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[Recorded by Electronic Apparatus]

Tuesday, May 16, 2000

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The Chair (Mr. Stan Keyes (Hamilton West, Lib.)): Colleagues, we have a vote and the bells will ring for half an hour, so why don't we begin by hearing the minister's opening remarks. If the bells start to ring, we can come back and ask the minister questions after the vote. It's a single vote, so we can be back in about 15 minutes, Minister.

The order of the day is the briefing session on the 2000-01 main estimates, Privy Council vote 15, and votes 1, 5, 10, 15, 20, 25, 30 and 35 under Transport Canada.

We welcome to the Standing Committee on Transport the Minister of Transport, the Honourable David Collenette, and his deputy minister and staff.

Mr. Minister, if you have some words to read into the record first, we'd like to hear them.

Hon. David M. Collenette (Minister of Transport, Lib.): Thank you, Mr. Chair. As you mentioned, I have my officials with me—the normal cast I bring to these meetings: my deputy minister, Margaret Bloodworth; Ron Sully, ADM, programs and divestiture; Janet Milne, ADM, corporate services; Ron Jackson, ADM, safety and security; and Louis Ranger, ADM, policy.

I'd first like to thank you once again for the outstanding work the committee did on Bill C-26. It was a very important bill to get through the House, and I believe we approached it in a collegial, non-partisan way for the benefit of all Canadians, the travelling public. I was exceptionally grateful for the cooperation I received yesterday in the House at report stage and third reading. I hope the Senate will be as expeditious as the House was.

Today I'd like to outline how we're moving the Transport agenda forward in three broad tracks. First are legislative initiatives, including economic and safety-based legislation. Second are ongoing initiatives vis-à-vis transportation safety and environmental sustainability, which of course are two of our core responsibilities as a department. Third are investment initiatives, in which we're finding the most strategic approaches to further develop our transportation system and infrastructure.

The success of each of these tracks is important if we are to maintain and enhance the transportation system on which so much of our prosperity lies as a country.

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First, on the legislative track, is an issue everyone in the room is keenly aware of, and one that my colleagues, Mr. Vanclief and Mr. Goodale, announced last week, and that is Canada's grain handling and transportation system. This was a tough process we began two years ago. There was a full and comprehensive study and review initiated by Justice Estey. Then Arthur Kroeger, a former deputy minister, took the conceptual framework of Mr. Estey and tried to put it in a fashion so it could be implemented easily. They gave us the basis for the proposal we outlined last week.

Certainly the work we went through exposed many of the truly complex relationships and critical elements of this particular segment of the economy. I believe the package we announced last week will enable this very important industry to move forward toward a more commercial, efficient, competitive, and accountable system for the benefit of all stakeholders. You know the main components, but I'd be very derelict in my duties if I didn't remind you that there are six main components to the package.

First is the replacement of the current maximum railway rate scale with a cap on annual railway revenues from grain. Second is a contribution to prairie grain roads. Third is the creation of a more commercial and competitive system for moving grain from country elevators to ports, which will be achieved through the expansion of tendering for Canadian Wheat Board shipments to port. Fourth is improvements to the final-offer arbitration provisions. Fifth is improvements to branch line rationalization. Sixth is continuous monitoring by an independent, private sector third party to assess the impacts of these changes.

We think this package is significant and will really help the needs of Canada's grain transportation system for the future. For us to do so, of course, we need to pass legislation we'll be coming in with right after the break—I think it should be ready. Then we want to get it into the Senate and obviously have it take effect for August 1, the beginning of the crop year.

From the cooperation we received on the airline bill, I know everybody will work hard and try to advance this cause, particularly in this case, since on August 1 the main beneficiary for us around the table will be the fact that there will be a new competitive system put in place, and producers will start to see these gains. So it will be, in effect, money in the producers' pockets, and I know everybody will be interested in getting the bill through quickly.

I don't think I should really go through the pages on the airline bill, because I think you might have some more questions for me. I haven't been at committee for a few weeks—I forget the last time I came here—but certainly a lot has happened since then, and all for the better, I might say. I'll be pleased to answer questions, so I won't really talk about that particular bill.

I'd like to also talk about the safety area, because safety, as you know, is Transport Canada's top priority. Safety often covers both economic realities and safety issues within a single piece of legislation. We are moving forward on key pieces of legislation that gain both aspects of transportation—economics and safety.


Take the Canada Shipping Act, for example. Because we remain committed to shipping law reform in this country, we've made it a high departmental priority. Industry is committed too—we've been consulting with stakeholders since 1996, to ensure that the proposed amendments are up-to-date with their needs, as well as with their new marine technology and revised domestic and international standards.

The amendments are proceeding along two tracks. Track I resulted in Bill C-15, which revised the introductory part of the Act. This Bill became law in February. The second track overhauls the balance of the Act, and has resulted in legislation—the Canada Shipping Act 2000, which we expect to table in the coming weeks.

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We've made sure that the revised Act is more concise and more focused on ship safety. We've eliminated unnecessary duplication, and simplified the language, making it easier for shipping companies to comply with. The end result will be a clear and modern act, which will streamline procedures and eliminate bureaucratic obstacles in the sector.


In a related initiative, the new Marine Liability Act, which is now at third reading stage in the Senate, will consolidate all existing marine liability laws into a single act that will establish uniform—and in some cases new—liability rules for marine carriers regarding passengers, goods, and pollution. The bill has been very well received by industry, and should be introduced in the House in the coming weeks.

The Motor Vehicle Transport Act we're amending also deals with safety issues. Bill C-28 was tabled on March 2 and, as you know, will establish a national regulatory framework for the safe operation of commercial vehicles. The amendments are based on several recent federal, provincial, and territorial developments in truck and bus safety regulation. The updated act will create a consistent national motor carrier safety regime in Canada benefiting carriers and all highway users.

