TRAN Committee Meeting

STANDING COMMITTEE ON TRANSPORT

LE COMITÉ PERMANENT DES TRANSPORTS

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 21, 1998

• 1533

[English]

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

Thank you, everyone, for being here with us on short notice, particularly our guests, Minister Collenette, Mr. Ranger, and Mr. McGovern.

We really appreciate that you accepted to appear in front of the committee within minutes of tabling your response and that you responded today when in fact it's not due until November 8. The committee has worked very hard at this report, as you all know, and you show your appreciation by responding quickly. We appreciate this.

Mr. Minister, I will turn the floor over to you, and after your presentation I will invite my colleagues to ask questions of you and your friends.

Hon. David M. Collenette (Minister of Transport, Lib.): Thank you very much, Mr. Chairman and members of the committee, for allowing me to come with such short notice.

This is one of the cases where cabinet yesterday morning approved the response, and I felt it was only right to get it out to members as quickly as possible. Sometimes these things have a way of finding their way out anyway. But by and large, I think the members of the committee do have the report at the same time it's being tabled and becoming public. Therefore, you're able to comment on it and show your concerns have been met, hopefully, or give your suggestions where there could be improvement.

• 1535

In February, as you know, I came before you and asked you for a really tall order. That was to examine how we could revitalize passenger rail in Canada and how we could do it without spending any more money than we do today.

I asked you to consult with stakeholders and Canadians, and I asked you to do it really quickly. You did it extremely quickly and it's a very thorough job. I'm very grateful.

You went about your jobs earnestly and enthusiastically, and in June you did submit your report. This report, of course, was a product of these wide consultations—70 witnesses, 35 organizations, and proceedings in three countries outside Canada.

Also, your report reflected the study of recent passenger rail milestones in the United States, France, and the United Kingdom.

[Translation]

You have done your work, and it is now my turn to report to you: I'm here today to officially present the government's response to your report.

First, let me say that I'm in agreement with the broad orientation of your report, and with virtually all of its recommendations.

[English]

The Chairman: I'm told there is no translation from the French.

Mr. David Collenette: It takes a while for things to reach the prairies. Only a guy from Toronto could say that.

The Chairman: I was going to apologize for interrupting, but I won't.

[Translation]

Mr. David Collenette: I will continue my presentation.

To me, the essence of your findings are presented in the following quotation from your report:

... we are yet again faced with a crisis in passenger rail service. How long can this precarious condition be allowed to continue? We have been told that this is the last chance to do something and that if the government does not act now... passenger rail services in Canada are in jeopardy.

We believe that this situation cannot continue... passenger rail... must be given the necessary tools to provide an efficient, reliable and cost-effective service to the traveling public.

[English]

I think that's an accurate summary of where we are today. Passenger rail, despite the impressive efforts of the employees and management of VIA Rail, cannot continue under the status quo.

So where do we go from here?

Today, through our response that we have just tabled in the House of Commons, I am pleased to let you know the next steps we have in mind for VIA Rail renewal.

You made 11 recommendations to the government in your report. Of these, I'm pleased to announce we are accepting nine. All of these recommendations were made with an eye to renewing passenger rail, so we are clearly working toward a new era of passenger rail development in Canada. Yet we are not being radical or reinventing the wheel. In many respects we are merely starting to play catch-up to the actions undertaken in recent years by countries throughout the world.

What we are announcing today are important actions, but in the international context they are really just modest steps in tune with Canadian realities.

But we shouldn't make any mistake. In the historical Canadian context this is an important day for passenger rail. And we're not going to do this through lavish spending. In fact, I hope we can provide for passenger rail renewal while working largely within VIA's current funding envelope.

I'd like to address in the next few minutes the specific responses to your 11 recommendations.

In recommendations 1, 2, and 4 you asked the government to make a commitment to the future of passenger rail in Canada, and you told us to do this by September 30, 1999. The government accepts these recommendations. Over the coming months Transport Canada and VIA will be working together to produce a strategic business plan for passenger rail in Canada. This plan will map the future orientation for passenger rail for at least the next 10 years.

[Translation]

The plan will include provisions for: new business opportunities; fleet renewals; innovative public-private partnerships; a detailed franchising framework; a commitment to remote services; and finally a distinctive Canadian corporate identity for VIA Rail.

I intend to adhere to your proposed deadline. In fact, it is my hope to produce this plan in the early part of next summer.

• 1540

[English]

In recommendation number 3, you ask the government to allow for and encourage innovative public-private partnerships for VIA. The government is quite pleased to accept this recommendation. As you know, I have made a number of statements, including before this committee, about the necessity of public-private partnerships to fund transportation infrastructure in the future.

I believe these are win-win scenarios that provide great benefits for both parties. For government especially, it lets us tap into the specialized talents and resources available in the private sector.

Public-private partnerships also help us deliver public services at lower cost to taxpayers. In fact, in some cases, services can only be delivered through these partnerships, as cash-strapped governments simply have not had the resources to undertake new projects on their own.

[Translation]

VIA Rail has entered into many of these arrangements already. But we want the company to restructure itself so that these partnerships become the norm rather than the exception. We want passenger rail to be an attractive and competitive service for Canadians, and we can only do this if we draw on the talents and resources of the private sector.

The two most visible public-private partnerships that I hope to introduce are for fleet renewal and franchising.

[English]

In recommendation 5, you asked the government to commit to remote services and to provide funding for these through a separate federal allocation. The government accepts this recommendation.

Remote rail services are critical to many isolated citizens across Canada. The government recognizes the importance of these remote services and renews its commitment to their continuation.

Today we speak constantly about the need to become connected electronically to ensure that we do not become isolated from the unfolding world. But it is of course as important as ever to maintain the infrastructure for physical connection.

[Translation]

This government will not allow citizens served by VIA in truly remote communities to be cut off from the rest of Canada. The government will be consistent with the policies that it follows with respect to ports and airports.

[English]

The government will therefore review VIA routes and protect those determined to be remote. The cost of the services will be segregated to provide assured funding for their continuation. However, this funding will continue to come from within the existing subsidy allocation for VIA. That is, VIA will not receive a $170 million subsidy and then an additional subsidy for remote services. Rather, remote funding will come from within the existing annual VIA subsidy base.

During the course of the review of remote services, we will see if we can deliver these particular routes better through alternative means. Some remote services might be provided by operators other than VIA through contract by the government. I can think of perhaps the short-haul operators in Manitoba in particular.

A short-line operator can make a number of savings and provide the service perhaps with scheduled freights and mixed freight-passenger service, which is not new to Canada. That was done many years ago in the age of steam. There is no reason why you cannot have mixed trains, as long as you have good service and it's reliable and affordable for Canadians.

