TRGO Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Transport and Government Operations

EVIDENCE

CONTENTS

Wednesday, May 22, 2002

º

1610

The Chair (Mr. Ovid Jackson (Bruce--Grey--Owen Sound, Lib.))

Mr. Collenette

º

1615

The Chair

Mr. Moore

Mr. David Collenette

º

1620

Mr. Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

º

1625

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

The Chair

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

º

1630

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

The Chair

Mr. Alex Shepherd (Durham, Lib.)

º

1635

Mr. David Collenette

Mr. Ronald Sully (Assistant Deputy Minister, Programs and Divestiture Group, Department of Transport)

Mr. Alex Shepherd

Mr. Ronald Sully

º

1640

Mr. Alex Shepherd

Mr. William J.S. Elliott (Assistant Deputy Minister, Safety and Security Group, Department of Transport)

Mr. David Collenette

Mr. Alex Shepherd

Mr. David Collenette

The Chair

Mr. David Collenette

Mr. Alex Shepherd

Mr. David Collenette

Mr. Ronald Sully

The Chair

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ)

º

1645

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Ronald Sully

Mr. David Collenette

Mr. Ronald Sully

Mr. David Collenette

Mr. Ronald Sully

Mr. Mario Laframboise

Mr. Collenette

Mr. Mario Laframboise

º

1650

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Collenette

Mr. Laframboise

Mr. Collenette

Mr. Mario Laframboise

Mr. Collenette

Mr. Mario Laframboise

Mr. Collenette

º

1655

Mr. Mario Laframboise

Mr. Collenette

Mr. Mario Laframboise

Mr. Collenette

Mr. Mario Laframboise

The Chair

Mr. Collenette

The Chair

Mr. Larry Bagnell (Yukon, Lib.)

»

1700

Mr. David Collenette

Mr. Larry Bagnell

Mr. David Collenette

Mr. Larry Bagnell

Mr. Collenette

Mr. Larry Bagnell

Mr. Alcock

Mr. Larry Bagnell

Mr. David Collenette

»

1705

Mr. Larry Bagnell

The Chair

Mrs. Bev Desjarlais (Churchill, NDP)

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. William Elliott

Mrs. Bev Desjarlais

Mr. William Elliott

Mrs. Bev Desjarlais

Mr. William Elliott

Mrs. Bev Desjarlais

Mr. William Elliott

»

1710

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mr. Louis Ranger

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

»

1715

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

The Chair

Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian Alliance)

Mr. David Collenette

»

1720

Mr. Jim Gouk

Mr. David Collenette

Mr. Jim Gouk

Mr. David Collenette

»

1725

Mr. Jim Gouk

Mr. David Collenette

Mr. Jim Gouk

Mr. David Collenette

Mr. Jim Gouk

Mr. David Collenette

Mr. Jim Gouk

»

1730

Mr. David Collenette

Mr. Jim Gouk

Mr. David Collenette

Mr. Jim Gouk

Mr. Collenette

Mr. Gouk

Mr. Collenette

The Chair

Mr. Gouk

The Chair

Mr. Larry Bagnell

Mr. David Collenette

The Chair

Mr. Mario Laframboise

Mr. Collenette

»

1735

Mr. Mario Laframboise

Mr. Collenette

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

»

1740

The Chair

Mr. David Collenette

The Chair

Mr. Alcock

Mr. David Collenette

Mr. Reg Alcock

Mr. David Collenette

Mr. Reg Alcock

Mr. David Collenette

Mr. Reg Alcock

Mrs. Bev Desjarlais

Mr. David Collenette

Mr. Reg Alcock

The Chair

Mr. Reg Alcock

The Chair

Mr. David Collenette

Mr. Reg Alcock

Mr. David Collenette

»

1745

Mr. Reg Alcock

Mr. David Collenette

Mr. Reg Alcock

Mr. David Collenette

Mr. Reg Alcock

Mr. David Collenette

Mr. Reg Alcock

The Chair

Mr. James Moore

Mr. David Collenette

Mr. James Moore

»

1750

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. Reg Alcock

Mr. James Moore

The Chair

Mr. David Collenette

The Chair

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

»

1755

The Chair

Mr. Reg Alcock

¼

1800

Mr. David Collenette

Mr. Paul Szabo (Mississauga South, Lib.)

Mr. David Collenette

Mr. Louis Ranger

¼

1805

Mr. Paul Szabo

The Chair

---

CANADA

Standing Committee on Transport and Government Operations

---

NUMBER 065

l

1st SESSION

l

37th PARLIAMENT

---

EVIDENCE

Wednesday, May 22, 2002

[Recorded by Electronic Apparatus]

º  (1610)  

[English]

    The Chair (Mr. Ovid Jackson (Bruce--Grey--Owen Sound, Lib.)): Colleagues, I see a quorum. The minister has arrived so I'd like to call the meeting to order. With us, of course, is the Minister of Transport, and we're dealing with the estimates. With him is Louis Ranger; William Elliott; Ronald Sully; Yvonne Latta; Assistant Deputy Minister Christine Nymark; and Jacques Pigeon.

    Welcome, ladies and gentlemen. Minister, you know the usual routine. We'll hear from you and then we'll have some questions for you.

    Hon. David Collenette (Minister of Transport): Thank you, Mr. Chairman. I apologize for being a few minutes late, but I will make it up if required.

    It's a pleasure to be here once again. Before I answer your questions, I'd like to give you a few thoughts on what has happened at Transport over the last year and what we've had to deal with.

[Translation]

    I'm pleased to be here this afternoon to speak to you.

    Much has happened since I appeared before this committee for the Main Estimates just over a year ago, most notably the September 11, tragedy. Among the lessons brought home in the aftermath was the central role of transportation to the smooth functioning of our economy.

    With airplanes grounded all over North America and with trucks backed up at our borders, nobody was taking transportation for granted.

[English]

    Following the terrorist attacks, we moved very quickly with a number of actions designed to protect Canadians. They ranged from announcing that cockpit doors would be locked for the full duration of flights, to ordering nearly $55.7 million of explosive detection equipment, and to putting police on selected airline flights.

    In December, as you know full well, we committed $2.2 billion in the next five years to make airline travel more secure, including the creation of the new Canadian Air Transport Security Authority, which is designed to provide a more consistent and integrated air transport security system across the country as well as to enhance security performance standards and services.

    On April 29, I joined my colleagues the Minister of National Defence and the Solicitor General to introduce Bill C-55, which is still before the House. I will not bore you with the details because you're involved in the discussion of it, but you know that it is a very important piece of legislation in response to the public security threat of last year.

    While public attention following September 11 focused largely on aviation, Transport Canada took several steps in other modes. For example, we have recently struck an agreement with the U.S. regarding enhanced security procedures for ships entering the Great Lakes and St. Lawrence Seaway system, and in the budget, $60 million was allocated for marine security.

    These are some of the direct responses to the terrorist attacks of September 11, but as I said at the outset, the attacks also underscored the key role that transportation plays in our economy and the need to take bold steps to improve our transportation system.

[Translation]

    With the increased congestion at our borders and in our major urban areas, the transportation system was showing signs of strain before September 11.

    Anybody who has tried to cross the border at any of the five busiest gateways, or who drives in any of Canada's largest cities, such as Vancouver, Toronto, Ottawa or Montreal, knows first hand what congestion is all about.

    While the economic costs of congestion on our roads and at our borders are enormous, there are serious environmental costs associated with increased pollution, and the subsequent impact on our health, which threaten our quality of life.

[English]

    When I spoke to the committee in May of last year, I referred to the $600 million strategic highway infrastructure program introduced in the previous budget. In the last budget, as you know, a further $2 billion was allocated to the strategic infrastructure fund, which includes significant support for transportation priorities. Also, there is a $600 million allocation to border infrastructure. What we're looking at, Mr. Chairman, is the original $600 million under the 2000 budget, $600 million under the last budget for borders, and $2 billion for strategic infrastructure, much of which, or a good portion of which, I hope, would be spent for transportation. This is good news for coming to grips with the transportation infrastructure needs of the country. Of course, cabinet is now discussing the parameters of both of those new programs. We're working on that with Mr. Manley, who carries the coordination of that particular file.

    Together, the new resources in security infrastructure, close to $5 billion, are significant investments in transportation by the Government of Canada, but new roads and infrastructure will not solve our problems alone. I think we need a framework to guide transportation development over the next 10 years, and the framework must be based on a vision for a system that's safe and secure, efficient, integrated, affordable, accessible, and environmentally friendly. It would be a system that supports our economy and our trade, that stimulates competition and productivity, a system that flows smoothly through our cities and across our borders to link us quickly and efficiently with our trading partners around the world.

    When I appeared before the committee last year, I spoke about the transportation blueprint project to design such a system. We have been working on this, after consultations that began with the 2000 Millennium Transportation Conference, and we also took into account the Canada Transportation Act review and a series of round tables that I participated in with key stakeholders.

    The events of September 11 required us to realign our focus in the short term and put us off target by a few months on some of the work we're doing, in particular the blueprint, but it remains a priority, and I'm hopeful that we will be able to move very soon on that. It will serve as a framework for our future actions and will connect us to the many parts of the government's broader agenda.

    Finally, before we get to questions, I'd like to focus on some of the recent initiatives by Transport Canada.

º  (1615)  

[Translation]

    On May 21, we announced that all Canadian carriers may apply to operate scheduled international air services, regardless of the size of air travel markets.

    This new policy is designed to attract new Canadian carriers designated to serve foreign markets. It will encourage competition, innovation and growth in the Canadian airline industry, and promote international travel options for Canadian consumers.

[English]

    The rent policy review for the leased airports in the national airport system is well under way. It will evaluate our overall rent policy to ensure that it balances the interests of all stakeholders, including airports, the air services industry, and the taxpayer. It will examine issues such as the rent formulae, the financial viability of airports, and the impact of rent on airlines.

    At the same time as we're doing this, we are also in the final stages of drafting the Canada Airports Act. The proposed legislation for this act builds on Canada's national airports policy, which was announced in 1994.

    I had hoped to introduce the bill in June, but because of the pressure on the Department of Justice drafters and the system with the security bills and other legislation, we've been slightly off target. When you come back in September, we will have that for you. If we can get it before the end of June, we will, but I am doubtful now.

    The legislation is going to set out the obligations for airports in the system and for the government as well. Stakeholders will be consulted on the draft of the proposed act, prior to its introduction in the House.

    Two months ago, I announced the extension of the port divestiture program to March 31, 2003, and the airport divestiture program under the national airports policy to March 31, 2005. In order to allow the best use of funding and resources, we will target sites we believe we can divest affordably over the next year. We've extended those two programs, which have been quite successful so far.

    Transportation is very much at the heart of the government's agenda. The relevance of transportation to the economy has changed. I think, quite frankly, we have a lot to make up for in terms of reinvestment in the transportation system.

