TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 21, 1997

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[English]

The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)): I'd like to call the meeting to order.

Welcome, committee members and our invited guests. The order of the day is a briefing session on Bill C-9, the Canada Marine Act, and on other matters related to the Department of Transport.

We wish to welcome Minister Collenette, and thank him for having accepted to join us on short notice so that we can start our work early. Starting our work early means the chairman not taking twenty minutes of our time; therefore, I will proceed directly to the presentation by Minister Collenette.

I ask you, Minister, to introduce your colleagues.

Hon. David M. Collenette (Minister of Transport, Lib.): Thank you very much, Mr. Chairman. It's indeed a pleasure to be here at the first session of the transport committee that I have attended as minister.

With me are deputy minister Margaret Bloodworth and Louis Ranger, assistant deputy minister for policy. There are also other officials in the room who can be introduced as needed.

It's going to be an interesting year for transport. I think the committee will be working extremely hard on a number of measures. I'll talk about Bill C-9 a little bit later in my speech.

I'm no stranger to this committee. I was vice-chairman for four years from 1974 to 1978, so I am somewhat aware of the issues. In going back to Winnipeg and Regina and in listening to the issues dealing with grain transportation, it seems to me that nothing much has changed in the 23 years since I was first elected and first sat on this committee. That's good, because that at least allows me to be aware of the issues on that very important file.

I do think I'm in a good position to appreciate the importance of the contribution this particular committee can make to the development of transportation policy and legislation.

[Translation]

I would like to take this opportunity today to review with you what I consider to be the long-term challenges facing the transportation sector in Canada and then focus on Bill C-9, the Canada Marine Act.

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I will conclude with a review of our planned legislative agenda for the coming months.

[English]

As you all know, during the previous mandate our department was a leader in re-engineering the role of government. We invented new ways of funding transportation infrastructure, and we're moving out of the day-to-day management of transport operations.

I think the past record, Mr. Chairman, is quite impressive, and much work still has to be done to meet program review targets, but I think the time has come to turn our attention to the future and focus on new long-term challenges. Rather than defining our role in terms of what we no longer do, we must now define a new, positive role for the federal government in transportation.

What remained constant in this period is the priority the department placed on transportation safety. In fact that's a point I made in the House. I did it this afternoon with respect to a tragic incident that happened in Manitoba. Safety remains a top priority. No matter how advanced and efficient the transportation system, if it isn't safe, it doesn't work.

Canada enjoys one of the best transportation safety records in the world. It's an enviable record, but we must continue to work through regulation, inspection enforcement, and increased public awareness to ensure this record continues to improve.

Clearly, transportation safety remains a long-term challenge.

[Translation]

What are the other long-term challenges in the transportation sector? One obvious challenge is the impact of the telecommunication revolution on transportation. The developments in technology and telecommunication, such as the widespread adoption of the Internet, will not curtail the demand for transportation services. Quite the contrary.

The main effect of the telecommunication revolution is to make the world even smaller. Our economy and our people will be able to interact over longer distances and much more easily than is possible now. More intense interaction will create more opportunities for business transactions and other activities.

In other words, the promises of greater virtual mobility through technology will need to be complemented by greater physical mobility through transportation.

Another challenge that we must continue to address is mobilisation. Perhaps more than any other country, transportation is crucial for the competitiveness of our goods and services in terms of cost, timeliness and reliability, both abroad and domestically.

[English]

I'll give you some examples, Mr. Chairman. One-third of our exports consist of natural resources whose prices on international markets reflect a high transportation cost component. In some cases it's as high as 45%. Furthermore, a growing portion of our exports, now more than 50%, consists of merchandise whose delivery at the final destination is increasingly time-sensitive. Given the size of our country, transportation will always be a key element of our competitiveness right here at home.

A third major challenge is urbanization. Most Canadians live within urban areas, with growth concentrated in cities such as the big three, Toronto, Vancouver and Montreal, with the national capital region and Calgary not far behind.

Growing urban congestion is perhaps our country's biggest transportation challenge. Taking on sustainable urban growth, especially with the federal government leading on climate change, is going to require close partnerships with other levels of government. While urban transportation issues fall under municipal and provincial jurisdictions, congestion in urban areas has a direct and measurable impact on the effectiveness of our national and international transportation systems. For example, access to ports and airports, and the connectivity between modes and between Canadian international transportation systems, is hindered by urban congestion.

[Translation]

Another challenge, which is closely linked to urban congestion, is the environmental agenda. Human-induced climate change is a real and growing threat to sustainable growth, and is perhaps one of the world's most crucial issues.

We simply cannot ignore the fact that transportation contributes to 27 per cent of greenhouse gas emissions in Canada.

A fifth challenge which is linked to both congestion and pollution is what appears to be irreversible growth in highway traffic.

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Current trends suggest that private vehicle traffic will grow between 50 per cent to 100 per cent over the next 25 years. For example, Toronto could see highway traffic double by 2025—that is the same as another highway 401 with 16 lanes.

[English]

Now, it's bad enough in French, but in English it's even worse, for those of us from Toronto. What it means is that with this doubling of truck traffic by 2025 we will require the equivalent of another 401 right through the Toronto region—another 16 lanes. We can't sustain it. We can't build it. We can't afford it. It won't get done. We have to look at other solutions.

[Translation]

To address the longer-term challenges that this country will face, namely the growth and the demand for transportation, globalization, urbanisation, private vehicle growth, and a sustainable transportation system, we need an integrated strategy that encourages the best use of all modes of transportation.

[English]

I've asked my department to do further research and to develop policy options to address these challenges. I will be coming back to you in the committee to seek your input, and your good ideas, I'm sure, for a strategy that will take us into the millennium on transportation.

Let me take a few minutes now on Bill C-9, which of course is an essential component of the marine policy reform announced in 1995 by one of my predecessors. In my short term in office I have consulted stakeholders across the country and I've been given clear indications of their support for this legislation. I think many of you are aware of the key legislative changes proposed for the ports and seaway and pilotage in this bill, but I want to refresh your memory because it's essential that we get this bill passed and we get it right.

Major self-sufficient ports will be managed by Canada port authorities established by letters patent as non-share capital corporations. Boards of directors will consist of a federal, a provincial, and a municipal appointment, plus a majority of directors nominated after consultation with port users.