As you know, in order to move the legislation along, and due to a lack of consensus, the amendments proposed in the former Bill C-77 regarding economic regulation of the bus industry were removed. I know you're in the process of examining this issue, and I look forward to seeing your report.

The Shipping Conferences Exemption Act is also being reviewed by the department. Developments in the United States and elsewhere have prompted this review in order to keep the act current and in sync with Canada's trading partners. In consultation with stakeholders, Transport Canada is preparing amendments to the act that will encourage more competition within the industry, and allow our ports to continue competing effectively in a North American context. This legislation is expected to be ready sometime after the summer recess.

We also continue to be involved in the future development of Canada's airports. Indeed, as the divestiture process winds down, we still have a role to play in their evolution. After extensive consultations with airport authorities and other key stakeholders, the five-year local airport authority lease review is now complete. The findings have been summarized in the April 1999 consultation report, which is available upon request.

In short, the review's findings outline benefits for airports and indicate some of the areas that need refinement in the airport system, particularly issues surrounding transparency, public consultation, governance structure, and accountability. We're currently examining the review, and will be considering the next steps in the coming weeks. I know this is of particular concern to many members in view of the recent appearance here of officials from Aéroports de Montréal.

I'd like to turn to the second track of activities the department is engaged in related to transportation safety and the environment. The safety and security of Canada's transportation system continues to be a top priority for the government—a priority that's reflected in all of the department's activities. I think we're on the right track, because our transportation system is globally recognized as one of the safest in the world. We're seeing long-term downward trends in accident rates for all of the modes. We continue to strive, through education, safety awareness, and the maintenance of effective regulations, to further improve our record in partnership with our stakeholders.


On top of the various pieces of safety legislation I mentioned earlier, we're also developing and enhancing Canada's safety regime through targeted programs such as Road Safety 2001, Direction 2006 for rail, and our recently announced Flight 2005. Through these programs—and through our recently developed Strategic Plan for Transportation Safety and Security—we've established hard safety targets and set out a clear vision for transportation safety in the years to come.

Also, recent events along our shared border with the U.S. have underscored the importance of maintaining a world-class transportation security program. To help ensure the continued security of travelling Canadians, my department is consulting with industry to develop a framework for an effective means of detecting explosives at Canadian airports.

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Through all of these activities, the Government of Canada is contributing to further improve the already excellent transportation safety record Canada has achieved over the years.


Addressing the environmental impacts of transportation activities is another ongoing priority for the department. When we consider that over one-quarter of our greenhouse gas emissions in the country are transportation based, our responsibility becomes clear. As part of the national climate change strategy process, we sponsored with the Province of Ontario the Transportation Table, which is a multi-stakeholder group to identify opportunities to reduce greenhouse gas emissions in all modes. So far 100 options have been explored, and the table submitted its options paper last November. We're now hoping to develop the transportation component of a national climate change strategy.

We have also been working very closely with the Canadian Environmental Assessment Agency and other federal departments to assess the environmental integrity of federal lands managed by others on our behalf, in this case port and airport authorities. Our proposal would close current gaps in environmental assessment requirements for activities undertaken by port authorities and would make airport authorities responsible for ensuring that these assessments are carried out on lands leased from Transport Canada. This initiative is part of the federal government's five-year review of the Canadian Environmental Assessment Act.

Last September I launched the Moving on Sustainable Transportation, or MOST, program, which allocated nearly $1 million over three years to fund projects that would decrease the impact of transportation on the environment.

Finally, as required by legislation, my department is preparing its strategy on sustainable development, which I will table in the House in December.

The third track of activities I'd like to outline today involves strategic investment in Canada's transportation system. We've emerged from program review with a lean, cost-effective system. We recognize that investments must still be made if the system is to continue meeting the needs of users and contributing to our prosperity and quality of life. There are a lot of demands on our resources, and we have to find the most strategic ways to invest the money we have and to help taxpayers realize the return.

Let's look at transportation infrastructure funding. As you know, in the Speech from the Throne we indicated our intention to work with the other levels of government and the private sector to develop a new comprehensive infrastructure program that would include the transportation component. In the budget the Minister of Finance allocated $2.6 billion to such a program. About $600 million of that would be dedicated to national highways.

In cooperation with Madam Robillard, my colleague at Treasury Board, we are initiating cross-country consultations with the provinces and territories to determine the direction of the program in the coming months. We think the program should have two main components: the municipal infrastructure component, with a budget of $2 billion, will favour projects that have a direct beneficial impact on the environment, make use of new technologies, and provide new ways of delivering services to Canadians through partnerships.

Of course, very important for those of us who live in cities in Canada, transportation is expected to be a big component for many of the municipalities. I attended a meeting with senior mayors from across the country, the Prime Minister, and Madam Robillard, and I know there was a consensus that transportation had to be at the top of the agenda for the big-city mayors. That was a point made by Mr. Duerr of Calgary, Mr. Lastman of Toronto, and Ms. McCallion of Mississauga, just to mention three.

The highway infrastructure component has a budget of $600 million over four years. We hope this is going to be directed to improvements to the national highway system in a strategic way for those areas that have increased trade and traffic and need the most attention. All in all, we believe the end goal will be a safer and more efficient highway system for all Canadians.


And the transportation's system of the future will be more than simply asphalt, concrete and steel—it will also include innovation, technology and skills. Canada can't afford to be left behind. Keeping our transportation infrastructure running efficiently also means making the most of available transportation technology.