    I've often said that we can invest all we like in new technologies, which we should do in a modern society, but unless we have the physical means of transporting goods and people from point to point, it doesn't matter how good the technology and the information sharing in the system is. I really do believe that unless we, as a country, start to invest heavily in transportation infrastructure over the next 10 years, we will lose a competitive edge with respect to our neighbours and others that we trade with in the world.

    Transport Canada's role has changed dramatically over the last number of years. We're not operating airports, railways, and the like. We still have some operational arms, like VIA Rail and Marine Atlantic, and of course the new security agency--when I say “operating”, that is to say that they are crown corporations. We have continued to divest assets where it makes the best economic sense and where local interests are better able to make decisions to reflect local interests.

    But government has to continue to play a very heavy role in transportation; in oversight and regulation of the industry; in safety and security of the infrastructure and its users; in the field of policy; in ensuring the legislative environment is integrated and allows us to remain competitive with our trading partners; and in helping to address challenges like congestion, pollution, and the need for innovation and skills development.

    Thank you, Mr. Chairman.

    The Chair: Thank you very much, Minister Collenette.

    We'll go now to our rounds of questions. The first round is 10 minutes. We'll start with James Moore from the Canadian Alliance.

    Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance): Thank you, Mr. Chairman.

    I'd also actually like to thank the minister for coming. Since September 11, he's made himself available to the committee quite a few times, and I know all the members do appreciate it.

    I'm going to start by asking the minister a subjective question, which will be followed by an objective question, so it does have a point.

    What percentage of Canadians does the minister think are satisfied with air security in this country?

    Mr. David Collenette: I wouldn't want to put my finger on it, but I would think that, by and large.... I think we had some polling on that that showed they are very satisfied and they think the government has done a good job on transportation since September 11, but particularly with the air security system. I can't give you a figure because I can't remember.

º  (1620)  

    Mr. James Moore: The reason I ask for a figure is that on page 11 of the estimates it says that the target of the federal government is that 90% of Canadians will be satisfied with air security in this country by the year 2005.

    I know the minister in question period has often said that air security is great and people are flying and everything is going well. But if 90% is the goal--and the minister says that with the $24 tax the government will be spending $2.2 billion on air security improvements--because it only costs about $3,000 to do scientific polling of a reasonable sample size for one question, will the government take $3,000 and find out if 90% of Canadians think air security is good enough now, before it spends all this money?

    Mr. David Collenette: The deputy has just reminded me that we believe it was somewhere between 70% and 80% on these polls of people.... We'll get the figures for you--

    Mr. James Moore: You found a number.

    Mr. David Collenette: I knew it was good, but I didn't know it was that good.

    I think you should ask this question of the Minister of Finance. As you know, governments poll, and I'm led to believe that before the user charge was put in, there were data that showed Canadians were prepared to pay for the enhanced security. In the last number of years we've gone to a user-pay system, and it appears that the public accepts that and the need to pay for the security.

    I realize there are issues that you and others have raised in the House with regard to the way this charge has been applied, and my colleagues Mr. Martin and Mr. McCallum have dealt with those questions.

    Mr. James Moore: In some ways.

    You're right about the poll. It did say that Canadians would be willing to shoulder some of the cost. But those polls took place before the amount of $24 came out and before the government decided not to ask the air carriers themselves to continue to contribute. I believe it was $72 million that the air carriers themselves contributed to airport and airline security. So the polling data showed that Canadians were willing to pay, but not on the assumption that nobody else would have to pay and that the rate would be $24 a round trip.

    Mr. David Collenette: I don't know upon what basis you make that assumption. You're perhaps more perceptive than I. That's a wild assumption and almost an editorial statement. The fact is that polling was done, and people agreed that the government should enact a mechanism to have the users pay, and the users have paid.

    There has been some controversy, and the Minister of Finance has said quite clearly that he will review the charge in September. We want to make sure there is not too much disparity between expenditures planned and revenues that come in.

º  (1625)  

    Mr. James Moore: I mentioned this in the House, and I was disappointed that the minister didn't answer. The minister knows that if an air carrier does not make a profit in the summer months, it won't make a profit the whole year. That is the big travel season. Given that we know the federal government has a $10 billion surplus this year and that the tax itself will raise more than the $2.2 billion the government has committed to spend, why haven't you gone to the wall to cut the tax before the summer travel season?

    Mr. David Collenette: As you know, a number of discussions led up to the budget. In fairness to the Minister of Finance and his officials, you have to be prudent in terms of traffic forecasts. The estimates of the number of passengers for 2002, as it will turn out, were much more conservative. But I think that in November 2001, when the Minister of Finance was planning a budget in an extraordinary environment, he had to be concerned with bringing in a charge that would cover the expenditures. While I admit there has been concern expressed and some consternation and a minor degree of controversy, if the Minister of Finance would have to raise the charge in September because he didn't get it right, I think that would be much more embarrassing for the government, and I don't think the public would have accepted that. But what he has said is that based on the way traffic has increased and the money has come in, he's prepared to review the methodology of applying that particular charge, and I think that's pretty fair.

    Mr. James Moore: In a sense you're defeating your own argument. If the finance department used a conservative estimate because they didn't want to undershoot the expenditures, and we know now, as you say, that more people are buying tickets, then cut the tax, because you're going to get the revenue you need with lower rates.

    I would also say that more people are buying tickets, but proportionately it doesn't mean that more people are flying. More people have bought tickets in the last little while because, number one, this is the time of year when people buy tickets; number two, if people purchased their tickets before April 1, they didn't get knifed with the tax; and, number three, people bought their tickets because air carriers had big seat sales due to their concern about not making a profit in the summer months because of the government's taxation.

    Mr. David Collenette: But you're suggesting that the Minister of Finance should act in a much more capricious way and on a monthly whim raise and lower charges or taxes. If you had a Minister of Finance who did that, the government would be in trouble. If that's the way the Alliance proposes to govern the country, almost having a monthly up and down of revenues in and revenues out, changes of taxes, and changes of charges, I'm surprised. It would be disastrous to the country.

    I think the Minister of Finance made a determination leading up to his budget, and he has been incredibly flexible, saying it will be reviewed over the summer months. In September, hopefully, he will decide whether or not to adjust it, and I don't think people could ask for any more than that.

    Now, we've heard a lot of dire predictions from some of the carriers. I haven't seen evidence of that at the moment. There will perhaps be some flight adjustments as a result of the charge, I'm not too sure. I think Canadians are prepared to pay for the enhanced security, and the polls show that the government has gotten it right with respect to security. The public accepts that.

    Mr. James Moore: Will the minister, when he has a chance in the House, table those polls he refers to as showing Canadians support this tax?

    Mr. David Collenette: All the polling that is done by government is available through the normal course and comes out--

    Mr. James Moore: Would you do me the favour of tabling it?

    Mr. David Collenette: I will have to look into the request, Mr. Chairman.

    The Chair: When it first comes to committee, do you still want it in the House?

    Mr. James Moore: You could table it in whatever manner is most efficient for the minister.

    Page 12 of the estimates says that Transport Canada will work in conjunction with the Solicitor General in creating CATSA, the new air security authority, but nowhere in the estimates as I've scanned them does it allocate funds from Transport Canada. There was some confusion--I believe this was back in February--about some comments you made about when the new air security authority would be set up. I believe the public comments you made put it in November or December.

    What I'm wondering is, what is Transport Canada's contribution to the creation of the new security authority? How much money is there, and when will it be set? You said November or December; again, that's a full seven or eight months of taxation without representation through the authority.

    Mr. David Collenette: No. Unfortunately, Mr. Chairman, Mr. Moore misconstrued comments I made in a scrum, comments the media didn't misconstrue but he did, and certainly I'd be pleased to set the record straight.

    What was said was that both here and in the United States we do not expect to have all the operations across both countries fully up and running until about the month of November. However, I want to remind you that immediately after the 11th we brought in new regulations. Transport Canada spent out of its budget, I believe, $100 million prior to March 31 in the last fiscal year. These were expenditures that were made by the government, and in addition, $128 million is being spent in this fiscal year for the security plus the new equipment. I believe this year it's $400 million.

    Mr. James Moore: Mr. Minister, my question was specifically about the authority. When will the authority be set up? When will the doors open?

    Mr. David Collenette: The authority was set up on April 1, and it has been operating since that time. In fact, it was operating before that in a way because what we did was, once we knew we were going to set up this agency, the staff worked over Christmas. We assigned people from within the bureaucracy, and other people were called back from retirement and from other agencies to Transport to augment the staff. We set up the nucleus of CATSA once the decision was taken in principle to go with it, and that work was done within the department in preparation so there would be a seamless transfer when the title legally came into effect on April 1.

    The notion that somehow this authority actually only started...what started on April 1 was that the chairman and the vice-chairman were appointed and it legally had authority in its own right. But in effect, Transport had created the rudiments of this and had augmented that over the months after the 11th to ensure that all the new equipment, for example, EDS equipment.... As I say, we announced some in October. That was being introduced, and there was an overlap.

    In terms of being fully operational where we wanted to be and in terms of reviewing all the contracts with security personnel across the country, well, you can't just come in and create an agency on April 1 when you have legally binding agreements with companies that have workers, members of unions. It takes some months to get this up and running.

    I wouldn't want you to give the impression, as you did, that somehow people are paying for something they're not getting the benefit of. The fact is that Transport spent, I think, $100 million prior to March 31, and that has to be recaptured as part of the charge.

º  (1630)  

    Mr. James Moore: Yes, and that revenue has to be recaptured now because you're not charging air carriers the cost they used to pay for security; you're nailing passengers. Why?

    Mr. David Collenette: No. The air carriers were paying I think about $75 million a year. What I've said publicly is that I would assume that the $75-million reduction in liability on the part of the carriers has flowed back to passengers by way of fares. The head of the Air Transport Association has said he believes that to be the case, that it's a competitive environment and that the airlines have flowed these moneys back.

    Mr. James Moore: If you drive down the number of passengers they have by putting in an air tax and you don't cut their fuel surtaxes, how do you expect them to--

    Mr. David Collenette: These are wild statements. There's no evidence that people are not flying because of this particular charge. In fact, we are finding--and you are acknowledging implicitly, because you're arguing for a reduction--that air travel has increased since September 11, at a pace we didn't anticipate.

    Mr. James Moore: Your revenues are going to exceed your expenditures. That's why I'm arguing for a tax cut.

    Mr. David Collenette: But it will all come out in the wash. In fact, the Auditor General has her people working with us right now, working with CATSA, seeing the revenues come in and making sure things are properly audited. The Minister of Finance has unequivocally stated that this is not to be a cash grab by the government and that when the five years are over, the revenues in will match the expenditures out. The expenditures out are budgeted at $2.2 billion.

    Mr. James Moore: But if you impose a tax, it hurts demand and therefore impacts supply. That's economics 101. If everything is fine--passenger traffic is back, you can raise taxes, there's an impact--why is every single tourism minister in this country knocking on your door, saying cut the tax?

    Mr. David Collenette: First of all, Mr. Chair, Mr. Moore talks about economics 101. I guess a lot of time passed between when I was in economics 101 and when he was in economics 101. I don't think his logic is supported by the facts.

