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37th PARLIAMENT, 2nd SESSION

Standing Committee on Transport

EVIDENCE

CONTENTS

Wednesday, February 26, 2003

1535

The Vice-Chair (Mr. John Cannis (Scarborough Centre, Lib.))

Hon. David Collenette (Minister of Transport)

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

1540

The Vice-Chair (Mr. John Cannis)

Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance)

The Vice-Chair (Mr. John Cannis)

Mr. James Moore

Mr. David Collenette

1545

Mr. James Moore

Mr. David Collenette

Mr. James Moore

1550

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

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

1555

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

1600

Mr. Mario Laframboise

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

Mr. Louis Ranger (Deputy Minister, Department of Transport)

Mr. Mario Laframboise

1605

The Vice-Chair (Mr. John Cannis)

Mr. Louis Ranger

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. Joe Fontana (London North Centre, Lib.)

Mr. David Collenette

1610

Mr. Joe Fontana

Mr. David Collenette

Mr. Joe Fontana

Mr. David Collenette

1615

Mr. Joe Fontana

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais (Churchill, NDP)

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

1620

Mrs. Bev Desjarlais

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

1625

The Vice-Chair (Mr. John Cannis)

Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)

Mr. David Collenette

Mr. Ovid Jackson

Mr. David Collenette

Mr. Louis Ranger

1630

Mr. David Collenette

Mr. Ovid Jackson

Mr. David Collenette

Mr. Ovid Jackson

Mr. David Collenette

Mr. Ovid Jackson

1635

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. James Moore

Mr. Joe Fontana

Mr. James Moore

Mr. Joe Fontana

Mr. James Moore

Mr. David Collenette

1640

Mr. James Moore

Mr. David Collenette

Mr. James Moore

Mr. David Collenette

1645

The Vice-Chair (Mr. John Cannis)

Mr. Stan Keyes (Hamilton West, Lib.)

The Vice-Chair (Mr. John Cannis)

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

1650

Mr. David Collenette

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

Mr. Louis Ranger

Mr. Stan Keyes

Mr. Louis Ranger

Mr. Stan Keyes

Mr. Louis Ranger

Mr. Stan Keyes

Mr. Louis Ranger

Mr. Stan Keyes

Mr. Louis Ranger

Mr. Stan Keyes

Mr. David Collenette

Mr. Stan Keyes

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

Mr. Stan Keyes

The Vice-Chair (Mr. John Cannis)

Mr. Mario Laframboise

1655

Mr. David Collenette

Mr. Mario Laframboise

Mr. David Collenette

Mr. Mario Laframboise

1700

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The vice-Chair (Mr. John Cannis)

Ms. Liza Frulla (Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles, Lib.)

Mr. David Collenette

Mr. Louis Ranger

Ms. Liza Frulla

1705

Mr. Louis Ranger

Ms. Liza Frulla

Mr. David Collenette

Mr. Louis Ranger

Mr. David Collenette

Mr. Louis Ranger

Ms. Liza Frulla

Mr. Louis Ranger

Ms. Liza Frulla

Mr. Louis Ranger

Ms. Liza Frulla

Mr. David Collenette

Ms. Liza Frulla

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

1710

Mr. David Collenette

Mrs. Bev Desjarlais

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

Mrs. Bev Desjarlais

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. Roger Gallaway (Sarnia—Lambton, Lib.)

Mr. David Collenette

Mr. Roger Gallaway

Mr. David Collenette

1715

Mr. Roger Gallaway

Mr. David Collenette

Mr. Roger Gallaway

Mr. David Collenette

Mr. Louis Ranger

Mr. Roger Gallaway

Mr. David Collenette

1720

Mr. Roger Gallaway

Mr. David Collenette

Mr. Roger Gallaway

The Vice-Chair (Mr. John Cannis)

Mr. Mario Laframboise

Mr. David Collenette

1725

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

Mr. Mario Laframboise

Mr. Louis Ranger

The Vice-Chair (Mr. John Cannis)

Mrs. Bev Desjarlais

Mr. David Collenette

Mr. Louis Ranger

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

1730

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

Mr. David Collenette

The Vice-Chair (Mr. John Cannis)

CANADA

Standing Committee on Transport

NUMBER 013

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, February 26, 2003

[Recorded by Electronic Apparatus]

¹ (1535)

[English]

The Vice-Chair (Mr. John Cannis (Scarborough Centre, Lib.)): Ladies and gentlemen, I'd like to call this meeting to order pursuant to Standing Order 108(2), review of the program and objectives of the Department of Transport.

We're very pleased today to have with us the Minister of Transport, the Honourable David Collenette, who is accompanied by department officials: Louis Ranger, deputy minister; Kristine Burr, assistant deputy minister, policy group; Jacques Pigeon, senior general counsel and head, Department of Justice; and Gerry Frappier, director general, security and emergency preparedness.

Minister, I've been told that you have four minutes to summarize your view on transport, but we've discussed it amongst colleagues and the floor is yours.

Hon. David Collenette (Minister of Transport): Four minutes?

The Vice-Chair (Mr. John Cannis): Well, that was recommended by Mr. Moore.

Mr. David Collenette: Oh, well, in that case, I'll have 24 minutes.

Thank you, Mr. Chairman.

[Translation]

Ladies and gentlemen, as you know, my department has had a very full agenda over the last few years and without the full commitment and cooperation of the members of this committee, we would not have been able to make the significant strives that we have made towards moving the transportation agenda forward. Your efforts and support are indeed most appreciated.

It has been a remarkable week for Canadians. Last week, our colleague the Minister of Finance introduced his first budget. In this 2003 budget, the federal government has announced an additional $3 billion in new infrastructure funding. In the past three budgets, our government has announced $8.2 billion in new funding for infrastructure.

Two billion dollars will be added to double the funds in the Canadian Strategic Infrastructure Fund. This fund can support large-scale projects, including transportation initiatives such as highways, transit, rail and local roads, in partnership with the provinces, municipalities or the private sector.

One billion dollars will be earmarked for smaller scale, municipal projects.

[English]

I'm working very closely with Mr. Rock, my colleague responsible for infrastructure, to identify various projects for funding under the infrastructure initiatives. I want to take a few minutes, Mr. Chairman, to talk about the national transportation policy framework document, “Straight Ahead: A Vision for Transportation in Canada”, which I tabled in the House yesterday.

As you know, I introduced at the same time legislation proposing amendments to the Canada Transportation Act and the creation of a new VIA Rail act. Soon, after the break, we'll be introducing a bill to establish a Canada Airports Act. All of this—and of course the refinements to the Canada Transportation Act—is a major undertaking that will entrench in law how the government will oversee the national airport system. All of these measures taken together really mean that this committee will have a lot of work to do.

“Straight Ahead” outlines a vision that I hope will help to guide us on federal decision-making for the next ten years or so. I think it delivers on the government's Speech from the Throne commitment to renew Canada's transportation policy. It provides a framework for key strategic infrastructure investments in transportation, placing an emphasis on strategic corridors that support trade and the reduction of congestion in our urban centres and elsewhere. In addition, it confirms that we'll continue to rely on marketplace policies where these make sense, but intervene selectively where necessary.

The vision document will support the government's agenda on competitive cities and healthy communities, climate change, and innovation and skills. “Straight Ahead” covers the full spectrum of long-term transportation initiatives in Canada, ranging from airline and railway competition to critical infrastructure needs, environmental pressures, and safety and security initiatives.

It sets out a clear course that aims to strike the right balance for a future transportation system that will be able to meet the economic, social, and environmental challenges of the future.

The vision articulated also reflects our examination and assessment of the main findings of the recommendations of the 2001 report of the CTA review panel. Based on its own process of extensive consultations, the CTA review panel made some 90 recommendations covering a wide range of transportation issues based on more than 200 submissions and extensive research.

I should also say, Mr. Chairman, that we've had many discussions in this committee on transportation policy and have had many bills in the last number of years that have led to this initiative, including: the airline restructuring bill; Bill C-26; the Competition Act amendments last year, Bill C-23; and the western grain bill, Bill C-34, a couple of years ago. I think we've really consulted members and have received their input. Let's not forget, of course, it was this committee that really launched the renaissance of VIA Rail with its report a few years ago.

The last 10 years have seen enormous changes in the transportation sector, and by and large we think these changes have been very positive for the country. Productivity gains in the sector have outpaced those of the economy as a whole, and as a result these productivity changes have contributed to reducing transportation costs to shippers and travellers by $10 billion a year over the last 20 years.

Overall, we think the system is generally working well and not in need of a major overhaul. But it's not just my conclusion; the CTA review panel made this point strongly in its report.

The strategic directions and principles of “Straight Ahead” are reflected in our proposed amendments to the CTA and in the new VIA Rail legislation. As many of you know, the amendments I'm proposing for the CTA reflect extensive consultations, not only the ones I referred to—discussions in committee—but also with many stakeholders, including shippers, industry, and the provinces.

The result, I think, is a legislative package that attempts to balance the interests of many and position us well for challenges in the future.

Knowing the interest of the committee in surface transportation matters, I draw your attention to the new provisions in the act that will help remedy a gap. At present, this country lacks a defined process for the efficient review and approval of new international bridges and tunnels.

¹ (1540)

[Translation]

At a time when our border crossings and international links are more important than ever, the government is moving to ensure that a process is put in place to authorize any new international infrastructure. This will position us well to respond better to the demand for new border capacity.

I want to turn for a moment now to the interest you have shown in marine transportation concerns, as evidence by the creation of the Marine sub-committee. We look forward to providing more information to the members of the sub-committee. In the meantime, I thought I would just say a few words on what I understand to be one of your concerns.

While opinions of course will differ, depending on perspective, there is evidence that the 1998 commercialization of the Seaway has worked well. The St. Lawrence Seaway Management Corporation has been able to maintain high levels of service, safety and reliability and keep downward pressure on costs.

[English]

In fact, Mr. Chairman, the Seaway Corporation has been able to operate with cost levels $16 million below the targets that were negotiated in 1998. This has earned the Seaway Corporation the ability to give rebates, contributing towards making the Seaway a more competitive transportation system.

In the first five years, the relatively small operating deficits that have been incurred have been paid from reserve funds that were transferred to the Seaway Corporation at the time of commercialization. New targets are presently being negotiated for the second five years of the Seaway agreement, which begins this coming April 1.

A combination of traffic and revenue reductions, as well as increasing maintenance costs for an aging system, have led to the prospect that reserve funds may be depleted within the next two years. We have to recognize all these challenges, and certainly in “Straight Ahead” we indicate that the government is beginning the examination of the long-term future of this critical component of Canada's transportation infrastructure, including how we could make better use of the system.