[Translation]

Under an amendment made by this committee, port authorities will have Crown agent status, allowing them to pay grants in lieu of taxes under the Municipal Grants Act.

Since federal government liabilities are increased by agent status, the agent and non-agent capacities of port authorities are to be clearly set out under the letters patent.

We are requiring ports to raise their financing in the private sector, and we are ensuring a public accountability regime and transparency of operations so that port users and the public can see clearly how ports are run.

This means that commercial ports will have to be more efficient than they are today and the government will not be on the hook for their borrowing liabilities.

[English]

The transfer of regional and local ports is happening in conjunction with this bill, of course, but it's not dependent on it. These transfers over the next four years are being assisted by a $125 million port divestiture fund. I'm sensitive to concerns about the future of smaller ports, which are so vital to many communities, especially in the more inaccessible regions of the country. As I've already indicated in the House, my cabinet colleagues and I will be sensitive to those concerns. We shall try to address all legitimate problems in a fair and equitable way to ensure this bill does truly reflect a national consensus.

We have to take steps now to put the seaway on a stronger footing. Viability of the seaway can only be assured by achieving efficiencies, reducing costs, and making the system more competitive.

[Translation]

Part III of the Canada Marine Act enables the Minister of Transport to enter into agreements with a non-for-profit corporation or any other interest that is able to operate and maintain all or part of the Seaway.

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We are continuing the negotiations to have a new operator in place representing the main users of the Seaway, and the existing seaway authority would be dissolved at an appropriate date.

[English]

We believe that a users group is best suited to take over the system, because users want to minimize their seaway tolls and ensure the long term integrity of the system. Safeguards in the agreement would ensure a sufficient asset renewal to protect Canada's interest in the system.

The bill also allows the Minister of Transport to improve the way pilotage authorities operate in Canada by permitting faster tariff setting, allowing tariffs to take effect within 30 days of notice and streamlining the appeals process for new pilotage rates, prohibiting government approbations except in relation to emergencies, and providing a dispute settlement mechanism and providing for ministerial review. These changes will mean better service for users, as well as a more efficient and cost-effective operation.

[Translation]

As always, safety and environmental protection will continue to be the government's top priority, and these changes will help to ensure that our high standards of safety continue to be maintained.

[English]

In summary, Bill C-9 meets the goals of the 1995 national marine policy, complements the government's other transportation initiatives and strikes a balance in how we manage our marine institutions.

[Translation]

Before I conclude, I would like to take a brief moment and tell the group about some of the other legislative initiatives you may see over the next several months.

[English]

Bill S-4, an act to amend the Canada Shipping Act on maritime liability—which you all know as the former Bill C-58—was introduced in the Senate a few weeks ago. This bill focuses on updating the regimes for the limitation of liability for maritime claims in general and for oil pollution claims in particular.

In addition to the two bills we've already introduced, I'll also be bringing forward other legislation to help modernize the Canada Shipping Act, which will update ship ownership and registration provisions and add a new general part to the act to replace the current detailed legislative requirements with regulation-making authorities.

The Canada Shipping Act Reform Bill, when introduced, will reflect the government's commitment to safety in the maritime industry and, together with the Canada Marine Act, will contribute to sustaining an efficient maritime transportation industry.

These bills show that Transport Canada is committed to delivering on the promises made and will do what is necessary to prepare the maritime industry for the next millennium.

Next year I plan on revisiting some amendments to the Railway Safety Act. For now I've delayed the reintroduction of this bill so that my officials will have time to consult with rail industry stakeholders on ways to further improve rail safety.

Finally, future initiatives may include legislation to cover liability for passengers and other liability issues. It would seem that this is going to be a very busy committee over the next year or so, in addition to the plan that I talked about earlier where you'll be required to come back and give us ideas for input into the government strategy.

[Translation]

I would now be happy to answer any questions you may have. As always, my officials will be available whenever you require them to assist you in your work.

[English]

I welcome your questions.

The Chairman: Thank you very much, Mr. Minister.

As a committee we haven't taken the occasion to debate the allocation of time amongst us, so have a bit of confidence in me and see how it works out. If you find that it's not going your way, interrupt me and let's fix it now. For this meeting give me a bit of leeway.

Mr. Morrison.

Mr. Lee Morrison (Cypress Hills—Grasslands, Ref.): Before I move into some questions that I have on Bill C-9, I would like to comment on a little throwaway line that you had in there about climate changes caused by man.

Mr. Minister, there have been well documented climatic changes going on for millennia, some of them much more severe than the one we're going through now, and during some of these changes the energy output or the pollution output from the human population was limited to cooking fires. So I don't think one should just baldly say that we know this climate change is caused by man.

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My first question is on the proposed method of board selection for the port authorities. I am really unclear about what criteria will be used for deciding which of the hundreds of users will be able to put forward candidates. What are the proposed protocols for the preparation of these lists?

Mr. David Collenette: First of all, you're questioning my bold assertion, or my bald assertion—either way it applies—on climate change.

Some hon. members: Oh, oh.

Mr. David Collenette: I'd like to take issue with you on that, not to start off on the wrong foot.

I'm not the environment minister, but certainly from all I've read I think the planet has a pretty big problem as a result of over 200 years of industrial expansion. I think that's what will be addressed in the next few years at the various conferences in Bonn and Quito. I think it's something we have to deal with.

The air may be very pure in Saskatchewan, but I can tell you, coming from Toronto, it's not. A lot of the pollution comes from transportation vehicles. I don't remember the figures exactly, but I think about 27% of greenhouse gases is a direct result of transportation. Of course cars and trucks make up a big chunk of that.

The nomination of directors for the port authority will be somewhat subjective, depending on the local community. This will entail consultations between the Minister of Transport and local authorities. Obviously I will consult colleagues and the opposition for all good ideas. We hope the people who go on these CPAs will be knowledgeable about the commercial interests of the ports and dedicated to running them in a business-like fashion.

The Chairman: Thank you.

The committee may choose a second round if you find I'm going too fast.

Before I call on Mr. Byrne I'd like to say to this committee that Mr. Morrison has proved that in four minutes you can ask two questions, make two points, get answers to both questions, make one point and even include some humour. I really appreciate this as chair of the committee because I come from a committee where it took ten minutes to ask a question. It's a hint to others to maybe do the same thing.