In any event, remote services will be protected and funded by the government.

In recommendation number 6 you asked the government to ensure that private operators do not endure undue hardship by a passenger rail service that receives a subsidy. We accept this recommendation. But that doesn't mean that a private passenger rail company has a monopoly on the track over which they operate for all time and for all types of service. If a company is offering an upscale tourist service over a given track, the government still reserves the right to provide a passenger rail subsidy for a company that provides basic transportation over that same track. These are clearly two completely different types of services. The government of course is not going to be harming the private sector by the subsidy.

That doesn't mean to say that we could not marry the two. That is another option in dealing with the potential alliances with the private sector, to which I'll come later.

Should a potential conflict arise, we will look at factors such as the type and frequency of service offered, seasonality, traffic density, and other factors to ensure the net effect is that the private operator is not unduly harmed. But we do not intend to prohibit as a matter of policy the introduction of new types of passenger rail service over a given track network.

• 1545

[Translation]

In recommendations 7 and 8, you asked the government to ensure reasonable access for passenger rail, on reasonable terms, over track the infrastructure of the freight railways. You also asked the government to use the Canada Transportation Act to ensure this access if necessary.

The government agrees with these recommendations.

If the government commits to passenger rail renewals, as it has today, it is implicit that passenger rail would require reasonable access over track infrastructure.

[English]

Track infrastructure in Canada is privately owned, mostly by Canadian National and Canadian Pacific. As you've heard during the course of the hearings, the freight railways have expressed some concern over granting increased access to VIA. Therefore, the government proposes the following course of action to deal with your recommendation.

First, I will formally ask CN and VIA to form a high-level task force to deal with issues related to access in the Windsor-Quebec corridor. This is the area where there are immediate access and capacity questions. I expect the two companies to jointly report their progress back to me by March 1, 1999.

Secondly, I will initiate a broad stakeholder forum to deal with access issues for passenger rail over the rest of Canada's track network. I would like to stress that it's my hope that this can be achieved through negotiation between the parties. However, should this not be forthcoming, the 2000-2001 statutory review of the Canada Transportation Act will offer an important opportunity to better define reasonable access for passenger rail. Coming as it does with the grain review for 1999, which we have accelerated, means that these issues can be looked at from a global perspective.

[Translation]

In recommendation 9, you asked the government to make VIA a commercial Crown corporation.

This is the only recommendation in your report being rejected by the government. In fact, it is not possible for the government to accept this recommendation. Under Canadian law a “commercial Crown corporation” must ordinarily operate without government subsidy. Obviously, this does not apply to VIA.

However, I want VIA to act like a “commercial company”. On the contrary: with our response, we are signaling a new era for VIA and a big part of that depends on improving VIA's financial performance.

[English]

In recommendation 10 you asked the government to pilot test a VIA route for franchising through an independent agency within two years. The government accepts this recommendation, but we're going to go one or two better. We're going to pursue this franchising through officials at Transport Canada and with experts from the private sector and VIA rather than through an independent agency. We're going to look at the possibility of doing more than one at the initial first blush, because we feel we can't really fool around with experiments. We have to look at the system as a whole to see whether or not we can act in total or in large part using these alliances with the private sector.

We think franchising parts of VIA's system is an excellent example of our commitment to public-private partnerships. If we can, through partnership with the private sector, provide better service at a lower cost, then we obviously will make extensive use of franchising. This could be one of the keys to passenger rail renewal in Canada. It's been implemented in the U.K. and it's shown some benefits, especially with respect to fleet renewal. I'd like to see if some of these elements can be deployed in Canada.

I have to say to some of the naysayers—and there were some naysayers, and even naysayers on the committee who came back and looked at the problems the British have had—that they made a bold experiment, they really charted a new course, but they made a lot of mistakes. We have to learn from their mistakes. They did not have a through ticketing system. They didn't have a system-wide information system. The competition allowed a lot of cost cutting and cutting of the edges of service. We don't have quite the competition, because we don't have multiple companies that will operate over the same routes, unless it's perhaps in the tourist area in western Canada. We may not even have that possibility.

• 1550

So they made a number of forays. They also, with the way they privatized the track itself, left it largely unregulated, and the new government in Britain is taking steps to deal with these shortfalls.

So I think we're in a good position. We're not going to emulate the British system, the French system, the German system, or the American system. We're going to draw from all of them. But when it comes to the British system, I think we can learn from some of the mistakes they have made, and hopefully we can draw from some of the benefits.

I think, really, through a partnership with the private sector we can deliver passenger rail services to make them more attractive to Canadians. The alternative, of course, was to basically ask the treasury to bankroll fleet renewal, and I just don't think that's on. After listening to the Minister of Finance last week, you know these are not the best of times right at the moment and we have to be very prudent as to how we spend government dollars.

Now, on this particular facet, I will adhere to your proposed deadline, and as I said, I'd like to move even faster if I can.

[Translation]

In recommendation 11, you asked the government to participate—through a maximum contribution of $25 million—in phase II of the Lynx high-speed rail proposal, in other words, the TGV (high speed train) proposed for Canada.

The Lynx proposal is complex and requires additional analysis and further consultations before the government can be in a position to make this decision.

There are many volumes of reports and issues to be examined in the Lynx proposal, and a great deal of money is potentially at issue. As this committee notes in its report:

Because of the scale of government contribution required, we believe that the Minister of Transport should very carefully consider federal government participation in the Lynx project.

[English]

So we're taking your advice. We are taking even more time on this one than you would recommend, because to move on this particular project would be a very bold step, a very imaginative step, and the government certainly will consider it. But the implications in even spending a nickel toward studies with the Ontario and Quebec governments and the Lynx consortium mean we had better be ready to go all the way and follow through on the commitment.

We're not prepared to make that decision yet. Hopefully sometime next year we will have all of our thinking fresh on this. But I would say that even if we did proceed with the Lynx, that does not obviate the measures I've outlined here to revitalize VIA as the passenger train service we currently have, because the earliest the Lynx proposal could be put in place would be within 10 years. And experience shows these big capital projects, whether they're subways, bridges, or whatever, always take longer than anticipated.

In the meantime, we've got to do something about VIA. It may very well be, in a perfect world if we've got the money and we build the Lynx proposal, that that will take over the corridor portion or part of the corridor portion. But the equipment that would come on through the changes I'm announcing in response to your report would be there and would be able to augment other services.

[Translation]

Mr. Chairman, committee members, it is my pleasure to formally table the government response to the fourth report of the Standing Committee on Transport.