To conclude, Mr. Chairman, while we cannot foretell the future, we can be reasonably certain that Canada will continue to require a world-class transportation system. We believe the document released yesterday and the policies of the government over the last ten years really continue to provide Canada with a world-class transportation system. I certainly look forward to working with you over the next few months as we have this heavy transportation policy agenda to deal with, and I look for your cooperation.

Thank you.

The Vice-Chair (Mr. John Cannis): Thank you very much, Minister.

I'll open the floor for questions. You know the rules. We'll start off with Mr. Moore.

Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance): Ten minutes?

The Vice-Chair (Mr. John Cannis): Yes, ten minutes.

Mr. James Moore: Thank you, Mr. Chairman.

Thank you, Mr. Minister, for coming to the committee today.

In June 2000 you appointed the panel to review the Canada Transportation Act. One of their recommendations in the tenth chapter refers to the World Bank-New Zealand concept of road and transport funding where federal and provincial user fees, fuel taxes, and licence fees are combined into a pool and then allocated to fund highways, urban transport, and municipal streets. That was recommended by a panel you appointed.

Now we have “Straight Ahead”, which says that federal fuel taxes are an instrument of fiscal, not transportation, policy and are an important source of general revenue.

There's a shift here. Why was there a shift away from the CTA review? Do you agree with the CTA review, or do you agree with “Straight Ahead”? Do you believe in designated taxes to help roads or not?

Mr. David Collenette: There's been no shift, Mr. Chairman. The fact is the government's policy has been rather consistent on this matter. The CTA panel offered certain recommendations, and certainly we've had a debate, publicly and privately, about whether or not we should make more tax revenues available to municipalities directly or have this kind of approach.

Certainly there have been lots of statements made. The consensus after all of the discussion, and one that has strongly been enunciated by the Prime Minister and the Minister of Finance, is that we will maintain the integrity of the current tax system as it pertains to fuel taxes and that we can influence the transportation system and improve it using the federal spending power, as we have done through the infrastructure agreements we've entered into with the provinces.

If you really total up all the measures we have announced as a government since 1994, plus the $3 billion in infrastructure, and you add the other $3 billion that is under Mr. Anderson for sustainable infrastructure and the environment—the Kyoto targets—which can be used for transportation, and Mr. Anderson has said so publicly, we're looking at a total potentially of $14 billion of federal money in the last ten years. If you match that with the provinces and the municipalities, you're talking about more than $40 billion of infrastructure, and that doesn't even count private investment.

This is the path we're on, and we're very comfortable with it. That's the one we will continue with.

¹ (1545)

Mr. James Moore: Mr. Minister, you say you want to maintain the integrity of the system, but I don't think everyday Canadians think there is a lot of integrity in a system where half the cost of gasoline constitutes taxation. They assume that taxation goes into roads. It is a fact that in Canada half of the taxation that is on a litre of gasoline is provincial taxes. It is also a fact that on average in Canada, 91% of the gas tax revenue collected by provinces is invested in roads. It is also a fact that a single-digit percentage of the amount that is collected by the federal government is invested in roads.

Today Ernie Eves has announced he is going to be giving tax points over to the municipalities so that they can build roads. Premier Campbell of British Columbia has done the same as well. So provinces have shown a much more effective proclivity for giving this tax room to the levels of government—themselves and municipalities—that engineer, build, and maintain over 95% of the roads on which we drive.

Are you as a transport minister arguing at the cabinet table and are you as a cabinet minister in favour of changing the current system of “integrity” you described, of taking gas tax dollars and giving them to general revenue, or are you personally advocating for the dedication of fuel taxes to provinces or to roads?

Mr. David Collenette: The policy of the government has been clearly articulated over the last number of months and is reinforced here in the policy document. Mr. Moore somehow seems to think this is a municipal council operation that we operate here. We have cabinet government, responsible government, and when a position is taken by the government it is reflected in government policy. Government policy is reflected in the document that was tabled yesterday.

I congratulate Mr. Eves for moving in this direction, if that is what he's going to do, and I certainly congratulate Mr. Campbell and other provinces. The provinces are actually living up to their constitutional obligations. I think we should all pat them on the back, because provinces like Ontario have denied their cities the necessary funding.

I think it's a tragedy that for five years there was a black hole where no money was spent for transportation infrastructure by the Province of Ontario. It was only because of the prodding of the federal government, and particularly me as Minister of Transport, that they came back in with a half-hearted measure of 33-cent dollars. They said the feds had to put their money in.

It's no good for the federal government to finally get into the urban agenda and make these kinds of contributions if all we're going to do is replace provincial funding that's traditionally been there. So I would say to Mr. Moore that he should be going across the country exhorting these provinces to recommit to the levels they historically have put into transportation infrastructure. Now we're coming forward with all these infrastructure funds, and I hope there will be more in the future.

Mr. Manley has talked about it in the context of a downpayment for the future. As we put more money in and the federal government becomes more and more involved in the urban agenda, it will be over and above the traditional commitments. Then there will be a real improvement for the cities. It means the cities that are really in need of this funding will get an increment. They just won't get what they did a number of years ago before provinces made massive cutbacks.

Mr. James Moore: I think it's interesting that somebody is lecturing the provinces on meeting their constitutional obligations when the federal government's constitutional obligations are to maintain the value of the dollar, border integrity, and national security, which this government has failed to do. But the minister has lectured me on the concept of process and what he suggested I should do. I will return the volley.

¹ (1550)

Mr. David Collenette: This is not volleyball. This is serious business.

Mr. James Moore: Good comeback, David.

Rather than releasing a “Straight Ahead” document a week after the budget, why didn't the minister show some leadership and release something like this document two months prior to the budget? Then the minister could have travelled across Canada, met with stakeholder groups, and developed some public support for some particular proposals in his “Straight Ahead” document. That public pressure would then have been put on the finance minister in a subsequent month or two and we could have actually got some commitments in the budget.

This coming out the week after the federal budget was a complete waste of time because the budget was a total failure with regard to transportation infrastructure. Everybody knows that. The minister knows that. He's been raked over the coals in the papers and editorials because of that. Why would this document be released now, a week after the budget, when it's going to have virtually no impact whatsoever on improving the transportation realities in Canada?

Mr. David Collenette: I'm just shocked that Mr. Moore is denigrating the work and the consultation that's gone on, not only with members of Parliament but with stakeholders across the country, for two and a half years. In transportation circles this report has been well received.

Not everyone agrees with it. There are people who are obviously disappointed and there's been some public comment. But the quality of the thought in the document and the conceptual approach that has been put forward as a result of much hard work by my officials and all the stakeholders make it something all Canadians should read.

I can't believe Mr. Moore made the statement he just did. I would have expected him to have read that document last night from cover to cover and not necessarily agree with everything in the document but at least not denigrate what I think is a seminal exercise in policy-making that is being well received across the country.

Mr. James Moore: The seminal exercise would have been shown greater respect by the minister if he had tabled it in a meaningful timeframe so it could have been implemented by a federal budget. He failed to do that.

One of the criticisms of this blueprint was put forward by the Canadian Trucking Alliance. They pointed out in their press release that Canada was the only country in the industrialized world that did not have a truly national highway infrastructure program, either on the financing side or the planning side, brought together by the federal government.

Does the transport minister believe it is all right for this country to not have a national highway infrastructure plan, or is he finally, after six years, going to move down the road to creating one?

Mr. David Collenette: We have announced a number of infrastructure programs in recent years. We have the strategic fund, which has been topped up in this budget. We have the ship program, which we've administered. We've announced highway projects across the country. The federal government has been involved in highway construction since 1919, using the federal spending power.

The program dollars have ebbed and flowed over the years. They've peaked and gone down. Now they're starting to come up, as governments have a better ability to finance the real needs of the country.

So I would exhort Mr. Moore to go back, do some research, and look at what has happened in the past. Look at what we've announced, and look at some of the very exciting projects that have come forward just recently in New Brunswick, in Quebec, and with the border infrastructure at Windsor. There will be many more.

I am certain he will recognize that this government is committed to our highways through the kinds of infrastructure initiatives that have been in place for a number of years and have been enhanced in the budget that he summarily dismisses.

The Vice-Chair (Mr. John Cannis): Thank you, Minister.

Mr. Moore, that's the end of your time.

We'll go to Mr. Laframboise.

[Translation]

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

I realize this is an exercise, Mr. Minister, but there is nevertheless a major weakness in your submission, since the expressions which come up most frequently are “will examine”, “will continue” and “will pursue”, but not “will implement”. Why? Because you lack the necessary funding.

Furthermore, Mr. Manley has just tabled his budget, and he earmarked $2 billion for your infrastructure program, Mr. Minister, but not a penny for 2003-2004 and only $50 million for 2004-2005. I acknowledge you put forth many ideas in your brief, but there's no indication when you will implement them.

Let me give you an example: the issue of our ports. Your government has a port divestiture policy which will expire on March 31, 2004. You said that the policy will come to an end and that you will examine... You say: “Transport Canada will consider options for the future of its remaining ports and will conduct all full program evaluation of port divestiture.”

I obviously don't see any money for an agreement with Quebec, which also has a port divestiture program, which in fact is currently being negotiated with the federal government. Though you say progress has been made, the problem remains money and there is no mention of it in the document, nor has any funding been earmarked in Mr. Manley's budget. That's my first question.

So, where will you find the money to help reach an agreement with Quebec on the issue of port divestiture?

¹ (1555)

Mr. David Collenette: Mr. Chairman, I must point out that yesterday's announcement unveiled a policy paper; it was not a budget. We tabled the budget last week, and in that budget, Mr. Manley announced an increase in the infrastructure fund. I must also point out that the infrastructure program includes major future projects. As Mr. Manley said, funding infrastructure projects throughout Canada will happen at another stage.

As for the specific issue of port divestiture, yes, it is true that the program will expire at the end of March, but we will renew it with existing government funding in order to promote the divestiture of our ports.

As for port divestiture in Quebec by the Quebec government, well, that's simply one option. We discussed the issue with the Government of Quebec, but a better approach, if you will, consists in promoting the sale of ports or port ownership rights to the communities involved. Therefore, we are considering several options, including the transfer of ports to the province of Quebec.

Mr. Mario Laframboise: What you are saying, Mr. Minister, is that you have the money. As you know, this represents over $80 million. You are saying that you have the money to transfer the ports over to the Quebec government. Do you have that money in your budget?

Mr. David Collenette: We have enough money for port divestiture, including divestiture to the province of Quebec or to municipalities or to the private sector. We have a port divestiture fund. Therefore, money is not a problem.