The list is Mr. Byrne, Mr. Calder, Mr. Guimond, Mr. Bailey, and Mr. Mercier.

Mr. Gerry Byrne (Humber—St. Barbe—Baie Verte, Lib.): Thank you very much, Mr. Chair, and I'll try to be brief.

I appreciate the minister's interventions, especially as they relate to some issues that still may be burning in rural areas with regard to the local and regional ports. It's an issue that's been flagged by some of my colleagues and I appreciate hearing that you're open to suggestions.

Just as a preamble to my question, a very sound reason why the Canada Marine Act is necessary is because, as it's been duly noted, in Canada approximately 50% of the cargo traffic and export traffic occurs through just under 20 ports. We maintain a system of ports 576 strong, yet 50% of the traffic occurs through just 20 ports. There's no question there's a need for rationalization.

Given the fact that is the national circumstance and is a driving influence on why we need rationalization in the port network, it also has to be noted that in certain parts of Canada a significant amount of traffic does not occur through those 20 ports. Specifically, I'm referring to areas of Atlantic Canada, B.C., and northern Canada where you have a bit of a reverse dichotomy and approximately 80% of the traffic actually occurs through the local and regional ports, as opposed to the big CPAs.

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Would your ministry be open to looking at special circumstances where a significant amount of economic activity occurs in certain regions of the country and where there is a proven need or justification as to why these ports exist in terms of local and regional ports? Would you be open to working with the committee in terms of making sure that regions of the country are not unfairly treated?

Mr. David Collenette: I think I signalled that in my speech. Although we're bringing back a bill that is identical to the one that was passed in the House last year and died in the Senate, that doesn't mean to say that a new Parliament and a new committee cannot offer suggestions for change.

There are basic principles we have to adhere to with respect to the national transportation policy as it's evolved over the last few years, especially on the marine side. We have to adhere to program review commitments. With those caveats, obviously, if we can be flexible we will.

Mr. Gerry Byrne: I have just a small supplementary.

The Chairman: Very small.

Mr. Gerry Byrne: The bill also talks about the privatization or the rationalization of ferry services. There are also constitutional obligations in regard to ferry services. Would it be possible to receive from officials some briefing material about what exactly our constitutional obligations are and about whether or not Bill C-9, in the current circumstances surrounding our transportation policy, reflects our constitutional obligations?

Mr. David Collenette: We can get that information for you.

The Chairman: Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Minister, I was very interested in what you're saying about the environmental impact of trucks in particular, given the fact that right now with Canadian National, for instance, we can run double-stacked intermodal from Halifax into Chicago in 18 hours through the St. Clair Tunnel. That is, to my way of looking at things, one of the best routes we could take to lessen the environmental impact.

My question then—and I know we'll be talking about rail safety next year—is whether we could incorporate into that what the government strategy is going to be in dealing with north-south trade on the transportation system, as we're dealing right now with east-west trade. Basically we could take a look at the railway issue, if we're going to do that then, and look at the capital depreciation problem that we have in the railway system with railway assets. We could also look at the fuel tax issue for railways.

Mr. David Collenette: You make some good points, Mr. Calder.

I just came back from a conference in Denver with my counterparts from the U.S. and Mexico, where we discussed these very issues.

When I talk about climate change, greenhouse gases, the pollution effect and cars and trucks, I don't want people to somehow construe this as an attack on the trucking industry. In fact, what we have found, especially in the United States, but to some degree in Canada, is that trucking companies are more willing to work with railways in order to have true intermodality. The trucking industry is a vital component of our system and will always be with us and should be with us. But here's the question: how can that interface with more fuel-efficient, less polluting and actually efficient ways of conveying goods generally by rail?

As you've pointed out, both CN and CP have their iron highway that runs more or less parallel down into the U.S. mid-west. These are the kinds of ideas I will be looking forward to receiving from the committee, ideas on how we can maximize the intermodality between trucks and rail on the freight side.

Let's not forget that on the specifics of north-south linkages about 35% or 36% of our trade now is north-south, and 64% is within Canada. That means we have to develop more of these links. But when we talk about NAFTA highways, let's just not think of a highway in the context of paved road. It can be paved road, and it will be paved road in certain circumstances, but it also has to be rail.

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You come from southern Ontario, and you know the kind of congestion you have down west of Toronto on the 401, the 403, into the Windsor area. We cannot sustain that kind of massive road building forever. We have to ensure the intermodal linkage between rail and truck is developed, and developed to the benefit of both industries; and I think we will all benefit.

[Translation]

The Chairman: Mr. Guimond.

Mr. Michel Guimond (Beauport—Montmorency—Orléans, BQ): Before I put my question to the minister, I have a request to make. I would like us to invite the minister back because today's agenda resembles a grab bag of sorts, since we are to be briefed on Bill C-9 and on other issues. I have many questions for the minister concerning road versus rail transportation and the high-speed train. We are rather pressed for time. Our main focus here is Bill C-9. Therefore, I would like the committee to consider inviting the Minister back. This is something for the steering committee to discuss.

Mr. David Collenette: I believe I'm coming back on Thursday. Is that right?

Mr. Michel Guimond: Perhaps you are returning Thursday to discuss the business of supply.

The Chairman: I agree with you, Mr. Guimond, that we are pressed for time. Could you please put your question? We have a management committee meeting scheduled for 5 p.m.

Mr. Michel Guimond: Let me begin by congratulating the minister. While I'm a rather humble fellow, I'm pleased to see that you went along with the Bloc Québécois' proposal and are maintaining the pilotage authorities, even though majority reports issued by the government party recommended the opposite course of action. I'm also pleased to see that you have sided with the Bloc and decided to abolish the Canada Ports Corporation, and we view this as a wise move. Our concerns about this bill have more to do with the process for appointing persons to the board of directors of the new CPAs.

We feel that the federal government is only partially divesting itself of responsibility for this sector. Either it hands over responsibility, or it doesn't. I've always held to the principle that it's impossible for a woman to be only a little pregnant. Either she is or she isn't. Therefore, if the federal government wants to withdraw from this area, it should adopt the same approach as it is did in the case of the airports, which was to let users appoint the members of the board of directors, not simply consult with users and then proceed with the appointments. That's my first area of concern.