[English]

You know, this has been a great exercise. I think we can have something extremely exciting. If we do our job, if we are innovative, we are talking not just of renewing the fleet and improving the service, but we are really discharging the vision you outlined, the title to your document, which is the renaissance of passenger rail travel in Canada.

[Translation]

Thank you very much.

[English]

The Chairman: Thank you very much, Minister.

One concern all committees have when we prepare reports is that a report would go on a shelf and gather dust. What you have just told us is that 9 out of the 11 recommendations are accepted. One is a maybe, and I don't think anyone around this table expected the government to commit to $25 million mid-term; those things are done at budget time. And the third is an impossibility to do. But you are allowing creativity and innovation, which is what the committee was looking for.

• 1555

I will turn now to my colleagues for five minutes per. As usual, we'll do a second round if we have the time. I have on the list, Mr. Bailey, Mr. Guimond, Mr. Cullen, Mr. Blaikie.

Mr. Bailey.

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

Mr. Minister, several times in your report today you used the words “renewal” or “renewing”. I find, with basically the same amount of money going into VIA Rail, it is not sufficient to really comply with any part of a renewal.

I want to ask the question forthwith and very succinctly that Canadians are asking across Canada. With this type of money going into renewal, are you not willing to let VIA Rail die so we can make room for some grandiose plan like the bullet trains and Bombardier, and so on? This is basically the question they're asking when they compare the amount of money going in at the present time.

Mr. David Collenette: Mr. Chairman, I'm surprised at Mr. Bailey from the Reform Party. Implicit in his line of questioning is that he thinks the government should be putting more money into passenger rail.

Mr. Roy Bailey: I didn't say that. I asked a question.

Mr. David Collenette: That's what I took from his question, and I'm delighted he comes at it from that perspective.

I can tell you, quite frankly, that I wouldn't have any part of a solution that meant the killing of VIA Rail. I just wouldn't accept it and neither would my colleagues. This has been debated at cabinet, and we want to renew the passenger rail system.

On the other hand, as I said, we've got some financial difficulties in Canada that we've just been dealing with. We're now in a surplus position. I think it would be very unreasonable, and probably unsuccessful, for me to go and ask for big capital amounts from the treasury when there are so many other demands on the treasury, whether these are health care, or roads—which we're going to have to deal with—or other transportation infrastructure.

We don't come at this blindly. We've engaged consultants who feel that, with the subsidy, if we structure operational agreements properly with third parties, we can lever private sector funds for the new equipment. I would like to tack on that when I talk about alliances with private companies, we're not talking about doing what the British did, which is privatizing and having separate identities. We want to keep the national passenger rail corporation that's now called VIA. It may be called something; I think there were some discussions by the committee about identity. We would look into that.

But certainly, we feel that the very minimum is to have the base level of subsidy we now receive, and to use this as leverage in the structuring of franchising agreements with the private sector to help leverage funds.

The Chairman: Monsieur Guimond.

[Translation]

Mr. Michel Guimond (Beauport—Montmorency—Côte-de- Beaupré—Île-d'Orléans, BQ): Thank you for your comments, Minister.

I have two series of questions and comments. You don't have to answer my questions consecutively, but I will ask them all now because if I let the chairman interrupt me, I will lose my punch in the next part. I would appreciate it if you were kind enough to take note of my questions.

First of all, I would like to discuss the issue of the high-speed train, the Lynx project. I'd like to know why the government continues to procrastinate. Our recommendation was aimed at encouraging funding a feasibility study for this project; we weren't talking about spending $11 billion. As a matter of fact, a better analysis presupposes this feasibility study. Why can't the government make a commitment and immediately unblock the funds to have this feasibility study done? We would have all the answers to our questions and at the end of the study, the government would decide whether or not to go ahead with this project.

We could see to what extent the private sector is interested in financing the project. Everyone recognizes that it's unthinkable to have $11 billion come solely from the federal, Ontario and Quebec governments. The private sector must therefore provide a significant proportion of the financing. Therefore, I would like to know why the government did not take advantage of this response to make up its mind.

Secondly, I would like to say that I am very pleased with your position regarding our recommendation no. 8 concerning fair and reasonable access to services.

• 1600

We're talking about freight trains and the private companies that operate these trains. I'm pleased to see that you hung a sword of Damocles over the heads of these private companies, especially when we see that CN, which has recorded profits, announced that it is eliminating 3,000 jobs in order to make more money and to satisfy Mr. Tellier's needs and voracious appetite. That's the comment I wanted to make. I'm therefore very happy to see that you're putting a sword of Damocles over their heads; that will benefit everybody greatly.

However, I would like you to admit that your predecessor, the late Doug Young, made an error in privatizing CN. He's asking Mr. Ranger why I call him the late Doug Young. If he hadn't sold the tracks, we wouldn't be at the mercy of CN today to negotiate access. If it had been done the same way it's done elsewhere in the world, the tracks whose construction was subsidized by Canadian taxpayers would still be part of Canada's public heritage and we would not be in a situation that forces you to hang a sword of Damocles over their heads. Will you acknowledge that your predecessor made an error during the privatization of CN?

The Chairman: I should only allow you two minutes for your response, but I will give you three.

Mr. David Collenette: Mr. Chairman, we've just heard a great speech, a great statement full of a lot of emotion. I'm not the one who spoke of being at CN's mercy or under any sword of Damocles; these words were uttered by Mr. Guimond. It may be characteristic of Bloc Québécois policy to always look back at history, but we in the government prefer to look to the future, the future of passenger rail travel in Canada.

In my opinion, it is possible to have a system that works well within the framework of the current Transportation Act.

You also asked why there's been a lack of action regarding the high-speed train. I must remind you of what I said a few moments ago. The committee invited us to examine the question very carefully, and that's exactly what we're going to do because this kind of initiative implies spending the money of Canadian, Quebec and Ontario taxpayers. It's a very, very important decision that we'll have to make. The answer is neither yes nor no; it's maybe. We are being cautious about this issue because, as you said yourself, it involves $11 billion. That's an enormous amount of money for Canada.

[English]

The Chairman: Merci.

Mr. Cullen.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you very much, Mr. Chairman. Thank you, Minister, and congratulations on responding so quickly. I think at first blush it seems to be a very comprehensive reply.

I had a couple of areas to ask you about. Looking back at the discussions of the committee, I think the rationale behind a commercial crown corporation was twofold. One was to give VIA more operational flexibility and the other to give it access to capital to finance the needed infrastructure investments in rolling stock, and other infrastructure investments.

You've pointed out a commercial crown corporation is not possible given that VIA receives a subsidy, and I accept that. You've also indicated you are going to encourage operational flexibility through other means.