    People are travelling and they are prepared to pay for the additional security they are getting. We have found evidence in polling data that they are happy and supportive of what the government has done with respect to air travel in this country. I really do think we should not try to use disingenuous ways of worrying the public. The fact is, the public know they're getting better security, it has been enhanced, and they're prepared to pay for it.

    The Chair: Mr. Shepherd.

    The minister went way over there, but we won't talk about that.

    Mr. Alex Shepherd (Durham, Lib.): Thank you very much, Mr. Minister, for appearing here today.

    I note one of your objectives in the plans and priorities is to reduce greenhouse gases, with the recognition that the transportation industry is a main contributor to greenhouse gas emissions and so forth.

    There's also a concern among the representatives of the automotive industry that the regulatory regime in Canada somehow differs from that of the United States. There's some concern that within the department you're currently working on new emissions standards and that these standards may well attempt to leapfrog the American standards. It creates great consternation among the manufacturers of automobiles on both sides of the border. As I understand it, there are a number of automobiles that currently are not imported into Canada from the United States because they don't technically meet Canada's regulatory regime.

    I wonder if you could address the emissions aspect and where we want to go in reducing greenhouse gases. At the same time, how do we do this in such a way that we don't throw a wrench into the automotive manufacturing industry?

º  (1635)  

    Mr. David Collenette: Mr. Chairman, as you know, we have a fully integrated manufacturing industry with respect to automobiles. Safety standards and emission standards are certainly almost seamless. There may be some differences from time to time. Mr. Sully, who works on this file as the assistant deputy minister, and specifically with our response on the Kyoto accord, will give you some details.

    The fact is that there is no desire on our part to have a disparity between standards, certainly not in safety and certainly not in terms of pollution standards, between the U.S. and Canada. It would be counterproductive, because the industry is so integrated. Cars that are made in your neighbourhood, in Oshawa, end up in the U.S. on a daily basis, and vice versa. Parts are made all over the place. It's really a fully integrated industry, and therefore the standards are harmonized as much as they can be.

    Perhaps Mr. Sully could be specific.

    Mr. Ronald Sully (Assistant Deputy Minister, Programs and Divestiture Group, Department of Transport): Thank you, Minister.

    Just for greater clarity I would say that with regard to what are called criteria of air contaminants, which are the traditional sorts of pollutants--nitric oxides, SO₂, and so on and so forth--our standards tend to track very closely the U.S. standards. In fact, the recent announcements by the Minister of the Environment with regard to sulphur levels in fuels and higher standards for light duty and heavy duty engines are basically tracking what's going on in the U.S. So there's no difference there.

    With regard to greenhouse gases specifically, which is something quite different, we have proposed--in fact it's part of the government's action plan on climate change--that we should have better fuel economy in new vehicles by the year 2010. But we've made it very clear that if we were to do that, that initiative should be fully harmonized with what the U.S. would do on their side, because we do recognize this as a totally integrated market. We recognize that if we were to try to impose a standard in Canada much different from that in the U.S., the cost to consumers and producers would be much higher in Canada in doing that. So the intention would be to negotiate a voluntary agreement with the manufacturers, but hand in hand with the U.S. administration.

    Mr. Alex Shepherd: I have been informed that there are some vehicles that are currently not imported into Canada because they do not in fact meet Canadian regulatory standards. It's probably a small group. But the fear seems to be in the manufacturing industry that we're planning to leapfrog the American regulatory regime. You're saying, categorically, that's not the case.

    Mr. Ronald Sully: No, what I was referring to was, specifically, fuel economy standard. I think what you're referring to perhaps is some other work we're doing with regard to some vehicles that are not currently sold in Canada. We are looking at those vehicles from the point of view of our safety regulations to see whether or not they would pass our safety regulations, or, if they didn't, whether or not we would have to change our standards. We do have a specific program under way to do just that.

    It happens that a lot of these vehicles are now for sale in Europe and other places and they are tremendously popular. They have very much higher fuel economy ratings, but they are not now legally available for sale in Canada.

º  (1640)  

    Mr. Alex Shepherd: This has to do with crash tests and seat configurations and that sort of thing. Is that correct?

    Mr. William J.S. Elliott (Assistant Deputy Minister, Safety and Security Group, Department of Transport): Perhaps I could address that, Mr. Chair.

    As the minister said, to a very large extent, our standards with respect to safety, including in relation to crash testing, are identical to the Americans. There are a small number of differences as far as I'm aware that have resulted in the past in two or three models being available for sale in the United States that are not available for sale in Canada.

    We certainly strive to harmonize wherever possible. We have had some differences to reflect the Canadian reality. We led the market, for example, with respect to the requirement for daytime running lights. There is currently a proposal where we are looking at potential changes to regulations dealing with airbags and seatbelts in part to reflect the Canadian reality that a very high percentage--in fact a much higher percentage--of Canadians wear seatbelts than do Americans. That means you can have less aggressive airbags.

    I'm sure the committee is familiar with the unfortunate deaths that have occurred from overly aggressive airbags. That's another area in which Canada has been a leader in having depowered airbags. We are looking at the possibility of further refinements with respect to our standards for things such as allowable chest deflections to reflect the Canadian reality.

    Mr. David Collenette: I might just say, on the issue of seatbelts--and correct me, Mr. Elliot, if I'm wrong--there's about 92% compliance in Canada versus somewhere between 65% and 70% compliance in the United States. That speaks well of Canadians and allows us a greater latitude in dealing with some of those safety requirements.

    Mr. Alex Shepherd: I'm informed that the air quality in Toronto is significantly worse than that of Chicago. How are we dealing with airborne emissions?

    Mr. David Collenette: Mr. Chair, I think this is really a question that should be asked of Mr. Anderson, the Minister of the Environment, in particular, because I don't have the breakdown in terms of what one suspects causes the emissions in my home city versus another.

    However, from what I understand, while we recognize that about 28% of greenhouse gas emissions are contributed by transport, there is a reality in terms of the coal-fired generating plants used in Ontario and also the pollution that comes from U.S. industrial sites in the Ohio Valley that is blown up with wind currents. So I think you'd better ask Mr. Anderson, because he's the expert on this particular aspect.

    The Chair: So you're basically saying your cars satisfy a certain CSA standard. They usually either meet those standards or exceed them, and I guess the accumulation of things that maybe cause the photochemical smog--temperature inversions, movement of air currents--is a whole different matter.

    Mr. David Collenette: I should just say, for some reason, a few years ago, before I became minister, the air emission standards authority was removed from Transport Canada and sent to Environment Canada. So it would be useful to get Mr. Anderson in to deal with this particular point.

    Mr. Alex Shepherd: As I said, I was just interested in your plans.

    The Chair: Me, too.

    Mr. Alex Shepherd: In your plans and priorities, it says there's an Action Plan 2000 for climate change of $40 million, the object of which is to reduce greenhouse gas emissions. That's within your department.

    I'm wondering how you're going to be spending that money and what the impact is going to be on greenhouse gases.

    Mr. David Collenette: Mr. Sully will deal with that.

    Mr. Ronald Sully: I think, sir, the $40 million program you're referring to would be the urban transportation showcase program, which the minister announced and launched last year. Under this program, we will be providing funding to a number of Canadian cities that are best able to demonstrate innovative ways, through a variety of techniques, to reduce greenhouse gases within their own cities.

    That's part of the proposal. The other part of it is to share best practices across the country. So what we would like to do is demonstrate best practices in a certain number of cities and then share those results across the country, and other cities can learn from that.

    The Chair: Your 10 minutes are up. We have to move to Mario.

[Translation]

    Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): Thank you, Mr. Chairman.

    My first question concerns the $600 million Strategic Highway Infrastructure Program administered by your department. According to the budget figures, three investment announcements will be forthcoming: $18.2 million for border crossing points, planning and integration; $9.3 million for smart transportation systems; and $128,420,443 for roads.

    Are these in fact the figures included in the budget?

º  (1645)  

    Mr. Louis Ranger (Deputy Minister, Department of Transport): This is a $600 million program involving investments of $150 million a year. This is a breakdown of this $150 million investment for the year.

    Mr. Mario Laframboise: More or less. In your breakdown, you list $128,420,443 for roads. How did you arrive at this figure? Surely you have planned expenditures and projects. Why aren't these listed in the estimates?

    Mr. Louis Ranger: We had decided that $500 million of the $600 million in total would be allocated to highways...

    Mr. Mario Laframboise: I understand that part. What I'd like to know is whether this $128,420,443 was divided into three. Surely you have some details as to what you would like to do with this money.

    Mr. Louis Ranger: On what page are you exactly?

    Mr. Mario Laframboise: I'm on page 23-5, under Transfer Payments. I have the details in the estimates; I don't have your...

    Mr. Louis Ranger: We can check that. Maybe it's on a pro rata basis. Perhaps the $600 million was allocated over a four-year period and then the decision was made as to how much to earmarked for highways, for border crossings, etc.

    Mr. Mario Laframboise: For example you specify under further details the amount of money that will be expended in each province for the Canadian Safety Code. You're planning to spend $128,420,443 on the Highway Component. Surely you have plans for spending that money.

    Mr. Louis Ranger: Most likely that amount also takes into account agreements that have been signed and funds already earmarked for specific projects. For example, we haven't yet signed an agreement with Quebec, therefore it's difficult to identify...

    Mr. Mario Laframboise: Is some of this money earmarked for Quebec?

    Mr. Louis Ranger: Certainly. The funds are allocated on a pro-rata basis. Quebec will receive $108 million.

    Mr. Mario Laframboise: This year, out of the total allocation of $128,420,443, how much will Quebec be getting?

    Mr. Louis Ranger: That's difficult to say without an actual agreement in place.

    Mr. Mario Laframboise: Yes, but your resources are not unlimited. Surely you've decided on how much you're going to be spending, because to arrive at a figure of $128,420,443, someone, somewhere, has to have done some calculations, if not you, then surely someone from your department.

[English]

    Mr. Ronald Sully: I'm not sure of the table you're referring to, sir, but I think to date we have signed agreements with seven provinces. For the ones we haven't signed with, we would have allocated a notional amount. I can't tell you offhand what that amount would be. Obviously, if in the case of Quebec, for example, there was $108 million, and none of the money was spent this year because we didn't have a signed agreement, that means in the last three years relatively more money would be spent, so that at the end of the program we would have spent the full $108 million. The money we know for sure for this year would only be with respect to the provinces with which we have signed agreements, and we know the projects they have proposed and that have been approved.

    Mr. David Collenette: But the figure Mr. Laframboise refers to has this notional amount that you expect--

    Mr. Ronald Sully: There would be some.

    Mr. David Collenette: --on the assumption the agreement is signed.

    Mr. Ronald Sully: Yes.

[Translation]

    Mr. Mario Laframboise: Yet, you can't confirm how this sum of $128,420,443 breaks down. You can't give me that information.