Secondly, our party is concerned about the divestiture fund. In the former Bill C-44, a total of $125 million had been earmarked for the fund. In reality, provision for this fund was not made in the bill as such, but in the relevant regulations. Can you tell us today how much money will be set aside in the fund to upgrade port facilities when the federal government divests itself of these facilities and transfers responsibility for them to communities? I'm not telling you anything you don't already know when I say that $125 million is clearly not enough money for all of Canada.

Thank you, Mr. Chairman.

Mr. David Collenette: Thank you, Mr. Guimond, for your comments. I'm very pleased to see that the Bloc Québécois is satisfied that I have taken its suggestions about this bill into account. In my equally humble opinion, this demonstrates that the parliamentary system and Canada work well together.

Some honourable members: Oh! Oh!

Mr. David Collenette: I'm prepared to answer your questions concerning the transportation sector and I'm also quite willing to come back next week, if that's what you decide you want to do.

As for your two questions concerning the earlier version of Bill C-9, the word used was "consultation". I think it's very important to have the necessary flexibility to engage in consultation, but it's not a matter of letting the municipalities or the communities make the final appointments. The Canadian government must assume responsibility for all appointments. It's very important for us to gather names of people who can make a contribution to the economic future of ports. That's why we prefer to use the term "consultation".

You also stated that the amount allocated to the port divestiture fund was insufficient. That's one opinion.

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As you know, we must keep a tight rein on our finances right now. I'm in a position to allocate $125 million to this fund.

[English]

The Chairman: Thank you, Minister. Mr. Bailey.

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

Mr. Minister, in your opening remarks you struck a little note with me when you mentioned that nothing had changed between Regina and Winnipeg. I don't know what you meant by that—something about how the problems were the same across Canada—

Mr. David Collenette: I was talking about how it seems that in the 23 years since I was first elected the basic issues of grain transport have been the same.

Mr. Roy Bailey: Yes, okay. I want to add a comment to that. Probably what is going to happen in the area of the province I come from is there will be more changes in the next 30 months or five years than there have been in the past 50 years. I will have approximately 500 kilometres of railways disappear. Most of the grain delivery points that were known when you were there will be gone. There will be a massive change from railway use to trucking use.

We'll deal with that another time. My question, though, is this. When Bill C-44 was under consideration in the last Parliament and the government offered amendments that would have allowed masters to be certified as pilots where they met the criteria to do so, withdrawal of these amendments resulted in a lot of protests from the shippers, especially grain shippers on the seaway, who were particularly vulnerable to the pilot monopoly in that. Has any consideration been given to reinstating similar amendments?

Mr. David Collenette: I would like the deputy minister to answer that particular question.

Ms. Margaret Bloodworth (Deputy Minister, Department of Transport): Pilotage, as those of you involved will know, was quite an issue of debate. In the end I think we reached—and it wasn't us; I guess it was more the committee than the department—a status that was acceptable, although not the ultimate desired by all the parties involved. Yes, some of the shippers would like us to have gone further. On the other hand, some of the pilots would have liked us not to go as far.

It is possible to have certification of masters, and some are certified. There is a review in there to look at ways of increasing that efficiently. But I think the pilotage provisions—and I've been reinforced in that view by the people I've met over the last four or five months...is that while no one says this is exactly what they want, everyone recognizes that everyone got some of what they wanted and this was a step forward. I think that's true of all the stakeholders involved.

I would be the first to say the users did not get everything they want, but nor did the pilots. So we have a balance that was struck, and I would say largely struck by the committee hearing the various views.

[Translation]

The Chairman: Mr. Mercier.

Mr. Paul Mercier (Terrebonne—Blainville, BQ): Mr. Guimond has already asked the question I had in mind.

[English]

The Chairman: Mr. Cullen.

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

Minister, thank you for your presentation. I think there are a lot of challenging and exciting issues we'll be addressing over the next little while, and I look forward to working with you and my colleagues on the committee.

I had a question on Bill C-9. Under Bill C-9, Toronto will be designated a Canadian port authority. I'm wondering how you see the Toronto port developing in the future, how you see the port of Toronto coming together into a cohesive plan for the future, and what sort of process you see evolving to address the different stakeholder interests in coming up with some kind of harmonized and optimal plan for the future.

Mr. David Collenette: As you know, Mr. Cullen, there has been some degree of controversy about this, but certainly not from the members of Parliament from the Toronto area, who insisted on this being included in the last bill. Generally the provincial government and most municipal leaders, business leaders and others in the Toronto area, support this particular initiative. There are some who disagree and are quite vocal in their disagreement, but as a Torontonian I can't believe Canada's largest city, which has had a long port tradition and still has very good facilities, a very good draft for bringing in boats, would at this time turn its back on a very efficient and environmentally sound method of transportation.

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It's the feeling of those involved with the Toronto Harbour Commission now, the general manager and others, and of other users in the port that new business can be attracted to the harbour and that it can grow from just being where it is now, the conveyance of aggregates and sugar and other heavy commodities. For that reason, it was suggested that a port authority representing users, more reflective of a commercial approach, taking the matter out of the hands of local politicians and indeed even, I suppose, other politicians would be a better way to develop the port.

Once the elections are concluded, the new council will look at this matter and I think will come to the conclusion that it is the best thing for the development of commerce on the waterfront. But of course there's lots of other land there that can be used for other matters that would obviously conform to the local planning process, plus there's one of the great assets of Toronto, the Toronto Island Airport, now called the Toronto City Centre Airport.

The Chairman: Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): Mr. Minister, I look forward to working with you over the next few years in developing a national highway funding approach. You've met with me very graciously, as have your staff—and I appreciate that—about a situation in my riding where a monopoly was created on every truck traffic highway in and out of the province of Nova Scotia. This was done with the assistance of federal funds, perhaps inappropriately, but the federal Auditor General has that under review now, as does the federal Competition Bureau's chief investigating officer. So I'm very attuned to that issue.

However, on Bill C-9, I have a procedural question more than an issue question. As a new member to the committee, I would like to have the assurance that we are going to hear from witnesses from especially regional ports, which have approached all of us, I think. I know they've approached me. They want an opportunity to be heard over some of these decisions on Bill C-9.

Mr. Chairman, are we going to have hearings? Are we going to hear from people who have concerns about this, from pilotage issues to the regional port divestitures to control and safety to environmental issues that have come up?