With respect to access to capital, and some of the investments VIA is going to need fairly urgently, will there be any sort of bridge financing available to them? Or, by the time you come to make the business plan or accept some business plan, will that be timely enough to deal with the subsidy issue over a period of years and also to provide them with the ways and means of accessing capital to finance these needed investments?

Mr. David Collenette: Well, Mr. Chairman, Mr. Cullen has put his finger on a very good issue here. By the time everything gets up and running, how is VIA going to operate? Of course, they'll have the $170-million subsidy, but quite frankly, they've had to dip into their capital funds just to pay operating costs for this year. They had some losses that they didn't anticipate as a result of the ice storm. They had the train accident last year in Biggar that took out a number of coaches, and that requires refurbishment of some stock. These are expenses they didn't anticipate.

• 1605

The solution could be some bridge financing. Again, that's something that we would have to look at in the business plan. That's also why we have to do this business plan fast. We're running out of time. So that's something we maybe would put to my colleagues as an option.

We might want to reprofile some of the subsidy. To get some of these franchises off in Britain, what they did was front-end load a lot of the subsidy. There were higher amounts in the first years and then they were reduced over the life of the franchise. That may be a way we could go about it.

Those are options we would look at, and that's why we have to have a really detailed plan to go back to cabinet with. We can then make an announcement, and I'll come back here to explain it and to get your reaction.

Mr. Roy Cullen: With respect to the franchising, which could obviously provide some sources of capital when you get to that point, have you thought of the areas yet? Have you zeroed in on the areas where you might like to really look at franchising in a very careful way, Minister, or is that going to come out of the business plan? Can you give us any indication?

Mr. David Collenette: That will come out of the business plan, but this is something you could probably help us with notionally in terms of what makes sense. It doesn't require great expertise to generate the ideas. We'll still have to test the models financially, but you might want to say that there would be a franchise for all of the western services out of Toronto to the west coast, excluding southern Ontario. I'm really talking about the transcontinental out of Toronto, along with the tourist services in the west, with the exception of Manitoba and the services to The Pas and Churchill. Those would have to be regarded separately, but you might want to package that as a franchise, have an RFP issued, and see what the private sector comes up with.

My gut instinct tells me there is so much tourist potential in western Canada that the money could be used to cover additional ongoing passenger service in western Canada all the way back to Toronto on the transcontinental. For example, you might say to a luxury train operator that he can have thirty coaches on which they're drinking Dom Pérignon, but he also has to have a certain capacity for Mr. and Mrs. Average during certain weeks of the year throughout the year. Those people want to get on a coach knowing they can buy a coffee or a snack. They are prepared to sit up, and they don't need fancy sleeping car service that they'll pay through the nose for. Let all the rich people do that. That way, the tourist potential would effectively be subsidizing the basic coach service.

Frankly, I think it's a tragedy that Canada has gone from two transcontinental services to one. One of the more picturesque lines runs through the constituency of Mr. Dromisky, my parliamentary secretary, but it's not open now along the north shore of Lake Superior. The CP line is not used for passenger service, but I think it has great potential for tourist dollars. That may be one franchise. There may also be one for the entire Atlantic. You may want to say the whole Quebec-Windsor corridor is a franchise. Or you may want to say it's Quebec to Toronto, including Ottawa. There are also the lines west of Toronto, where a lot of people live, to Windsor, to Sarnia, to Chicago, to Niagara Falls, to London. Those communities could be served by another franchise.

So it would be useful to have your ideas on that issue. We can then run them through financial models to see if they make sense.

The Chairman: Thank you.

Mr. Blaikie.

Mr. Bill Blaikie (Winnipeg—Transcona, NDP): I want to thank the minister for his prompt response to the report. I know him to be someone who's genuinely concerned about the future of passenger rail, and I wish him well in dealing with a lot of the difficult questions, of which I have a few for him. I hope they're not that difficult. And I'm glad to hear about what he didn't call the sword of Damocles, but an opportunity that would be available to him in a year or two if he finds that CN and CP aren't as cooperative as I'm sure we all hope they will be.

• 1610

With respect to the question of remote services, I just want to remind the minister—as I think others may have done in the report—that when you look back at the VIA cuts of January 15, 1990, there were nine remote services before then. Eight of them were preserved as is. There was a ninth one that was rolled into the transcontinental service, and that was the Winnipeg-to-Farlane service that served campers and cottage communities from Winnipeg to just inside the Ontario border. I would therefore ask you to keep in mind that when you're talking about the remote services in Manitoba, you're not just talking about the northern line to The Pas and Churchill; you're also talking about something that was identified as a remote service but wasn't preserved as such.

The argument of CN and VIA at the time, as made by Mr. Lawless—I think he was heading up both at the time—was that this remote service was being protected by rolling it into the transcontinental service. If that transcontinental service is transformed in any way, if it's moved to the south on the CP line through Thunder Bay—

Mr. Roy Bailey: It goes around Thunder Bay.

Mr. Bill Blaikie: —or if you end up with two services, I would ask you to be very cognizant of the fact that you do have some remote communities along there that might need service, particularly in the summer time, not necessarily in the winter.

That's just a point that I wanted to make with the minister. I hope we'll see some restoration of service, not just the existing service. It seemed to me that this was what you were saying when you were talking about maybe trying to get some service back on the Calgary-Regina-Winnipeg-Thunder Bay line, the old CPR line, which was the original Canadian service. So those are some comments for you to respond to.

Finally, have you thought of trying to access more money than the $170 million? One of the things the Government of Canada is going through right now is an attempt to devise a response to climate change, to greenhouse gas emissions. It seems to me that trains are infinitely superior to cars and trucks when it comes to greenhouse gas emissions. Perhaps you should be talking to your colleagues, Madam Stewart and Mr. Goodale, about whether or not there is an envelope there that you could tap into for VIA or for the future of passenger rail service, in the name of reducing gas emissions. If this is something that the government is going to do over and above what it's doing now, what could be more environmentally friendly, job-creating, and good on a whole bunch of fronts, Mr. Chairman, than investing new money in passenger rail? I would certainly encourage the minister to follow that route as well.

Mr. David Collenette: Thank you.

My assistant deputy minister of policy, Mr. Ranger, who I didn't introduce—sorry about that—has really driven this with David McGovern, our director of rail policy. They have been doing a great job. Mr. Ranger reminded me of what I just talked about in the report. Our business plan that we're talking about will examine a number of funding scenarios and different models, including the restoration of services such as those you have mentioned. Maybe I'm wrong, but I think there's a good case to be made that a private operator operating on behalf of the national passenger rail service could find innovative ways to run passenger service or luxury service that would effectively bring along those services to the remote areas.

