for the two freight carriers, and VIA was thrown in.

I had the pleasure of appearing with Judge MacKenzie, who was the judge appointed to resolving the labour-management conflict at VIA. Quite candidly, VIA management kept saying they didn't have any money, it was that simple. Judge MacKenzie, to his benefit, said that the most important thing VIA Rail has to do to make sure they have a railway is to make sure they have a rightage of track, that they can get on the track and run their trains. Because I knew $50 million had been sent from VIA to CN for many years, at that time I didn't really think it was a big issue. Now, when you look into the future, the right to run on the track becomes a much bigger issue.

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We think there is a future in passenger services for the railway. Quite candidly, if the committee decides there isn't, it will be finished, or if the committee makes the wrong choice, that question will be finished. We've learned that the work the committee is doing will be very important and whatever decisions are made will, I'm sure, end up in Parliament or go to cabinet. But if you make the decision to leave things exactly the way they are, VIA Rail will die. It cannot continue cutting down and cutting back. It has cut to the bone.

We have a round of collective bargaining coming up. Right now, we're in the process. As a union, we're trying to stick-handle away from CN and CP because we know, for example, that with the bad ice storms in January and February in Quebec and Ontario, if VIA has another dispute it will have a really negative effect on the bottom line, which means that with the $170 million the government gives VIA it will not hit that target. So we're trying to stick-handle around that problem.

I'd like to talk a little about the impact on jobs the past has had. As I mentioned before, we've lost about 1,500 jobs in VIA, as a whole. The job numbers keep going down, and you can't cut any more. We're going to the bargaining table again to look for a new collective agreement, and the employer has told us it doesn't have any money.

Just so we all understand, the majority of VIA Rail employees came from CN. They are already making 4% less salary than CN and CP employees. Now we're up against the same hurdle that there's no money. But more importantly, is there a future for VIA Rail?

On the question of the privatization or franchising of VIA Rail, we spent a lot of time thinking about how we could deal with this problem. Our number one major concern is, if you cut up the railway and give away the best parts of it, it cannot function as a national carrier. If you took the corridor and asked who could make money on it and sold it to somebody, I bet Bombardier would buy it from you. But that's all it would buy. It might not want to go all the way to Windsor or Quebec City. Maybe it would only want to go between Montreal to Toronto.

On the Rocky Mountaineer Railtours experience, we represent the members there also. Some people, particularly in western Canada where I've lived for a number of years, consider that a success story. It has had some successes, but we understand that when the government made that decision, it took the best route for tourism and gave it away. You could have given it to us and we would have made money on it. The problem is the other routes. Churchill and Gaspé are not going to be money makers, but we think the government has a role to play in ensuring that people have proper transportation.

We don't really support the franchising question or the privatization question. When we really look into it, could we as a group contemplate the idea of a partnership, public and private? We think there's some value in that. That might be an opportunity to explore, for example, if Bombardier wants to provide the equipment and lease the equipment and our people are repairing the equipment, and you have a lease arrangement where the government doesn't have to put out a big bundle of cash. Maybe something constructive can be done that way. We're looking really hard to find ways to ensure that VIA exists.

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We think the question of a crown corporation is a very strong, good choice. We think the question of a crown corporation that has a mandate and funding would be a positive way to go.

We think that way to go is much better than leaving it the way it is. With the way it is, there's no long-term planning, because every year, when there's a new budget out, the question from Transport Canada comes down: how much are we cutting out of VIA?

We think there are expanding opportunities for VIA. We mapped those out on page 8. We talked about a new rail link in greater Vancouver. We talked about a new high-speed rail link between Pearson International Airport and downtown Toronto, which would be very much like what they've done between London and Heathrow. We think there are the same opportunities in Montreal.

The expansion of VIA Rail between Vancouver and Banff and Jasper we think is really important. I believe it was last year that VIA asked to run more service. Of course, the Rocky Mountaineer Railtours folks said it was now their marketplace.

So what really happened there was that VIA was told no, it could not make money. But what VIA ended up doing was taking cars from Atlantic Canada and moving them west to make the trains longer. The problem is that if you're in eastern Canada, you might not think that was the best idea.

We think opportunities are there. We think there are opportunities to sell in the tourist service. There's a lot of chat around the question of whether the Olympics will come to Toronto. What a marketplace that can be. So we think the opportunity is there.

Probably the best opportunity I've ever seen or had the opportunity to talk about was the idea that between Montreal and Toronto, or Montreal and Ottawa, instead of one or two non-stop trains a day, you could be running five or six.

To us, this has a lot of logic, you know. I'm someone who comes from the airline, and it still has a lot of logic for me. It has a lot of logic for our employees.

I want to talk a little bit about customer service on the train. I don't know if many of you have travelled on the train recently. I do know that MPs get free airline passes, at least most of them do.

You don't any more?

The Chairman: I'm the one who has an airline pass because I'm an airline retiree.

Mr. Gary Fane: I see.

Ms. Bev Desjarlais (Churchill, NDP): And that's perfectly all right.

Mr. Gary Fane: That is, eh?

An hon. member: We have to pay it out of our pockets.

Mr. Gary Fane: I see.

The Chairman: We were given a rail pass, but there are no trains to Sudbury.

Mr. Gary Fane: We've got to think about fixing that problem, too.

In my days at the airline, the MPs used to have airline passes, so we should talk about negotiating a better deal for you, then.

If you have the pleasure of travelling on the train from here in Ottawa or Toronto, although all this negativity has happened in the railway, our employees are very happy about being railway employees. They're very proud of their work. They're very proud of the things they do. They're happy to serve the public, and they want the public to come back.

The customer ridership has been growing. The revenues from that have been growing. Our people are proud of that. It's a pride in their work.

I'd like to talk a little bit about the use of track. Quite candidly, VIA Rail is saying that if the problems of having more trains or more usage of the track aren't fixed, then they can't grow.

Now, this is a little contrary to Mr. Tellier's position. Quite candidly, we don't agree with Mr. Tellier's position. We think CN has done very well. We represent nearly 7,500 members there, and we want it to continue doing well.

Mr. Tellier should remember that he had $900 million of the public purse to get going. He's running a very good business, a very wise business. If you have shares, they're doing very well. But the idea of suggesting that because VIA gets more use of track this is going to kill CN business is utterly nonsense.

Now, he's a tough bargainer. I'm sure he came here and put forth tough positions. I know that's what he does with us. Except for the bargaining position, though, we see absolutely no logic in the position he took here. His last speech that he gave was called “Growing the Pie”. He gave it in Winnipeg, and he talked quite candidly about growing the pie because of the Illinois Central purchase. Growing the pie somehow doesn't include VIA.

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If Mr. Tellier was running VIA and Mr. Ivany was running CN, would their positions be reversed? I suggest to you that Mr. Tellier is taking very good care of the shareholder, and that's his job. But we should keep in mind that Canadian National is over 75% owned by foreigners—non-Canadians, Americans—and something seems wrong when a company that's doing so well in Canada should be attempting to dictate that the public policy of passenger service isn't of great importance. We think it is of great importance, so we have a little bit of a contradiction on that note.

I just want to summarize a little bit what the VIA challenge consists of. Quite candidly, it's not a secret that their trains are old. They are going to need more rolling stock, and they need money to find that. If you do that via the crown corporation and some guarantees, do you do that in a partnership with private business? I'd like to think that could happen under some type of arrangements.