The Chairman: First of all, I'd like to say this is not a question that should be asked of the minister. It is not a decision of the minister. It is a decision of members of this committee as to who will be invited, and we can discuss this at the steering committee meeting at 5 p.m.

Mr. Bill Casey: Okay. In that case, can I ask a question that involves the minister?

The Chairman: Yes, this is why we have invited him.

Mr. Bill Casey: There was a port in New Brunswick, Bayside, that was about to be sold to a U.S. company. Did that come under one of your ports or was that a DFO port? It was to be sold to a U.S. company for their total control. It was being divested and a U.S. company was buying it as part of a project to establish a quarry in New Brunswick. Actually the former Minister of Transport was working on that on behalf of the company from the U.S.

Mr. David Collenette: There were two issues there: one was the port and the other was an issue not in federal control, the development of the quarry. Perhaps the deputy minister can give us the details.

Ms. Margaret Bloodworth: Thank you.

I'd be quite pleased to get you further details, but let me tell you what I know about it at this point. My understanding is we were not negotiating with the U.S. company. In fact we were negotiating with a local group, which is the normal process we go through. We have a letter of intent with them. There was, as the minister has referred to, a development proposal, but that was not directly involving us.

That is one of the ports we are proposing to divest. We are proceeding in the same manner as we do with other ports, which is that we go first to local users. That's our first choice. We only go to a public tender process, which would involve anyone who might want it, if there is no one, municipally, provincially, or locally, interested in purchasing it, which was not the case with this port.

I'd be pleased to get you further details about that particular status if you'd like, but that's my understanding at the moment.

Mr. David Collenette: Mr. Chairman, before we leave Mr. Casey, he did mention Bill C-104, and he raised it with me in the House and he's sent me a lot of documents. In fact I feel as though I've driven along the highway—and I haven't been along it—because of having so much material.

• 1615

I just want to make it clear from our point of view. I asked my officials about this and I said I would look into it for him and I've written a letter, but other members should know that as far as we can see, from the federal side, there appear to be no irregularities with the building of this highway. Highway construction falls under provincial jurisdiction, so the province decides on the alignment, the design, the construction, the tendering process, and how to finance construction costs, and our only involvement with Highway 104 is to match dollar for dollar the $55 million with the province, funded through the Strategic Highways Improvement Program.

As for the questions on the tendering process and anything else he has, I'm sure he has already addressed those to the provincial Department of Highways, and I'm sure the Auditor General will find the federal involvement in funding to be quite appropriate and normal.

On the Competition Bureau aspect, that is not under my jurisdiction, and it's something he will have to pursue. And he is pursuing that.

The Chairman: Thank you.

Before I invite speakers on the second round, I ask those who have not asked a question, do you wish to do so?

I move on to second round. Before I do, I'll mention that we chartered this aircraft until 5 o'clock, so we're going to travel as long as you wish, but not past 5 p.m.

Mr. Morrison, Mr. Cullen, Mr. Casey.

Mr. Lee Morrison: Thank you, Mr. Chairman.

Mr. Minister, I'm going to briefly defend myself on this global warming question. I was not speaking as a politician. I do have some expertise in these matters, as you know. I do not suggest that there's no air pollution; I do not suggest that there is no global warming; I suggest that there is no proven causal relationship. This is very important to bear in mind when one is making policy.

My next question again relates to the boards of the port authorities. I know that as long as you're at the helm, there's not going to be a problem. But what future safeguards, if any, do you have in mind to ensure that patronage, partisan favouritism, maybe even influence peddling, won't corrupt the entire commercialization process, including the selection of boards in the future? Do you have any idea for some roadblocks in there to keep it clean?

Mr. David Collenette: Well, Mr. Morrison, I can only speak for this government. Our record on the appointments process in the last four years has been exceptionally good. I have some firsthand knowledge, obviously, as a minister, but also for other reasons. I have been associated with an individual who is involved with that.

Vigilance is a key element in ensuring there is no abuse in the system—vigilance on the part of the governing party, but also vigilance on the part of the opposition. If one compares the record of this government with the record of the previous government, certainly it is extremely good; it's much better.

I suppose the answer to your question is there are no guarantees about anything in life, except for governments to police themselves and opposition to do its job, as I'm sure your party has done and will do in this Parliament.

Mr. Lee Morrison: But you are aware, Mr. Minister, that in private dealings, you try to build safeguards into your contracts or into your plans to avoid future problems, and this is what concerns me.

Mr. David Collenette: I always take the point of view of looking for the goodness in mankind rather than the evil. I assume that people are motivated by noble pursuits rather than nefarious pursuits. If the nefarious comes to the surface, there are always laws and procedures to deal with that.

Certainly in developing the letters patent for these port authorities, strict operational procedures will be part of them to ensure that the ports are run on a businesslike basis and that there is no abuse.

The Chairman: Mr. Cullen.

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

• 1620

Mr. Minister, in the last Parliament this committee spent some time looking at the renewal of the national highway system, and we submitted a report. One of the key recommendations, it seems to me, was the establishment of a panel to explore public-private partnerships. Notwithstanding the apparent concern of my colleague opposite with respect to Highway 104, I think it's a model from a fiscal point of view and a transportation policy point of view that makes a lot of sense to explore.

I'm wondering if you or the department have had a chance to review that recommendation, and if it's a pursuit you would like to continue. If you haven't had a chance to review that, perhaps the department could give an update.

Mr. David Collenette: I'm glad you raised this, because I've taken the public position that until we get our deficit in order there isn't money for highways or much of anything else by way of new spending.

You know, of course, what we campaigned on in the election, and that is that once we do get into a surplus position, 50% of the surplus will go into program spending. The Minister of Finance did give us our financial position last week, and in the throne speech we said we would be having a balanced budget within the next year. So I think it now is possible to start talking about usages for that program spending dividend, if you will, and I'm sure there will be lots of people who want money spent on highways.

I think the degree of infrastructure improvement in Canada is so required that we'll have to use the private sector to help finance it, and that also means in the highway area. It doesn't necessarily mean tolls. People always think of a toll road, but there are other ways of getting the private sector in—to design, to manage various highway systems. The designing and operating company is compensated by, in effect, shadow tolls. These are, I guess, ex gratia payments from central treasuries, based on the usage of various routes and estimates of traffic flow.