Mr. Mario Laframboise: My second question, Mr. Minister, deals with rail transportation. You made certain statements with regard to a high-speed train between Quebec City and Windsor, but you made no mention of this in your report. The statements you made with regard to a bullet train between Quebec City and Windsor are not included in your plan. No budget item has been set aside and there was nothing in Mr. Manley's budget on rail transportation or on a bullet-train project between Quebec City and Windsor.

I want to support you, but I'm trying to understand why you made such a statement. Can you tell us today where you will find the money?

Mr. David Collenette: Mr. Chairman, it is my pleasure to acknowledge Mr. Laframboise's congratulations and his support for the rail project. That's very nice of him.

But I must inform him that I have not yet submitted the project to Cabinet. I simply asked Via Rail a year ago to give us some ideas with regard to a high-speed train between Quebec City and Windsor. Via Rail obliged. Officials from my department and from the Department of Finance have studied the issue and I will soon be discussing it with my Cabinet colleagues. If Cabinet agrees to the idea of a high-speed train between Quebec City and Windsor, we have funding within the fiscal framework to go ahead with it. Of course, there will be more announcements in future budgets, but we can go ahead with it in the next fiscal year.

º (1600)

Mr. Mario Laframboise: With regard to road transportation, you said in your opening statement that you are negotiating funding for highways and road transportation with Mr. Rock.

We all know that the Canadian Strategic Infrastructure Fund does not only fund highway construction. Is there any flexibility in that area?

The officials who appeared before our committee, which has studied the highway issue, seemed to indicate that there was some flexibility with respect to the $2 billion which were announced... I'm not talking about what's coming down the pipe. Again, if you take a close look at the Manley budget, the new $2 billion fund does not provide anything for 2003-2004 and only $50 million for 2004-2005.

Do you think any money can be found within the $2 billion fund for highway projects other than those which were announced, money which could go towards highways 175 and 30 and to the New Brunswick highway? Is there any room for flexibility?

Mr. David Collenette: With all due respect, Mr. Chairman, let me say that this is a rhetorical question, because the expansion of this program was announced, which means that there are $4 billion, and thus, there are funds for other projects. The issue of highway 30 is a priority for the federal government. We are working together with Quebec officials, my deputy minister and Mr. Rock's deputy minister, and I hope that an agreement will soon be reached.

I know that we often say it will be soon, soon, soon, but this is a very complicated matter because we have to build two bridges and get the private sector involved. I am very satisfied with the work done by the Quebec officials and with Mr. Ménard's sincerity, as he is my counterpart, as well as that of the other members of the Quebec government in this matter. I think that we will be able to make an announcement soon.

Mr. Mario Laframboise: With your permission, let me come back to the issue of highways. You said there are $4 billion. I am prepared to believe you, Mr. Minister, but you know that out of the $2 billion just announced by Mr. Manley, only $50 million will be available in 2004-2005. There is nothing for 2003-2004. Thus, you will not be able to use this money for the next two years.

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

Mr. Louis Ranger (Deputy Minister, Department of Transport): Let me briefly raise two points. With regard to funding, I must say that there has never been as much money available for infrastructure, be it money from the Canada Strategic Infrastructure Fund or some other fund. The $2.6 billion announced in 2001 were indeed meant for other infrastructures, but the truth of the matter is that we share this 50-50. The provinces already have budgets for their highway investments and now they can get 50¢ on the dollar in Ottawa. Thus, they need not look all over the place for priorities, as the highway system is the obvious one. When it is over, and we look at how the $2.6 billion were invested, let me assure you that there will be an incredible share of this allotted to transport, and specifically highway transport.

Secondly, you say that these look like small amounts for the coming years. It takes time to plan a highway system. The Chicoutimi highway, for which $525 million were announced, will take five or six years. Thus, we do not need all that money right away. On the other hand, now we know, and this is a very important thing announced by the government, that this is the first time we know that we will have funds for the next 10 years. This allows us to make plans. It takes a year or two to do the environmental study, draw up plans and estimates, etc.

Thus, for the first time in a very long time, we now know that we can count on a source of funding. This is why, when we drafted the document Straight ahead: a vision for transport in Canada, we were able to tell where we would spend the money which was available. We can be confident about this, because we know that there is a continuous source of funding. This makes a big difference.

Mr. Mario Laframboise: However, Mr. Ranger, I would not want any ambiguity about the Canadian Strategic Infrastructure Fund. You think that highway transportation will get a large part of that money, but we need to keep in mind that municipalities, including cities, given their problems with water and sewage systems, will also get a good part.

I do not want to go back over the promises you made in the last election, to Quebec, for example, without talking about those you made to the rest of Canada. I think that you need billions of dollars in new money to meet your objective.

º (1605)

[English]

The Vice-Chair (Mr. John Cannis): Very briefly.

[Translation]

Mr. Louis Ranger: We need to make a distinction between the first infrastructure program, which was designed for small projects in municipalities, and the second program which was designed for strategic projects. In the December 2001 budget, $2.6 billion was earmarked for major strategic projects, and I can guarantee you that a very large part of that money is going to highway transportation.

[English]

The Vice-Chair (Mr. John Cannis): Okay, we'll go on to the next one.

[Translation]

Mr. David Collenette: Mr. Chairman, I must inform Mr. Laframboise that the province of Quebec did not sign the agreement with Transport Canada about the small municipal projects. If he has any friends in Quebec City, he can tell them that the people of Quebec are losing out because that agreement was not signed.

[English]

The Vice-Chair (Mr. John Cannis): Thank you for clarifying that.

[Translation]

Mr. David Collenette: Yes, I do not hesitate to tell the Government of Ontario the same thing.

[English]

The Vice-Chair (Mr. John Cannis): Minister, thank you for clarifying that.

We'll go to Mr. Fontana.

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

It's too bad Mr. Moore isn't here, but it's refreshing to hear that the Alliance critic is essentially espousing the federal's government support of infrastructure, because on the record they've always been against it. It's refreshing that he's now coming to the table saying we need more.

I would also point out to him that since 1993 it's been this government because the government for the previous eight years invested absolutely zero in the infrastructure programs altogether. So we agree $8 billion may not be enough; therefore, after this committee does its good work in planning on the CTA and so on, hopefully Mr. Moore will be in a position to offer some creative solutions on financing and even additional investments on behalf of the federal government.

Mr. Minister, I want to cover three areas. First is airline and airports policy. I know the airports policy thing will come down the line. Second is highways, as they relate to the Trans-Canada Highway. It's a truly provincial responsibility, but what is your vision for the Trans-Canada Highway? Third is VIA Rail. Our caucus task force back in 1990 or 1991 indicated moving to a crown corporation and allowing VIA to essentially operate unfettered.

On the airline policy, in light of the new realities in the United States and Canada, and all of a sudden understanding Air Canada's problems with regard to potential losses and so on, do you anticipate that the CTA will look again at what our airline policy should be, if there is a need to review some of those airline issues that are still before us and may very well come sooner than later?

We all hope Air Canada will continue to survive, but in light of their difficulties and what they need to do, I'm just wondering whether or not, within the CTA or your vision of this transportation policy for the country for the next ten years, you see us having to review our airline policy.

Mr. David Collenette: Mr. Chairman, there is, I think, a great degree of success to our airline policy in the last number of years. It's been very challenging for everyone since the merger of Air Canada and Canadian Airlines. Our policy on the former Bill C-26, which was supported by members of this committee--and in the House I think unanimously--was to encourage domestic competition.

That policy was working on September 11, and Air Canada's market share had fallen from 82% to 65% or thereabouts. Of course, with the failure of Canada 3000 and the events of September 11, 2001, Air Canada's market share went back up to 78%. Now, notice it didn't go back up to 82%, and that was because throughout this period WestJet continued to grow.

We now have a situation, about 15 months after September 11, 2001, or a little bit longer than that, 18 months, where Air Canada's market share is again in the 60% to 65% range. This shows the policy is working.

I think we have to be careful not to confuse the efficacy of the airline policy, which we reiterate in the document “Straight Ahead”, and the problems Air Canada has, which are unique to Air Canada in a domestic context but are not unique in the international context. If you look at airlines around the world, especially in North America, you'll see that there have been a lot of trying events. We have United Airlines, United Airways, in chapter 11 proceedings. We have American Airlines in a very difficult corner, and all the others, Delta, Continental--they were all significantly challenged. So Air Canada is not unique in this regard.

It is unique in Canada because it's so large and it means so much to us. I tell you, Air Canada is a wonderful airline. It's still one of the best; it's the number 10 airline in the world. The government is very supportive of Air Canada, but Air Canada has to deal with a lot of its own problems--and they're not public policy problems; they're not government problems. The management has done a great job in the last year at reducing a lot of the costs. Now they have publicly said they want to work with their employees to have significant efficiencies, if you will, on labour costs. I hope this will indeed work out.

In terms of other airlines coming forward, we see competition developing. We see a lot of good bargains. I think we have to try to work in the context of existing policies to help Air Canada through its difficult time. When we bring the Airports Act in, of course, there are some tough issues we have to face with respect to airports, airport improvement fees, and all the rest of those issues.

Finally, there was quite a degree of controversy on the airline security charge. It has been reduced. That is going to help not only Air Canada but the other airlines.

º (1610)

Mr. Joe Fontana: Mr. Chair, I would agree with the minister that, obviously, parts of the competition philosophy are starting to work. I think he's absolutely right. While Air Canada can't be confused with airlines policy, the problem in this country is that we only have one national air carrier.

Mr. David Collenette: I would dispute that.

Mr. Joe Fontana: Well, by that I mean the only one with a network that's servicing an awful lot of communities. Hopefully the other ones will grow into truly becoming competitors nationally. We all hope and pray that Air Canada can become profitable and continue to grow in service, but the fact is, we ought to look at it to make sure that if that's not possible, we're able to ensure that Canadians have the service they require.

Can I move to the other highway policy? I know there's a budget with regard to our approach to highways. At one time there was an agreement between the provinces, at least in identifying the Trans-Canada Highway. There is an amount by which one wants to maintain the standards and agreement on how much it would take over the course of a number of years. I guess the numbers were something like $17 billion some time ago.

A provincial-federal agreement was close, in which either a particular portion of the gas tax would be taken by everybody and applied to the reconstruction of the Trans-Canada Highway or the provinces essentially committed to ensuring that the Trans-Canada Highway was up to standard and was functioning as it should as a truly national highway.

I'm just wondering where you think this is going in terms of discussions with the provinces and/or whether or not it's contemplated within your CTA document “Straight Ahead”.

Mr. David Collenette: The national highway system, the 25,000 kilometres agreed on about 15 years ago, is still there and projects are being funded, certainly under SHIP, although the new strategic infrastructure plan allows money to be spent on highways other than the basic 25,000 kilometres.