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The benefits of this technology—particularly Intelligent Transportation System technology—are well-known. That's why my department has developed a strategy to promote the deployment of ITS across all modes of transportation in Canada. We have a budget of over $7 million for ITS developments in Canada, including $250,000 to establish an ITS testbed at the University of Toronto. This initiative furthers the Government of Canada's commitment to creating partnerships among the public, private and academic sectors, and is an important first step in helping transportation to benefit from this new technology.


Improving transportation for passengers is equally crucial, particularly for inter-city travel. Providing Canadians with a convenient, affordable, and environmentally friendly transportation option is an excellent way to encourage them to leave their cars at home and use public transportation, therefore reducing the congestion we see everyday.

As you know, last month we announced $400 million in new funding to be spent on major capital investments at VIA Rail over the next five years. This strategic investment will, I think, give Canadians a better national passenger rail service, with more access to trains throughout VIA's network, more frequent services, better stations, and more modern equipment. By giving VIA the tools it needs to ensure that it can operate safely and efficiently, we are helping to secure a viable, economic, and environmentally sound transportation option for all Canadians now and in the years to come.

I should also say, Mr. Chair, that this is another area where this committee did much of the groundwork for the new policy I announced. For those people who sometimes chide the parliamentary process, the fact is that this committee has had a dramatic impact on the policy initiatives of this government in both air and passenger rail and in the area of the transportation of grain. So I want to thank the honourable members for their cooperation on this particular file.

We've also been busy improving the ferry service on the east coast. As you know, I confirmed what had become a daily rumour, and that was new capacity on the gulf run between Port-aux-Basques and North Sydney. That is something that was long overdue. The extra capacity was required. A lot of work was done by Marine Atlantic's board and its employees to look out for a suitable vessel to meet the growing demand within the context of their four-year corporate plan. They found a vessel. We recently authorized them to spend $58 million plus taxes and duties to purchase the MV Stena Challenger for the fleet, and it's going to come into operation next year. In the meantime a high-speed ferry, the HSC Max Mols, is going to begin operations next month, just in time for the peak tourist period and the Viking millennium celebrations.

I hope this will mean for Newfoundlanders that There will be no more delays at Port-aux-Basques or North Sydney. There won't be any more rotting vegetables or meat in freezer trucks at either end. There won't be any more tourists or residents having to sleep in their cars and being hassled because they cannot get the run back that they had booked. So I think this is a very good investment, and certainly one that will meet the basic needs of the province of Newfoundland and Labrador.

So the department is busy on many fronts. We want to make sure we have the tools and the legislative and regulatory foundation to continue to serve the public for many years to come. Transportation is at an interesting juncture. As the new millennium unfolds, I think now is the time to set our future agenda.

Part of the process will be the upcoming review of 1996 Canada Transportation Act, an initiative that will have far-reaching implications and will determine how the system functions in the coming years. By July 1 I'll be appointing one or more individuals to review the act, as well as any other act that pertains to the economic regulation of transportation for which I have responsibility.

The initiative has to be supported by a pervasive, forward-thinking vision for transportation. To begin developing this vision, I'll be hosting a millennium transportation conference that will bring together key Canadian transportation decision-makers as well as a broad range of prominent public and private stakeholders. Some of your favourite transportation personalities, such as Mr. Milton and Mr. Tellier, will be there. I've invited all the members of the committee to participate on June 11 and 12. For the international flavour, we have added the former Australian transport minister, Peter Morris, and as a keynote speaker at lunch, Secretary of Transportation Rodney Slater from the United States, plus many other names you will recognize.

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That will be coming to you very shortly. I hope you can come to Toronto. It's on a Sunday night and Monday, and we scheduled it so that members could hopefully get there quite conveniently without missing too many votes in the House. I would hope most of you could come.

The proceedings will be in both of Canada's official languages and it will be open to the media, but not the general public. Hopefully we'll all benefit from not only the formal sessions, the formal exchanges, but also the private conversations you will have with the 300 stakeholders from across Canada, including some of the names I've just mentioned.

I think I've just about brought you close to vote time, but I'm here for however long you want me, Mr. Chair.

The Chair: Thanks, Minister, for your summary to the committee.

Colleagues, the actual vote will probably be at 4:20, so we could probably have at least one round. With the number of members here, I think we'll do five-minute rounds. So we'll start with the first five-minute round, then we'll go for the vote.


Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): Thank you, Mr. Chair, and thank you, Minister.

I'm going to ask you three questions so that I at least get my questions in.

I want to talk to you about the highway infrastructure program and the ITS system. The amount of money you are putting into the highway program is $150 million a year. It's less than 3% of the revenue that is taken in by gas tax, and I would ask you if you feel this is enough.

I want to ask you about the ITS system that you're developing. I'm glad to see it's here. I'm glad to see you have a commitment to fund it. I'd like to know how many years that $7 million represents, over what period of time? And is the system we are developing compatible with the systems in the United States? If we're talking trade corridors and we're talking about the transportation of our trade going north-south, it's essential that whatever intelligent transportation system we put together is compatible with that of the United States.

In my third question, I'll throw in a comment as well as a question. I notice you are improving ferry service on the east coast. Do you provide any kind of financial support for the ferry service on the west coast? If not, why not? The fact that it is within a province I find not good enough when you are subsidizing, through a grant program, bridges over the St. Lawrence River within the province of Quebec.

The Chair: Thank you, Val.


Mr. David Collenette: Let's look at the last question first. With respect to ferry service, I don't believe we put any money into operations of any of the west coast ferry services. We do?


Mr. Louis Ranger (Assistant Deputy Minister, Policy, Department of Transport): Yes, we put in $25 million this year as part of an agreement that was reached many years ago where the amount is adjusted for inflation. We've reached the level of $25 million.

Mr. David Collenette: But this is different from what we do in Newfoundland, which is a constitutionally mandated service. But why did we get into that on the west coast? Can you give me the history on that?