Why do this? Well, this allows the design to be a bit more flexible. Using private sector methods allows the money to be raised on the open markets. It is, I think, perhaps an innovative way of using the private sector to build these kinds of roads. It's used in some European countries.

It's a bit early in the game. I've asked my officials to look at this, because I think that with the degree of infrastructure improvement that's required in transportation in Canada, whether it's rail, passenger rail, intermodal facilities, or highways, we certainly have to involve the private sector in some manner or way.

The Chairman: Thank you.

Messrs Casey, Byrne, Guimond, Mark.

Mr. Bill Casey: Thank you. I want to just defend myself too there for a minute, and I wasn't—

Mr. David Collenette: I wasn't attacking you.

Mr. Bill Casey: No, I know that, and I don't blame you for trying to distance yourself from this 104 deal, which is going to get a lot more coverage—

Mr. David Collenette: I wasn't trying to do that.

Mr. Bill Casey:—as we move.

In your opening remarks you said your only involvement was cost sharing, but the actual agreement where your department put $27.5 million into this project says, in section 5:

A Management Committee...shall consist of two members, one member to be appointed by the Federal Minister and the other appointed by the Provincial Minister.

The Management Committee shall be responsible for the general administration and management of this Agreement...

Decisions of the Management Committee shall be in writing and shall be acted on only if taken unanimously by its members.

So I agree, you're not directly involved, but you are certainly indirectly involved, and hopefully that will work out all right.

Mr. David Collenette: I'm glad you agree.

Mr. Bill Casey: We'll come back to the 104 highway many times, I'm sure, before we're done. But it is an example, if we don't have a national highway policy, of the kind of mess we're going to get into. This is a 44-kilometre section of highway. New Brunswick is going to do one now, 100 kilometres; and all the way across the country we're going to have this hodgepodge of deals, some of which may go bankrupt, some of which may have good management, some of which may have bad management, some may be of poor quality, like this one. When they negotiated this, they negotiated with the Province of Nova Scotia, so they didn't have to meet their traditional highway standards and all kinds of other things.

Anyway, Bill C-9 says there is a five-year review system in there.

In Nova Scotia this week they've just announced a halt to all public and private sector partnerships, because they aren't working right. In New Brunswick, in the papers on the way up, I noticed going through Moncton airport that they're reviewing every public-private partnership they have with public buildings, schools—whatever it is. And as I said, in Nova Scotia they halted them completely, because they are failing.

• 1625

It seems to me that an awful lot of these projects and proposals in Bill C-9 are innovative, and may fail before five years. If it's anything like the public-private partnerships—and that's what a lot of these are, without calling them public-private partnerships... With this divestiture program, is it possible to shorten up that review time to three years from five years? Considering the history and the track record in my part of the country of these public-private partnerships—they may work, but they need a lot of fine tuning, and the first ones they've done are already failing.

Mr. David Collenette: Well, I think the committee is going to have to look into this more and make some evaluation as to whether or not it should be three or five years. I'm sorry that your view of public-private partnerships has been so tainted by one particular project in your own province that you would think it perhaps doesn't have utility elsewhere. When we study the overall policy thrust that I'd like the government to follow, perhaps this is one element of the policy the committee should go into and satisfy yourselves. You'll have the flexibility to answer a lot of these questions.

In the meantime, this government did involve the private sector, and put a lot of its transportation infrastructure in commercial hands, whether it's the airports, the proposition here for the ports, or NAV CANADA. We actually privatized CN. We are, in effect, trying to continue this policy that by and large has worked. That doesn't mean to say there wouldn't be glitches in individual projects, and it's up to the committee, I think, to help us make sure that there aren't problems in the application of the policy, especially given your particular interest and expertise, if we apply that to highways.

I think Mr. Ranger has a comment.

Mr. Louis Ranger (Assistant Deputy Minister, Policy, Department of Transport): Just to clarify, we talk about a five-year review, but it is a review to be carried out during the fifth year, so really, it is looking at the first four years.

Mr. David Collenette: There—it's a nice compromise.

The Chairman: Mr. Byrne.

Mr. Gerry Byrne: Mr. Minister, in my first question to you I mentioned the fact that local and regional ports were essential to regional economies. In the Canadian Transport Act it mentions that transportation is a key element to regional economic development.

One of the things I also noted was that the future CPAs basically form the bulk of transportation requirements in terms of the marine sector for Canadian exports. I also have mentioned that there was a requirement for local and regional ports in local areas.

Just a quick question. Has an analysis been done in terms of the regional economic impact of certain local and regional ports? That's part one. And two, if certain local and regional ports are not divested within the six-year timeframe—I understand there is no A-base of funds forecasted to be in reserve or allocated towards future upkeep of these ports—is there a contingency fund that is accessible or available, or what is Transport Canada's plan in that particular case?

Mr. David Collenette: We assume that everything will be taken care of within the specified timeframe. The normal response to a question like that is to say the scenario you portray is hypothetical at this time, and should it become the case, then the government would have to look at it.

Mr. Gerry Byrne: Well, Minister, it isn't really, because by definition a CPA is something that is economically self-sufficient at the time of divestiture. By definition, a local and regional port is not economically self-sufficient, and therefore chances for divestiture could be quite limited. Therefore I think a contingency has to be built, in that given the fact that a CPA is self-sufficient, a local and regional port by definition is not self-sufficient. I'd just like to hear your thoughts about that.

Mr. David Collenette: I think the deputy minister has a few points on that.

Ms. Margaret Bloodworth: First, let me make it clear that not all local and regional ports are not self-sufficient. In fact, we have some that are quite profitable. Clause 8 of the bill talks about the conditions of a CPA, and certainly self-sufficiency is one, but not the only one. It has to be of strategic significance. It has to be linked to a major rail line or major highway infrastructure and have diversified traffic. The reason is that it's intended to capture the major ports on which the country as a whole depends.

• 1630

There are some regional and local ports that are key to particular regions and many that are very profitable. In fact we expect some of them to make money when we divest. As you say, there are others that are not, and we have recognized certain categories. We have remote ports—for example, where there is no other—that make up a fairly limited number, but there are places where that is the only way in at certain times of the year.

On the divestiture fund, we have also created a fund of $125 million to help to ease the transition. It's true that we may find out over six years that it's not enough, in which case the government will have a decision as to what it does at that time. But we still have most of the $125 million left, so we still have a way to go on that.