Personally, if I could get the money, I'd love to have the Trans-Canada twinned from coast to coast, including through northern Ontario. It would be incredibly expensive, but I think it would be great for the economy and for national unity, and I think that's an objective we should work towards.

In fact, I think we're showing that we believe this to be a great idea in the investments we have announced. We've announced investments in New Brunswick and in Quebec on the national highway system. I would hope we could make some investments soon in Saskatchewan and British Columbia. We've actually made some investments under SHIP in B.C. I think this is a long-term goal, and it comes down to the availability of funds. Nothing should deter us from that.

º (1615)

Mr. Joe Fontana: The minister will recall that in fact he attended a meeting where the private sector indicated it also could be a willing participant and come through with approximately $7 billion to $8 billion in concluding the Trans-Canada Highway. We have to look for other partnerships where they might exist.

On the rail side, if you could, Minister, there's no doubt that trade continues to increase. The rail corridors are getting busier and busier. Trains are getting longer. They have to go through cities sometimes. Therefore, in the whole scheme of the infrastructure, there's no doubt that southwestern Ontario wants safer, faster freight trains as well as passenger rail. I'm happy to see we're moving down those tracks with regard to both.

I'm just wondering, in order to achieve certain efficiencies and also keep safety in mind, whether or not the infrastructure programs anticipate grade separations within certain municipalities to ensure that those trains can move as safely and as quickly as possible in getting to our trade partners and those corridors through Windsor, Sarnia, and into Chicago. I'm just wondering if there's a plan. I know at one time the federal government had a very proactive grade separation program, along with the railroads and the municipalities, to anticipate and do this. Is this anticipated in CTA?

Mr. David Collenette: Well, we do have the grade separation program. It hasn't been funded in recent years because of budget cutbacks. The theory the Minister of Finance has pursued is really to put these investments in the infrastructure pot. When we voted on the last budget bill, the 2001 budget, there was specific wording that allowed the strategic infrastructure fund to see moneys applied to rail. I can assure you that there are funds available for this type of rail infrastructure.

I should also point out that for the first time, in the “Straight Ahead” document and in the bill you have before you, we bring forward a regime governing railway noise, which is becoming quite an issue, especially close to the marshalling yards of big cities. Particularly it was brought to my attention by Irwin Cotler, one of our colleagues from Montreal, and Bonnie Brown, one of our colleagues from Oakville, who has a particular issue there. I would draw your attention to this particular measure.

The Vice-Chair (Mr. John Cannis): Minister, thank you.

We'll move on to Ms. Desjarlais.

Mrs. Bev Desjarlais (Churchill, NDP): First off, I don't think there's any question that a good amount of what's in here sounds absolutely wonderful. But as a lot of my other colleagues have indicated, what was sorely missing was the funding to put a lot of this into place.

Just to key into page 7 of this background document, which indicates “the government will place a high priority when making strategic investments”--this is on integrated transportation corridors, trade and passenger corridors and urban transportation--the phrase used is “the government will place a high priority on...”. It's hard to believe there was a very high priority placed on it when there were not enough dollars in the budget to really put this in place.

I recognize your point that it's the most we've ever had, and I recognize the point that previous governments didn't put in enough. But we've been talking about this for five and a half years in my time, and the dollars haven't been there. They're still not there. At what point before the point of no return do you put them in?

Mr. David Collenette: Well, Mr. Chair, Madam Desjarlais recognizes that the federal government really hasn't been implicated in the urban agenda before and she recognizes that we're now in it. She recognizes the money we've put forward and she says it's not enough. Yet her party was in the forefront of demanding more money for health care, and there's only so much money to go round.

There's one essential point, Mr. Chairman, and that is that the policy framework we announced yesterday isn't tied to one budget or one year. It's for the future. Hopefully it will guide us for 10 years or more. So there will be subsequent budgets.

Is the NDP saying we should have put more money into infrastructure at the expense of health care or at the expense of child care or the child tax benefit or meeting our Kyoto commitments?

It's a question of priorities, and I think we have made great strides in this budget, Mr. Chairman. And I'm glad she will be lending her voice to others who will be asking for more money for municipal infrastructure and subsequent budgets. I'll be right there congratulating her when she does make those requests.

Mrs. Bev Desjarlais: If the minister would like me to mention all of the things they could have used the money on rather than...I could do that, but it would take up a lot of time. Quite frankly, I think the priorities have been out of whack. I think there are still dollars there that could be utilized in infrastructure and we could still have the benefits within health care, within a child care program, whatever.

Mr. David Collenette: Let's debate transportation, not the overall budget.

º (1620)

Mrs. Bev Desjarlais: Well, the minister brought it up, so with all due respect, if he can stand here and say there's been no government wastage of dollars over the last five and a half years and say it with all honesty, without any criticism from the Auditor General or anybody else, that's all well and good. But he can't do that.

So the bottom line is, there's been an abuse of taxpayers' dollars, they haven't gone to where they should be going to, and I think there needs to be a more honest and upfront effort to put in the dollars that are required.

So apart from that, I'm going to get on to something a little different, if I may.

The Vice-Chair (Mr. John Cannis): Now we know why you're sitting here.

Let's have a quick response on this.

Mr. David Collenette: The point is, Mr. Chairman, none of us is infallible. Madam Desjarlais talks as if the NDP would be infallible too if they were governing the country with billions of taxpayers' dollars.

Even NDP governments, whether it's Bob Rae's or Gary Doer's, or even other governments, Mr. Clark's...errors are made and you deal with those errors. I don't think it's fair to flog that dead horse. The fact is, from a public policy point of view, are we investing where we should be investing in transportation, now that we're in a surplus position? The answer is yes.

The Vice-Chair (Mr. John Cannis): Okay, we have to refocus on transportation.

Mrs. Desjarlais.

Mrs. Bev Desjarlais: From a little different perspective, but since it comes up in the document, there's mention made of accessible transportation. I'm wondering whether or not there have been any regulations put in place by Transport Canada that would require air carriers or whatever transportation mode, but I'll specifically mention air carriers, to require a medical certificate for people who may have reduced mental capacity.

Mr. David Collenette: We don't think so, but we'll have to take note of that question and get back to you.

Mrs. Bev Desjarlais: Okay. And because you're here today I'm going to specifically use this opportunity to mention this. Air Canada has now taken a position that individuals who have reduced mental capacity, and I'm suggesting individuals who may have Down's Syndrome or whatever, have to have a medical certificate to get on board their flights.

Quite frankly, a good number of people believe this is an infringement...because they may be people who are working in the House of Commons doing some job. If it's indicated that they may need some assistance getting on and off a plane, they're requiring a medical certificate. As that accessibility is in there, I'm curious as to Transport Canada's position.

Mr. David Collenette: We'll get an answer for you, Mr. Chairman.

Mrs. Bev Desjarlais: You did mention a long-term strategy and you mentioned possibly ten years.

I'm not suggesting that you can say within every budget there's going to be this amount there ten years down the road, but would it not be beneficial for a country such as Canada to have a long-term strategy nationwide for infrastructure investment or infrastructure needs? Is that not something that can be looked at?

Mr. David Collenette: I thought, Mr. Chairman, that's what we talked about in “Straight Ahead”. I mean, we've laid the groundwork for that.

Mrs. Bev Desjarlais: I guess I wasn't only talking about the words; I was talking about exactly what the infrastructure will be that's put in place. Is there a planning process in place?

We know there's going to be an increase in population in this area. We're going to need this much more access in this area. Are those things happening nationwide?

Mr. David Collenette: Well, we conferred with the provinces on that, especially in terms of highway capacity. In terms of marine capacity, there is a marine review going on. There is an issue that the ports want greater availability of money and more flexibility to raise money for infrastructure. There's the whole issue of the Seaway and its future capacity that's coming forward. There's the whole issue of access to the borders, improving border infrastructure.

If you're asking if we have a plan and have identified priorities, yes. But in many cases, in most cases, we have to work with the provinces. They will determine highway priorities. In other cases we work with...well, we set the framework for the airports, we have the Airports Act. There's infrastructure there for the rail system. Yes, we have an idea of what has to be done, and we talked about that in the framework.

So the answer is yes, there is long-term strategic planning going on in Transport Canada, but we can't do it alone. We have to work with the provinces and also the municipalities.

º (1625)

The Vice-Chair (Mr. John Cannis): Thank you, Bev. You're surely saving some time here for us.

We'll go to Mr. Jackson.

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

I'll start first with some remarks before I ask the minister a question.

For the debate and for discussion, for people who might be listening, I'm one who is not for dedicated taxes. The idea of talking about dedicating taxes for roads and automobiles, I think, has to be done in the context of how does the automobile contribute to pollution and other things.

For instance, the car itself takes a lot of road space; it takes away green space. When you're driving along the road, there's tire dust coming from it. You apply the brakes and there's asbestos and metals coming from it. Coming out of the tail pipe there's CO, carbon monoxide, CO₂, carbon dioxide, NO_x, oxides of nitrogen, HC, hydrocarbons, along, perhaps, with sulphur.

In cities we have a lot of automobiles running around, and you get filled with chemical smog caused by these contaminants that form temperature inversion. It causes emphysema; people get sick. People who have lung problems have problems breathing.

So why is it that the moneys coming from a gas tax should only pay for the roads? Let's not talk only about roads.

Also, in the transportation system there are inspectors in stations who have to look at the state of a vehicle to see if there are emissions coming from a car. I mean, there are a whole bunch of things that come out of it. So the money is probably never going to be sufficient.

But I'm glad to see we're having the framework and we are going to work on this, Mr. Chairman, through you to the minister.

There are a number of things that are important to us--for instance, our borders. We have $2 billion to $3 billion worth of trade across the United States all the time, and with the current problems we have with security right now, it's emphasizing some of these problems in terms of having smarter highways and better delivery systems across places where there are gridlocks. To some degree, I hope we will integrate--I hope, Mr. Minister--some of these important crossings within that network system, using the smartest systems possible.

Could you outline for us some of the products that are on their way, perhaps the pieces that will probably be assembled in terms of how we get ourselves straight ahead, as you call it?

What moneys are you spending on infrastructure, starting now?

Mr. David Collenette: Are you talking about the various infrastructure projects we have announced? Is that what you mean?

Mr. Ovid Jackson: Yes, I'm talking as far as the linkage we have there. Are they linked in some way?

Mr. David Collenette: I thought perhaps I answered that a little earlier to Madame Desjarlais about an overall plan. We certainly have it on the infrastructure side, if that's what you're talking about. We have some ideas of what should be built and should go forward.

Maybe the deputy wants to add something.