Where's program review when you need it?

Ms. Val Meredith: I hope you didn't help the government buy those fast ferries.

Mr. David Collenette: No, we wouldn't have done that. Look, I apologize, that escaped my attention, so we'll get the information for you on that.

But on the east coast, this is a constitutionally mandated ferry service and part of the terms of union in 1949, and we are obligated to continue that particular service as we were for the railway. As you know, the Mulroney government bought our share out of that commitment for whatever it was—ten, twelve years—for highway construction.

Ms. Val Meredith: My comparison, Minister, was with the bridges over the St. Lawrence in the province of Quebec.

Mr. David Collenette: In regard to the bridges over the St. Lawrence, this again predates everybody at the table. In another era, for whatever public policy reasons, it was deemed necessary for the federal government to build bridges across the St. Lawrence. We don't do that any more, but we still are the residual owner of those bridges.

We are putting the management of those bridges on a much sounder footing. We've established the Federal Bridge Corporation Limited, and the intention there is to ensure that while we still have these bridges they are looked after, they are maintained. There has been some discussion with the Province of Quebec about the province taking on those bridges. We have no movement on that particular file at this time.

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On highway infrastructure, in terms of your question on whether it is enough, the answer is no. But I was happy to get the $2 billion for the infrastucture, because for many of us from the cities, the municipalities do need the ability to invest in transportation infrastructure. I consider the $2.6 billion as all potentially transportation related. Of course it won't be; it would depend on the province, on the municipality, the size of the municipality. In the Greater Toronto area, as I said, the priority is affordable housing and transportation.

But the $600 million for federal highways, I think, has to be looked at again, and certainly I'm going to go back to the Prime Minister and the Minister of Finance and say, look, let's hope this is just the start. We only had so much money, but I think it's significant that we've at least turned the corner and we're now starting to put money back into highway funding. The key is how we're going to spend the $600 million.

I personally would like it spent in a strategic fashion to get the best bang for the buck, but as Mr. Ranger will tell you, he's been talking to the provinces, and Canada being Canada, everybody wants their share of the pie. So that's why the $600 million, if it's divvied up on a per capita basis, is not going to have the same kind of effect the way it's spent. But these are discussions we're having with the provinces.

On ITS, I'll ask Mr. Ranger, who is in charge of that program, to give you a bit more information.

Mr. Louis Ranger: On ITS, your question was for how many years. The $7 million was for three years, and we're already one year into that program. But as the minister said in his opening remarks, we no longer define a highway just as asphalt and steel and so on; everybody in this country agrees that a more modern definition of highways would include intelligent transportation systems. So as we visited the provinces and territories, they all agreed that some of the money set aside for highways should be available for ITS. We're working on a detailed program design, but I certainly hope we will have additional resources to pursue this agenda.

Ms. Val Meredith: Will it be compatible with the systems that are being developed in the United States?

Mr. Louis Ranger: Absolutely. In fact the money we have now is used precisely to make sure we have what we call a “national architecture” that's also consistent with what the Americans have in place. Frankly, we've retained the same consultants who designed the system in the U.S. to help design ours so that there's no problem of compatibility.

The Chair: Thanks, Val.

Colleagues, we're recessed till after the vote.

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The Chair: We're resuming our hearings.

Minister, given that we have only about 25 minutes left before the bells ring again, some of the members have come up to me and asked if you're available to come back to the committee again to answer more questions—not tonight, but at another date.

Mr. David Collenette: Oh yes, another time. I have the Toronto caucus at 6:30 p.m., and then I have a dinner meeting.

The Chair: Maybe we can coordinate with your office and the clerk to find a date where we can all have you back again.

Mr. David Collenette: Well, the week we come back.

The Chair: The week we come back, the first Tuesday back? Okay, we'll compare our schedules.

Going back to the list, we have Joe Fontana.

Mr. Joe Fontana (London North Centre, Lib.): Thank you.

Well, Minister, I'd like nothing more than to talk about airlines, but I'm going to give myself a break and talk a little about another passenger mode that I'm very fond of, and that's VIA.

I thank you for your comments with regard to the recommendations of the committee, but it would seem to me that our advice was probably to be a lot bolder, go a lot further, and allow for some creative public-private partnerships. As I look at the estimates, albeit I think the $400 million over five years is going to go a long way to trying to give them the capital they need to upgrade their fleet and some of their infrastructure, I see that their base funding at $170 million continues for about three or four years.

In the absence of obviously being able to bring more money to the table, I would have hoped, and I think our recommendation might have been, for it to be a lot more, so that they could even take that $400 million of yours and leverage it, go out in a very creative way and get the resources they need in order to expand services, especially in light of what we see now. In fact some customers are telling me they're so peeved off with the airline service that, as far as going from Toronto to Ottawa is concerned, although it might add about an hour or and hour and a half, at 500% less in terms of price than the air fare, perhaps VIA or high-speed rail could be that alternative and that competition we're looking for.

My point is, is it possible to go even further with VIA and unshackle them, so to speak? I know you have part of the way, but my point is that I think our advice to you was to go a lot further with it.

Secondly, maybe you could address the high speed...that plan that was out there that this committee looked at a couple of years ago, in light of maybe providing that competition in the corridor that might be necessary in the absence, say, of other airlines coming to the table.

Mr. David Collenette: Well, all along we agreed there had to be a reinvestment in VIA, and I pursued the private sector angle very hard, simply because I didn't think we'd get any more money out of cabinet. But because of the surplus and because of money being available, a number of my colleagues were very helpful in saying, look, why don't we just put some more money into VIA in the short term and then encourage them to develop these private-public partnerships over the long term, and in effect get the best of both worlds?