Second, you need to make sure that they can get on the track and have greater access. I didn't add up how many years VIA has been paying CN $50 million a year, but it's obvious by Mr. Tellier's reports that that $50 million isn't a high priority.

Quite candidly, if VIA doesn't have more opportunity for track, VIA cannot grow. Somebody has to play the referee here and find out how CN, CP and VIA co-exist. We don't really think that the problem is the three of them co-existing. We know that down in the States everybody is talking about free access, which means free access not on the highway when we had deregulation, but rather on the railway track. That is a bigger threat to CN and CP long before VIA Rail gets to be a threat. We find that perhaps the need for security for CN is still there, but it's not really against VIA Rail.

Finally, we need a long-term commitment from the Government of Canada that we're going to have a VIA Rail. There are other considerations, like the environment, but you can find those in our report. I think they're self-explanatory.

I've covered most of our recommendations, which start on page 11, but we think VIA has to be established as an independent crown corporation with long-term funding. We think that the access problem has to be solved by the government. Quite candidly, when the railways have an argument with us in the CAW, they go and get legislation and provide an arbitrator. Perhaps we'd like to give CN and VIA the same opportunity.

Finally, on the question of growth and tourism, we think that VIA is very important to the country.

On that note, Mr. Chairperson, I think I've covered most of the points I wanted to touch on.

The Chairman: Thank you very much.

We'll proceed to questions. I would ask that we be brief in the questions and brief in the answers. We'll start with Mr. Morrison, Mr. Drouin and Mr. Cullen.

Mr. Lee Morrison (Cypress Hills—Grasslands, Ref.): Thank you, Mr. Chairman.

I have three brief questions, Mr. Fane. You spoke of the need for VIA to expand and grow. I think most of us here would probably agree that the one place where growth could be possible is in the corridor. But Mr. Tellier told us that if you're going to run a train in the corridor to carry passengers, and run it at a speed acceptable for passenger service, this will displace, through reduced capacity, four or possibly five heavy freight trains, which he says they cannot afford to do, because that's where they make their money.

Do you dispute that figure—that unless you're willing to run a passenger train at the same slow speeds as freights, it's going to take the place of four or five freight trains?

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Mr. Gary Fane: I think there are two or three answers for that. First, we have to talk about time of day, who should be using the track at what time.

Secondly, a few years ago the figure both companies used to kick around was one or two trains, and now suddenly it's up to five. So I don't know where he's getting that data from.

But I know there's a question of time of day, and obviously there are times when passengers want to travel and don't want to travel.

Definitely there's a debate on how to use the track, and if I'm Mr. Tellier, I'm not going to come in here and say to you, please take my track. Right? He's a businessman; he's an entrepreneur. He's extremely successful. He's a very powerful man. He's not going to come in here and give you the track. If the Government of Canada decides they want to have a rail service, then there has to be a meeting of the minds on distribution of track.

On his exact one for five, when I knew that number three years ago, it used to be one for two or one for three, so I don't know the validity of that number.

Mr. Lee Morrison: Okay. My second question also deals with the potential for expansion. It's a sociological rather than engineering question.

Suppose you do have more trains. Suppose you do make this thing grow and make it more convenient. You still have to get people onto the train. You have to wean them away from the car. Studies that have been done, including by this committee in the past, indicate that may be your toughest hurdle, to get people convinced not to have the convenience of having their car when they leave their home, and getting to exactly where they want to go and not having to change modes of transport somewhere along the line. How are you going to get people to ride these trains if you have them? We don't have this in North America as a social custom.

Mr. Gary Fane: I think the question you've asked is the major hurdle. I think the company, VIA particularly, has to market. If you're bringing people to Toronto or to Montreal, you have to be selling the tourism, what's there. For example, if you're coming to a Montreal Canadiens hockey game or you're going to see the Blue Jays, definitely there's a knack at advertising marketing. That's number one.

Number two, I think the train is and can continue to be price sensitive. Priced right, more people will come.

But I don't know; I don't have a complete answer, sir, for your question. Definitely the railway company, VIA itself, has to figure out how you get more bodies on the train.

Mr. Lee Morrison: Yet right now rail travel is one of the more expensive modes. In fact, it's second only to air travel in cost on a per person per mile basis. Even cars are cheaper, if you shove two people into a car.

Mr. Gary Fane: Yes.

Mr. Lee Morrison: So I think you've almost painted us into a corner—not yourselves but us.

Mr. Gary Fane: Yes.

Mr. Lee Morrison: How do we do that?

Mr. Gary Fane: I haven't spent a lot of time on the costing question, but when you're talking about cost you also have to think about the environmental cost, how many cars we have. It's odd coming from a guy from the auto workers' union.

Mr. Lee Morrison: I was just going to say watch it, fella.

Mr. Gary Fane: No, we think there has to be a balance there.

Mr. Lee Morrison: Yes.

Mr. Gary Fane: Quite candidly, Buzz Hargrove would tell you the same thing. The question is balance. We have to find balance between the different modes of transportation.

[Translation]

Mr. Claude Drouin (Beauce, Lib.): There is something I'd like to understand. Everybody wants to have as much access to the track as possible. CN and CP have more and more freight to move. On the other hand, if VIA has more equipment, it might get more passengers. Did you think about this? How would you manage that? It's hard for me to understand because everybody wants to have as much access as possible to the track.

Some say that the private sector can have some work done at night, but it might cause a problem in some businesses. Did you look at that and did you find a solution? We only have one track and we have a problem. What do you think about that?

[English]

Mr. Tony Wohlfarth: In analysing this problem of access, let's remember that there are not one but two national networks. There's CN's network, and there's CP's network. Our figures indicate that at any given time both of those networks are only being used at between 30% and 40% of capacity.

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Well, I can tell you, an auto plant is not being used today at 30% to 40% of its capacity. It's being used way more, to more like 95% of its capacity.

So we have plenty of scope to grow in terms of capacity on the two—and let's remember, there are two—national networks. Right now VIA is running most of its services on CN track, but there is another national network as well.

The Chairman: Thank you.

Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Mr. Chairman.

Thank you, lady and gentlemen. I have a few questions.

In your estimation, has VIA's management been good management from the point of view of labour? Would you say VIA and VIA management should be part of the solution to passenger rail in Canada, or should we be looking outside of VIA for solutions?

Mr. Gary Fane: I would think they should be part of the solution.

Have they been good management? To be quite candid with you, they've been very tough on us, but we have a respectful relationship with them. The respectful relationship starts with the senior management. Sometimes what happens is that the middle management has had the tough job of figuring out how to operate on the demands they have.

Many of them, if I owned the company myself, I would hire, and probably there are a few I certainly wouldn't. But we definitely have a respectful relationship. Sometimes it takes time to solve problems, but definitely we find solutions.

Mr. Roy Cullen: Do you think management has the capacity to be creative, as creative as rail passenger management has to be in Canada to make it work? Or have they been under certain constraints? Is it a fair assessment to say that they have the capacity to be creative and grow the business so that it's feasible and viable in Canada?

Mr. Gary Fane: I think they've been under great constraints. When I used to go to the VIA building there were seven floors of people working there. Now they're down to two floors. I think they need very good marketing people. I don't know how good the marketing people are that they have now, but I think senior management knows what they're doing, and they seem to be on target.

What used to really make us angry, to be quite candid with you, is that if they were allowed $220 million from the government, at the end of the fiscal year they were giving $20 million back. They did that for a number of years. They gave back money to the government. They were allotted x amount of money and they gave money back.