Mr. Louis Ranger: Talking about highways, as the minister said earlier, many years ago the provinces and territories and the federal government agreed on a national highway system of 25,000 kilometres. This is one of the best decisions that has been made in a long time, because the point was that if money becomes available, that's where we're going to focus our expenditures.

As money became available through the 2001 budget, it didn't take long. We didn't have to debate where the money should go. It had to go to the national highway system.

As I said in French earlier, at the end of the day, when we look at how the $2.6 billion budget will have been spent, you'll be surprised at how much of that money will have gone to highways.

The reason for that is very simple. If a province or a city chose to have a congress centre, they would have to find new money to match the federal money. That's very difficult, but in the case of highways, each province and territory has its own annual highway budget, and all of a sudden, Ottawa puts additional money on the table and it can easily be matched. So we should not be surprised that almost automatically, most provinces have come forward with plans to put money into highways. Not all the announcements have been made yet, but I'm saying at the end of the day you'll be surprised at how much of that money will be going to highways.

If I may, in regard to the question earlier about what mechanisms are in place, when money becomes available, there's no doubt that municipalities and provinces will come to us. In the last 12 months I've never had so many meetings with municipalities and provinces, where we decide what the priorities should be and we engage in a multi-year process to plan for investments down the road.

º (1630)

Mr. David Collenette: I should say, Mr. Chairman, I was very moved by Mr. Jackson's analysis of the car-dependent society. I think he made some extremely good points, especially for urban dwellers. We have to think outside of the box on dealing with congestion, and I think the points he raised are particularly germane.

We obviously are a big country. We need highways. We need to drive. We need to communicate with each other and get goods to market. But as we become more urbanized, we have to look at other models, other than simply depending on the private automobile to get people from point to point.

Mr. Ovid Jackson: That's notwithstanding the contribution of the automotive industry to the prosperity of Ontario and Canada.

Mr. Chair, as we build these different crossings, and so on, are we putting smart highways computerization, elevating highways where there are conflicts, all that into place? I know as a municipal politician sometimes you try to have some new infrastructure, and you put in sewer and water. Then, in the next couple of years, somebody comes and digs up the road and puts in the gas, and then somebody else comes and does something else. So are we trying to integrate some of these things as we go along so that we perhaps don't have extra overruns?

There's one other question I will throw in while I'm at it. How are we doing with regard to trains to large urban populations, high-speed rail? Are there any such things under consideration?

Mr. David Collenette: Well, in regard to the first part, take the Autoroute 30, for example. This will be an all-toll highway, with incredible technology attached to it. I think it's going to be state of the art, and hopefully mistakes that have been made elsewhere will not occur there.

On your point about the elevation of highways--I think that's what you said--

Mr. Ovid Jackson: Or going under.

Mr. David Collenette: Or going under. The only problem with elevating highways is that, first, the provinces have to determine whether or not, in a particular area, you want to elevate for a certain reason, other than going over a river, as we're doing with the A-30. Tunnelling is very expensive.

I shudder when people talk about elevated highways, because we have a monstrosity called the Gardiner Expressway in Toronto, and I go back long enough that I remember when it wasn't there, when we had visual access to the lake. This became a fad in the 1950s, in North America in particular, and then in Europe. Now, of course, places like Boston are taking their elevated highways down. So I would hope we don't go back into more elevated highway building, especially in the urban core.

Certainly we have an information technology program. We have an urban showcase program where we're looking at new ideas, new ways to showcase technology and its applications. So we're doing a lot of work on that, and we've put some money into that kind of venture.

Mr. Ovid Jackson: I have just one last quick comment, Mr. Chair. Basically, when I talked about elevated highways, I was talking about removing areas of conflict where there are accidents and not conflicting with the normal traffic. I wasn't thinking about miles and miles of overhead highways.

º (1635)

The Vice-Chair (Mr. John Cannis): I'd like to follow up on the question that was asked by both Ms. Desjarlais and Mr. Jackson. Earlier on you said, we know there will be money for the next ten years. We are in a position, if I understand it correctly, of knowing that over the next ten years there will be funds to apply to our national highway system or to touch upon some of the issues Mr. Jackson just referred to. Is there flexibility in the funds that will be coming in the future to address some of these concerns?

Mr. David Collenette: This is really a question for the Minister of Finance. If we continue to do a good job as a government in managing our finances and we continue to generate surpluses, then obviously we'll have funds that can be invested in more and more transportation infrastructure projects as well as other worthy projects.

The Vice-Chair (Mr. John Cannis): Minister, I'm referring to one specific case of “I'm out of money”. I'm a member from the GTA, and recently we've been getting bashed about not supporting the transportation system and what have you. If I recall correctly, the provincial government recently made available about $62 million. Maybe my colleagues from the GTA will correct me. It wasn't too long ago that the federal government, if I'm not mistaken, provided about $76 million to the Toronto Transit Commission. There were accolades and great write-ups about the federal government coming to the aid of Toronto transit. That money went for what? Was it for capital costs or improving TTC overall? Where did that money come from? We know it came from the federal government, but was it from any specific department?

Mr. David Collenette: That came out of the old Canada-Ontario infrastructure program, which was announced in the 2000 budget. There was a provision in that program for the funding of green transportation infrastructure. The stipulation was that the $76 million, which coincidentally matched the $76 million first payment made by the province under its new scheme of a third, a third, a third, was to go toward such things as upgrading streetcars, signals, subways, that type of thing.

We have invested quite a bit over the years in various transportation infrastructure, including urban transit infrastructure, and a lot of it is forgotten. In fact, we even invested some millions of dollars in the Sheppard subway under a certain program. I think 30 years ago the federal government invested in subway extensions in Montreal for the Olympics.

So there are moneys available. I think there might be some moneys available should Vancouver get the winter games. There are lots of ways we can continue to invest in infrastructure.

The Vice-Chair (Mr. John Cannis): Thank you.

We'll go to our second round, and we'll start with Mr. Moore for five minutes.

Mr. James Moore: Thank you.

I have a couple of short questions. First, the minister said that the government generates surpluses, and I just wanted to correct that. Citizens intellectually investing their labour create an economy. The government taxes the economy and creates revenue. If they overtax, they have a surplus. That's not generating revenue. Citizens generate an economy, and the government can tax it to finance programs. The government doesn't generate things.

Mr. Joe Fontana: I won't buy another cup of Tim Horton's coffee.

Some hon. members: Oh, oh!

Mr. James Moore: Mr. Jackson suggested we shouldn't invest in roads because pollution from cars is bad. We should invest in roads and get cars moving so that they're not idling and polluting.

Mr. Joe Fontana: Human pollution is even worse.

Mr. James Moore: I'm going to ask the minister to respond to a press release that was sent out by Warren Everson, which states:

Increases in taxes, airport charges, security costs, insurance; we see some new costs every week. We have small airports in serious financial trouble, we have airlines withdrawing from markets. This is what is killing air service, especially in regional markets. And the government is ignoring all this so it can deal with a pile of administrative minutia.

The administrative minutia is the report.

Mr. David Collenette: On the first point, I never cease to be amazed by the torturous, tautologous, analytical reasoning of Mr. Moore. He must have fun on his holidays coming up with that kind of convoluted logic to describe the financial system. But we'll leave that as is.

On to the issue of comments made by the Air Transport Association. It's become quite trendy for the airline industry to blame the government for problems. Some of them are problems of the industry's own making and some of them are due to factors beyond the industry's control. But to those people who criticize the government about fees, who do they expect is going to pay for air navigation? Who do they expect is going to pay for the new airport infrastructure? This gets back to the basic fundamental philosophical question as to whether or not the general taxpayer should pay or whether the user should pay. We have followed the principle of the user paying. I think it has worked rather well.

The fact is that the measures that were criticized by Mr. Everson in his statement were absolutely necessary. It's true that the airline industry came forward last fall with their voluntary code. They came forward with their voluntary code because in June, at an airline conference in Toronto, I said we were going to legislate this in the new CTA, so they wanted to sort of be there before the train left the station and say, “Look, aren't we great? We've done this, so please trust us.”

I'm sure they're very trustworthy and honourable people, but since the law is now to be changed, these commitments really should be enshrined in statute. I think consumers across the country applaud this particular measure on the advertising of airline fares. It's worthy of great support.

º (1640)

Mr. James Moore: On a different issue, there have been conflicting reports in newspapers in the last 48 hours or so about the whole Windsor-Quebec City corridor and the train. Some people say this blueprint and the bill that came along with it suggest that the government is moving away from it. We're also hearing comments in the other direction.

Can the minister just tell us what's happening with the Windsor-Quebec City corridor? Will there be a push from this minister and this government to make that happen with the provinces and so on? Is the government backing away or moving forward?

Mr. David Collenette: You're talking about the rail.

Mr. James Moore: Yes.

Mr. David Collenette: I've been pretty consistent since I've been minister in wanting to see a revitalization of the passenger rail system. Indeed, this committee came forward with a report and we accepted its recommendations. I think it was called “The Renaissance of Passenger Rail”. We invested $400 million. This had great support in Parliament.

I asked VIA last year if they could come up with a plan to make trains faster in the corridor, other than going the TGV route, which is basically constructed on a new right-of-way. The estimated cost a few years ago was around $11 billion. The private sector that was pushing for it wanted $7 billion of that to be put up through cash or loan guarantees from the Ontario, Quebec, and federal governments.

They've brought forward a plan that I think is quite imaginative. We're looking at it and costing it. In essence it means making track improvements and signal improvements, lengthening sidings, some new track, and the restoration of passenger service on the north shore of the St. Lawrence between Quebec City and Montreal. There would be a new 67-kilometre track between Smiths Falls and Kingston, double-tracking, triple-tracking, and in some cases use of the CP and CN rights-of-way. The railways have been quite cooperative in this.

Close to an hour would be shaved off the train time between Quebec City and Montreal. Train times between Montreal and Ottawa would be one hour and fifteen minutes, and between Ottawa and Toronto, two hours and fifteen minutes. Between Montreal and Toronto the trains would be run through Ottawa, and most trains would take three hours and thirty minutes. There would be a provision for express trains in the morning and afternoon peaks to run on the CP subdivision bypassing Ottawa, which would mean Montreal-Toronto express trains that would take three hours. Similarly, between Toronto and London and Toronto and Windsor there would be faster trains.

I see Mr. Gallaway here. There would be connections to his beloved city of Sarnia that would get him home faster. Of course, Mr. Fontana is from London. I can see the day when cities like Kingston and London will have hourly VIA Rail service. Of course, part of this whole plan is to increase service to the Niagara peninsula, where valuable agricultural lands are under threat and there's controversy about building a mid-peninsular toll road. We could have greater utilization of the CN rail to Niagara Falls, which would mean more trains to Hamilton.