    Mr. David Collenette: We'll try and come up with the exact figures and we'll send them to you in writing, if that's o'kay with you.

    Mr. Mario Laframboise: That would be fine. The item is listed on page 22-4 of the Main Estimates. I could send you the reference, if you like, and then you could respond to my question. All right?

º  (1650)  

    Mr. Louis Ranger: Fine.

    Mr. Mario Laframboise: My second question concerns something your said in your presentation, Mr. Minister, specifically:

On May 21, we announced that all Canadian carriers may apply to operate scheduled international air services, regardless of the size of air travel markets.

    You seem to be more receptive to that idea.

    In Quebec, Canada Air Charter's application was rejected by Transport Canada, according to newspaper reports. Could you tell us why? Were these actions consistent with the new policies announced on May 21? Will this carrier's application ultimately be approved?

    If you're not up to date on this matter, perhaps I can send you a letter and you can respond...

    Mr. Louis Ranger: Was the carrier applying to provide domestic or international service?

    Mr. Mario Laframboise: I believe it was international service. I will send you...

    Mr. Louis Ranger: To which destinations?

    Mr. Mario Laframboise: To Africa and other countries. The story made the headlines a few weeks ago.

    Mr. Louis Ranger: If Africa was one of the intended destinations, admittedly Canada does not have many bilateral agreements with Africa, hence no service. Perhaps a bilateral agreement is already in place with a sole designated carrier.

    Mr. Mario Laframboise: It's most probably because their flights depart from Mirabel.

    Mr. Louis Ranger: That's not a criterion.

    Mr. Mario Laframboise: No, but it's something similar.

    Speaking of rent review, you indicated that you would be reviewing the airport leasing policy, specifically lease conditions. As you know, I'm convinced that ADM is not complying with the terms of its lease for Mirabel Airport. However, an owner has the right to turn a blind eye when a tenant fails to comply with the terms of a lease. In my opinion, Transport Canada is choosing to do just that. You're letting ADM...

    Mr. David Collenette: If there is some disagreement over Transport Canada's interpretation of the two airport leases, the matter can be challenged before the courts. However, no one has done that because everyone appreciates that ADM acted within the terms of the lease when it decided to transfer flights from Mirabel to Dorval.

    Mr. Mario Laframboise: Not everyone, Minister. Many people in Quebec are challenging ADM's position. We're talking about a lease here. Obviously, an owner like Transport Canada - because the owner of the facility is the Government of Canada - can always decide that the tenant is not complying with the terms of the lease. That's the case with ADM because over the past five years, it has made no attempt whatsoever to revitalize Mirabel. Everyone knows that.

    You say you plan to review the lease provisions. However, no funding has been provided to revitalize Mirabel from an industrial standpoint, despite the positive signs we seem to be getting from everyone and despite the statements of other ministers who have pledged to promote Mirabel as an industrial facility. Justice Minister Cauchon made a statement to that effect.

    Mr. David Collenette: It's not Transport Canada's job to provide this kind of support. The department is responsible for overseeing the administration of airport leases in Canada. Providing financial assistance to the Mirabel Region is a matter for the Industry Minister and for his Secretary of State, Mr. Drouin.

    Mr. Mario Laframboise: So, this is not the domain of the Justice Minister.

    Mr. David Collenette: Generally speaking, the Justice Minister is the spokesperson for the federal government in Quebec. He is the minister responsible for Quebec.

    Mr. Mario Laframboise: May I remind you, sir, that despite the promises you have made as Transport Minister, the only one I've seen you keep toward Quebec involves Autoroute 30, an initiative that you seem to be more supportive of than other projects. Otherwise, I've never seen you commit personally, as minister...

    Mr. David Collenette: That's not true, Mr. Chairman. Our National Transportation Policy applies to the entire country, including Quebec. Quebec is also covered by the port and airport divestiture programs, the National Airports Policy and the Roads Policy.

º  (1655)  

    Mr. Mario Laframboise: As far as the National Airports Policy is concerned, you probably got what you wanted, namely the closure of Mirabel to...

    Mr. David Collenette: It was not our intention to close Mirabel. That's not...

    Mr. Mario Laframboise: ...transfer operations to Toronto. That was your objective all along.

    Mr. David Collenette: The Montreal Airports Authority is responsible for administering the leases of the two airports and for ensuring that these facilities operate at a profit. It was for this reason that the Authority decided to transfer flights to Dorval. However, freight companies and businesses such as Bombardier are still encouraged to use Mirabel. It's not fair to accuse ADM or the federal government of neglecting Mirabel Airport.

    Mr. Mario Laframboise: Yet, the facts speak for themselves, Minister. In the budget, not one penny is being earmarked for Mirabel's development. I'm sorry, but that's the truth. Let's be honest, Mr. Harvey. There's no money here for Mirabel.

    Since you did broach the subject, I would like to talk about the Port Divestiture Policy. Mr. Minister, from your presentation and the figures quoted, it's clear that your department will be promoting the port divestiture program, which has been extended for one year. You knew that inevitably, Quebec would be affected by this decision, since over 20 ports in the province are still owned by Transport Canada.

    I note that the sum of $17,131,384 has been allocated to this program for 2002-2003. Most likely this represents the balance of the original budget of $150 million. Therefore, there's $17,131,384 remaining for the final year, which is the one-year extension announced.

    In the case of the 10 ports targeted by the Quebec government, in excess of $60 million would be required, even if these ports were to be operated by independent authorities. How can you devise a genuine policy and continue to apply you port divestiture policy when you lack the money needed to provide authorities with sound facilities, from an economic standpoint?

    Clearly, there is a funding shortfall. The government can well decide not to negotiate with the provinces, but the fact remains that a mere $17 million has been allocated to this program.

[English]

    The Chair: Mr. Minister, Mario is out of time, but I'll allow you to answer it.

[Translation]

    Mr. David Collenette: Mr. Chairman, I must point out that the national port divestiture policy is a very sound initiative that has helped us to accomplish a great deal. As Mr. Laframboise indicated, the federal government still has several ports in Quebec, Newfoundland and British Columbia, I believe, targeted for divestiture. We intend to extend the program for another year so that the divestiture process is fair for all small communities.

    We feel that there are adequate funds remaining to carry out these operations. If the province of Quebec wishes to take over the operation of these ports, that may be a political decision, but one that nevertheless involves the federal government from a financial standpoint. We have $17 million in the budget for the port divestiture program and we believe this is adequate for this purpose.

[English]

    The Chair: I'll give you another round later on.

    We'll go to Larry.

    Mr. Larry Bagnell (Yukon, Lib.): Thank you. Thank you, Mr. Minister, for coming.

    In relation to comments related to the tourism industry and the airport tax, I want to thank you and the Minister of Finance for acknowledging the three members from the north and not having that tax applied to our small, remote northern airports.

    A voice: It's not really a tax; it's a charge.

    Mr. Larry Bagnell: Charge, sorry.

    The people who screen the luggage at the airports--the security companies or people--used to be charged to the airlines. With the new system, is that charged to the airlines, or do the airlines save that amount of money now?

»  (1700)  

    Mr. David Collenette: No, they've saved that $75 million that they've paid up until March 31. So the question is, what happens to the $75 million? I would have assumed that it should be rebated in fares. The president of the Air Transport Association says that has been the case. One doesn't know for sure, but let's take ATAC at face value.

    Mr. Larry Bagnell: Before I ask my next question, just as a commercial, I would note that, as you know, our new Yukon airline, Air North, is going to fly from Whitehorse to Vancouver, Edmonton, and Calgary starting in a couple of weeks. We hope that will give some competition to Air Canada and that you'll support that, because they only carry on those routes.

    My question is related to our small adventure companies that have canoes, and our rafting companies. They are worried about the waivers and then the insurance regulations that are being looked at this summer under the Marine Liability Act. Some of them think it may make insurance impossible to get or that rates would be too high.

    I realize that Mariport is doing the consulting this summer and they get a chance to input, but I would like your assurance that, first of all, my companies in the north will get a chance to input. Either there will be a hearing in the north or maybe someone could be covered to go to them. I would like the consultants to definitely get input from that sector, which may not have been the normal major sector in this bill, so that they won't be put out of business because of the unavailability of insurance, or the cost of insurance will be too high for them.

    Mr. David Collenette: Mr. Chairman, as the honourable member knows, this is an issue where the department has been examining the concerns of the tourism industry, and it's not the department's intention to adversely impact the industry. The act was put in place really to ensure that the vessel owners were held liable in the event of a death or a personal injury sustained on a vessel.

    As I've said before to Mr. Bagnell and my other colleagues in the territories, the people in the north have a particular sensitivity that has to be respected and a fragility in terms of the economies, and we'll ensure that that is indeed taken into account with respect to the application of the act. We're not out to nail small operators and put them under. The act that passed in Parliament is there to try to put a standardized regime in place.

    Mr. Larry Bagnell: I'm sorry if I keep asking questions about my riding, but--

    Mr. David Collenette: That's why we're all here.

    Mr. Larry Bagnell: --I wonder if you could give an update on the--

    Mr. Reg Alcock (Winnipeg South, Lib.): I'm not going to ask them so you might as well.

    Mr. Larry Bagnell: You know I've been lobbying on the Alaska-Canada railway commission to investigate the feasibility of that railway. I wonder if there's any update on that request.

    Mr. David Collenette: I believe there was a démarche from the Americans. It went to the foreign affairs minister, and the government is looking into it, so I can't really give you an official government view.

    I'll give you a personal view, and it is that I think this is a very imaginative--my officials will cringe here--and bold proposal in the same way as putting a tunnel under the Straits of Belle Isle in Newfoundland is a bold, imaginative proposal and should be part of nation building. I think we should really be imaginative.

    We've become a nation and a government of bookkeepers and regulators. I think we have to have some vision for the country. That's what built the railways. That's what built the seaway 40 years ago. Now the question is, who's going to pay for it all? That's the issue. But I don't think we should stomp on an idea.

    I know that the Alaskan senator has put this forward, and that you support it and everybody in your province supports it. I think it is a bold, imaginative proposal. The question is, can we afford it? What are the environmental ramifications? What are the ramifications for our foreign policy vis-à-vis the United States?

    All of these issues should be taken into account, but I don't think we should dismiss it out of hand because it's going to be a very expensive proposition. They built the Alaska Highway during the war under duress. There have been lots of imaginative things done.

    I think we should have a bit of imagination in politics and in government. There has been too much of a lack of it in recent years.

»  (1705)  

    Mr. Larry Bagnell: I was speaking personally, Mr. Collenette.

    The Chair: Bev, you're on.

    Mrs. Bev Desjarlais (Churchill, NDP): Thank you.

    Actually, I have a wonderful vision and a great imagination. I'm just thinking of a national highway infrastructure that doesn't need billions of dollars of repairs. We'd probably all be happy and excited to know that this was what the gas tax dollars were going towards, and there are already dollars being collected. One doesn't even really have to think hard about that one; it's a great vision, and I think a good majority of Canadians would support it.