Mr. Roy Cullen: What is your assessment of the level of morale amongst the employees of VIA Rail? If they can see that the investments haven't been made in the rolling stock and infrastructure, is there a feeling that they're part of a lost cause? What's the state of morale?

Mr. Gary Fane: The state of morale is not good presently. There's frustration. People are definitely tired of cutbacks. People want to have a future in the railway. They're proud of serving the customer. They're proud of their job, but at the same time, they're frustrated, because they look at the future.

VIA Rail has done its own customer service surveys with the membership. We were quite surprised that the customer service was so high, because being in the union business, when people have a problem, they come to talk to us. It would be much better if people knew they had a future.

Mr. Roy Cullen: That leads in, Mr. Chairman, to my last question for this round.

Mr. Fane, do you think VIA employees under certain circumstances would have any interest in being part of, let's say, an employee-leveraged buyout?

Mr. Gary Fane: I would be very surprised, sir, if they did. Basically, most VIA employees come from CN Rail. That's where they started their job. Most VIA employees depend on their union to make sure they have quality working conditions and decent pay.

I'm a little bit surprised.... I'm not suggesting to you that if you were selling shares tomorrow we would not have many employees buy them—many employees bought CN shares, for example—but I don't think as a collectivity they would be doing that.

Mr. Roy Cullen: Thank you.

The Chairman: I don't usually do this, but the question is important. Do you think they would consider buying into a partnership as opposed to buying outright?

Mr. Gary Fane: Could you help me a little more with your question? I'm not sure what type of partnership you're talking about.

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The Chairman: If there are private entrepreneurs who are coming into partnership with VIA, do you think the employees would consider a third partner, even if it's a minor partner?

Mr. Tony Wohlfarth: Mr. Chairperson, there'd be absolutely no points in employee ownership under those circumstances. You would go to a private sector partnership to bring new capital in. So you have the new capital brought into the equation and now you want to bring the employees' capital in.

Our position on employees involved in worker ownership is that they already have a significant equity stake in the company. They have their homes that are at stake, their homes in places like Montreal and Winnipeg. They have their pensions tied up with that company. They have all of their benefit plans, all of their seniority-related benefits like vacation and so forth, tied up with that company. They have a substantial investment at stake.

The Chairman: Okay.

Mr. Tony Wohlfarth: And the problem we have with a leveraged buyout is that it then exposes even more of their meagre savings to risk. If you bring in a private sector partner, you have the capital you need. You don't need the workers' capital.

The Chairman: Mr. Bailey.

Mr. Roy Bailey (Souris—Moose Mountain, Ref.): Thank you, Mr. Chairman.

We're here discussing passenger rail, and it's just of interest to note that where my colleague and I come from, by the year 2000 there'll be enough rail pulled out of my constituency and his constituency to lay track from Windsor right through to Montreal. So there, we'll give it to you and you can put VIA on it.

Some hon. members: Oh, oh.

Mr. Roy Bailey: They'd have their own track and they wouldn't have to bother with CN and CP at all.

I might add that we've paid for that railway; my ancestors have paid for it. We have over 1,000 miles and more that are going to disappear.

But to get to VIA itself, VIA is sick right now, and you'll admit that. It's not in very good shape. We just defeated a bill on euthanasia in the House—

Some hon. members: Oh, oh.

Mr. Roy Bailey: —and I suppose the point is that if the government refused to give any further funding we'd be guilty of the very same thing that we voted against.

On the other hand, we recognize one thing: the most feasible place is the core service. And as for what you're saying and what the president of CN said, I have some difficulties with it, because I think CN made a good presentation, as you have.

The question is basically the following. We can talk all you want about it in this committee, but sooner or later...the longer we procrastinate, the longer we don't make a decision, the sicker the railway gets. And it will get so sick that any amount of capital going into it won't revive its life. It'll be dead. So whatever we do here—and you've brought your suggestions—it seems to me that we had better do something pretty quickly.

And if we can't do it...it's going to take a massive infusion of funds. There's no question about that. Quite frankly, I don't think the government's quite prepared to do that right now. So here's my question: without a mass infusion of funds how are they going to limp along until they do get some funds?

Mr. Gary Fane: If the government makes no decision, sir, they'll have decided to kill it. Let's not fool ourselves here. It cannot be cut down to the bone any further. It cannot last the way it is now. How long? Two, three, four years? Maybe Mr. Ivany can tell you that. It's probably the type of question a president of a railway doesn't want to be asked and doesn't want to answer. But quite candidly, if the government decides...I think your work here will be done by maybe the summer or the fall. The government has to make a decision. No decision means they've decided.

Mr. Roy Bailey: This is my last question, then, Mr. Chairman. Then euthanasia would come into the act and all you'd have left is scraps and pieces, and probably you'd have nothing left to do with them except go with the Rocky Mountaineer and the other private firms, and those that are mandatory would be to the areas of Churchill, the Gaspé and so on, which the government would have to operate because it doesn't offer any other transportation services.

So unless there's a fund...and I don't know whether I'm prepared to go with that right now. You would have to admit that this is a very serious step. One hundred and fifty years ago, or almost that, we were big on railways, the dream, Canada's dream, “we're moving freight”. When I was a boy, the only way a guy could get out of town in the winter was by rail and so on. And now? My kids have never seen a passenger train.

Are we going to revive it enough? That's my question. If you don't save the corridor, forget about it nationally.

• 1615

Mr. Gary Fane: Quite candidly, I think you have to give VIA a long-term commitment first. This idea of the Department of Transport being on the fifth page of the pack of demands when it comes to sitting in cabinet.... They cannot build for the long term unless they have long-term planning, and long-term planning means long-term financing. That's why our suggestion was to start with the crown corporation approach.

Mr. Roy Bailey: Okay, but I still give you that railway: make a separate track from Windsor to Montreal.

The Chairman: Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): Thank you very much. I like your charts here, but we're talking about a viable rail system. It almost looks like we're dreaming in technicolour here if you look at the chart. The operating expenses of VIA Rail in 1997 were $396 million, and the revenues were only $190 million. We're not even close to a viable operation.

Mr. Gary Fane: Yes, sir, but to answer you, Mr. Casey, Mr. Tellier said it all right in his opening remarks. There is not one railway system, in any country, in which the government doesn't take an active role in financing. Mr. Tellier says that right in his brief, and he then goes on and tells you the good, the bad and the ugly of them. And that's including, for example, the United States. With $260 million, Amtrak only gets $1 billion a year from the federal government, and never mind how much they get from the states.

You have to decide whether or not you want a rail service, and that means with those many government expenditures. I know they've been cutting down quite a bit, but it also means there has to be a dedication to putting some money towards this transportation mode, or else it won't last. We do it already on roads.

Mr. Bill Casey: So you agree with Mr. Tellier on that: it's not possible to have a stand-alone, viable passenger rail service.

Mr. Gary Fane: Yes.

Mr. Bill Casey: Do you know any country that has one close to being viable?

Mr. Tony Wohlfarth: No, we don't. And let me just add by way of invitation that, as Canada's main transportation union, we are members of a federation that's called the International Transport Workers Federation, which is based in London. I understand this committee is travelling to London, so while you are there, it would be an opportune time to put that question to an organization that represents railway workers and transportation workers from about 140 countries. But they will give you the same answer: that there is no viable passenger rail service without government support.

As Mr. Fane has already indicated, you are, willy-nilly, already subsidizing air travel. You are already, willy-nilly, subsidizing road travel, which everybody seems to be enamoured with. The subsidies are there. So the question is not whether you subsidize, it's a question of how you subsidize.