I've asked VIA Rail to terminate their Montreal-Toronto trains--I didn't ask them because you're not supposed to direct crown corporations. I didn't really direct them; I just said, “Why don't you explore the idea?” They came back and said, “Minister, what a great idea.” So they're terminating one of the Ottawa trains in Kitchener. They're terminating one of the trains in Oakville or Burlington, and then that will go to Hamilton. They're terminating the Windsor train in Oshawa so Toronto is a through station. This is going to benefit all of these other communities. They're going to have increased VIA Rail service.

This is all part and parcel of the scheme for the corridor. It depends on the availability of funds. If cabinet agrees to the “VIA Fast” proposal, I am sure there are funds in the fiscal framework right now to get the program started. There will be need for additional appropriations as time goes on.

º (1645)

The Vice-Chair (Mr. John Cannis): It sounds like one great big benefit. Thank you, Minister.

We'll go to Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): Wow. I was just looking through the news release.

The Vice-Chair (Mr. John Cannis): Stan is really thrilled that Hamilton's going to get some trains.

Mr. Stan Keyes: I was looking through the news release and the “Straight Ahead” document. It's gone from a thumbnail sketch to the minister almost producing a train schedule here for us.

Minister, I'll start softly. Let's go to the component that deals with the examination of the long-term future of the critical component of Canada's transportation infrastructure, namely the Seaway. You're saying this is going to be an examination. Can you or Louis Ranger tell us whether that critical examination will be done in concert with the U.S., or will it just be us?

Mr. David Collenette: Well, we have to protect our position. The U.S. Army Corps of Engineers has embarked on studies. Transport Canada has the lead on our side in coordinating our response. I believe we have to be there. We'll require the allocation of certain moneys, but we haven't yet sought those moneys. It would probably be around $20 million for the initial phases. Quite frankly, we can't let our U.S. friends go alone. After all, most of the locks on the Seaway are on Canadian territory. We must do this in partnership.

In dealing with my colleague, Mr. Mineta, and his people, they're very cooperative. I don't anticipate--

Mr. Stan Keyes: I'm only given five minutes. I just wonder, are we going to cooperate with the U.S. on the study, yes or no?

Mr. David Collenette: I thought you wanted a detailed—

Mr. Stan Keyes: No, I don't need the detail.

Mr. David Collenette: I didn't want you to think I was being flippant.

Mr. Stan Keyes: I'm only given five minutes. I had to wait an hour and a half for my five minutes. You can understand how edgy I am about that.

Yes, we are going to be worked into it?

Mr. David Collenette: Yes, in phases.

Mr. Stan Keyes: All right, good.

Now, given that we live in this post-Panamax age, and that there are obviously pressing maintenance issues with the Seaway as we speak, and that pilotage fees are gripping the shipping industry at this very moment and causing them some grief—to the tune of something like $15 million a year—with all that, what is the timeframe for this examination?

We've been studying the Seaway to death. Let's be honest. I started studying the Seaway in 1989, and here it is 2003 and we are still not doing, I don't think, what we should be doing with the Seaway.

Mr. David Collenette: There are two issues, Mr. Chairman. One is the physical infrastructure, which we've answered in terms of being involved with the U.S. in the studies. The other is on the pilotage question. This is a very touchy issue and one that has bedevilled a number of governments and has been the subject of hot debate in Parliament.

There's no question that improved technical capabilities and technical systems call into question the present arrangements respecting pilotage. New methodologies are being introduced, in particular between Quebec City and the Gulf of St. Lawrence. We believe that will deal with some of the concerns with respect to the future need for pilots.

Mr. Stan Keyes: But what's the timeframe? That's all I'm asking.

Mr. David Collenette: We are working on this right now. We think there can be some meaningful resolution to some of these issues with respect to the Quebec City-Gulf of St. Lawrence part of the Seaway within the next year to 18 months. The area between Montreal and Quebec City is much more difficult because of the loads and because of the volume of traffic.

Mr. Stan Keyes: All right. Let's flip over to highways for a moment. People who use our highways and our roads, Minister, pay all levels of government something to the tune of $12 billion a year. How much of that money does the federal government receive?

º (1650)

Mr. David Collenette: I don't really have the figures.

Mr. Stan Keyes: What's the ballpark?

Mr. David Collenette: We'll get the—

Mr. Stan Keyes: Louis, do you have a ballpark figure? How much do we get in revenues from the—

Mr. Louis Ranger: From the fuel taxes?

Mr. Stan Keyes: Fuel taxes, excise taxes, etc.

Mr. Louis Ranger: I think we collect about $5.5 billion to $6 billion a year.

Mr. Stan Keyes: Of that $6 billion, how much are we re-investing in our highways?

Mr. Louis Ranger: In our highways?

Mr. Stan Keyes: In our highways and roads—federally, the federal portion.

Mr. Louis Ranger: At the time when we had our own program at Transport, it was $300 million a year, on average. But with the new infrastructure funds that have been created, we're not automatically entitled to that funding. We have to fight for it, if you wish. In the coming years, it's quite clear that the annual average is going to be higher than that, but no—

Mr. Stan Keyes: And this is a chronic difficulty, isn't it?

Mr. Louis Ranger: Oh yes, of course.

Mr. Stan Keyes: If we accept that a highway system is a fundamental requirement for a solid economy, as we say time and time again; if we understand that safety is paramount, as it is priority number one for Transport Canada; if we understand that it's important to tourism; that it's important to trade, what's being done on the recommendation we made, Mr. Chairman, when I was in your shoes as chair of this committee, to the federal government that we work with the provinces to create a framework that would ensure that a national highway system is properly maintained, is properly restored, and even expanded? What have we done? Are we trying to put together this framework as we sit here today?

Mr. David Collenette: We've had lots of discussions, Mr. Chairman, over the last number of years, but it comes down to a question of priorities. As Mr. Keyes knows, we inherited a monumental deficit and we're now in a surplus position. We're now able to reinvest in a lot of areas that were cut back, and the question is one of priorities.

As I said earlier, we have calls for health care; we have calls for all manner of investments in the public good. I'm with you, Mr. Keyes. Mr. Chairman, I'm with him in the sense that we have to now pick up the pace for investment in the highway system and hopefully emulate the kind and degree of investment we made in the 1960s.

But the fundamental principle is that the $6 billion Mr. Ranger talked about, or $5.5 billion, goes into the consolidated revenue fund and is spent on national priorities as developed by government.

What Mr. Keyes is advocating is more money to be spent on highways, and I certainly agree with him, and I would expect.... We've come a long way in the last three or four years. At one point we weren't investing any new money; now we're investing new money in highways, and as Mr. Ranger said, this is really going to pick up as we go forward.

Mr. Stan Keyes: Thank you.

May I close, Mr. Chairman?

Maybe we can rethink some $3 billion that might be spent on a high-speed system to move businessmen from Toronto to Montreal and decide if it's a priority of the taxpayer, whose money it is that we're putting into general revenues, to decide whether or not it should be going to highways, instead of a chunk of high-speed rail.

The Vice-Chair (Mr. John Cannis): I like high-speed rail.

Mr. David Collenette: Even if there's a branch line to Hamilton?

Mr. Stan Keyes: Even if it's a branch line to Hamilton, I'd rather have a better highway.

The Vice-Chair (Mr. John Cannis): We have to move on. Thank you.

[Translation]

Mr. Laframboise, please.

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

I would first like to comment briefly on the answer that you just gave to Mr. Keyes about shipping. Minister, I hope that we will never see the disappearance of the St. Lawrence Seaway pilots for the simply reason that they are our eyes and ears on that river, which is one of Quebec's jewels. Given the poor condition of ships being used at sea and all the accidents that happen, minister, it is not an appropriate time to question that practice. There are apparently two accidents a month on the world's oceans. I hope that in Quebec we will continue to have a knowledgeable pilot assigned to each incoming ship to be the eyes and ears of Quebecers. We will stand in your way, minister, if you intend to get rid of the pilots in the St. Lawrence Seaway. That was my comment.

º (1655)

Mr. David Collenette: Nobody is talking about getting rid of the pilots. What I am saying is that we can use new technologies to find other ways of offering the service. Between Montreal and Quebec City, the traffic is very heavy and we will clearly continue to need pilots. But can we use technology to reduce the use of pilots from time to time.

[English]

I think we should really be pretty clear about this. If new technologies come into play, then obviously you need to improve productivity. It happens throughout industry. It's happened throughout the last 50, 60 years. It's happened in the transportation sector.

At one time, when you flew a Boeing 707, you'd have five people in the cockpit. Today, you only have two people in the cockpit, even on 747s and A340s doing transatlantic flights. So we just cannot stop the clock and say there's a job here that has been done and it continues to be done. It wasn't long ago when you had individuals, named “compositors”, actually putting line type each night to print newspapers. Today it's all done on-line; it's all computers.

We have new technology now being made available for global positioning for trucks, new methodologies, and a lot of these new technologies can be applied to modes of transport, including the marine mode. But there obviously will continue to be a need for pilots in an area where there's a high level of traffic or where there's a danger of accidents.

So I don't think we should get people unduly excited, but I don't think we should mislead people. You cannot stop the clock; you cannot halt the need to increase productivity and the need for new technologies.

[Translation]

Mr. Mario Laframboise: Except for the fact, minister, that there is a whole inspection system for aircraft that does not exist for ships. If I were in your position, I would look at the possibility of giving even more power to the pilots to examine the condition of the ships coming into the St. Lawrence River. It is strange, but there is a world of difference between the technology used to pilot ships and damage that can be caused by the ship itself, and I do not trust amateurs in that area. That is why I made my comments.

Mr. David Collenette: It is not the role of pilots to inspect ships; that is the responsibility of Transport Canada, since we are the ones responsible for safety. I do not agree with Mr. Laframboise about that. The government has that responsibility, not the pilots. The pilots are responsible for helping guide the ships, but they are not responsible for safety inspections.

Mr. Mario Laframboise: But the number of ship inspections you do is nothing compared to the aircraft requirements, minister. I hope that there will be a commission on that at some point where we can provide evidence and so on. I know that you are intelligent enough to understand that these are two completely different worlds.

My question deals with highway transportation. I just want to say that we were talking earlier about budgets. In Quebec, the federal government collects $900 million in excise taxes and spends only $60 million a year on average. I am talking about the budgets that have just ended, since we were talking earlier about the difference. I am not counting the 1,5¢ a litre on gas you are charging to balance the budget as you managed to do in 1998, minister. So according to Quebec's estimates, your intended investments and programs will spend some $175 million a year, according to your announcement. So the difference between what you collect in excise taxes and what you are going to invest... I am not talking about what you have reinvested, since that was only about $60 million a year, but you intend to spend some $175 million a year. Between the $900 million you are collecting and the $175 million you are spending there is a very large gap which means that you have the flexibility required to be able to meet the objectives, minister, as long as you can convince your colleague in the finance department. You have your revenue source to be able to invest in highway transportation, and I am also taking into account urban transportation in that investment. Of course, I hope we will be looking at that.