    But on to something else. I have a number of questions and possibly some comments. May I ask them and get fairly quick answers from you? I could ask them all in one quick sweep, but that just might overwhelm you, so I'll do the asking and get quick answers.

    Mr. David Collenette: I'm easily overwhelmed.

    Mrs. Bev Desjarlais: What were the criteria for deciding which airports would get charged security? Was the decision based on the size of airports, the number of passengers going through the airports, an RCMP risk assessment that you have available indicating that you should have security charges at these airports?

    Mr. David Collenette: Well, we wanted to make sure we covered as many passengers as possible and that it was practical.

    Are there 89 airports in the system, Mr. Elliott?

    Mrs. Bev Desjarlais: I'm asking you what, specifically, were the criteria. There must have been criteria, where you said you would look at this, this, and this and then make a decision.

    Mr. David Collenette: Obviously, the criterion was to get the maximum coverage possible for Canadians, and the risk had to be assessed. That's why we have made certain exemptions in the north. We felt that the risk was such that we could ensure we didn't charge those fees.

    Mrs. Bev Desjarlais: Did you get a risk assessment from the RCMP?

    Mr. David Collenette: Mr. Elliott can answer that.

    Mrs. Bev Desjarlais: Mr. Elliott, did you get a risk assessment from the RCMP?

    Mr. William Elliott: The short answer to your question is no, not in relation to the designation of the 89 airports. The 89 airports are those where screening took place last year.

    Mrs. Bev Desjarlais: Now let's be very clear. You're saying where screening took place last year, so are you suggesting...? Let's use Thompson airport, which had screening six years ago, but didn't have it after that because it wasn't considered necessary to have security at that airport. So why was it considered...? Just to use your own airports--I can use it as an example because I'd be asking this for any airport in Canada that didn't have security before and now has to have it, but is not listed as an RCMP security risk. Could you explain to me why there's a security charge?

    Mr. William Elliott: I guess the security surcharge relates to where screening operations have been carried out. Certainly, the expansion of screening historically has been as a result of security risks and measures put in place to facilitate the movement of passengers from airports.

    Mrs. Bev Desjarlais: Can you explain to me why one carrier at an airport would provide security and another carrier would not have to provide security, yet the security charge is charged to each and every passenger?

    Mr. William Elliott: Up until recently--certainly post-September 11--screening was not mandatory at all of those 89 airports. Because it was the carriers' responsibility to conduct screening, decisions were made by carriers at airports where screening was not mandatory, largely based on the desire to facilitate the movement of passengers.

    Mrs. Bev Desjarlais: If you have now left whether or not they have to screen up to the carriers, how does that ensure security for Canadians?

    Mr. William Elliott: With respect, the government's decision to take screening out of the hands of the carriers, to take screening decisions away from carriers and give them to the Canadian Air Transport Security Authority, is based on the notion that a carrier should not make decisions about where screening takes place. It should in fact be a government function.

    The starting point in the world of screening was that carriers had developed the system, in part because of mandatory requirements and in part because of other considerations. The government's position has been that, over time, we certainly shouldn't reduce the number of places where there is screening and we shouldn't reduce the number of passengers who are screened.

    The status quo was 89 airports. CATSA will be looking at the situation in those airports. And certainly over time, my expectation would be that the number of passengers screened and the circumstances in which passengers are screened, beginning at those 89 airports, will in fact increase, based on the notion that, just as you have indicated, it's not desirable to have different rules applied to similar circumstances.

»  (1710)  

    Mrs. Bev Desjarlais: From a security perspective it has no credibility whatsoever, with all due respect. It just makes no sense whatsoever. The criteria being used are just not practical. If you're looking at security and we're talking terrorism, it makes no sense whatsoever. To suggest, as you've said, that it was anybody who had security as of October, that's just not true. That is not true, and I think you have to be clear about that. That is not a true statement to be telling Canadians, because that was not the case. I don't know about each and every airport in Canada, but it's not accurate information. I think when you're talking about the security of the nation, you'd better have a credible reason why you're doing things, and that just is not cutting it, as far as I'm concerned.

    I then go to my next question of the polling. When the polling was done, what questions were asked? When was the polling done? Was it done one week after September 11, two weeks after September 11? Did it let people know exactly what was in place before and what was in place after? Did it let them know they were going to be paying for security, but not necessarily anybody crossing the border from Canada to the U.S. in their cars or their trucks?

    Mr. David Collenette: Any data research leading up to the budget with respect to what Canadians would want to pay would be more appropriately addressed by the Department of Finance because they obviously had to make that recommendation.

    Mrs. Bev Desjarlais: Who did the polling? Was it done through Transport or through the Department of Finance?

    Mr. David Collenette: If I'm correct, in leading up to the budget, any data research is done under the auspices of the Department of Finance.

    Mrs. Bev Desjarlais: Okay, so they did the polling, and you said that information is accessible. Does it have to be accessed through access to information, or can we readily get that information as to exactly what was asked in the polling?

    Mr. David Collenette: Yes, we can raise that with the Minister of Finance.

    Mr. Louis Ranger: The survey the minister referred to earlier today was done by Ekos Research. It's fairly recent, certainly after Christmas.

    Mr. David Collenette: That was ours. That was based on whether Canadians were satisfied with the level of security. But that's not the one we're talking about leading up to the fee.

    Mrs. Bev Desjarlais: Exactly.

    Mr. Louis Ranger: Oh, I'm sorry.

    Mr. David Collenette: That's what she was talking about.

    Mrs. Bev Desjarlais: That's what I'm talking about.

    Quite frankly, I have numerous petitions that just keep piling up in my office saying that people aren't satisfied with the fee. They'll come about probably around the same time you're going to make new presentations in September. We'll make sure we have enough signatures there for you, because there is a lot of dissatisfaction with the fee. As more and more Canadians realize that the security that's there is really not a whole lot different from what was there before--

    Mr. David Collenette: That is patently not true, Mr. Chairman. The fact is that we have started the implementation or installation of bomb and explosives detection equipment. All the contracts are now being reviewed and are in the process of being renegotiated. All the regulations were changed within days after September 11, which put a very exacting administrative burden on the airports.

    With great respect, I don't think Madam Desjarlais should have that particular comment stay on the record. The fact is that--

    Mrs. Bev Desjarlais: It's there and it can stay.

»  (1715)  

    Mr. David Collenette: It's there, but it's wrong, Mr. Chairman. The fact is that security has increased. It's increased enormously, and the fact is that Canadians are prepared to pay for that and they know they're getting it. Madam Desjarlais may not be convinced, but certainly it seems that Canadians are convinced, and they're the ones who are using the system.

    Mrs. Bev Desjarlais: With all due respect, I've been to a number of airports and have discussed this with the airport authorities and with other people there, and I have a fairly good idea of what's available. There is not going to be bomb X-ray equipment and all that in each and every airport you're charging security in.

    Quite frankly, I admit those things should be there and they have to be paid for. I recognize that there should be police on flights here and there along the way. Do I think Canadians on airplanes should have to pay for their own policing? No. Do I think Canadians should now have to pay for the policing at airports that was already in place before, but for which you're now charging the airline passengers? No. That's the information that Canadians are not being given.

    In regard to the $75 million that you say is a reduction in the amount it's going to cost the airlines, WestJet has made the statement that to administer the airline tax, it's going to cost them the equivalent of what they were paying for passenger screening before. They have to pay out the money first and then get it back. So there are no savings to the consumer.

    Mr. David Collenette: Again, there are a number of inaccurate, misleading statements. I defy Madam Desjarlais to tell anyone where equipment will be deployed at what time. That is information that will not be publicly available.

    The fact is that we have to ensure that the kinds of security measures and the sophisticated equipment and the level of sophistication at specific airports is something that has to remain outside of the public limits. We don't want to tell terrorists which airports have what degree of sophistication with respect to their equipment.

    Again, I think Madam Desjarlais is offering more of a political perspective than a substantive perspective.

    Mrs. Bev Desjarlais: If I have another moment, Mr. Chair....

    It's not a political perspective. I listen to representatives of the American government who have no problem indicating what's going to be there for security.

    I think the minister in all reasonableness should recognize that the people who work in these airports are people who we all somehow work alongside of, in some way, shape or form, so it's not as if we're naive to what's available in regard to some areas of security. Not that you know every single thing that's happening, but we know if there's going to be bomb screening equipment. You know if there are dogs available. We all can see that these airports aren't huge, and there are people in the communities who work there and know what's there and are not feeling comfortable about the whole security system.

    Quite frankly--and I've stated it before--somehow thinking that taking nail clippers from someone is going to save a passenger on that plane is just not going to cut it. There needs to be a lot more done in the preventative measures than there is being done as far as the screening at airports is concerned.

    Mr. David Collenette: Mr. Elliott just reminded me that over the life of this particular security measure and charge, EDS will be installed, in some manner or form, at every one of the 89 airports that are publicly listed.

    What will not be made available is the degree of sophistication of that equipment, because at certain airports with volumes and risks, the level of sophistication is much more intense. Obviously that is the larger airports. But in answer to her concerns, this charge will cover that equipment as it's installed.

    It is being installed right across the country. I'm surprised you haven't given the examples or at least talked about where that has been installed.

    The Chair: Thank you.

    I'll move to Jim Gouk.

    Mr. Jim Gouk (Kootenay—Boundary—Okanagan, Canadian Alliance): Thank you.

    Mr. Minister, I'm going to switch gears, because one of my pet projects is VIA Rail. I want to talk to you about that.

    I can't start without making a couple of observations on what we've been talking about in terms of airports, which is my background, actually.

    It turns out, in airport safety, it doesn't matter what you put into Vancouver, Toronto, and these big regions, but in my region in Cranbrook, in Castlegar, in Penticton, we don't even have a basic X-ray machine, nor does the physical structure of the building have room for a lot of additional equipment. Yet the people who board the aircraft in those locations fly into the secure side of Vancouver and Calgary, bypassing the most sophisticated equipment in the world, if you install it in Vancouver. So until such time as that changes, that aspect of it is a farce.

    The second thing you said is that no passengers have to pay for security if there's no security provided at their airport. Yet the passengers who get onboard aircraft at the Vancouver south terminal would certainly like to dispute that, as would the airlines that carry people out of that.

    Mr. David Collenette: Mr. Chairman, there are alternative measures other than screening equipment. There are hand searches that are conducted.

    Mr. James Moore: For $24?

    Mr. David Collenette: Over the life of this agreement, those airports where there isn't the equipment in place will get the equipment.

    What is true is that people are paying now, as of April 1, for a five-year regime to have this equipment installed, to upgrade the quality of the screeners, and to improve the security overall. So the communities you talked about will be getting the equipment, will be getting the enhanced security as the months go ahead. But it's not right to say there's no security there, and you don't dispute that.

»  (1720)  

    Mr. Jim Gouk: But it's obviously not at the same level as Vancouver, and as long as they fly around what's there, your chain is still as strong as its weakest link.