Mr. Bill Casey: The subsidies here range from $388 million down to $228 million. Assuming that VIA had access to rail, to tracks, and could develop a marketing plan, what do you see as a realistic level of government funding?

Mr. Tony Wohlfarth: My understanding is that VIA came before this committee with a simple proposition, Mr. Casey. Their simple proposition was to never mind ten years of federal government cutbacks, just give them what they're getting now as a subsidy, but lock it in at that number because it's going to allow them to replace their aging rolling stock. If you look at their numbers, you'll see that in 1997 VIA spent the princely sum of $16 million on capital investment. Now, $16 million is not enough to replace what was damaged in the ice storm. Just give them a locked-in commitment and VIA can grow its business.

So the answer would be to lock in for the long term what VIA is getting right now.

Mr. Bill Casey: Do you agree with their position?

Mr. Tony Wohlfarth: Yes, we do share that perspective.

The Chairman: Mr. Grose.

Mr. Ivan Grose (Oshawa, Lib.): Thank you, Mr. Chairman. I have a couple of points here, and I guess I'll address them to Mr. Fane.

Under other environmental considerations, VIA Rail's transcontinental passenger rail service uses straight-dump toilets. I find that absolutely appalling. For anyone who knows what my business was in my real life, I wish I had been able to dump my trucks as I went down the highway. It would have saved me a lot of dumping fees. You can leave that one with me and I'll do something about it.

• 1620

I have something here I'd like to read to you:

An electrified high-speed rail link will not only reduce emissions generated by this mode of transport, but will also divert traffic from other emission-producing modes of transportation.

...

The Government of Canada should, as a priority, establish VIA Rail as an independent crown corporation with a long-term funding commitment and a mandate to grow passenger rail service in Canada.

...

The Government of Canada should support and encourage plans to build a high speed dedicated electric rail link in the Quebec City to Toronto corridor.

You're going to have a tough job selling that to the brothers in Oshawa, and you're going to have to do it because I'm sure as hell not going to try.

It's statements like that I think really....I know you're between a rock and a hard place, I understand that, and you have a huge, powerful, good union, but you've put yourself in a position where you lose some credibility here.

I'm absolutely opposed, on general principles, to government subsidizing rail service. I don't believe you'll ever get people back on the railroad. I'm old enough to remember when that was the way you went. As a little kid, I stood by the side of the tracks and watched the big steam engines come in—it was how close could you stand to them. In any case, I don't think you're going to coax people back to it, no matter what you do.

Mr. Gary Fane: Okay, so let me try to answer you, Mr. Grose. First of all, you and I share one thing. We are both appalled about how the toilets work on transcontinental service, but that's not the question here.

When you talk about our organization being between a rock and a hard place, this paper has been approved by the executive of our union and the president of our union. He was expected to be here to deliver it. Quite candidly, we think if CN, CP and VIA Rail can work out a better arrangement to make sure passenger rail moves properly....

In the auto union where we make cars, we have the largest percentage of our members. We also represent people in the airlines who would probably like to see the corridor not working so they'd have more Montreal-Ottawa-Toronto traffic. But we think it makes perfect sense to have a balance between the modes of transportation, especially when you talk about the environmental damage or lack of damage when you're using the railway. To us it just makes perfect sense.

Will we ever get the railway to look like it did in the past? Maybe not. But if you say you're opposed to putting government money in here, what you're really saying is who will take care of Churchill, who will take care of the Gaspé, who will take care of Prince Rupert? Does the government have no responsibility there?

On the question of the Montreal corridor, what will you do? Will you only run it if it makes money? If you only run it if makes money, then you might not be running it. I don't know if you've driven the 401 lately, but I spend too much time on it.

Mr. Ivan Grose: Twice a week.

Mr. Gary Fane: So you and I'll be there together, and a lot more traffic. Quite candidly, we think the role of government is to dictate proper public policy and make sure we have a rail service.

Mr. Ivan Grose: One final point, and I know you can't do anything about it, but for me to get here for Parliament opening at 11 a.m. on Mondays, I have to leave Oshawa at 4 p.m. Sunday. Then I stand on the platform in Kingston for an hour next to the potato chip machine. That's all there is, there's no snack bar, no bar or anything. That's not my idea of how to travel.

Mr. Gary Fane: But, Mr. Grose, you have hit it right on the nose. That's the only way you can get here because VIA Rail doesn't have enough frequency. Why? CN and CP say, sorry, we're not going to give you the frequency; we're not going to let you use the track. You've hit it right there. You should be able to get back and forth.

When I go from Montreal to Ottawa, I should be able to come, do an hour and a half to two hours of business, get on a train home and not have to wait. When I take the train from Toronto to Montreal, there should be four to six non-stop runs a day there, not one or two.

Mr. Ivan Grose: Yes, but here's one of the problems—

The Chairman: Very briefly, Mr. Grose.

Mr. Ivan Grose: Thank you.

The Chairman: Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thanks, Mr. Chairman.

Just to carry on where Ivan's going with this, quite frankly I disagree with him a wee bit because I think there is a reason for passenger rail. Every eight minutes in Canada right now there's somebody turning 50, and that's going to change to 60 in another eight years.

• 1625

A voice: So?

I believe right now there are three points you're going to have to deal with. We need a detailed operating plan that is basically going to take in scheduling. You need the management structure of this—however it's going to be set up has to be changed, and it has to allow coordinated decision making—and of course you need new rolling stock.

I see by your presentation...on page 4 you had a chart, table I. If you take a look at the number of passengers from 1992 to 1996, it's not anything really spectacular; we've got 64,000 more on there. Then the number of passengers per train mile is nothing really spectacular, because we just went from 126 to 138.

What I do find spectacular is the passenger miles, because over a four-year period, you've increased that by 75,141—in other words, 18,785 miles a year. I guess my question is how? It sounds as if we've not necessarily turned the clock back, but wound it up.

Mr. Tony Wohlfarth: I'm not sure what interpretation you're putting on those figures. I'll tell you the interpretation we're putting on the figures, and that is, the trains are operating with more passengers on them.

Mr. Murray Calder: Yes, but they're running more miles right now, too, right? Either that's more frequency on the tracks or you have actually increased the routes that the trains run. Which is it?

Mr. Gary Fane: Let me try to answer that, because when we went through all those figures we had this great debate with the company: were they cutting service, or were they adding frequency? Just before these things happened, there were a number of places, for example western Canada, where we know they cut service, for example—specifically for Winnipeg-Edmonton.

Here the company would be saying to you, “What we've done is we've started to add minimally more frequency”. That's how they get the passenger miles. We're not sure, to be very honest with you, how much of that we agree with. It's a little debate we've been having with them. But definitely the passenger miles come right from corporate figures, and they are right.

Mr. Murray Calder: Okay.

The Chairman: Excuse me, just to clarify, are we not trying to say here “passenger miles”, indicating that individual passengers are taking longer trips? That's right—more miles per passenger. Usually that's the way it's interpreted.

Mr. Murray Calder: Okay, great.

The next thing I would like to take a look at kind of works into both the detailed operating plan and management structure. Norfolk Southern right now is working on a track-sharing philosophy—in other words, common running rights. If we're going to deal with passengers, or what I refer to as people freight, it's fast freight. Therefore we need high-speed rail; we need concurve turns and everything else like that, to deal with the higher-speed train. Obviously if there is slower freight your scheduling problem that you were talking about, when you run the slower freights as opposed to running the passenger.... Have you followed how that's working—the Norfolk Southern example? If so, do you have any comments on that?