In other words, we'd have a minimum of disruption, have the core system that's there refinanced in terms of new equipment, but then move toward new partnerships. We're looking at some for the remote lines where private sector operators do provide services on contract for VIA, plus they have the ability to look at very innovative things such as public-private partnerships on the maintenance centre in Montreal, and other issues.

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We do believe that the $62 million that will be spent on the Montreal-Toronto bottleneck, with longer sidings, sometimes going to four tracks, and improved signalling switches, will cut down a lot of the congestion and allow VIA to run up to five express trains a day—I think it's five—in each direction on Toronto-Montreal, and two to Ottawa, plus the regular stopping services. This will mean, therefore, more trains on that route. It will mean probably a reopening of the maintenance centre in Toronto, and again, that's an area where you can have a public-private partnership.

There is an individual who has taken the old CN shops in Moncton, who is taking the Budd cars, refurbishing them, and would like them to be used on selective VIA routes or other routes, as well as sell them to the United States—refurbished Budd cars. There is more activity, potentially, at that maintenance centre.

So there are lots of things to improve the public-private partnerships with VIA.

On the point you made about competition, right now on the Toronto-Montreal and Toronto-Ottawa runs the only competition for business-class passengers is VIA. That's why we need to get more equipment on.... Royal Airlines, Canada 3000, and others who are also now flying in the triangle are basically flying for the economy-class seat. They're doing very well and they're offering very cheap prices.

So I take your point about VIA being an alternative. If we can get the speeds down to three hours and thirty minutes for Toronto-Montreal, and three hours and twenty minutes for Toronto-Ottawa, maybe three hours and fifteen minutes, that becomes even more competitive, certainly with road, and even with the airlines, especially at the kind of quality you get in business class or VIA 1 service.

On the high-speed train, I'd love to have a high-speed train. I'd love to be the minister of transport who launches this. The fact is, we have to get the present system back to snuff and improved in the short term. I think within 10 years this country will start work on a high-speed, TGB-type line between Montreal and Toronto, and then expand to Quebec and Windsor. I think its time will come. I don't think we can get the resources right at the moment to put into that. If it's a choice between my getting more highway funding in the short term and getting money for the high-speed train, I'm going to have more chance getting highway funding, because if I get $2 billion in highway funding, well, that's up against $3.5 billion that the rail franchise wants.

The Chair: Michel Guimond.

Mr. David Collenette: Tell the Minister of Finance.


Mr. Michel Guimond (Beauport—Montmorency—Côte-de- Beaupré—Île-d'Orléans, BQ): Good afternoon, Mr. Chairman.

I'm going to make a comment for my colleague from the Canadian Alliance Party regarding the question she asked you a few moments ago. I will give her time to put on her receiver so that she can appreciate the subtlety of my comment.

You gave a good answer to her question about funding of bridges over the St. Lawrence. However, you could have added that when Quebec becomes sovereign, this will be part of the negotiations on sharing the assets and liabilities in any case.


The Chair: Michel, five minutes goes very quickly.


Mr. Michel Guimond: Having said that, Mr....

Mr. David Collenette: The same thing can be said of dreams.


The Chair: Let's get to the questions.


Mr. Michel Guimond: In reading the Summary of the Estimates, Mr. Minister, I noticed that you gave Marine Atlantic authorization to spend $58 million to purchase the MV Stena Challenger. I imagine that this amount was not part of Marine Atlantic's budget allocation, which amounted to $28 million in 1999-2000, and increased to $48 million in 2000-2001. Do you have to add the $58 million for the purchase of the MV Stena Challenger to the $48 million?

Mr. David Collenette: Mr. Ranger will answer your question.

Mr. Michel Guimond: I hope his answer will be short, because I have two other questions on Marine Atlantic.

Mr. Louis Ranger: The costs of purchasing this vessel will be taken from Marine Atlantic's budget allocation, and spread over several years.

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Mr. Michel Guimond: I see.

The election results last night showed that the announcement you made a week ago was not productive. In short, I think the people of Newfoundland made the right decision when they opted for surplus capacity.

I would like you to tell us what you think about the future of Marine Atlantic, Minister. One of your predecessors, the late Doug Young—I say “late” even though he is not deceased, because your former colleague has converted and become a supporter of the Canadian Alliance—told me, when he was sitting where you are today, that there were some plans to privatize Marine Atlantic. Is consideration still being given to privatizing Marine Atlantic?

I would like to ask one final sub-question, that I forgot earlier, when we were talking about the MV Stena Challenger. Would it not have been a good idea to consider building such a vessel in one of our shipyards, for example MIL David Inc., to promote shipbuilding in Canada?

Mr. David Collenette: In response to your question about building new ships, I would like to point out that, in the last two years, there has been a very significant increase in the number of passengers who take the ferry between Nova Scotia and Newfoundland, and that we did not have time to wait for new vessels to be built. I asked Marine Atlantic officials to develop a strategy to replace the MV Joseph and Clara Smallwood and the MV Caribou over the next few years, and to plan that these new vessels will be built here in Canada.

I have discussed privatization with a number of my colleagues, in particular with the Premier of Newfoundland, Mr. Tobin. Privatization of Marine Atlantic remains a possibility, although for the time being, I am mainly concerned that we be able to meet the demand this year and the next, to appoint a new president, and to restructure the management of this corporation. Once I have done that, I will look at the privatization options.

Mr. Michel Guimond: Will you give an official answer to the question asked by my colleague, Mr. Fontana, about the HST? Will you make a commitment to implement one of the committee's recommendations that is still outstanding? When you spoke about the future of VIA Rail, you were responding to the Transport Committee's report. We asked you to make a financial contribution to the feasibility study, which was supposed to cost $102 million. We asked you to invest $25 million in this, while the Lynx consortium would contribute $51 million, the Ontario government, $12.5 million, and the Quebec government, $12.5 million. I am pleased to hear what you have to say. You are behaving as I expected in the rail sector. As I have said publicly, you are one of the Transport ministers most committed to rail transportation, and that is more than base flattery.