The greenhouse gas issue is very interesting, and passenger rail service is part of the solution, not part of the problem. I think that's more long-term. We're going through these transportation round tables that we've set up with the provinces, but it's going to take a number of years. When we talk about the greenhouse gas strategy or meeting the Kyoto commitments, we're talking about a twenty-year window. What I'm talking about here is basically a twelve-month window to get something in place so that we can continue to operate.

• 1615

So I think you could be right, and I'm glad I have your support to make that argument—and I hope I have it from others. I think that kind of money should be forthcoming.

The Chairman: Mr. Jackson.

Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Thank you very much, Mr. Chairman.

Mr. Minister, I'm new on this committee, but being a chap who's interested in transport, I'd like to ask you a question. You've dealt with the passenger rail here, but the congestion on the roads suggests to me that we have to do more to get the trucks off the road. I might be a little bit off the rails here, but I'll try anyway.

Like Mr. Blaikie, I feel that with greenhouse gases involved, along with congestion and all the pollutants and contaminants that come from the tailpipes of cars and trucks—a lot of rubber comes off them and is blown into the atmosphere and so on—we would be wise to do something as a nation. I know we have long distances between major population bases, but it would appear that the world, including Great Britain, is using this containerized stuff. They have a system in which part of a truck can actually go on a train and can move around in that way. I don't know if you can connect it, if there are ways of integrating the freight with the passengers, or if it's going to be a separate line, but is there anything being done by the department in that regard?

Mr. David Collenette: This gets a little away from the passenger end, Mr. Chairman, but it's a good point and it should be raised and dealt with.

The long-term solution has to have freight that is balanced in the way it travels. In the United States, you're now seeing cooperation between trucking companies and the railways to build intermodal facilities. We do have them here, and we do have CN and CP providing those services. I believe CP's is called the iron highway. Correct me if I'm wrong, Mr. McGovern, but isn't that where the entire truck, the entire vehicle, is driven on, and not just the back end?

Mr. David McGovern (Director, Passenger Rail Service Review, Department of Transport): It's the container that is put on the train, and they have regularly scheduled services that run through the Montreal-Toronto corridor. They've been running that service for several years and they're increasing their business. It's something they're interested in, and also something that our department is interested in.

Mr. David Collenette: But there's an issue that I can give you a sneak preview of. I had a discussion with Mr. Tellier recently, and it's of particular interest to Mr. Guimond. The Quebec government is under extreme pressure from the trucking industry to increase the allowed weights. As you know, in western Canada and elsewhere in the country, these heavier vehicles—I forget what the axle weight is, but they really are big—are permitted. They are also permitted in many parts of the United States. Quebec is under great pressure to start allowing them in, but this will be very harmful to Canadian National and other railways. This is an issue that I'm quite worried about. If the pressure on Quebec succeeds, then Ontario will be forced to come along as well because it is also under extreme pressure from the trucking industry. If that happens, I think it is going to be disastrous for those of us who live in southern Ontario and who have to deal with the wear and tear on highways like the 401.

We're getting off passenger rail here, but the reason I raise this is that it's all tied in with the aspect of greenhouse gases Mr. Blaikie raised. I'm going to be presenting to the House amendments to the Motor Vehicle Transport Act in February, and this matter can be dealt with then.

Under a 1954 decision of the Judicial Committee of the Privy Council, our old sort of Supreme Court on constitutional matters, interprovincial trucking, busing, regulation, and weights were all given to the federal government. Mr. Howe, who was the minister at the time, didn't want anything to do with it. He therefore basically delegated everything back to the provinces. In our discussions with the provincial governments, we are now finding that there are a lot of cries from the trucking industry in Quebec and in some other provinces, and from other stakeholders, that the federal government use the constitutional authority it hasn't used—we try to do it cooperatively—and impose certain regulations nationally.

I think you should raise this issue when that debate comes forward, because there are going to be some thorny questions. That's one of them, and the other is going to be interprovincial bus deregulation. You're going to be hearing a lot from lobbyists on both sides, so I'm glad you raised that point.

The Chairman: Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman.

• 1620

Minister, I want to go back to the $170 million subsidy and in particular to the amount for remote services, which will be pulled from the $170 million. I'm curious to know if there will be a percentage ceiling as to how much of that money would be pulled out for remote services and what will be left for the regular passenger rail. I'd like to know how we're going to deal with that, because you could be in a situation where you're putting in jeopardy what moves up and down the Windsor-to-Montreal corridor, which obviously needs a certain amount of subsidy.

You said we're going to work within the structure that exists right now and we're going to try to be innovative. I'm wondering about VIA maybe starting to look at carrying mail and parcel post. Because we're working on a set schedule, perhaps that mandate might be opened up to them. Of course, that would fit in with a short-line operator taking a look at these remote services that I think you're alluding to here, the old style of way freight that used to go up and down the line. I'd just like to get your comments on that.

Mr. David Collenette: You're entirely right. I'm not sure the mail trains would really work between the major centres. They work in Europe. Countries such as Britain have extensive mail operations, but it's a different kind of country and it's smaller. But for remote areas this may be a way to move not only mail but also other essential commodities on some of these remote lines.

I see Mr. Blaikie stepped out for a minute. But take, for example, the Winnipeg-to-Churchill line. Maybe Omnitrax would be willing to look at providing the passenger service, along with regularly scheduled freights taking on board other kinds of essential commodities. I don't know how things such as fresh milk and bread and other basic consumer items get to those smaller communities, whether they use those trains. There are certainly no roads. The alternative, of course, is air. They could continue this kind of service if they have it already, but mail could be part of that.

Under any franchising arrangement you would pro-rate the subsidy. You couldn't have a request for proposals because I don't know whether anybody would want to do that on that line other than an operator such as Omnitrax. But who knows? You might go, then, even with a sole-source kind of proposal and say, are you prepared to guarantee passenger service, one service a day of a certain quality, and to invest in new equipment? You can run the trains however you want as long as you have a certain level of service, speed, and all the rest. From their point of view they may say, we're going to get x dollars from the federal treasury as a subsidy, and the economics are good for us because we're going to marry the existing freight trains with the passenger trains.

So I think there are lots of innovative ways we can do it. There are lots of short hauls in Quebec now and in New Brunswick that could do the same.

[Translation]

The Chairman: Mr. Drouin.

Mr. Claude Drouin (Beauce, Lib.): Minister, I'd like to thank you and congratulate you for this response to our report, through which you have demonstrated your interest in passenger travel. Your response is congruent with the report that we have submitted.