Mr. Gary Fane: No, Mr. Calder. I'm sorry, we haven't had the pleasure of following that one yet, and I can't give you a concrete answer on that one.

Mr. Murray Calder: It would seem to be worth while investigating. I'm going to.

The Chairman: If you decide to do it, and wish to present a paper, it will be received.

Mr. Gary Fane: I'll definitely find out.

The Chairman: Ms. Desjarlais.

Ms. Bev Desjarlais: First of all, you mentioned that there are U.S. rail lines that are going to free access. How exactly will that work?

Mr. Bill Coolen (Secretary-Treasurer, National Automobile, Aerospace, Transportation and General Workers Union of Canada (CAW)): The free access is way back to the freedom of the movement. If I'm the railroad and I own the line, and you're my competing railroad, you have the access to my lines.

Ms. Bev Desjarlais: Okay—sort of like free access to the phone lines. Everybody gets the opportunity to use them, no matter who laid them.

Mr. Bill Coolen: Yes, that's exactly it.

Ms. Bev Desjarlais: Of the list that you have on page 9, what do you see as the most importance in order to see VIA's viability? Did you list them in the order you see as most important?

• 1630

Mr. Tony Wohlfarth: No, we haven't. I think if we have to point out one issue for the committee that is absolutely vital, one issue that we as the main union representing VIA Rail workers will be looking to this committee for leadership on, it's the question of access. It's the question of confronting CN and CP and saying there has to be a better arrangement to allow a greater frequency of passenger rail service while at the same time allowing you to operate your freight business.

We think there can be a much better balance there than what's happening right now.

Ms. Bev Desjarlais: Just one more quick question. I'll make it really quick.

Mr. Gary Fane: Excuse me, I have more on your earlier question on free access. You have to understand that you now have CN buying the Illinois Central. The argument in the States is free access, meaning that if I own a piece of railway equipment, I can get it on that railway line. The government will guarantee that I can move it up and down that line.

It's kind of like open skies with the airlines. On the road, it's like freedom to move. If you own a rig, we're going to let you drive it up and down.

So free access really, especially with CN sending so much of their traffic north and south, creates a major new competitor that they haven't had to deal with in the past.

Ms. Bev Desjarlais: Okay, just one question. Mr. Bailey mentioned the amount of track that's being lifted in western Canada. We both are greatly opposed to this happening, for obvious reasons. As for the track that's getting lifted, is it being moved anywhere else and being used?

Mr. Gary Fane: No, it's usually sold. The major railways sell it two different ways. They take it up, rip it up, and sell it as a whole, or they'll give it to you cheaper if you want to go and rip it up.

Ms. Bev Desjarlais: It's just used as scrap.

Mr. Gary Fane: Well, they use it elsewhere, export it, or sell it as scrap.

Ms. Bev Desjarlais: Is it being used elsewhere as track?

Mr. Gary Fane: No, not to our knowledge.

Mr. Roy Bailey: Could I interject in this? It's useful too. As for the good track, if it's good rail, CP will take all that rail and use it as replacement rail and stock it.

Some of the rail at the tail end of the lines is sold. That rail goes directly to Interprovincial Steel. It's too light a rail to use and it's too old.

There are two ends: keep it or send it to refineries.

The Chairman: Ms. Desjarlais, did you have another question?

I'll just make a comment that no one is better positioned to identify down time than your members. Whatever presentations we are sent will be received and considered. I can't be clearer than that.

Mr. Keyes.

Mr. Stan Keyes: Thank you, Mr. Chairman.

I look forward to any detail that the CAW can bring forward to this committee. Of course, the easiest thing in the world that anyone, including the CAW, can do is tell the government what it should do. Unfortunately, the CAW representatives here before us today, all five of them in fact, haven't been able to tell us—at least I haven't been able to glean any information about this—how these lofty goals can be achieved.

For example, Mr. Fane, if I could ask you a few short questions, how does the CAW suggest the better utilization of existing rights of way in the greater Vancouver area?

Mr. Gary Fane: Do you want to answer that one?

Mr. Tony Wohlfarth: Sure.

First, we know that there is a problem of congestion in the greater Vancouver area. Let's start from that point of departure.

Mr. Stan Keyes: Agreed.

Mr. Tony Wohlfarth: When you look at the public transit situation in Vancouver, you see two problems. One is that you have a non-integrated system. Even the Globe and Mail has talked about the lack of integration in that system. You also have under-serviced communities. That light rail system was built by our members, by the way, who work for Bombardier. There are bedroom communities that this doesn't serve.

• 1635

Mr. Stan Keyes: I realize that. You've said all that on page 8. But I'm asking how.

You say:

A new rail link to relieve congestion for commuters and better utilize existing right of ways in the Greater Vancouver area;

How do we better utilize these existing rights of way?

Mr. Tony Wohlfarth: We're suggesting that there are existing tracks, just as there are from downtown Toronto to Pearson Airport that can be used.

Mr. Stan Keyes: Can you identify these?

Mr. Tony Wohlfarth: If you want us to identify them, we'll be happy to identify them.

Mr. Stan Keyes: If you could forward that information, that would be great.

You also say here, “A high speed rail link from downtown to Pearson Airport in Toronto”. Who would pay for the infrastructure and the train sets?

Mr. Tony Wohlfarth: What we're suggesting, Mr. Keyes, is that VIA be given the first option, first right, to operate those services.

The kinds of arrangements you're talking about would have to be commercial arrangements worked out by contract between the parties. However, it would be a viable service. When you're in London, England, you can check out the viable service that's been set up between London Heathrow and central London.

Mr. Stan Keyes: This is what I'm getting to. I think it's pretty obvious that a rail link between Pearson Airport and downtown Toronto would be a hell of a good idea, but what we're trying to identify here—and maybe CAW can help us—is where do you build it, who do you bring on board to build it, and who pays for its construction?

What are your ideas on that? Should the government construct this line? Should we go into partnership with the private sector? Should the private sector do this line and then lease it out to VIA to manage?

Mr. Tony Wohlfarth: First of all, there isn't much infrastructure to be built. There is an existing line.

Mr. Stan Keyes: A high-speed rail link?

Mr. Tony Wohlfarth: There is an existing rail link, operated for freight purposes, from Union Station to a point that is about half a kilometre from Pearson Airport.

Mr. Stan Keyes: How fast can a train go on that track, do you think? You called it a high-speed rail link.

Mr. Tony Wohlfarth: The answer would be to just upgrade the track.

Mr. Stan Keyes: Oh. So it's not a high-speed rail link. It's something you'd have to upgrade.

Mr. Tony Wohlfarth: But it would be a dedicated service that we think would be viable on that line. It would be a way to expand, not contract, passenger rail service.

Mr. Stan Keyes: I'll come back to my original question: who's going to upgrade it? Who's going to pay for its upgrade?

Mr. Tony Wohlfarth: We've suggested a couple of options there. One is that by giving VIA a long-term funding commitment, they, as a crown corporation, could make that commitment. The other is that a partnership between the public sector and private sector would operate it.

Mr. Stan Keyes: You favour the latter idea, that possible partnership?

Mr. Tony Wohlfarth: We've raised that, Mr. Keyes, as a option, an option we would consider as being something that would be worth undertaking.

Mr. Stan Keyes: In your estimation, how many people would use expanded VIA Rail services between Vancouver, Banff, and Jasper?