As Mr. Ranger told us earlier, you seem to be on top of things. But you are not in reality. The needs are much greater than the money you have available. You have made some headway, but the needs are enormous, minister, and we need to work together to find the solution.

» (1700)

The Vice-Chair (Mr. John Cannis): Mr. Collenette.

Mr. David Collenette: As I already explained, it is a question of priorities. People in Quebec want a more effective health system, and we are investing in the health system, but Quebecers and people in other provinces also have other needs. It is a question of priorities, but we have changed over the past few years and have begun reinvesting in freeways and transportation infrastructure. I think that in the future these investments will increase.

The vice-Chair (Mr. John Cannis): Thank you.

Ms. Frulla, please.

Ms. Liza Frulla (Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles, Lib.): Thank you, Mr. Minister. I would like to draw Mr. Collenette's or Mr. Ranger's attention to three points.

First of all, to get back to the question of the Seaway, there is the question of co-piloting, which has been discussed at length, but there is also the entire issue of user fees. You will tell me it is not up to you, but up to Fisheries and Oceans, except that we have heard a lot of presentations lately saying that our ports, which are very efficient, competitive and work very well, you even say so yourself, will no longer be or already are not as efficient because of those user fees, which of course are much higher than those of our U.S. competitors.

We realize it is not your department's responsibility, but in your review of the Seaway, could you not negotiate some of those things with Fisheries and Oceans? The matter is being reviewed, but on the other hand, if the other party makes our ports less competitive, I think everyone is shooting themselves in the foot.

Mr. David Collenette: It is not the exclusive jurisdiction of Transport Canada, as you said, it is also Fisheries and Oceans' jurisdiction, but I do agree. I think the fees for the St. Lawrence Seaway should be reviewed. I know you have a lot of user fees, especially for the ice breakers and other operations, and that is why part of our document deals with the policy to privatize shipping services for the boats using the Seaway. I hope that such a system will translate into savings for the industry.

Mr. Louis Ranger: The SODES is very active in that area.

Ms. Liza Frulla: Yes, indeed.

» (1705)

Mr. Louis Ranger: We are fully aware of the fact that there are several players: we are involved at the ports level; there are ports charges; there is the St. Lawrence Seaway, with its tolls; there is the coast guard; Fisheries and Oceans. For at least three years now, we have tried to work in a more concerted fashion. That takes time. Coincidentally, the minister is meeting with representatives from SODES later this week. We are very aware of the problem and we are trying to...

Ms. Liza Frulla: In any case, since you work in cooperation with the Department of Industry and Allan Rock on infrastructure projects, it seems to me that the same thing could surely be done with Fisheries and Oceans.

I would like to raise another issue. We have talked a great deal about highway and municipal infrastructures. We heard the same reaction in Quebec City as well, where the government said that the needs were much greater than the funds being put on the table. However, we are talking in terms of billions of dollars, which is not insignificant either. Highway 30 will be a toll road, as will highway 407. We have talked about that as well. Some people, such as the truckers, came to tell us that there could be better highway service if there were toll roads. If we gave them this service, they would be onboard. So is the user-pay principle—ultimately, that is what we are talking about—something that will guide you in the future?

Mr. David Collenette: At the federal level, our position is that we are very happy to accept toll roads, or the user-pay principle, if there is another non-toll road that can be used. We had a problem in New Brunswick, because we had established a toll system on the Trans Canada Highway. This was difficult, because there was no alternative highway that truckers and others could use. However, the government of Premier Lord changed the system. Theoretically, if there is a non-toll highway available, then we can authorize a toll road.

Mr. Louis Ranger: I was going to say that there is no doubt that truckers are prepared to pay for that.

Mr. David Collenette: Yes.

Mr. Louis Ranger: A truck that leaves Quebec City for Toronto spends one or two hours getting through Montreal at the moment. Providing more direct access for such trucks is worth money.

Ms. Liza Frulla: Yes, that is worth money.

Mr. Louis Ranger: There is the driver's salary and the gas used while waiting on the bridges.

Ms. Liza Frulla: There's a question of safety as well.

Mr. Louis Ranger: So they are quite prepared to pay $15 or $20 to take a shortcut.

Ms. Liza Frulla: We have talked about marine transportation. Let us turn now to public transportation. There has been some requests as regards public transportation. We spoke about the subway in Montreal, which was extended for the 1976 Olympics. So requests are made for public transit. I imagine there are probably some for Toronto. For Montreal, there is no doubt that this is on the table. So, in the budget available, whether we are talking about the supplementary estimates or the infrastructure budget for the year 2000, I imagine provision was made there as well for these requests. I see that Mr. Ranger is saying yes; that is good news.

Mr. David Collenette: Yes, the infrastructure program, and not only Mr. Rock's infrastructure program, but also Mr. Anderson's $3 billion, provides funds for public transit. That is why I said that the mayors of the large Canadian cities did not read the budget paper. There are funds available, and we hope to add more in the years ahead.

Ms. Liza Frulla: I would like to make a comment about Air Canada in response to Mr. Fontana, who has left. As we know, Air Canada is our carrier and should be not only that, but also a source of pride. We know that, at the time Air Canada was forced to merge with CP, with all the difficulties that go with a corporate merger. So I just wanted to say that when Mr. Fontana maintains that it is not working, I am quite sure, that collectively, we will not accept this. Air Canada is much more than jobs, both in Toronto and Montreal, and everywhere else. So I imagine that we will find intelligent solutions to make it work.

[English]

The Vice-Chair (Mr. John Cannis): Do you have a brief response, Minister?

[Translation]

Mr. David Collenette: No. I think that this is a statement and I accept Ms. Fulla's advice.

[English]

The Vice-Chair (Mr. John Cannis): Madam Desjarlais.

Mrs. Bev Desjarlais: I'm even more concerned now after the comment that somehow it's okay to suggest toll roads for trucks coming in because they'll save gas driving across a longer area. So somehow it should be possibly okay to charge tolls. With trucks bringing in our goods, ultimately an increased cost to the trucker is an increased cost to the consumer. I believe that we, the consumers, through our everyday course of working and paying taxes, paid for a lot of this infrastructure, and we should pay for that infrastructure as a whole, not just say let's pick the transportation industry and hit it at every turn with an increased cost.

Mr. David Collenette: Mr. Chairman, I think the point Mr. Ranger was making is that the costs of the toll will be obviated by the fact that they are not having to pay higher gas prices, having drivers sit idly in traffic--

Mrs. Bev Desjarlais: Aren't there already taxes on the gas they're using? Yes, I recognize it goes into general revenue, but at what point do they get to benefit from that general revenue as an industry?

Mr. David Collenette: You know that the--

Mrs. Bev Desjarlais: With all due respect, Mr. Minister, the transportation industry has been nabbed at every darn turn with additional cost.

» (1710)

Mr. David Collenette: But who is going to pay? The general taxpayer. We're trying to allocate costs to the various industries--

Mrs. Bev Desjarlais: That's right, the general taxpayer, because we all benefit from an industry that's working together to provide a road system, to provide an airline system. We're all working together. We shouldn't be nabbing individuals, because at some point--

The Vice-Chair (Mr. John Cannis): Mr. Collenette.

Mr. David Collenette: Mr. Chairman, this is socialist “oldthink”, where the general taxpayer pays for everything, no matter what. The NDP are back to their old ways of just writing a cheque and it comes out of general revenues.

Mrs. Bev Desjarlais: I believe we're all paying.

Mr. David Collenette: I think there are innovative ways to fund this kind of thing.

The Vice-Chair (Mr. John Cannis): Ms. Desjarlais, you have the floor.

Mrs. Bev Desjarlais: I believe we are all paying with our taxes each and every day. The bottom line is you are nitpicking a particular industry. This is not happening to each and every area. Do we give money to the National Capital Commission through our general revenues? Do we charge everybody going through the national capital area a fee for using it?

Mr. David Collenette: So if we build a new bridge in Ottawa--I ask you, Mr. Chairman, and I ask Madam Desjarlais--is she saying that should be financed out of general revenues and not a toll bridge? Someone has to pay, Mr. Chairman, and it's the taxpayers of Canada.

Mrs. Bev Desjarlais: Taxpayers are paying.

Mr. David Collenette: The question is, what is the fairest way of allocating the taxes. We feel user charges have been supported.

The other thing is, when you use tolls you allow the private sector to go out and borrow the money on the open market. One of the most successful ventures has been the bridge to Prince Edward Island, Mr. Chairman, where the money has been raised on the private market. And it's been a great boon to the people in Prince Edward Island--

Mrs. Bev Desjarlais: [Inaudible—Editor]...you're now making a profit off it, which is even worse.

Mr. David Collenette: It has opened up the province. It has provided incredible benefits. That's just not the private sector....

Mr. Chairman, when I was young and first elected, I was innocent and wide-eyed and believed the state could fund everything, but as time goes by you become more responsible about life.

The Vice-Chair (Mr. John Cannis): I once heard a comment that there's a price for civility that's called taxes.

Bev, would you close?

Mrs. Bev Desjarlais: No one is suggesting that taxpayers shouldn't pay, and they do pay. But at what point do you say it's not okay to continually tax or add a charge onto a particular industry? You have to admit, Mr. Minister, the transportation industry, by far, is getting nabbed, far greater than any other area.

Mr. David Collenette: I wouldn't admit that at all.

The Vice-Chair (Mr. John Cannis): Go ahead.

Mrs. Bev Desjarlais: Quite frankly, somebody is not doing the job and making sure we have the transportation industry benefiting from general revenue, not if taxpayers continually have to pay additional.... Quite frankly, I'm a user; I have to pay, plus I'm paying my taxes. Quite frankly, I don't have a problem with general revenue going to benefit high-speed rail. I think it is important. In a high-density populated area, I think it is important.

I also think it's important that we have a national road transportation system that is going to get the goods across so that all regions of the country benefit. That's a vision, and that's benefiting the entire country, not nitpicking little parts of it.

Mr. David Collenette: I've never been accused of being a nitpicker before, Mr. Chairman. I'm hurt.

The Vice-Chair (Mr. John Cannis): Minister, we're very pleased that Bev's voice came back this week. We missed it last week.

Mr. Gallaway, five minutes.

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): I won't take that long. I really don't like asking questions of a person who is devastated.

Mr. David Collenette: I'm sure you'll pump me up.