    Anyway, if I could go to VIA Rail, because there are some things that I really do want to find out about, one of the potential new bills that was listed in the government documents, which suggested there's going to be quite a bit of new activity, particularly in the fall, listed VIA Rail.

    As we know, VIA Rail is very heavily subsidized by the taxpayers. You yourself have seen to the stability of that so that VIA could do some long-range planning. So we know that's going to be there. Therefore, any new bill is going to cost something, unless you have some great revelation.

    I would like to give you the opportunity to give me a very fast overview of the intent of the new bill as it deals with VIA Rail. What general direction is it going in? What is it intending to do with VIA?

    Mr. David Collenette: Well, there has been criticism in Parliament, including criticism that I levied in 1978 as the vice-chairman of the transport committee, when the government at the time, under Mr. Trudeau, introduced VIA Rail. The criticism was that it was not done with a statutory base. It was done, I think, under a dollar item in the estimates. I remember--and if you look at the records--there were a lot of us who objected to the way that was done in terms of form. Indeed, I believe the Speaker at the time, James Jerome, and subsequent speakers also felt in rulings that this was not appropriate, and I believe auditors general over the last 20 years have said this is not the appropriate way to operate a service, without a statutory base. So it would be my intention to convince my cabinet colleagues that we do indeed have a statutory base for the normal procedural and administrative and accountability reasons.

    Also, quite frankly, I think that by establishing VIA under a statutory base, it will make it very much more difficult for governments in subsequent times to be somewhat arbitrary and capricious with the passenger rail system.

    Mr. Jim Gouk: One of the things you said when you first became the Minister of Transport was that you were very much interested in looking at either privatization or commercialization of VIA--a very noble thought, which you withdrew a relatively short time later, with the explanation that having consulted with the private sector you found that there just wasn't any interest out there. Because Via was incapable of making money, the private sector wasn't interested. I've talked to a lot of private sector operators and I'm in the process of talking to quite a few more. I can tell you that there is interest in that out there.

    I would like to ask you, sir, whether, if I can present to you or to this committee documented proof--written proof--of expressions of interest from viable rail operators, companies such as Railex or the Great Canadian Railtour Company, that there is definitely interest in the private sector taking over the operation of VIA Rail, without subsidy, you would be prepared to ask--and it's not a demand or a request or a commitment--the Standing Committee on Transport, which from time to time does get requested by the minister to study certain things, under those circumstances to look into that, view the viability of it, and make recommendations to the ministry as to going in that direction.

    Mr. David Collenette: Mr. Chairman, when I became minister, it was in an environment after program review, where I never thought in my wildest dreams that I could get $400 million out of Finance for VIA Rail. We looked around for other ways. One of the ways that we sought was with the private sector, perhaps an adaptation of the British model--forget about all the horrors of Railtrack, that's a separate issue. Many of the train-operating companies over there are making money. There's a combination of declining subsidies over time and reinvestment. I thought that was probably the only way to go.

    I was amazed when my colleagues felt that this was such an essential public service that it should not be privatized using the models of, say, Britain or Australia or Argentina, but that it should remain in the public domain and receive a subsidy.

    Now, there's no question that the private sector had interest. We sent out a solicitation of interest and 40 companies were interested, from some international financial outfits, engineering companies, train-operating companies, banks, the equipment manufacturers. They were all interested, and it would have been possible to do something.

    There are cases around the world where passenger rail makes a profit, but very few of them. I can think of Heathrow Express, Gatwick Express in Britain. The French will tell you that the TGV makes money, but they somehow conveniently discount all the capital costs that have been put in by the state over the years.

    Just before I finish, it's a bit like privatizing the mail service. I'm sure that companies would love to have a piece of Canada Post, but they would only want to deliver mail in the high-volume areas. Of those private companies that think they can make money on passenger rail, it's either a private tourist operation like the Rocky Mountaineer or it would be in high-volume areas. Even then, the consortium that wanted to build a TGV link between Montreal and Toronto wanted $7 billion of cash or loan guarantees from the federal, Ontario, and Quebec governments.

    So I'd like to know what private sector companies would be willing to take this on. Then what do you do about the service in Mrs. Desjarlais's riding in Churchill? What do you do to the service in Senneterre or northern Ontario?

»  (1725)  

    Mr. Jim Gouk: I'd point out that part has already been privatized. That part is not run by VIA Rail; it's run by a separate company.

    Mr. David Collenette: That's not true. VIA Rail offers a service. You should travel on it. Omni-Track runs and owns the rail line. VIA offers a service.

    Mr. Jim Gouk: In terms of your concern that this is an important transportation link, you chose not to reincorporate Air Canada. You thought it should remain privatized when it was having its difficulties. It was a crown corporation and it got privatized. Your government took all the airports that were operating at a loss and turned them over to the private sector, which is now running them at a profit and making a profit for the government itself.

    With regard to the Rocky Mountaineer, yes, they did take over that operation from VIA Rail, which lost money at it. It carried 4,500 passengers--

    Mr. David Collenette: That's not true. VIA made money. Check the facts.

    Mr. Jim Gouk: Oh, come on.

    Mr. David Collenette: Check the records.

    Mr. Jim Gouk: You've made some outrageous statements here today, sir, but that is the most outrageous yet. The only time they made money was when the Rocky Mountaineer was sold.

    Mr. David Collenette: Mr. Chairman, would you allow me to participate in a wager with Mr. Gouk?

    Some hon. members: Oh, oh!

    Mr. David Collenette: The fact is the Calgary-Vancouver service made money, and that's why VIA didn't want to lose it.

    Mr. Jim Gouk: The Rocky Mountaineer made money carrying passengers--

»  (1730)  

    Mr. David Collenette: Sure they make money, but they don't think about the ordinary people who want to go from point to point. It's a tourist outfit that puts people in a hotel halfway along the line. It's a luxury service.

    Mr. Jim Gouk: It's a specific operation that--

    Mr. David Collenette: The Alliance wants to provide passenger rail service for the elite. The Liberal government wants to provide it for the people.

    Some hon. members: Oh, oh!

    Mr. Jim Gouk: The fact of the matter is that what the Canadian people want, the people who don't happen to live where VIA Rail runs through, which is a large portion of this country.... The people inside the Quebec-Windsor corridor are never going to lose rail service. People will line up a mile deep to take that one over.

    Now we're talking about going through the prairies. But every riding in this country pays $650,000 a year even if VIA Rail doesn't go anywhere near it. Even if there's not a damn person in their riding who ever goes on VIA Rail, their proportionate share of the subsidy is $650,000 a year. We're closing hospitals, we have bad roads, we have all kinds of problems, and you're shovelling out $650,000 a year on average from each and every riding.

    I'm telling you that the private sector is prepared to run it. If they provide evidence of interest in doing that, you can come up with lots of ideas, such as performance bonds they would have to put up. If they failed to operate it, it would come back to the government with the collection of the funds. It's the same as you did with community airports, when you turned them over to places such as Castlegar and said if at any time in 10 years you fail to operate it as an airport, it all comes back to us, including any leases and improvements. Fair enough. Do the same thing with VIA Rail. But have the integrity at least to consider allowing the private sector to operate it if they can do it without having to dip into the taxpayers' purse.

    Will you do that if they express interest in doing this? You can add all the conditions you want. All I'm saying is, will you look into the viability of the private sector operating it and make recommendations on the evidence I have provided?

    Mr. David Collenette: Mr. Chair, I don't know where Mr. Gouk was a couple of years ago when I asked the committee to study VIA Rail. This committee produced an all-party report called The Renaissance of Passenger Rail in Canada, and the government accepted most of the recommendations.

    The train has left the station, Mr. Gouk. We're going to have a publicly supported passenger rail system, one that is for the people in Canada, not just for tourists who are prepared to pay a premium.

    Mr. Jim Gouk: In other words, your mind is closed. You don't want to see any evidence to the contrary.

    Mr. David Collenette: I would say, Mr. Chairman, that the parliamentary system has worked. The government asked parliamentarians for their views. Their views were put into a document, and those views were accepted.

    The Chair: Okay, guys, let's have a good exchange.

    Mr. Jim Gouk: All the people who are represented by anyone other than Liberals--

    The Chair: Order.

    Larry, you have time for one quick question before I go to Mario.

    Mr. Larry Bagnell: Air Canada cutting the fees of the travel agents is obviously devastating to the travel agents in my area. Do you have any comments on that?

    Mr. David Collenette: This is something the U.S. carriers started and Air Canada followed. I suppose there are two ways it can be remedied. One is what is happening, that is, people are now being charged by the travel agents for booking on Air Canada, and what a lot of agents are doing is booking on airlines that do pay fees. WestJet still pays commissions to travel agents, and with the way WestJet is growing, this is something that will perhaps assist them--and other carriers too.

    We had a real setback with September 11. We have competition starting to come forward quite nicely now, and there are alternatives in most of the major markets. In many cases you have choices between Air Canada and Conquest-Skyservice or WestJet, where the latter two pay commissions to travel agents and Air Canada doesn't. Air Canada will have to keep this in mind in the future, but that's a business decision they've taken. It's their business.

    The Chair: Mario.

[Translation]

    Mr. Mario Laframboise: Thank you, Mr. Chairman.

    I'd like to follow up on three of the questions I asked earlier.

    Firstly, $108 million is earmarked in the budget for Quebec under the $600 million Strategic Highway Infrastructure Program. You indicated that none of this money has yet been spent and that you are waiting until an agreement is reached. This program is fully separate from the $2 billion Strategic Infrastructure Fund administered by Mr. Manley.

    Therefore, you understand that the Government of Quebec will not be signing an agreement for five highways at a cost of $108 million. You'll likely get a limited agreement for that amount. Have you had some discussions with Quebec concerning Autoroute 30 and the two bridges to the south shore? Is that what you're looking at as part of this $108 million allocation?

    Mr. David Collenette: The important thing is to sign an agreement with Quebec for the $108 million provided for in the 2000 budget under the Highway Component. Mr. Manley does consult with his provincial counterpart on infrastructure in general, including transportation, and he is working with me and with my officials to determine which transportation projects are eligible for funding.

    Once an agreement is in place for the $108 million allocation and once we've had discussions with Quebec on the infrastructures, we'll be able to examine all of the projects together and set some priorities. It's quite possible that a portion of these funds will be used to improve a section of the national highway network and another portion for Autoroute 30 or for improvements to the highway located in the parliamentary secretary's riding.

»  (1735)  

    Mr. Mario Laframboise: That's if you manage to negotiate some kind of agreement. You said that an agreement was possible but that...

    Mr. David Collenette: We have to negotiate an agreement for the $108 million because this is a separate program. So far, we've negotiated agreements with seven of ten provinces. We need to come to an agreement with Quebec on a specific project, such as Autoroute 30, but we can consider the overall picture. That's the advice my officials and I have given Mr. Manley and other members of our committee.

    Mr. Mario Laframboise: Mr. Ranger, for the sake of even greater clarity, can you tell me if, in the case of the $108 million in question, you're recommending a general or a specific agreement for a highway in particular?