Mr. Bill Coolen: In response to that, last year, when VIA tried to market extra frequencies, in that part of the country they sold out everything. If you call today to get yourself a nice bedroom on that service for this summer, you won't get it, because it's already sold. It's sold out. You might get it two years from now, but right now it's sold out.

If they could increase their frequencies by doubling them, they would double the amount of people on those trains—even with the Asian flu in Korea and Japan.

Mr. Stan Keyes: Are you talking about tourist-type—

Mr. Bill Coolen: Yes. That is a basic tourist service.

Mr. Stan Keyes: That's what you're calling for there, a tourist-type service.

Mr. Bill Coolen: Oh, yes. That could sell itself without even being marketed.

Mr. Stan Keyes: There's no doubt about that. I mean, we have living proof and examples in the country, especially with the Rocky Mountaineer, where the tourism industry is booming and we can supply a terrific ride for tourists, and even Canadians, through the Rockies.

That isn't so much a concern of ours as how you move passengers in the corridor. Or do we have a national passenger rail transportation system that goes from one end of the country to the other? Those are the questions we're wrestling with today.

As you indicated, better utilization of existing...or any kind of information you can provide for me, and ultimately this committee, on how we go about paying for these things. As Ms. Desjarlais started to touch on, it's terrific for you to suggest what's required, to say that we need rolling stock. There's no question of that. But what's the cost? It's $700 million. Well, that makes you stop short. Who pays that $700 million for the rolling stock? This is what we're interested in learning. We know the questions. It's the answers we're seeking.

• 1640

Mr. Gary Fane: Let me try to answer you, Mr. Keyes.

First, on the first question you asked on more utilization of the track, we'll be happy to provide you with a printed copy of a process that we think will help the government come to terms with this question. We're not naive. We're one of many groups. We're not trying to tell the government anything at all; we're politely trying to ask. We see this as an important service that has been drastically cut back and can't last if the government does nothing.

Quite candidly, as a member of government...government makes decisions every day on where its expenditures will be made and how much money will be spent on anything from transfer payments to hospitals. Somewhere along the line, the question of whether or not transportation is on that list has to come up.

To answer your question, if it is on that list, we're very interested in any way that it can be done, and that includes partnership. Perhaps ten years ago, you wouldn't have heard us saying the word “partnership”. You hear us saying that word now, because we've watched the balancing of the budget—if I could use that term—and the importance of expenditures. We think that if nothing is done, you won't have to debate this question five or ten years from now. It will be finished.

So we're not trying to tell you, we're trying to ask you, and I'm sure you know your responsibility as well as anybody else does on where to come to conclusions.

Am I going to tell you that you should raise taxes to do this? No, I'm not going to tell you that. The Government of Canada has some constraints that it lives in, like we all do. Can you find a private partnership? I'm sure that if there are people in the private sector who think they can make money on this, they will be there. We represent people like Bombardier also, and quite candidly, they said they've been talking about high-speed rail for five or ten years. I don't even know if they're going to be here in front of this committee, but we had a responsibility to do exactly what we've done.

So I don't have all the money answers for you, but we will give you some suggestions on process, on how to resolve the track question.

Mr. Stan Keyes: If I could get some of that information, Mr. Chairman, I would very much appreciate it.

The Chairman: Just direct it to the clerk of the committee and it will be dispersed to all members.

[Translation]

Mr. Dubé.

Mr. Antoine Dubé (Lévis, BQ): Going through your brief, it is easy to see that the cuts have mostly affected the number of employees. The figures speak for themselves. It's in this area that the cuts have been felt.

Now that we have reached zero deficit, there is an interesting public debate. People are talking about the future. When we were trying to reduce the deficit, people did not mind talking about cuts.

I will speak only once, but I have three points to make. I think that if we want more people to get on trains, we have to improve their frequency. Where I live, on the Lévis line, there is one train once a day in one direction and another one in the other. It's not much. A train goes by at 5 o'clock and at 11 o'clock. People tell us that they would take the train more often if there were more of them.

However, if we have more trains, the problem is then how can they share the corridor. I think that if we don't want to build side tracks, we could maintain those we already have. I'll give you two examples. In Lévis one of them has just been abandoned. If VIA trains could use the side track, the freight trains could continue on their way, but this solution has been set aside. I would like to know what you think about that.

Second, if we want more people to use the railway, they should have access to trains right in the center of our major cities, at least. Right now, in my area, a station is being built 30 km west of the center of town. Every single study which has been done, including those by VIA, indicate that because of that, the number of passengers is going to decrease.

• 1645

Also, to get more people on trains, they have to be faster. People like Bombardier believe that we need an enormous train, but those who know the railway business are saying that between Québec and Montréal, the main problem is the fact that the tracks are not straight enough. Maybe they are appropriate and solid enough to move freight, but they are not straight enough for trains to run at high speed.

So regarding access to the corridor, do you think we should maintain the existing side tracks instead of building new ones? Do you think there should be better access to trains, right from the centers of our main cities? And finally, are you in favour of straightening up our tracks to allow high speed trains to run, which would increase the number of passengers?

If they had a choice, people in my area would take the train rather than the bus. It's more secure and more comfortable. These are the reasons given to me by the people I talk to. What do you think?

[English]

Mr. Gary Fane: Mr. Dubé, I agree with most of your observations. We definitely think that ridership will grow if the frequency is there.

On the technicality of how fast the train can go with the present track, I don't know the technicalities on that. But I do know the problem on the corridor and the use of the corridor will be exactly the same problem for Mr. Tellier, or for Mr. O'Brien or CP Rail. You have to resolve the access question not only on one part of the rail but on the whole rail, and I believe that the parties could do that if they were sitting down bargaining and the Government of Canada was saying we want a solution here. It might also include some provincial governments. I don't know, I haven't thought about it that far. But somebody has to say we need a solution.

We represent 8,000 people at CN. We're not interested in CN losing business, but when we look at how much of the track is used—30% to 40% of the track—we find absolutely appalling the idea that a solution can't be found.

If the judge walked in the room and put all the players in the room and said, you're going to decide or I'll decide for you, I bet you that smart businessmen like the presidents of CN and VIA and CP would have a solution before the judge decided. And that's the challenge we're going to put for them, because we have no interest in hurting the freight railway; we represent lots of people there. But this is the only country I have ever been in where the passenger sits on the side of the rail watching for the 100 cars of the freight to go by, and that's what happens in this country.

Ask who has the right of way on the track. The times I've been on the train, I've been wondering why somebody was kind enough to bring me another drink as I sat there watching the freight train go by.

The Chairman: Excuse me, Mr. Fane. Are you saying that the priority should be given to the passengers?

Mr. Gary Fane: No. I'm saying, sir, there has to be a balance. I'm saying that the time of day and the frequencies all add into that, just as the CN shipping schedule also has something to do with that. I'm not picking one or the other, but I'm saying intelligent businessmen can come to a conclusion of what's in their best interest and that of the country.

The Chairman: Thank you.

Pierre.

[Translation]

Mr. Pierre Rouleau (Vice-president, National Council 4000, CAW, Montreal): Personally I work on trains and I often experience that kind of thing: we are delayed by freight trains which are ahead or behind us and which have the right to go before us. What Gary just said is right. We give passengers one more drink.

As far as having access from downtown, we have a perfect example here, in Ottawa. Fifteen years ago, if my memory serves me right, we had access to the trains right in the middle of town. There was a political decision, or maybe it was a company's decision, and the station was built outside the city. Access to the trains is not as easy or as quick any more.