Mr. Roger Gallaway: Minister, I don't want to suggest I'm following up on a theme of my friend across the way, because I'm not. I want to talk about the principle you enunciated that the user pay...cost recovery, in a general sense. One can certainly convincingly make the argument that this is the right thing to do in a number of spheres.

If I look at user pay or cost recovery in certain parts of the transportation sector, I'd like to know what role your department has in setting the fees when the issue is cost recovery, and I'm referring to the ATSC. What role did your department play in setting that $12 addition?

Mr. David Collenette: Well, we had a number of discussions with the finance department. I talked to Mr. Martin about this, and we gave them various options. Ultimately they had to make a judgment. This was uncharted territory; this was a new venture. They looked at the various options and they made the decision that there should be a flat fee of the $12.

It was quite obvious early on that there was a lot of opposition to that. People felt it was unfair, and there were allegations that it affected traffic in short-haul markets.

Mr. Manley had a lot of hearings, and again, he conferred with us. We ran a lot of models through the computer and he decided that an adjustment was necessary.

» (1715)

Mr. Roger Gallaway: As a principle, then, do you think it is correct that the finance department would set the quantum, the amount, or would you prefer that you were given the authority to set whatever the ultimate fee would be for whatever the service?

Mr. David Collenette: We don't have that responsibility. The responsibility for generating taxes and financial fiscal policy is with the Minister of Finance.

That was why all the questions put on the air security charge were answered by the Minister of Finance and not me.

So the division of labour is that Transport Canada and the minister is responsible for the application of the funds and the discharging of the mandate, whereas the Department of Finance is responsible for the policy to generate the funds. And the actual collection of the funds is done through CCRA.

Mr. Roger Gallaway: Then would you say that the reduction of the ATSC from $12 to $7 on short-haul domestic flights is an accurate reflection of the true cost, or is it a response to the industry?

Mr. David Collenette: I think you're really going to have to ask Mr. Manley these questions.

They had a lot of discussions, and perhaps the deputy could talk about this because he was involved in many of those discussions. There were a number of models looked at. At one point we were looking at a three-tiered system, at $12, $7, and $5, and they eventually went, on the domestic runs, to a reduction, to $14 return.

I don't know if Mr. Ranger has any further information on this.

Mr. Louis Ranger: On the revenue side, obviously traffic drives revenues, so the first time around we had a few weeks to try to make the best projections possible. A year later, obviously, based on our observation of how traffic picked up from September 11, we were able to provide a better forecast. That's what the finance department used to establish things on the revenue side.

On the cost side, we had also a year's experience in how quickly we could buy the equipment and so on.

There is another important variable, and I cannot explain the details, but we have now moved to accrual accounting, which is a major development that has given the Minister of Finance flexibility to reduce it from $12 to $7.

Mr. Roger Gallaway: A further paradox would be this. What right do you think users have in access to information that would indicate that the calculation of a user fee, whatever it might be, is reasonable under the circumstances? That's obviously one of the great complaints the public makes about how these people arrive at this number, and it's a great mystery.

The other part is, what would you recommend in terms of people appealing these decisions if indeed they believe or have reason to believe that the fee imposed is unreasonable?

Mr. David Collenette: In the budget of last year it was announced that there was $2.2 billion worth of expenditures anticipated for increased airline security. And as CATSA is now up and running and is making expenditures, all those expenditures on equipment, salaries, and all the rest, they're all part of the estimates; they're open. The Auditor General will audit the statements. So there shouldn't be any question as to whether the money is being spent appropriately on new security measures.

The issue you ask about, the right of an individual to appeal an unfair fee, is the same as an individual believing they should have a reduced taxation level. That's done through public debate; it's done through the electoral process and public opinion. And certainly there was a lot of public debate about the airline security charge and the belief in the industry that it was harmful and, as the deputy said, was in effect driving down demand. The Minister of Finance and his officials took all that into consideration and felt that the present fee was more appropriate.

» (1720)

Mr. Roger Gallaway: I have a final question, if you don't mind, and it's a short one.

That being the case, Minister, you're saying these user fees are recovered and they're posted and it's all transparent in terms of revenue, and the revenues appear in the estimates. Are you telling me that a user fee is the same as a tax and therefore a person has no right to appeal it?

Mr. David Collenette: There's an issue of semantics here. When the Minister of Finance wrote the budget in 2001, he chose to call it a charge. Some people, like the opposition, refer to it as a tax. Officially, as a minister, I support the notion that it's a charge, if that's what the cabinet decision was.

So when is a tax not a tax? I suppose when it's a charge. These are semantics. But the basic principle is what happens to the money? The money goes into the CRF and is applied against the expenditures we make.

Some people said you spent less money than what was collected in the first year, and that probably is the case. But this is a five-year program and it takes a while for the expenditures to ramp up, especially with expensive equipment, but it will be revenue neutral. Mr. Martin said that, Mr. Manley said that, I've said that. This is not a tax grab; this is to pay for the enhanced security measures.

Mr. Roger Gallaway: Thank you.

The Vice-Chair (Mr. John Cannis): Thank you.

Mr. Laframboise, s'il vous plaît.

[Translation]

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

My final question will be about Mirabel, minister. In the bill you will be tabling on airports in Canada, which you call the Canada Airports Act, you talk about the empowerment and transparency of airport authorities. Are we finally going to deal with the ADM situation and the future of Mirabel Airport?

I have asked you this question a number of times, Minister, and you maintain that the ADM is complying with the lease. The lease provided that ADM was supposed to table a development plan for Mirabel by 1998. At this time, the hotel is closed. Statements have been made to the effect that they were not hotel managers. They do not want to worry about the future of the hotel, which has more than 200 rooms, and passenger flights are going to end in 2004. We still do not have a plan for this airport, minister, which the federal liberal government helped build. You are involved in closing it down. There is still no highway to Mirabel, the 50. You have told us that you do not want to be involved in that.

Under the new Canada Airports Act, will it be possible to force ADM to present a development plan for Mirabel so that we finally know what will be done with this airport, which, by the way, is the largest piece of federal property in Quebec?

Mr. David Collenette: There will be a new bill on airports, and we are going to improve transparency, the management of corporations and accountability. But ultimately, it is up to the ADM authority to determine the priorities, and decide whether it is better for business and for its passengers to centralize all passenger flights in Dorval.

I have no doubt that in 20 or 30 years, Mirabel will be the principal airport in the region, but for the time being, ADM has decided that it is in the best interest of passengers in the region to concentrate all flights in Dorval. And that is their decision to make.

I am well aware that it is very difficult for many people who live in the Mirabel region, but the issue is whether or not this is better for passengers, connections, and everything related to transportation.

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Mr. Mario Laframboise: Perhaps I was misunderstood, minister. ADM was required to give you a development plan for Mirabel by 1998. What are we going to do with this airport in the future? They have not tabled such a plan. Are you going to require that they do so?

I would mention in passing, minister, for your personal interest, that you should do a poll on Quebecers' perception of ADM. You would be very surprised what people, not just in Mirabel, but throughout Quebec, think about the way ADM is managed and administered. You would be very surprised at what they think.

Mr. Louis Ranger: May I reply? Without giving you all the details of the bill, it is clear that all airports will have to table what we call a ground-use plan, a master plan, a business plan. This will have to be done in a transparent way. As the minister said, we are not going to be dictating these plans or making any judgments about what they should contain, but airports are going to have to prepare and table these plans.

Mr. Mario Laframboise: Mr. Ranger, the lease provided that ADM was required to table such a plan by 1998, and they have not done so. Are you telling me that you will require them to do so in the future?

Mr. Louis Ranger: Yes, under the legislation, they will be required to prepare and table these plans.

Mr. Mario Laframboise: And in the case of ADM, will they have to do so for both airports?

Mr. Louis Ranger: For both airports, for all the property they control.

[English]

The Vice-Chair (Mr. John Cannis): Ms. Desjarlais will be our last questioner. A brief question, please.

Mrs. Bev Desjarlais: There's been acknowledgement that airports as well as ports are feeling the effects of not being able to fund additional operations, additional infrastructure changes they have to make, and are looking for support in doing that.

It was quite noticeable that although we're planning on addressing some of the airport issues, what's seriously missing out of this “Straight Ahead” vision for transportation is any real mention of the shipping industry. There are minor little notes about it and a little bit about port divestiture, but nothing else related to the shipping industry. It is a major portion of Canada's transportation system. I'm wondering what happened to the shipping industry. Did it go off the edge of the world, get lost in the Halifax harbour? What happened?

Mr. David Collenette: Madam Desjarlais will remember that we have passed two shipping acts in the last five years. We passed the Canada Marine Act, the Marine Liability Act, and the shipping conferences act, so we've been really.... What's the other one?

Mr. Louis Ranger: The Canada Shipping Act.

Mr. David Collenette: The Canada Shipping Act. We've been very preoccupied with marine matters.

There is a statutory review called for in the CMA. There's a panel that has that under way, and they will be reporting. I have no doubt there will be amendments to the CMA.

The reason we're coming forward with the CTA, and the reason we come forward with the vision, is really to.... Number one, on the amendments, we're obligated to do their five-year review. Secondly, we felt as a government that we needed to set national priorities.

We don't ignore the marine mode, but there aren't as many measures and proposed changes, because obviously the issue is under review. There will be a bill within the next year, no doubt, that will have significant changes.

The Vice-Chair (Mr. John Cannis): Thank you.

We too are not ignoring the marine mode, as you can see from our subcommittee, which you touched upon.

In closing, I would just like to make you aware that last week I had visitors here in Ottawa, from my riding, a junior public school, grade 8s from Churchill Heights. In their questions about what we do as members of Parliament, our work throughout the day, and some of the issues we cover, I was pleased they asked me about transportation, believe it or not. I was pleased and very surprised that here were grade 8 students and they were interested in transportation, safe roads, and safe vehicles on the road. They know we're a country in motion, a vast land that needs to be connected, our urban or city settings.

This is just a message; I'm not asking for a response. You could, if you will, but it just goes to show you that it's an issue that does not affect just the people who transport goods from across the country or south of the border, or people who fly for business, or what have you, or the corridors. Young Canadians, seniors, and everybody in between are talking about transportation.

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Mr. David Collenette: I agree. For too long we've really not paid enough attention, in a policy sense, to transportation. I think people realize that it's an essential component of their daily lives and the good of the economy. So I'm glad you're finding that with your constituency.

The Vice-Chair (Mr. John Cannis): In closing, Minister and your officials, on behalf of the committee and all the members, I'd like to thank you for your generous time in being here and giving us your views and your thoughts.

Thank you very much.

Mr. David Collenette: Thank you.

The Vice-Chair (Mr. John Cannis): This meeting is adjourned.