In some areas, such as Newfoundland, we have also divested a number of ports to the province of Newfoundland, along with some money. The main purpose of those ports was to service the ferry service to Labrador. We felt the Newfoundland government was in a better position than we were to make sure that service was delivered effectively, and they agreed. We transferred the ports and some money in order to help with that.

I think we've at least tried to have a number of different approaches, recognizing that there are differences in the country. Let me stress again, however, that not all regional and local ports are not profitable—in fact to the contrary. I wouldn't want to go away thinking that's the case, because we expect to get some money for some.

[Translation]

The Chairman: Mr. Guimond.

Mr. Michel Guimond: I have two brief questions, Mr. Minister.

This bill is known as the Canada Marine Act. I would like to know why this bill fails to address, like Bill C-44, one sector of the maritime industry which could benefit from tax breaks similar to those granted throughout the world, particularly in Korea and in Germany. I'm talking about the shipbuilding industry. Why does the bill not address this industry sector? It could have contained provisions granting the Canadian shipbuilding industry some tax advantages. Getting back to what you said about the advantages of Canadian federalism for Quebec, when the Conservatives were in power—I know you're going to say, it happened when the Conservatives were in office—the only province in which shipyards were closed down was Quebec. At the time, there were three major shipyards in Quebec accounting for 50 per cent of all shipbuilding in Canada. Quebec was the only province to be targeted by the rationalization process. At the same time, the Conservatives provided the start-up capital for ten shipyards in the Maritime provinces. This is another example of how efficient Canadian federalism is for Quebec.

My second question is a little more technical and I imagine your deputy ministers will be able to answer it. The letters patent that you issue as minister define the port perimeters. What technical provisions should there be in this bill to deal with a situation where a port authority would like to divest itself of some of its land? For example, what procedure must be followed if the new CPA doesn't want to be responsible for an outdoor recreational area currently located with the port perimeters? What would need to be done in this case? Is the committee going to discuss the perimeters of each port and the issue of land use? Mr. Ranger, I hope you're not going to tell me that the CPAs will have to supply land use plans.

• 1635

Before the port boundaries are formally set, is there something that would need to be done to transfer responsibility for part of the CPA's land to another party? I realize that this is a highly technical question, but I'm interested in getting an answer.

Mr. Louis Ranger: The reason why we have letters patent is precisely to acknowledge the specific characteristics of each port. During the next phase of the process, we will sit down with officials from each port and define the boundaries.

If the ports wish to divest themselves of some of their land so that it can be used for other purposes, they must comply with existing procedures. For example, if the land is to be sold, the rules and regulations governing transfers of this nature must be followed. An application would have to be made to Treasury Board.

Mr. Michel Guimond: Yes, but don't you see that the CPA is in somewhat of a conflict-of-interest situation? Renting sailboats, paddle boats and sailboards is not really very relevant to a port operation. In other words, the community needs to mobilize. If you consult only with the port administration, of course it will tell you it needs and will be holding on to all of its land.

Mr. Louis Ranger: Except for one very isolated case, I'm not aware of our having received representations asking that the port boundaries be adjusted.

Mr. Michel Guimond: What can the community and port users do if they want to get these lands transferred over to them?

Mr. Louis Ranger: If were talking about Crown lands, they will have to follow existing procedure governing the sale or divestiture of lands for other uses.

Mr. David Collenette: To answer your first question, we will not be focussing on the shipbuilding sector, just as we did not focus on the building of aircraft or trains. The purpose of this bill is to examine and establish regulations for the operation of the ports. I suppose we could have a policy on shipbuilding, but in that case, we would also have to discuss taxation and other components. That is not the aim of this bill.

The Chairman: Does that answer your question, Mr. Guimond?

Mr. Michel Guimond: I'm not pleased to see the minister take my question so lightly. It is very relevant to workers in Canada's shipbuilding industry. You indicated that when airports were privatized, the subject of the aircraft industry was not broached.

The Chairman: Mr. Guimond...

Mr. Michel Guimond: With all due respect, sir, your answer is rather simplistic.

The Chairman: Mr. Guimond, I didn't ask you if you were satisfied with the answer. I asked you if you had another question.

Mr. Mark.

[English]

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chairman.

First, let me congratulate the minister on his appointment. I look forward to working with him.

Having been a former mayor, and having experienced at the grassroots level some of the changes in transportation related to both rail lines and transportation over the last four years, I hope my experience will be an asset to this committee. I do also look forward to the new challenges that are up ahead for the honourable minister.

Bill C-9 will certainly be a bonus for the province of Manitoba, where I come from—and not only Manitoba, but also for the farmers in the western provinces because of the changes to the Port of Churchill. As I've indicated in the debate in the House, it's long overdue that this ocean-going port will finally be operated as a port after sixty years of neglect.

Under Bill C-9, the minister will levy an annual fee or stipend against each port authority. The details will be hammered out in each port authority letters patent. The concept of a fee is not objectionable, but its calculation on the basis of a port's gross revenue is. That is a general concern of all the maritime stakeholders that have been communicated with, because such a policy could drive ports with low operating margins into the red.

The question to the minister: Rather than setting different rates of stipend on ports' gross revenues, why not set a global rate on net revenues so that everyone will know where they stand?

• 1640

Mr. David Collenette: Perhaps you can answer that question.

Ms. Margaret Bloodworth: You're right that this is another avenue that could have been taken. I guess the choice that was made is that there could be endless debate about what net revenue is. Indeed, that's one of the reasons for the number of people we have in the revenue department. Determining exactly what is the end result is not easy. So the decision was that instead of that, go with gross so that we are not arguing about what is a business expense and what isn't and so on.

We recognize, though, that there has to be some differentiation on a port basis. That's how we would do it. Obviously, there are choices to be made. I guess our choice was predicated by the fact that we did not want to create an industry for both accountants and lawyers. I'm a lawyer myself, so I'm not being negative about lawyers.

So that is a choice, but if we made that choice, we'd have to recognize that there it would open a lot of debate as to how you get to net. That's why that choice was made.

The Chairman: Thank you. This completes the second round.

I have one request for a third round. Are there any others who wish to ask a question during the third round? If not, I close the list at Mr. Casey.

Mr. Bill Casey: I'm going to use great restraint; I'm not going to mention Highway 104 this time.