    Mr. Louis Ranger: We're working with the province. There's nothing preventing Quebec from listing its five priorities as far as highways are concerned. We have a total of $108 million to work with. Quebec could suggest that $20 million be spent on the first priority, $30 million on the second, and so on and so forth. The $108 million could be divided up and spent on several different sections of roadway.

    Mr. Mario Laframboise: Just as this money could be spent on one highway if, as you said...

    Mr. Louis Ranger: Yes, that's correct, it could be spent on one roadway.

    Mr. Mario Laframboise: For instance, Highway 30 could be in that one, and the others could be in the agreement with Mr. Manley.

    Mr. Louis Ranger: If this meets the major criteria, that could suit us.

    Mr. Mario Laframboise: Perfect.

    My second question concerns ports. Earlier, it was mentioned that there were $17 million dollars left for ports. I would like us to understand each other well, because I really hate it when Quebeckers are taken for fools.

    You granted more than a million dollars just for the Cumberland ferry wharf. That leaves 20 in Quebec, among others the wharves in Baie-Comeau and Havre-Saint-Pierre. These are not wharves like the one in Cumberland. If you tell me that you think that 10 or 50 requests for funding for Quebec are excessive, I would agree with you, but when we are talking about $17 million for 20 wharves in Quebec... Just for Baie-Comeau, the amount requested by the parties concerned is more than $5 million. We're not talking about the money Quebec is asking for; we are talking about what those who work in the field would like to obtain. So you are going to run out of money somewhere. Admit it and we will understand each other. I really hate to be taken for a fool.

    Mr. David Collenette: We believe that the $17 million we have are sufficient, as I have already said, but if we need more money, we can ask the Minister of Finance to add to the fund.

    Mr. Mario Laframboise: That's better.

    I have one last question. Concerning Mirabel, Mr. Minister, Aeroports de Montreal, ADM, has announced its intentions. You will continue to own an empty air terminal building. Do you know as of now what you intend to do with it? Have you put any questions to ADM? Will the air terminal be maintained? Will it be heated? We know that one runway will be closed. Will it be maintained? Have you asked yourselves these questions?

    Of course, the decision has been made: there will no longer be any passengers. So there will be one empty air terminal. If you have decided to make them into bowling alleys, perhaps you should let us know. Do you know what you're going to be doing with this property which belongs to you? Do you know?

    Mr. David Collenette: The intention of ADM is to promote Mirabel as an air cargo airport. We want to keep the runways, and air operations will continue with all of the necessary security measures, but for air freight flights as well as for Bombardier commercial flights, for instance, and that of other businesses. But we will be keeping it operational. It is not true that the Mirabel airport will be closing. ADM has decided to transfer passenger flights to Dorval.

    Mr. Mario Laframboise: But Minister, cargo won't occupy the part that the passengers used to occupy. In that part, as of September of next year, there will be no one. Are you aware of that? Have you already given directives? Have you required from ADM that it maintain that building in good repair, that it heat it? That part of the air terminal will not be used either by Bombardier or for air cargo. We are talking about the air terminal where there used to be people and where merchandise will not be received.

    Mr. David Collenette: It is up to ADM to examine the options for the use of the terminal until Mirabel once again becomes a passenger airport. I believe that in a few years, in 20 or 25 years, perhaps, a decision will be made to transfer all flights to Mirabel, but right now ADM feels it is preferable to use Dorval exclusively for passenger flights.

    Mr. Mario Laframboise: Mr. Minister, it's not fair...

»  (1740)  

[English]

    The Chair: Mario--

    Mr. Mario Laframboise: Je veux faire juste un petit commentaire, monsieur le président.

    The Chair: Make it a quick one.

[Translation]

    It is not ADM, Mr. Minister, but the government of Canada that has authorized borrowings to do all of the work they're doing at Dorval. Billions of dollars will be allocated and invested for the purpose of one day returning to Mirabel, but according to what I understand, you don't know what you will be doing with the Mirabel air terminal.

    Mr. David Collenette: We have an agreement with ADM for the management of the two airports. The decision was taken by ADM in the context of the lease and of the profitability of Montreal airports.

[English]

    The Chair: Mr. Alcock.

    Mr. Reg Alcock: Thank you, Mr. Chairman.

    Mr. Gouk is gone. I wanted just to correct his math.

    Minister, I'm just looking at the estimates book here. In two or three of the votes you spend in the area of policy: in capital spending, around $809,000 of planned spending; in grants, $23 million; and in contributions, $72 million--over $100 million in the area of policy. Can you help me understand what that's spent on?

    Mr. David Collenette: Which page are you talking about here?

    Mr. Reg Alcock: I'm looking at your Transport Canada estimates, part III. Let's start first on page 38 in table 2, “Summary of Capital Spending by Business Lines”, where under “Policy” is shown “Planned Spending 2002-2003” of $809,000.

    Then go over to page 41, table 4, “Summary of Transfer Payment Spending by Business Line”. Under “Grants” it says “Policy” and shows $23,539,000. These are in thousands? Yes, they are. And under “Contributions”, in “Policy” again, is shown $72,960,000.

    Mr. David Collenette: But that's--

    Mr. Reg Alcock: Somebody should pay attention to the book.

    Mr. David Collenette: Those are the payments for VIA Rail and for Marine Atlantic.

    Mr. Reg Alcock: What's that?

    Mr. David Collenette: VIA Rail's payments and Marine Atlantic subsidies go through--

    Mr. Reg Alcock: No, they are down here under.... They have a second line actually. Marine Atlantic is vote 20, $32,949,000; vote 25 is payments to VIA Rail Canada, $255,701,000. But above that, in vote 10, grants and contributions, $376,347,000. When that is detailed over here, it says in it.... There is just a lot of money spent. And I'm a policy wonk, so I like money spent on policy. I'd just like to know what you're spending it on.

    Mrs. Bev Desjarlais: The problem is the report on the policy.

    Mr. David Collenette: There is a whole list of things. We can give it to you.

    Mr. Reg Alcock: If you have details, why don't you just send it all over to me?

    The Chair: To the committee, Minister, to the clerk.

    Mr. Reg Alcock: I do have another question or two. I have some time, right?

    The Chair: You have two more minutes.

    Mr. David Collenette: There are payments to the Canadian Wheat Board in here. There are contributions for non-VIA service, Algoma Central, Ontario Northland. There is a whole slew of things.

    Mr. Reg Alcock: On another related policy area, we've been waiting for some time to start the deal with a review of the act itself and to finally solve this problem of bringing competition into rail. The task force did its work and produced a fairly decent report, with a few minor exceptions. What's happening now? When are we going to see that? When are we going to get that piece of work? When is that going to come before us?

    Mr. David Collenette: We hope to bring an amendment to the Canada Transportation Act in the fall, and we hope to be able, on or about the same time, to issue a policy document that will give guidance to transportation policy and deal with the question you're concerned with.

    When you said deal with competition in rail...I know there are two competitive companies, CN and CP, and there are a number of short lines. But in certain parts of the country, especially in the west, there are many--or some--who feel the competition doesn't exist. You are familiar with all of those issues. We dealt with that in Bill C-34 a couple of years ago. Although many of the stakeholders believe there is competition, with the larger grain elevators, the improvement of roads, there is competitive access for more and more farmers than there ever was, but there is this issue of whether or not we should change the act to permit other rail companies to run over the lines of CN and CP. It's highly contentious, and that's an issue that we're reflecting on. As you know, Mr. Estey, Mr. Kroeger, and the CTA panel all looked at this, as did people studying Bill C-34.

»  (1745)  

    Mr. Reg Alcock: All, by and large, came out in favour of it, with the exception of Kroeger, who said let's just look at it again. We did that, and once again they came out in favour of it, so it may be time that we moved on that.

    Mr. David Collenette: The railways argue against it. They say look what happened with Railtrack in the U.K. You don't get the investment in the plant. It runs down. You don't have the incentives there, but then you have other companies such as the Omni-Tracks of this world that provide real competition to the users.

    Mr. Reg Alcock: It's strange, actually, how the two railroads think there is lots of competition, but none of the shippers do. It's not an uncommon kind of divide. I think we need to get on with that piece of work. That's what's really on the table here.

    You're consulting right now on the blueprint. Is that the right term?

    Mr. David Collenette: Yes.

    Mr. Reg Alcock: There are people out in the west talking to people about it. Is this issue of running rights part of it?

    Mr. David Collenette: Yes.

    Mr. Reg Alcock: When you talk about the Railtrack experience in the U.K., you're ruling out the purchase of the rail bed by the government?

    Mr. David Collenette: I would find it very difficult, knowing the mentality of my colleagues in cabinet, that they would agree to such an expensive proposition. It's certainly an option. I think the British perhaps regret the way they did it. A Nav Canada model might have been more appropriate--to make it a not-for-profit where you do get all the reinvestment in the plant. We might have considered that when we privatized CN. In fact, cabinet discussed that particular option, but the decision was to privatize the infrastructure as well as the operating company.

    Mr. Reg Alcock: Yes, it's a shame.

    The Chair: Jim, you have five minutes and then Paul.

    Mr. James Moore: While we're on the issue, I want to ask about an important railroad that actually goes through my riding. I know you're aware of the issue, Mr. Minister, and it's the issue of West Coast Express and their ongoing fight with CP Rail over the running rights. West Coast Express is saying it is being charged over 1,000% of what the market value is for the ability to run passenger rail from Mission through to downtown Vancouver. I understand you have a petition that was signed by all Liberal members of Parliament from British Columbia, including all the cabinet ministers and every single Liberal senator from British Columbia, asking you to consider sending the contract between West Coast Express and CP Rail to binding arbitration. Will you commit to doing that?

    Mr. David Collenette: First of all, this matter is under contest, if you will, and I'm not going to talk about what the cabinet may or may not do, except to say--

    Mr. James Moore: What were you aiming for?

»  (1750)  

    Mr. David Collenette: --that this contract was negotiated in good faith by Canadian Pacific Railway and the government of Mr. Clark in British Columbia. I believe it was a 20-year contract, and it is a legally binding contract.

    In 1996 we brought in the Canada Transportation Act that provided for final-offer arbitration that really would have dealt with the issue that is now in the public light. The problem government will have is whether or not legally we could overturn a legally binding contract that was signed in good faith by two parties, simply because we may believe that contract favours one party over another.

    There is a lot of discussion on it, and I really can't say any more, given the fact that potentially cabinet may be asked to look at this.

    Mr. James Moore: But the question is whether or not it is fair, given that they have a monopoly and that they're charging 1,000%.

    You made two statements not that long ago that the Liberal Party stands up for commuter rail and for regular, ordinary Canadians. People in my riding are regular, ordinary Canadians. They want passenger rail into downtown Vancouver. And Doug Kelsey of West Coast Express tells me they can expand capacity and get fewer cars on the roads, and therefore lower air pollution, something Liberals like to talk about. Why wouldn't you open up the contract so they could expand capacity?