Last night, we heard on the news that Canadian National would be reducing its staff. I hope that the employer and employees will be able to find solutions to remedy these difficulties as soon as possible. It was also announced that train service would be reduced, that there would fewer trains, but that the trains would be longer and could measure up to five kilometres. Could one of the officials of your department do a follow-up on this question in order to ensure that these much longer trains will not have a negative impact on the activities of VIA Rail and will not cause increased waiting times?

Mr. David Collenette: You've asked a good question. The issue of the length of trains must be examined.

• 1625

Yes, CN can start using long trains, but Transport Canada, which is the agency that regulates the transportation system and its safety from coast to coast, must study the situation.

I don't know if this announcement will lead to changes for VIA. It is unfortunate that CN is laying off employees, but as the Minister of Finance stated in the House of Commons a week ago, next year may be a difficult one from an economic standpoint. There are sometimes job cuts and an increase in...

[Editor's Note: Inaudible]... in the private sector, especially among the major automakers in Quebec and Ontario. I hope that after the reduction in business and revenue for CN, the number of workers can be increased within a year. But that's a question for CN. It's a private company that has the right to manage its own affairs while respecting the laws of Canada, but also while respecting the laws of economics.

The Chairman: Thank you. Would other members of the committee like to have the floor before the second round?

[English]

Therefore, we enter into the second round. I have three names, Mr. Bailey, Monsieur Guimond, and Mr. Cullen.

Monsieur Laliberte, if you wish to speak, you can do it now.

Mr. Rick Laliberte (Churchill River, NDP): I'll do it second.

The Chairman: Mr. Bailey.

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

Mr. Minister, I wish you had been out to some of the areas where I've been that deal with emissions control, with the hundreds of miles of tracks being taken out and the hundreds of trucks now necessary on the roads. We have just the opposite effect where I come from.

Mr. Minister, we on this committee studied at length, and heard from the railways both here and in the United States, particularly here in Canada, the necessity that freight rail had a time object, a running time, that was every bit as important as passenger rail. We heard that not once; we heard that over and over again, particularly from CN. Mr. Minister, if VIA Rail is going to become successful, the success rests on whether the car area is 80% of its value.

I'm wondering, Mr. Minister, when you mentioned this, and you mentioned it in your report to us today, what measures you have that we don't know about that will bring CN and VIA to a more harmonious relationship in the running of the passenger rail so it's on time, it's trustworthy, and it can increase its capacity for the passenger rail. There must be something you have in mind. You mentioned it in your report. I'm sure the committee would like to know what that little secret might be.

Mr. David Collenette: Well, we do have the statutory review of the Canada Transportation Act. I mean, Parliament makes the law that governs and regulates the railways, and the railway companies know this. They're not living in a vacuum: they know the western premiers have asked the Prime Minister to have a moratorium on branch-line abandonment in the west.

What they have done is looked at each on a case-by-case basis, and I don't know one instance where there is a viable proposition on the table where they have forestalled any negotiations. Where lines have been closed they are lines that are not economical, where people have not made proposals to take them over. The railways are often blamed for abandoning lines, but 80% of all the trackage that has been declared surplus has been taken up by short-haul operators, some of it in the west. But not all of those lines are economically viable.

• 1630

The problems with grain transportation and abandonment in the west aren't just due to the railways. There are other dynamics, such as the consolidation of elevators by the elevator companies. All of this is being looked at by Judge Estey, and his report's coming out on December 31. I'm sure the committee will have a number of sessions to look at his report, and you might want to make some recommendations to me on that.

The short and long of it, Mr. Bailey, is that the government is the regulator. We are serving notice today that we are four-square behind a renewal of passenger rail service, and that must be accommodated. I know VIA and CN have improved their working relationship recently, and there will be discussions that will go on. I don't like to use scenarios based on if they don't. I know the principals involved at VIA, CN, and CP, and the management. They're all professional people and they understand accommodations have to be made.

Mr. Roy Bailey: I have a quick side question, Mr. Minister. I think it's incumbent at this time, and it's in relation to your department...the lay-offs we mentioned already this evening, and of course the severance package... I think, from the phone calls I have received this morning, Canadians are not aware of the severance package being made by CN. Was it not part of the contract prior to the privatization of CN—the agreement?

Mr. David Collenette: Mr. McGovern can answer with all the details on this.

Mr. David McGovern: Okay. CN has collective agreements with its employees. They have employment security provisions that are between the private sector employer and the employees.

Mr. Roy Bailey: But did they not have to take over that before they became privatized? Did they not take the contract with them when they...

Mr. David McGovern: Yes, they—

Mr. Roy Bailey: That's the point.

Mr. David Collenette: They took the collective agreement with them.

Mr. Roy Bailey: Okay. Thank you.

Mr. David Collenette: But I think you'll see in the release that came out from CN last night—and I'm sure the committee chair or the clerk must have it to send it out—they do talk about, in their view, rather generous severance payments—

Mr. Roy Bailey: Over $90,000.

Mr. David Collenette: —within the context of these collective agreements.

Mr. Roy Bailey: Okay. Thank you.

The Chairman: M. Guimond.

[Translation]

Mr. Michel Guimond: Mr. Chairman, I still have two questions. Unfortunately, Minister, I must get back to my second question, because with all due respect, I must say that you have behaved exactly as you do in the House: you do not answer our questions.

Mr. David Collenette: What was that question?

Mr. Michel Guimond: You did not answer my question regarding access. You were probably too impressed by the use of the expression “sword of Damocles” and that lead you to avoid the question. I will no longer use that expression.

The Chairman: You have to give him the time to answer.

Mr. Michel Guimond: I will therefore get back to the question of access. I will reread your words and we will see whether or not there is a sword of Damocles.

I want to stress that it is my hope that this can be achieved through negotiation between the parties.

That's fine. That's the overall general principle. Everything's juste hunky-dory.

However, should this not be forthcoming, the statutory review of the Canada Transportation Act will offer an opportunity to better define reasonable access...

You underline those last words.

... for passenger rail.

CN and CP's in-house lobbyists were undoubtedly very displeased; there must have been steam coming out of their nostrils. We will discuss that with them later.

Minister, I also want to tell you that we know what Mr. Tellier thinks of passenger rail service. In an article published in the Globe and Mail in the first or second week of September, Mr. Tellier stated that he didn't want to hear about passenger rail service in Canada.

My question was as follows. Would you agree that if your predecessor had not sold the infrastructure, we would not be forced to better define reasonable access?

Mr. David Collenette: This is a political argument or debate, and I am here as...