To have fast links, we need better access to the track. To do that, maybe we need a third party which would manage the track and say to CN, CP and VIA: I am the one who manages the track and I will give you access based on my decision or on you needs.

Mr. Antoine Dubé: Would there be an additional side track?

• 1650

Mr. Pierre Rouleau: Between Montreal and Toronto, there are two tracks: the CN one and the CP one. Maybe freight trains could all travel on CP's track while VIA trains would take CN's? That might be a solution.

The Chairman: Thank you.

[English]

The Chairman: We will now proceed to the second round and I will do my utmost to keep everyone at three minutes. That's the question and the answer in three minutes. I have Mr. Cullen, Morrison, Desjarlais and Bailey. I can mention that every member has had a question already.

Mr. Cullen.

Mr. Roy Cullen: Thank you, Mr. Chairman.

Mr. Fane, maybe for this first question you could you just give me a yes or no answer, because I have some other questions. When you submit to the chair some ideas on how the infrastructure could be more productively shared, will that also contemplate higher-speed passenger trains or high-speed passenger trains, because that tends to put more pressure on the capacity?

But I think what you said earlier is we need more frequency and faster trains, so that compounds the capacity question. Could you deal with that when you submit those remarks?

Mr. Gary Fane: Yes.

Mr. Roy Cullen: Thank you.

It hasn't come up to my knowledge yet, but someone along the way, I'm sure, will raise the question of labour productivity, flexible labour contract. It seems to me that VIA is running a pretty tight ship. Can you give the committee any wisdom on this, on, for instance, how productive is the labour force at VIA? Do you have any comparisons, etc.? How flexible is the contract?

Mr. Gary Fane: Let me try to answer your question right up.

As I mentioned earlier, people at VIA are paid approximately 4% less. In my estimation—and I'm in charge of the bargaining in all three railways—the bargaining at VIA Rail is going better than the bargaining, for example, at CN or CP. This is not to take away from CP, they're just last on the list.

We are expecting to sign a collective agreement at VIA without a major strike. We are planning right now to have a major strike at CN.

Mr. Roy Cullen: Is VIA giving away too much or—

Mr. Gary Fane: No. Let me tell you what that means. VIA hasn't given away anything yet, but quite candidly, given the labour climate at CN, unfortunately in our organization we haven't been able to find a collective agreement. Sooner or later bargaining comes to a halt and something has to happen.

I want you to know that it wasn't VIA who locked us out last time. It was CN, Mr. Tellier, who locked us out. We expect him to do the same again.

The Chairman: We won't discuss that here.

Mr. Gary Fane: Okay, sir. I appreciate that.

If there are ways that the union and the employees together can agree to be more productive at VIA and it enhances their long-term existence, they'll have a very open mind about that. This is compared to a scenario at CN where they're being more productive to buy the Illinois Central, which if you own shares is a good thing.

The Chairman: Mr. Morrison.

Mr. Lee Morrison: This is more of an interjection than a question. You and your colleagues have both made reference to the fact that we shouldn't be too concerned about rail subsidies because other modes of transport are also subsidized, and I question that as a matter of fact. The ports, due to legislation that is recently passed, are not only going to be self-supporting, they're going to put money into the public treasury. And it's the same thing with airports. Roads are already contributing far more to public treasuries, both provincially and federally, than is being put back into infrastructure.

So, in effect, the way I look at it, VIA within a year or a year and a half is going to end up being the only subsidized mode of transportation we have and the other modes are going to be putting money into general revenues. So I think to maintain your own credibility you shouldn't have that in your presentation, because it's simply untrue.

I know the capital cost of the roads, the ports and the airports was borne by the taxpayers, but so was that of the railroads. We built that CPR, by God; they didn't get that money out from under a tree. So I just wish that you perhaps would not take that tack. If you have a comment—

Mr. Gary Fane: We do have a comment, as we probably have a disagreement on this one, sir. But I'll let my friend Tony answer the first part and then I'll see if I can answer the second.

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Mr. Tony Wohlfarth: When we talked about subsidies we talked both about direct and indirect. Yes, it's largely indirect in the case of the other modes, and yes, it's largely on the capital side. But one shouldn't underestimate the impact of a road that is built and the cost of that road that is built at the expense of the public sector. One shouldn't underestimate the impact of the airports and the entire infrastructure that was built at the expense of the public taxpayer.

So yes, those other modes are publicly subsidized, and we stand by that statement, sir.

Mr. Lee Morrison: So were the railroads. The railroads were built with public funds, both CP and CN. In fact, it was quite profitable to build the CN because not only did they get a subsidy for building it but they were allotted millions of acres of public land that they, in turn, were able to turn around and sell. They made money on the venture.

Mr. Gary Fane: We wouldn't disagree with you that CN—

Mr. Lee Morrison: This is CP—

Mr. Gary Fane: —has been well subsidized. Is it only CP you're talking about?

Mr. Lee Morrison: Yes, the land. They're the ones that got the boodle, 26 million acres.

Mr. Gary Fane: Yes.

The Chairman: Will we agree that everybody got help from the taxpayers?

We'll move on to Ms. Desjarlais.

Mr. Gary Fane: Why don't we do it the other way? We'll agree that the governments were doing a good job on it.

Ms. Bev Desjarlais: We will agree that everybody got help from the taxpayers, in my view. Especially the cost of highways is extremely wicked. It's exorbitant. To not have some opportunity to ease the possibility of building more and more highways, especially...you mention the 401. I'm not on it often, thank God. It's hell. I don't know how you do it every day, and quite frankly, I think anybody driving that road should be here saying let's get some more rail service.

It is not necessarily to get cars off the road but to get some trucks off the road. The numbers are out of this world. I've been on that road, as well, in New Brunswick.

I just want to understand. When you talked about having the opportunity to access the tourist section, was part of the intent to help make VIA viable and give it some income that's on an ongoing basis?

I also want to let you know that usage of that rail, that tourist section there, the Calgary-Banff stretch, takes cars away from people trying to get to Churchill on a day-by-day basis, because they can't free up the cars for people to get to Churchill. People for whom that's the only access in can't even get there because we don't have the rolling stock.

I have a question. Were we not going to get some information from CN or CP on the rail capacity? I thought we discussed that at a previous meeting and they were going to give us some information as to rail capacity. Was that not part of something we were going to receive?

The Chairman: We'll check the minutes and make requests. We will make an official request for information.

Ms. Bev Desjarlais: Okay.

The Chairman: We should have a meeting to do just that.

Ms. Bev Desjarlais: I have another comment.

I agree with Mr. Calder. Everybody is getting older and I think people will go back to the rail. I haven't been on it often but it's wonderful. I just think the marketing is not there and I think there needs to be a greater push.

Mr. Roy Bailey: You were talking about passenger rail, Mr. Chairman, and it seems there's a difference in our discussion between passenger rail and freight, in this respect: if you're going to have more frequency, if you're going to have more people riding the train, if you're going to make it a truly Canadian enterprise, why are we sitting here talking when we seem to ignore the other partners to make passenger rail a viable thing?

For instance, right in the corridor we have the biggest percentage of the people living in Canada. The cities need to become part of this. The municipalities need to become part of this. The provinces need to become part of this.

We simply cannot go out and plan this without involving the other actors in the play. Up to date, I don't think we've done that. I really don't think we have. Before VIA starts selling its program to increase its passengers, it seems to me they have to get some key players on board.

I talked at length last weekend with a great supporter of the GO train and we had a big discussion. The interesting thing is I tried to get some questions in relationship to that. We don't do any planning here.