I want to follow up on Mr. Byrne's remark about the regional and local ports. It is an important question, because many of these communities revolve around their ports and their wharfs. It is the focus of everything that goes on in the community.

What happens if you divest a port and they are not able to survive? What happens if they go bankrupt? In the case of Bayside, New Brunswick, could that have been turned over to the private sector, as it appeared it was going to be? Could that private sector use the port and the wharf and the facilities for collateral to secure loans for operating or for capital costs or what have you, and then for whatever reason go bankrupt, and have a bank repossess the whole port? Is that possible?

If it does happen, if a wharf or a port does get in trouble, whether it's owned by a municipal government or whether it's turned over to the users or private sector or what have you, what happens? Is there any recourse for the feds to come back in and help or to take it over again? What happens? Because some will.

Mr. David Collenette: In the bill on page 44 there are conditions on the agreements for disposition of these ports. Clause 72 covers some of the points you've raised.

Ms. Margaret Bloodworth: I guess the other point is that one of the reasons we choose first to go to local people, which includes municipalities, is that our experience has been, including with airports, that often they can run them better than we can, more efficiently, for a lot of reasons.

Anything is possible, I guess, but our experience—and I'll look at airports first, because we've done more of those than we have ports—has been generally very positive. Local people, whether it's a combination in some cases of municipal and users and/or other interests in the community, are in a better place to know what works. They have a shorter decision-making train than we do coming up to Ottawa. Often they can run it in a cheaper way than we can.

So the chances of them making it a viable and effective operation are, I would say, higher than they are with us. That's not because we haven't tried to do a good job; it's the nature of trying to run things from Ottawa. We don't always do it as well.

Mr. Bill Casey: More flexibility.

Ms. Margaret Bloodworth: Yes.

Mr. Bill Casey: Have you had any airports fail?

Ms. Margaret Bloodworth: No. We've had some airports close because there's been no use for them, but very few, I might add. In the case of ports, we've specifically chosen to have a fund in order to get over some of the humps, because we recognize some of the ports, particularly in some of the less central regions of the country, if I can put it that way, may need some infusion of help to get there. But so far the experience has been very positive.

• 1645

Mr. Bill Casey: Could we have a list of the airports that did close?

Ms. Margaret Bloodworth: You can certainly have the ones we have. There are very few of those. But you should recognize that many airports never were run by us. There are a lot of private airports in the country, and will continue to be. Largely, with the ones we owned it tended to be for historic reasons rather than other reasons. I'm leaving aside the major airports here.

Mr. Bill Casey: It would just be interesting to see why when they transferred from public ownership to private ownership or to local ownership they did fail.

Ms. Margaret Bloodworth: Oh, don't get me wrong. I don't think any have closed after we transferred them. I think some have closed down because indeed there wasn't any business. There are very few of those. I'll confirm that, but we don't have any experience where we've transferred one and it subsequently closed because people didn't operate it properly. I'm not aware of any cases like that.

The Chairman: I've had a request from Mr. Morrison for another question. I think as the official opposition they are entitled to more time than some of the other parties. Mr. Morrison.

Mr. Lee Morrison: Thank you.

Mr. Minister, you know some of the harbour commissions that are going to be converted to port authorities do have misgivings or problems with the fact that suddenly they are going to have to start paying grants in lieu of taxes. This is going to be a sudden cold bath for those which have not had the experience before. When NAV CANADA was formed, for example, it was allowed a grace period before it was to be completely cut off from government funding. In fact, it's still going to be partially funded right until March of 1998. Why didn't the government consider, or why won't it consider, a phase-in period for harbour commissions being converted to port authorities?

Mr. David Collenette: I met with a lot of the stakeholders over the summer. In one particular meeting, I think about three or four weeks ago, the harbour commissioners were present and they did not state any misgivings. I understand from things I've read that some of them have some misgivings. I'm not sure how objective they are in expressing those concerns. It would seem logical that if they had substantive concerns they would have raised them with me at the briefing we had.

Mr. Lee Morrison: How many of them did you talk to, Mr. Minister?

Mr. David Collenette: They were all there. Every single harbour commission we have was in the room. We had a big meeting at the Radisson Hotel here in Ottawa, together with the other representatives of the port community, including Ports Canada.

Mr. Lee Morrison: I'm getting mixed signals here.

Mr. David Collenette: There are perhaps some local political concerns and pressures in different communities. Sometimes those commissioners reflect that. We're trying to extricate ourselves from these ports, these facilities, getting bound up with local politics and politicians...and to be in effect part of the community, but answering to the commercial aspects rather than the political aspects of the community.

The Chairman: Before we conclude, I would like to thank other members of the department who have agreed to be here today.

Because we have a few minutes, I would like to improvise and ask you to stand, tell us who you are, and tell us what you do best. We'll know who to call when we have problems.

Mr. Randy K. Morriss (Director General, Port Programs and Divestiture, Transport Canada): My responsibility is the public port divestiture part of this piece.

Mr. Barrie LePitre (General Counsel, Legal Services, Transport Canada): I'm legal counsel for the bill.

[Translation]

Mr. André Pageot (Director General, Marine Policy and Programs, Department of Transport): I'm director general of marine policy and ferry services.

[English]

Mr. Bruce Bowie (Director, Marine Policy Branch, Transport Canada): I work on marine policy.

Mr. Gerard McDonald (Director, Marine Pilotage, Transport Canada): I'm director of marine pilotage with Transport Canada.

[Translation]

Mr. Paul-Émile Drapeau (Director, Port Divestiture and Operations, Department of Transport): I'm director of port divestiture and operations.

[English]

Mr. David Collenette: They will all be available for you in your work whenever you want them.

The Chairman: That's the point I would like to get to. We are one committee, a team, and we consider ourselves part of a team with the department—inter-party, with the minister, with everyone. Our job is to do the work of the House that is required of us. I sense already that we have very strong committee members who are willing to be serious and do the job.

• 1650

Mr. Minister, I want to thank you very much for appearing on short notice. I thank you for expressing earlier during the meeting that you were willing to reappear if requested by committee members. I suspect that will happen soon.

I thank you very much for this presentation. Would you like a few minutes to conclude?

Mr. David Collenette: No. I welcome the questions, and I'll take more.

The Chairman: Thank you very much.

[Editor's Note: Proceedings continue in camera]