[Editor's Note: Inaudible]

Mr. Michel Guimond: You're not in politics?

Mr. David Collenette: You're asking me to explain the practices of a railway company. Like Mr. Young, I'm a member of the government. We've adopted a bill on Canadian transportation and I strongly support the actions of the government; that's why I'm still a minister.

• 1635

So with all due respect, I must say that I've already answered your question here, in the document. You even read the response. It says that if it is impossible to come to an agreement, we can invoke the legislative provisions to settle this impasse.

Mr. Michel Guimond: Fine.

Mr. David Collenette: Fine then. That's clear.

Mr. Michel Guimond: Fine, that's okay.

The Chairman: I'd like to point out that that question was out of order, but since I know that you are very open with this committee, I allowed it anyway. The Minister does not have to answer to what happened in the past.

Mr. Michel Guimond: My second question is about recommendation 6 on tourist service.

Although you didn't specify the name, you are alluding to Rocky Mountaineer. You stated:

... the government still reserves the right to provide a passenger rail subsidy for a company that provides basic transportation over that same track.

Is that company VIA Rail or could it be another private company to whom the government could decide to pay taxpayers' money as a subsidy? In reading the English version of your brief, I asked myself that question.

The Chairman: I will allow the Minister one minute to answer your question.

Mr. Michel Guimond: Yes, but I'd like to finish the question.

The Chairman: You've been talking for five minutes.

Mr. Michel Guimond: All right.

The Chairman: We will have a third round.

Mr. David Collenette: If we go with the concept of franchising, it will be possible to ask the private sector to submit proposals. The Rocky Mountaineer Company can submit one, as can any other interested corporation. It will up to us to decide what's best for Canadian travellers. Rocky Mountaineer is at the mercy of VIA's will and the contracts it grants it. I'm told that these contracts will expire next year. It may be desirable to renegotiate the terms of the contract in a different context, which may include franchises as we pointed out in the report.

For my part, I honestly think that Rocky Mountaineer represents one solution and that this company will want to participate in this project.

[English]

The Chairman: Thank you.

Mr. Laliberte.

Mr. Rick Laliberte: Thank you.

Mr. Minister, I just wanted to share an experience we had with VIA Rail this summer. We had a chance to go coast to coast on the rail system. From the perspective of attractive and competitive services for Canadians, I would challenge the minister to ask Canadians what they expect. You don't want to sacrifice bright ideas just for the sake of the private sector coming in and saying they could provide audio, video, and nice entertainment services on trains, which barely exist there now.

In terms of national unity, what struck me was that the Canadian line stopped in Toronto. It went from Vancouver to Toronto. All of a sudden, it splits into Quebec and Atlantic routes.

Consider the vision of not only ourselves as Canadians but of a lot of tourists who come from all over the world to ride these rails. You get on a Canadian train, and there's a big sign saying this is the Canadian rail line. Then it stops in Toronto, where you have to switch to different cars and different systems.

• 1640

I think for the sake of our country, which was brought together by this rail line, we should ask VIA to keep that title right across, from coast to coast. Physically, mentally, we should keep our country together.

Here's the other side. I beg to differ with your answer on the Kyoto challenge. You say that as there's a 20-year window, we can wait. No, we can't wait. We have waited since the Rio Declaration, when we said we would voluntarily take these measures.

Now there are legally binding challenges set before us. We have to take this action now and these investments will have to be made. I think if you take these challenges to the parliamentarians of this country, national and provincial, we're ready to make these investments.

I think if you speak to the many committees—I'm thoroughly involved in the environment committee, and there's also the transport and industry committees—we're ready to make this investment now. Look at what measures and investments we can make in the long run. Otherwise, industry and other people will be making investments in other parts of the world for cheap credits. It's better if we pre-create the industry here for research and development, our youth, and employment.

Mr. David Collenette: Well, on the question of Kyoto, when I said it would be about 20 years, that doesn't mean to say we won't do anything for 20 years. This is something that we have to do over the next 20 years. There is a lot of long-term planning and there are a lot of implications, depending on the solutions we adopt maybe for lifestyle, industry, and the rest. Those discussions are going on.

But I can't wait for those discussions. We have to work on the revitalization of the passenger rail system now. It doesn't mean to say that the point you and Mr. Blaikie raised cannot be incorporated, which is, in other words, additional funds being added to passenger rails, urban transit, and commuter transit. Specifically, it does help with the reduction of gases. That doesn't mean to say we can't put that kind of regime in place.

You talked about the transcontinental... In the old days, the days of steam, the train used to go from Halifax to Vancouver. In fact, if you look at the CN schedule of 1966—I looked at it two days ago—you'll see that this indeed was the case. But before we jump back to the past and do this, let's try to make what we've got now work properly.

Who knows, maybe it will be possible to construct some service to certainly go from Halifax to Montreal to Vancouver. Maybe it would not even be going through Toronto. It might be going through the line that used to be used up through, I guess, North Bay and Sudbury in northern Ontario and on to the main line out west. One of the tracks is still in existence and you can still do that. I see that as something that's a laudable goal, but I'm not sure we can address that at the moment.

The Chairman: Mr. Dromisky.

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Thank you very much, Mr. Chairman.

Mr. Minister, many of the comments and questions so far have dealt with process. I'm just dealing with your speech here. Maybe I could draw an analogy. What I find is that it's really in essence a duet that's involved here: the department and VIA. They're playing their own lyrics. Then there are references to a quartet, as we introduce CNR and CPR in there. So we have a quartet in operation now, but there are more than 40 railway companies in this country.

Is it possible that we will have an orchestra? Who will be the conductor? What kind of music will it be playing? Will they be allowed to play? Will they be allowed to contribute toward the objectives and goals that you have here that you have listed, where creativity, new ideas, and so forth, might be brought into the music chamber?

Mr. David Collenette: Well, to try to be consistent, the government is the orchestra, I'm the conductor, and these are two of my biggest instruments. This process is going to be driven by the government, which means the cabinet, minister, and officials at Transport Canada. We're working with VIA Rail and we will work with VIA Rail. So that's the main part of the orchestra.

Maybe the analogy then is that CN and CP aren't part of that orchestra. Maybe they're just different concert halls that the orchestra has to play in. There are big ones and there are small ones. That's what CN and CP are. We have to get the orchestra fine-tuned—this is what we are doing with this policy—and then deal with the railways.

• 1645

The railways are in business, but they have always had a public dimension to them. Even CP, which has been a private company throughout its history, had to come cap in hand to John A. Macdonald and others for money to build, to survive.