Will you be responding specifically to this request of the committee? As far as I can recall, you have not responded to this recommendation.


The Chair: On a point of clarification, the funding the committee asked for in that report was for a study of the high-speed rail system, not money to a high-speed system. I stand to be corrected, but I've done two of them already.


Mr. David Collenette: Mr. Guimond did mention the feasibility study.

Personally, I think I have already responded to this recommendation. Clearly, we are not prepared to start planning the construction of a high-speed train, even though I acknowledge, as I have said before, that that might become possible in the next 10 years. But we are not inclined to finance such a study at the moment. I believe the governments of Quebec and Ontario share my view for the same reasons.


The Chair: Thanks, Michel.

Joe Comuzzi, please.

Mr. Joe Comuzzi (Thunder Bay—Superior North, Lib.): Thank you, Mr. Chairman.

Minister, I'll just make a couple of comments with respect to the budget, and then I'll ask the question.

• 1700

On page 27, you talk about the $150 million and that it's going to three provinces, including $34 million to Newfoundland and $58 million to New Brunswick. You talk about the bridges, Victoria Bridge in Montreal and Confederation Bridge in Prince Edward Island. Those are the items to which you refer. I don't see that as being national in scope.

With respect to passenger trains and the money that you announced just recently, if we're looking at trains as a potential way to move people, that still leaves, in northern Ontario, 400,000 people from Sudbury to Winnipeg who do not have access to the train service. We opted under the regime of former Transport Minister Mazankowski to go through the northern route, where there are only 15,000 potential passengers.

Those are issues I draw to your attention. I don't expect a response today.

But given that we always pride ourselves as being a leader in the G-7, Canada is not a leader when it comes to funding transportation, particularly highway transportation. The reason the United States is spending the money they are is that they dedicate up to 90% of the taxes they collect on gasoline and diesel fuel to the renewal of the infrastructure.

I think England contributes about 70% of what they collect through taxation back to the resource. France is in about the same category. But we in Canada have never—in the last 20 years anyway—indicated that the $4.9 billion we collect as a federal government in gasoline and diesel oil tax, or any portion of it, should be contributed back to the resource.

I know that has been an argument at the table of cabinet, and I know that's one of your concerns. So my question is, why can't the federal government, through your department, make a commitment to a national highway policy—which, in our interpretation, is a limited-access four-lane system from coast to coast—with particular emphasis on the 11 most important border crossing points, in order to at least keep transportation productivity in this country close to that of the United States? Why can't we make a commitment to a national highway program?

If we can make that commitment, what do you think this committee can do to assist you in making sure the adequate financing and adequate government structure is put in place so it can be funded properly?

Mr. David Collenette: We have made a commitment to the national highway system with the provinces. We've identified the 25,000 kilometres, and we want a rebuilding of the national highway system.

We received $600 million in the last budget. That's not enough. We need more money, and the members of this committee hopefully can make that known to the Minister of Finance, the Prime Minister, and others of my colleagues.

But it really comes down to a question of priorities. The taxes that are collected in excise tax are put into the general revenues in the Consolidated Revenue Fund. They go to pay all manner of things. It seems that the public's preoccupation at the moment is to give more funding to health care. That comes out of general revenues.

We've never had what the British call “hypothecated” taxes, or dedicated taxes in the American sense. It's something to which the Minister of Finance and his officials have always objected, because they believe a tax dollar in revenue is a general tax dollar and should not be tied to specific expenditures.

But there's no question that we take in much more in fuel taxes than we spend on highways vis-à-vis the historical expenditures. I think that gap should be narrowed. That's why I welcome your views on how to get more money. It's a question of this committee and others lobbying the Minister of Finance and the Prime Minister on this.

• 1705

You mentioned other systems. You can't always compare other jurisdictions to us. The U.K. is a centralized system where everything sort of flows from the central government, and it's the same with the French. These are highly centralized countries without the intermediary step of regional or provincial governments, notwithstanding partial devolution to Wales, Ulster, and Scotland in the case of Britain. In France, there's very much a centralized funding from the French government.

I think the Americans actually have a lot to offer us in their commitment now to public transportation and to highways. Certainly I think they're going to show us up if we don't really match on a proportionate basis the kind of investment they're making, for the reasons you stated.

But on the highway priorities we've had, I've stated publicly the ones you've just mentioned, moving towards twinning the Trans-Canada Highway right across the country and making access to border crossings better in terms of the quality of the roads. I can think of Windsor, in particular, which I think is the busiest border crossing in the world. It's abysmal. You go through a six-lane residential road.

So those are our priorities. As soon as we get the money, we can make those priorities a reality.

Briefly, I believe the $150 million you mentioned is the $150 million we expend on federal roads at the moment, such as for the bridges and that.

Isn't that right, on the $150 million that Mr. Comuzzi was talking to?

Ms. Margaret Bloodworth (Deputy Minister, Department of Transport): That $150 million is existing money. It's not the new $150 million. That happens to be what we are spending in 2000-01 on existing highways.

Mr. David Collenette: But that's not bridges as well, is it?

Ms. Margaret Bloodworth: No, there's additional money for the bridges.

Mr. Joe Comuzzi: But my question, Mr. Collenette—and thank you for answering it—was that I know you're having some federal-provincial consultations, and....

Am I still within my time zone?

The Chair: No, you're beyond it.

Mr. Joe Comuzzi: Can I ask this question?

The Chair: Very quickly, Joe.