I am talking about VIA Rail and the other players. I think we are missing the boat here. We should be taking a look at planning with the provinces—planning. We're not planning with them at all.

• 1700

I don't think VIA Rail has ever gone to the provincial government in Quebec or in Ontario and asked them to help us to plan so we can meet some of these needs of the future.

Mr. Gary Fane: To answer your question, sir, I don't know the answer. But I do know one thing. In the past, we've certainly gone to the provincial government in Quebec. We've been there more than once. We meet with them often about transportation and rail, including CN and CP and VIA, but I don't know what VIA has done. You have no disagreement from us that there are a lot of actors who should be involved, the major cities, the major provinces. We have no disagreement with that.

The Chairman: Mr. Keyes.

Mr. Stan Keyes: I don't think, Roy, there's any boat being missed here at all. I think what it boils down to is a matter of money. If we're going to put passenger rail into any kind of existence in this country, it has to start in the corridor, because that's where the people are. The same is true of Europe, where there are a lot of people. But if we're talking about it being a matter of money, let's remind ourselves of what Mr. Tellier said back on March 11, when he came before our committee. He said an additional four passenger trains per day operating in the Toronto-Montreal-Toronto corridor would consume capacity equal to as many as 20 additional freight trains.

Twenty additional freight trains—that means, for the CAW, a very awkward position because the CAW, remember, represents 15,000 workers at CN and CP, but only 2,300 at VIA Rail. They're here to represent VIA Rail, but not as much as they'd probably like to represent VIA Rail, because for every four of those freight trains Mr. Tellier is talking about, losing 20 additional freight trains by putting four more passenger trains on a Montreal-Toronto run means that literally hundreds, if not thousands, of jobs are threatened in the freight industry between those two cities.

Am I wrong?

Mr. Gary Fane: I think you're wrong, Mr. Keyes. I think you're wrong. I think you bought everything Mr. Tellier.... You should have him come here and prove those numbers. I'm quite candid with you. You should have a third party arbitrate this question, because I think you're wrong.

Yes, we represent all three railways—

Mr. Stan Keyes: Prove it wrong to me. Prove me wrong. I invite you to prove me wrong.

Mr. Gary Fane: I ask you to have him prove he is right to you. I ask him to prove he is right.

Mr. Stan Keyes: No, no, no. This is not a game. This gentleman came here and gave evidence to this committee in which he said that four additional passenger trains would consume equal capacity to twenty additional freight trains. Now, if you can prove him wrong, it's up to you to do so.

Mr. Gary Fane: We will make an attempt to do that, Mr. Keyes. Quite candidly, he has a vested interest here, like we do—

Mr. Stan Keyes: To make money.

Mr. Gary Fane: —and what you're saying—

Mr. Stan Keyes: To make money.

Mr. Gary Fane: There's nothing wrong with making money. He's making lots of money.

Mr. Stan Keyes: You got it. Because—

Mr. Gary Fane: But he doesn't have to put VIA Rail out of business to make money.

Mr. Stan Keyes: If he makes money, your 15,000 employees are working. Mr. Chairman—

Mr. Gary Fane: Never mind my 15,000. He doesn't have to make money, sir, by putting VIA out of business.

Mr. Stan Keyes: Mr. Chairman, I asked a question.

Mr. Gary Fane: And that's where he's going.

The Chairman: Order, order!

Mr. Stan Keyes: If he's making money—

Mr. Gary Fane: Yes.

Mr. Stan Keyes: —your 15,000 employees are working.

The Chairman: Order.

I will have to request that everything goes through the chair, and that's boring as hell, so please let's go back to some order.

You didn't get an answer to your question. I understand why, but—

Mr. Stan Keyes: I did.

The Chairman: —you are welcome to provide that information. That's what we're doing. We're gathering as much information as we can. If you find fault in someone else's testimony, present a document and everything will be considered. Is that's fair enough?

Mr. Gary Fane: We will. Thank you, sir.

The Chairman: Mr. Grose.

Mr. Ivan Grose: Mr. Bailey, yours is an excellent idea, except please be informed that the provincial Government of Ontario has just downloaded the GO train onto the municipalities. So they're obviously not in the business at all.

My other comment is that I obviously always get on the wrong car because I've never seen any dancing girls there yet.

Thank you.

The Chairman: Is there anyone else on the second round who hasn't spoken?

Now for a third round. Monsieur Dubé.

[Translation]

Mr. Antoine Dubé: I am still not completely satisfied. You say you don't have exact figures regarding the United States or other countries, but I think you could provide them to us after the meeting. I would like to know what's the situation of passenger train workers in other countries, particularly in the United States.

• 1705

In you brief, you talk about the UK experience, but you could also have mentioned France, etc. It would be useful, to argue this point.

I am only pointing that out. From what I have read, every normal country in the world agrees to finance passenger rail service. Nobody said anything about the environmental aspect, but everybody knows that in the future, not only will we have to think about money, we'll have also to consider sustainable and environmentally sound development.

[English]

Mr. Tony Wohlfarth: We looked at the U.K., sir, because the mandate of this committee included privatization and because of the experience in the U.K. vis-à-vis privatization. Quite frankly, privatization in the U.K. was simply a massive giveaway from the taxpayers of Great Britain to the private sector, in the order of £5 billion British. So that's the sum total of the situation there.

We also looked at the U.K. because of the experience—and undoubtedly you'll see this, as members of the committee—with Railtrack, the agency that administers the track right of way in the U.K.

Earlier, we invited the committee—and I think we'll leave this with the chair—to do something better than collect statistics from us on what's happening in other countries, and that is to meet with representatives from railway workers in 140 countries when you are in London. They will give you their experience and will amplify on the points we've made in our brief. I'd encourage you to do that and I'll be in touch with Christine about that.

The Chairman: Ms. Desjarlais, did you wish to make a point?

Ms. Bev Desjarlais: Yes. You indicated that you felt they were operating at only 30% or 40% capacity.

Mr. Tony Wohlfarth: Yes.

Ms. Bev Desjarlais: Okay. I wanted to clarify that, because I guess my understanding, too, when the report was made—I'm not sure whether it was CN or CP at this point—and when the comment was made that they would be equivalent to, I think, 20 trains.... I'll clarify it with the minutes. It was also mentioned that it wasn't that they would lose that freight, because they're not operating with getting all that freight. It was a matter that it would be equivalent; it doesn't necessarily mean they had that business now. I didn't get the impression it was going to happen any too soon, either.

The Chairman: For the benefit of committee members, personally I can't imagine doing the study that we're doing without having an analysis that addresses all of those issues and some conclusions. We can't go by hearsay from all the witnesses; we have to go after the statistics. Otherwise, we're wasting our time trying to prepare a report that would make recommendations, for a shelf. I'm not interested in producing a report that will go on a shelf, so I agree with all of you.

Are there any other closing questions and closing comments, please?

Mr. Gary Fane: Finally, I would like to thank all of you very much for your time and your effort. I know you have a difficult task and hard decisions will have to be made.

We will attempt to find some information for you, including an attempt to do an analysis on Mr. Tellier's freight rail count. We didn't expect to do that, but we'll certainly take a look at it.

I wish you well in your endeavours, and quite candidly, I honestly believe the future of VIA Rail and passenger service in the country is basically in your hands and the hands of the cabinet and the ministers of Parliament.

Thank you very much.

The Chairman: Thank you very much.

This meeting is adjourned.