In the twenties we consolidated and amalgamated Canadian Northern and Grand Trunk into Canadian National. We still regulate the railways. We were the ones who determined that CN should be privatized. So they recognize they don't operate in a vacuum, and the government has made a commitment to passenger rail. They knew we were heading down that track. I think they'll be working with us.

The Chairman: I too want to be consistent, so I want no one here to forget that I open the curtain, I close it, and I turn off the lights.

Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): I would like just a little clarification. Recommendation 1 was to commit to a long-term support of not less than ten years, and recommendation 4 was that the government commit to stable funding for passenger rail in the amount of $170 million annually, to be reviewed every two years. You said you would agree with those, and I just wonder if you view that $170 million as a two-year commitment or a ten-year commitment.

Mr. David Collenette: I think what's implied in the document is that we're looking at 10 years, but I think it will actually be more. If we go into the franchising business, we may have to look at 15- to 20-year windows.

If you look at what has happened in the U.K., they started off with seven years, and there are a couple that are 10 years, but I think they're talking about increasing the franchising to 15 or 20 years.

We're saying we want to keep the same level of subsidy and work within the same envelope we have now on a continual basis.

Mr. Bill Casey: You think that's good for 10 years at least, then.

Mr. David Collenette: I would hope it would be good for 10 years, maybe longer.

The Chairman: This completes the second round. We have the room until 5.30 p.m., but I've just decided I will close the curtain at 5 p.m. We have time for a few two-minute interventions.

Mr. Casey, you still had time.

Mr. Bill Casey: I just have one on a completely different subject that the minister brought up.

The Chairman: Okay. Mr. Bailey.

Mr. Roy Bailey: Mr. Minister, we have come to the conclusion of our questioning and your reply to our report, for which I thank you very much.

We are now, in the transport committee, selecting what topics and areas this committee might pursue. If we had time and if we had selected...what areas do you think we should pursue in relation to the report you've just brought in?

You've generalized, and obviously you saw what we reported in nine of the ten recommendations. Is there anything in particular you would like this committee to take a look at? I'm not saying you'll get it, but I suspect you would. In relation to rail transportation, is there anything you would like this committee to study in depth that wasn't covered in the previous report we presented to you?

Mr. David Collenette: You will have three pieces of major legislation. I think the Railway Safety Act is coming up first in mid-November. That's on rail safety. That's very important, not only on the passenger side but obviously on the freight side.

You will then have the Motor Vehicle Transport Act. I think you could do some really valuable work on the whole question of national standards and deregulation and look at some of these issues dealing with the trucking industry in particular and interprovincial buses. There are other amendments in there, but I picked on those two areas.

• 1650

Then there's the Canada Shipping Act, part II, 80% of which is transport related and 20% of which will be for fisheries and oceans. I think there will be some really difficult issues that the committee will have to deal with.

Then there's the Marine Liabilities Act.

If you really want to do a service to all of us, you might want to look at the whole area of air safety, given the problems that have happened recently. Mr. Casey has asked questions two days in a row on this in the House. We had a terrible accident off our coast a few weeks ago. We obviously have an airline industry where the pilots are quite concerned and have made a number of unscheduled landings. Statements have been made by many people about air safety.

I happen to think air safety is very good, the regulation is very good, but there are still a lot of questions that emerge and will emerge. I assume the TSB will be bringing forward its report on the Fredericton accident of Air Canada some time later this year. Then there will be the Swissair report down the road. But in the meantime, there will be other reports, such as the TSB investigation, which seems to be minor, of the forced landing of the British Airways flight the other night, the Air Canada flight at Thunder Bay last week, and the Royal Airlines flight a couple of weeks ago. So there is really great public focus on all of this.

There are a lot of issues that I think you should look at. There are a lot of accusations being hurled around that regulatory agencies, government, and airlines are all cutting back to be competitive and meet budgetary requirements and that therefore this has an implication on air safety. We're satisfied that the regime is satisfactory, but the committee may want to look at issues of that nature as well.

You're going to be pretty busy until June with the bills, and that will take a lot of work.

Mr. Roy Bailey: But would this be your order—one, two, three—the way you listed them?

Mr. David Collenette: I wouldn't give the committee any order. You're the masters of your own house.

The Chairman: Mr. Bailey, I found your question to be a very good one, but in the future it will be ruled out of order, because in the answer the minister gave us 15 years of work.

Mr. Casey.

Mr. Bill Casey: Thank you.

Mr. Jackson brought up the subject of highways, and we've had an ongoing situation in Atlantic Canada—and I think I passed this on to you today—where one province is suing another province, or proposing to sue another province, because they've established a toll highway and they're going to make a profit of $321 million on it by shutting down a federal highway to trucks.

You mentioned earlier that you had a constitutional authority on interprovincial trade and you might be able to impose regulations on that highway. Fifty percent of that highway was paid for with federal dollars. The province has proposed to shut it down to truckers, who are taxpayers and have paid for that highway, in order to make sure they make their profit on their highway.

The Chairman: The question is out of order, but if you wish to address it, you may.

Mr. David Collenette: We've talked about these highway agreements in the context of the national highway plan and the whole issue of tolls—that more work is being done on the question of tolls by the federal-provincial working group. In fact, I think the first report should have been made public by now, or is in the process of being finalized. When you get the NBTA here in February, you might want to look at this issue in that context, because you will then be dealing with interprovincial road transport in the NBTA. So I think that would be a good time to look at it.

Mr. Bill Casey: Do you—

The Chairman: That issue is out of order.

Mr. Bill Casey: No, it's a different issue. Do you have constitutional authority over that issue?

The Chairman: That's a different issue and the same subject.

Mr. David Collenette: The Parliament of Canada has constitutional authority over interprovincial road transport—trucking and busing. Obviously, it means highway financing, because the federal government has been involved for a long time. So I think you should bring these issues to the fore when you discuss the NBTA.

The Chairman: That's right. As you said, Mr. Minister, we are masters of our own destiny, so, Mr. Casey, it would be up to you to convince your colleagues that this is an issue that should be addressed.

• 1655

Mr. Minister, the intent of the committee was to produce a living document. By accepting nine of the eleven recommendations and not closing the door on others, you have allowed for creativity and innovation. I know that in years to come we will see the effects of our work.

We thank you very much for your quick and positive response and your support for the very hard work that was done by all members on all sides of this committee.

I will allow you closing remarks for the duration you need.

Mr. David Collenette: I think I've said enough. Thank you.

The Chairman: Thank you very much.

Colleagues, the meeting is adjourned. We will meet next Tuesday at 3.30 p.m. You will be advised, and it will be in camera to continue the work we started on issues to be addressed. I suspect there will be six new issues added to the list.