Mr. Joe Comuzzi: It seems to me that we should be putting the framework together because of the different thoughts between the provinces. If we put the framework together, then it becomes a matter of how to influence our government to spend more, and the private sector to spend more. But it's difficult to get this private financing and public financing put together with it unless they know what the framework is, what the contributions are going to be, and what the standards of the highway are going to be. It seems that some of that money should be spent on preparing ourselves for it and then trying to put the financing package together.

The Chair: Thank you, Joe.

Mr. David Collenette: Perhaps talking to the same thing, not to answer that—that was more of a recommendation—on the transcontinental train route, I think it was unfortunate that the previous government, for crass political reasons, chose to keep the one service on the CN line instead of the more attractive and therefore revenue-generating potential line of the Canadian Pacific along the north shore of Lake Superior and going through your town of Thunder Bay. I've asked VIA to look at all the routes and to see if it makes sense to restore some routes that were closed.

Obviously the $400 million will only go so far, so we shouldn't get people too excited, but there are things we should look at, and it might be possible to put the transcontinental back on the CP line while still maintaining a quality service for those remote communities on the CN line that could then join up with the other service, either at Sudbury or Winnipeg.

The Chair: Mr. Casey, please.

Mr. Bill Casey (Cumberland—Colchester, PC): Thank you very much.

Where is the $400 million in the estimates for VIA? I see $170 million, which is the same old number.

Mr. David Collenette: It's going through the supplementary estimates.

Mr. Bill Casey: When will that come?

Ms. Margaret Bloodworth: This was a post-budget announcement, as you will recall, so we would have to have supplementaries before we can put it in our estimates. So it will come.

Mr. Bill Casey: Where's the ACAP, the airports capital assistance program? I was under the impression that was going to get more money, and there's no increase there. Is that the plan, that we're not going to increase the ACAP plan, $35 million last year and $35 million this year?

Mr. David Collenette: We've had some discussions with my colleagues on that, and there is a general agreement to continue the program. I'm hopeful we'll be getting additional funds in that program, because it is certainly a necessary one.

• 1710

Mr. Bill Casey: I have another question, just a curious one on ferries. The service from Saint John to Digby went down 30%, and Yarmouth to Bar Harbour went up 34%. How come? Was there a subsidy?

Ms. Margaret Bloodworth: What page are you looking at?

Mr. Bill Casey: I'm looking at 22-4. That's what it says on this one anyway. Maybe this is a different version. It's transfer of payments in dollars, total grants, and down at the bottom of the page it says 22-4 on the copy I have. Maybe this is—

The Chair: Bill, for reasons of saving time, because it's very limited right now, maybe we can get the response to that question from the minister or the deputy minister.

Mr. David Collenette: We can get a detailed response for Mr. Casey.

The Chair: Great. Then we can give that to the committee clerk.

Do you want to move on to your next question?

Mr. Bill Casey: Yes.

I realize that the compliance commissioner is a late development too, but do you have an estimate of how much that's going to cost the CTA? Is that going to be extra for the aviation industry?

Mr. David Collenette: There will be more funding required. In fact we've apportioned some resources for the earlier provision in Bill C-26 for monopoly pricing. That's been discussed with the chairman of the CTA. Of course the recent development is one that hasn't been fully costed out yet, but obviously there will have to be money in the supplementary estimates for that.

Mr. Bill Casey: Where's the $175 million for western rural roads? Is that in here anywhere?

Mr. David Collenette: That's the same thing. You're so far ahead of the game, Mr. Casey. The fact is that we've been announcing so many good programs for the benefit of Canadians that we haven't been able to keep up with the budgetary documentation, but it will all be there. The money's there; it's guaranteed.

The Chair: Mr. Casey, do you have another question?

Mr. Bill Casey: I just want to make sure it's there, that's all.

Mr. David Collenette: It'll be there; don't worry. I'm glad you're so happy about the money going into western Canada.

Mr. Bill Casey: I'd like to see a matching amount for eastern Canada. That would be great.

Do you have an estimate of how much it's going to cost to implement Bill C-26?

Mr. David Collenette: I don't think we can give you an answer right now. The bill just got through yesterday. We've just made amendments as of last week.

The Chair: Yesterday, actually.

Mr. Bill Casey: Regarding the $175 million to the west, did we decide what provinces are going to get that money? Is it going to be cost-shared?

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): Three plus one.

Mr. David Collenette: There are four western provinces that technically would be eligible for grain roads. Obviously most of the money will be spent in the three prairie provinces.

Mr. Bill Casey: Will it be cost-shared 50-50 between federal and provincial, as it traditionally has been?

Mr. David Collenette: Those details are being worked out. There is a previous model of the WGTA road expenditures that will help guide us. That's something that really has to be worked out.

Mr. Bill Casey: What was the old model?

Ms. Margaret Bloodworth: It was an agriculture program.

Mr. David Collenette: Was it agriculture? I don't think it was 50-50; I think it was a straight expenditure by the federal government.

Ms. Margaret Bloodworth: I believe it was, but it was an agriculture program. It didn't come through us. Indeed, this one will be an agriculture program as well.

The Chair: Thanks, Mr. Casey.

Mr. Hubbard, please.

Mr. Charles Hubbard (Miramichi, Lib.): I probably could get into tolls. Bill didn't bring up tolls.

Mr. David Collenette: [Inaudible—Editor]

Mr. Charles Hubbard: I'm not sure they are, Mr. Minister.

I'm looking at these bridges that Michel was talking about. We have two toll bridges in New Brunswick, the Saint John Harbour Bridge and of course the one going to Prince Edward Island. The toll there is something like $35 to cross back and forth. In this we have a number of bridges, and Michel was talking about bridges. I could be wrong here, but according to the figures I've been reading, in a four-year period the federal people are going to pay about $300 million towards the three bridges in Quebec.