    Mr. David Collenette: We stand for all those things, Mr. Chairman, but we also stand for upholding the law and upholding fair commercial practices where they exist. This is not an easy one to deal with, and the question is, ultimately, should the Governor in Council overturn a contract between one of the stakeholders it regulates and the Government of British Columbia--

    Mr. James Moore: Are your cabinet colleagues--

    Mr. David Collenette: --on the argument that one of those parties believes the contract they signed in good faith some years ago is unfair. This is really a very difficult issue, and it's a legal issue and one where I really can't go any further without prejudicing my position as the individual who may or may not choose to bring this to the Governor in Council for recommendation.

    Mr. James Moore: So then you mean you're siding with Glen Clark and CP Rail, the monopoly that's gouging the communities in my riding for 1,000%, despite the position of your cabinet colleagues from British Columbia and Liberal MPs from B.C.

    Mr. David Collenette: Mr. Chairman, I think the public will see through the very self-serving rhetoric of Mr. Moore here. I would really urge him to perhaps pay attention to due process, to legal obligations, as well as making a very easy statement to be on the side of those who feel aggrieved. There are two parties here, and some people may not like the Canadian Pacific Railway, but the Canadian Pacific Railway has rights too.

    Mr. James Moore: I'm pleased to know that at least the Liberal members of Parliament seem--

    Mr. Reg Alcock: Don't go too far.

    Mr. James Moore: I appreciate that the Liberal members of Parliament and senators apparently have no impact or influence whatsoever with the transport minister--

    The Chair: Time is up.

    Mr. David Collenette: This kind of rhetorical drivel is unworthy of the sophisticated debate we've had here this afternoon.

    Mr. James Moore: Yes, well, stand up for B.C., David.

    The Chair: Bev, you're on.

    Mrs. Bev Desjarlais: Now that I've gotten through the airport security stuff, I'll give you three questions. It might have been fiction or it may not have been, but the papers reported a week or so ago that there was going to be a pile of legislation coming in, in the fall, and one was listed as “Transport, VIA”. I'm curious as to what that would be. If it's fiction, that's fine. I just wasn't sure what legislation might be coming forth related to VIA.

    Mr. David Collenette: Mr. Chairman, I've said on a number of occasions, and I think before this committee, that we have an ambitious agenda, including the Canadian airports act, the Canada Transportation Act, the VIA Rail act--

    Mrs. Bev Desjarlais: So it's just a review of the--

    Mr. David Collenette: --a review of the Canada Marine Act. So, no, what we've been discussing this afternoon was perhaps a statute, which would be a new statute, to govern VIA Rail.

    There will be amendments to the CTA, probably to the CMA. The Canada airports act would be a freestanding, new bill. The Aeronautics Act will be back again for more amendments.

    Mrs. Bev Desjarlais: I have another question related to the bridge crossing in Windsor. After that Windsor election, all of us know about the bridge crossing at Windsor now and the congestion with the truck traffic and traffic within the Windsor area. I am aware that there are differing views as to what's the best approach for addressing that concern. I know one group is suggesting possibly a tunnel, which would incorporate road traffic as well as rail traffic; some are indicating a totally different area, other than the bridge crossing. I'm wondering if there's any discussion taking place concerning that.

    The other question concerns investment in rail. I think there's an acceptance that rail is more environmentally sound and that there is an issue related to having enough dollars to fund quality rail service, including high-speed rail within the Windsor-Montreal corridor. Even though I don't live here, I think it's an important issue and that the rest of Canada would recognize it's well worth supporting increased dollars to have high-speed rail service in that area.

    I'm wondering if something along the lines of the labour-sponsored investment tax credits, and this is being rather imaginative, that they have in Manitoba and other provinces, where you're investing in labour in those provinces, is something that might be looked at--a tax credit related to investment in improved rail service in Canada.

    Mr. David Collenette: Well, that's really a question for the Minister of Finance.

    In terms of the specific question on high-speed rail, there was a consortium put together. Bombardier was part of it, and there was money put in, I believe, by the.... I'm not sure whether governments did put any in. They wanted money from the Quebec government, the Ontario government, and the federal government for a study. But the proposition ultimately called for about $7 billion of either cash or loan guarantees, and this was at a time when we were coming off program review and didn't think we could do that.

    I personally think we should look at establishing a TGV service in the long run. Part of the strategy I followed, and encouraged VIA to follow, is to work with the railways--it's largely CN in the corridor--to upgrade the infrastructure and of course introduce new equipment, to gradually increase the speeds. VIA is making those kinds of investments both in track and equipment. They have a rather ambitious plan so that we can move towards a high-speed train, but not necessarily a TGV-style, within the next five to six years.

    In fact, I believe, starting maybe this fall, the schedule between Montreal and Toronto will be eight trains a day--an hour and 15 minutes--with the new track upgrades. They are working on the Montreal to Toronto portion, or Brockville to Toronto portion, and the speeds are to be cut down gradually.

    It's something I think we need to do and will. Over the next 10 years or so, you'll move towards a TGV style of rail.

    The last point was on Windsor. We could speak for a long time about this. For whatever reason, the city of Windsor has a local road with six lanes, called Huron Church Road, which is the link between the 401 and the Ambassador Bridge. Unlike Sarnia and other places, the provincial government never sought to expand this to the bridge, and there's been opposition in the city of Windsor. I believe the city council does not want Huron Church Road to become a limited access highway or an extension of 401.

    The question is, then, how do you deal with it? There's another proposal to build a crossing to the south using the expressway--it's called the Eastside Expressway, or something like that--that goes across the town, but certain others feel it doesn't have the capacity.

    We have entered into an agreement in partnership with the Ontario government, the State of Michigan, and the U.S. government to look at options over the long term. But the problem is the long term, which is seven or eight years, is too long. We have to really deal with things reasonably quickly.

    Take, for example, this new infrastructure program. Should we say to the Province of Ontario, would you split the cost 50-50? Or should we go into a partnership with the Ambassador Bridge to make Huron Church Road a limited access highway, which in effect will cut the city of Windsor in half? It does anyway, with all the trucks there. That's one option, but do you do that in the face of opposition from the local citizens? That's an issue that has to be resolved.

    Canadian Pacific has an option to use both of their tunnels--and then re-bore tunnels for double-stacked containers for the railway--as an exclusive truck route. That would be a public-private partnership. So there are some options, but I think we really have to get moving on these, because it's becoming untenable.

    Mrs. Bev Desjarlais: Thank you.

»  (1755)  

    The Chair: Paul has the last word, but Reg said he had a quick question.

    Paul will get pretty upset if you take too much time, so do it quickly.

    Mr. Reg Alcock: I wondered if the minister could simply forward to the committee or to myself the information on the sale of the hopper cars. The government bought them and gave them to farmers, or gave the use of them to farmers, and then there was a proposal to sell them to the railroad and charge the public a second time for them. Well, this time it would largely be farmers, with an additional fee on the rate.

    They have also been paying, over the life of those cars.... I believe the allowance was $4,000 per car for maintenance and upkeep. That's part of the annual feel that's assessed by the commission. So there's been a lot of money put into the maintenance and repair of these things. The railways have not exercised their option, and I believe the option is coming to an end shortly.

    A voice: Next week.

    Mr. Reg Alcock: So we need to know what's going to happen with those cars. Are we now going to adopt a more, shall we say, farmer-friendly policy and see that farmers continue to have the use of them without having to pay for them a second time?

¼  (1800)  

    Mr. David Collenette: I'll be going to cabinet in the fall with a proposal to deal with the sale of the hopper cars. It's still government policy to sell them. The question is under what conditions. There is an amount of money that's booked in the fiscal framework, and the government policy to sell them has not changed. The question is, what are the conditions attached to the sale? That will be an issue coming up in the fall.

    The Chair: Mr. Szabo.

    Mr. Paul Szabo (Mississauga South, Lib.): Mr. Minister, I suppose what Canadians probably would like to ask every minister is, tell me a little bit about your successes in terms of the fiscal responsibility of your department. Obviously 9/11 has added a whole other dimension. It's probably disrupted many of the planned activities that Transport had, and it may have some ongoing and lingering implications. Every department is constantly looking at efficiencies, sunset clauses on other things we've been doing.

    Can you give Canadians and the committee an idea of the success you've been able to have in terms of fiscal responsibility success stories in your budget areas?

    Mr. David Collenette: I'll perhaps let the officials deal with some of the details.

    This is a self-serving statement, but I do think Transport Canada did perform very admirably in the aftermath of September 11, with very little increment in terms of cost. Extra people had to be brought back. The staff were terribly overburdened and it was extremely stressful, because not only did we have to deal with the events of September 11, but also with all the new regulatory regimes that came into place in negotiations with the FAA, discussions with others, the industry, plus the preparations for the budget and the security provisions in the budget. All of that was really quite stressful for the department, and I think the officials behaved in an admirable way and should be congratulated.

    With respect to efficiencies, these are things perhaps Mr. Ranger can deal with. I just want to say that for a department that is now not really an operational department, there is limited scope for operational efficiencies of the kind of magnitude we had years ago. The fact is that airports have been commercialized, and in some cases those airports are paying rents to the federal government. We're now reviewing that, but there are plans for other airports to pay rent, which is an efficiency in a sense because it's a return on investment for the taxpayers.

    Also, the rates of subsidies have been reduced. We've found that whether it's the ports or the airports, local management is operating these facilities in a much more efficient way than was done by the department, and it's no disrespect to the department. It's just the whole notion of the commercial approach that has been taken, and also local efforts to manage and to market these particular facilities.

    There may be other issues that the deputy can raise.

    Mr. Louis Ranger: For example, some of our good news stemmed from some of the bad news of the past. We were severely criticized in the past for the way we managed highway funding, for example. The Auditor General had been critical, and we accepted the criticism. Quite frankly, one conclusion was that having only four people manage hundreds of millions of dollars was not enough, and we thought the Auditor General was quite right about that. I think we've made a lot of progress on that front and have improved how we manage highway funding.

    We were also criticized for what was perhaps our lack of monitoring of airport leases. Again, we've turned things around. Now we have a fairly sophisticated monitoring system for airports.

    We do manage large amounts of money--large subsidies to VIA Rail. On that front, I think we've always had a good record.

    There's a new practice in government for every program now. At the time you seek approval for the program, you also have to develop an evaluation framework, how you are going to measure your results and so on. We've developed an expertise in the department--we're actually being copied by other departments--on how you set this up, up front. We've become quite good at it.

¼  (1805)  

    Mr. Paul Szabo: Okay. That gives me a good idea. I think the message about the successes we do have is one we don't hear often enough, those successes we have working within the resources, abilities, and capacities we have, looking for efficiencies and performance measures, etc. This would indicate the responsible management of our country's resources.

    The Chair: Thank you very much, ladies and gentlemen.

    Minister, I think we had a nice, cordial meeting. I know everyone had a chance to ask their questions. We even got into some ideological discussions. I thank you and your staff very much on behalf of the committee.

    We're adjourned until tomorrow at 11:30.