It appears, Mr. Minister, that this year alone about 12% of your total budget is going to go to those two bridges. Is that right, or am I mistaken?

Mr. David Collenette: There's no question that money from the budget does go into maintenance of those bridges.

Mr. Charles Hubbard: But is it correct? Does $122 million out of a budget of a little over $1 billion go for those two bridges in Montreal? Is that right, or am I mistaken?

• 1715

Mr. David Collenette: There's no question that money from the budget does go into maintenance of those bridges.

Mr. Charles Hubbard: But is it correct? Does $122 million out of a budget of a little over $1 billion go for those two bridges in Montreal? Are there other bridges that the federal government owns besides those three and the two in the Atlantic?

Mr. David Collenette: Well, we have the ones we took from the St. Lawrence Seaway Authority. We can get you a list of all of the bridge infrastructures we have.

Mr. Charles Hubbard: So the federal government is maintaining 22 bridges along the seaway. Is that correct?

Mr. David Collenette: Yes. The Federal Bridge Corporation took on some of the assets from the St. Lawrence Seaway Authority when we commercialized the seaway.

Mr. Charles Hubbard: Michel, you do get a pretty fair share of federal revenues in terms of what your province gets. You brought that up.

Mr. Minister, I'd like to follow up on Joe and others, on the railway issue. In terms of environmentalists, you read a lot of papers that say that air travel and the airlines, because of the energy they use, are the least sustainable methods of transportation in this country. I'd like to emphasize that it's very important that we look other modes of transportation, particularly rail because rail is very environmentally friendly, probably second only to navigation by sea. I would hope we can devote some energy and some money towards rail transportation.

Thank you, Mr. Chairman.

The Chair: Thanks, Mr. Hubbard.

Mr. Bailey, please.

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

Mr. Minister, as you know, you have had the Kroeger report for one year and the Estey report for two years, and we've now had a press conference but no bill as such. You've been well aware that this has created a great deal of attention in the west for some time.

The freight rate will be falling by about 13.5% unless you pull back the 4.5% increase, which was originally slated for August 1. I read in the paper that you may do that.

The change that the main players in the west were looking for was to have a more commercialized grain transportation. The main players in that—the major grain companies, certainly the railways and certainly most of the producers—felt somewhat taken aback. We all welcomed the freight reduction as such. You'd have to be crazy not to welcome that. But at the same time, the railways indicate that they can do even better with freight rate reduction if there were a commercialization of the grain industry.

Obviously we now know about a memorandum of agreement. If the major players don't know what is contained within the memorandum of agreement prior to the passing of the bill, it seems like we're in limbo somehow. No one knows for sure that the third party that has been created to provide you with recommendations of the phasing out, to some extent, of the beginnings of commercialization, I might say.... If your department is going to look at the bill recommendations in the same way and in the same time limit as it took for the Estey and Kroeger reports, then we may be a long way away from total commercialization.

My point is simply that we appreciate the reduction, but certainly the industry in itself and the major players in the industry do not appreciate some kind of agenda that would slow up the commercialization of grain transportation. I'd like your comment on letting the players know what that memorandum of understanding is, because without that, the major people who operate.... And I'm talking about the three major role players: the producers, the railways, and the grain companies. Without that, I'm sure we're going to cast a lot of shadows over the industry.

I'd just like your comment on that.

The Chair: Thanks, Roy.

Mr. Minister, the bell's ringing, so if you could give us a....

Mr. David Collenette: This is a very intricate, detailed question. Mr. Bailey mentions that it's been two years since the Estey report and a year since Kroeger. That shows how much we were committed to a thorough analysis of the proposals and consultation with stakeholders. No one has any right to complain about not being consulted.

• 1720

We've reached a consensus, we have reached a balanced package, but a package that tilts in the favour of producers. I appreciate very much that my friends from the Alliance are somewhat more preoccupied with the effects on the grain companies and the railways than perhaps the producers, but certainly we on the Liberal side believe the producers have to come first.

Mr. Hilstrom seems to be nodding there. He understands the Liberal position.

Mr. Chair, let's not be cute about the 13.5% or 16% or 18%. This is 18%. We're talking about the base figure as of August 1. If people are coming around now and saying it's only 13.5%, they're ignoring the statutory increase that was allocated by the CTA. It's very good for producers. The railways may not be as happy and the grain companies may not be as happy, but it's a start.

On the issue of the Wheat Board, I have some sympathy with the arguments you're talking about. There is a question in this day and age as to how much an agency like the Wheat Board should still be involved. There are motions about this in the west, and there are good reasons that the phasing down of the transportation role of the Wheat Board has to be done in a very considered way.

This MOU is now being negotiated. Mr. Goodale has been holding discussions already with members of the Wheat Board, with the executive of the Wheat Board. He said in the House today or yesterday that certainly that MOU will be public before the bill is voted on. So everybody is going to know what is at play here. The bill will be here in the House right after the break. It won't be a long, intricate bill, as I understand, but it will be very important. Hopefully we'll have your cooperation for an early passage so that the producers are able to get money in their pockets.

Mr. Roy Bailey: We will not know the contents of the memorandum of understanding prior to the passage of the bill. That will not come until the—

Mr. David Collenette: As I said, Mr. Goodale said that you will see the MOU. It will be public. There's going to be no hanky-panky here. You'll see that MOU and you'll have the bill. You'll have everything before you.

The Chair: Thanks, Mr. Minister.

Colleagues, when we coordinate our schedules on the Tuesday or Wednesday when we return after the break week, I'll pick up on the list showing where we left off, so that everybody gets a shot at the minister. Thank you very much.

Minister, thanks for appearing before the committee. Thank you to your officials.

We're adjourned.