TRAN Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Transport

EVIDENCE

CONTENTS

Monday, February 17, 2003

¹

1535

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

Mr. Jim Facette (President, Coalition to Renew Canada's Infrastructure)

¹

1540

¹

1545

The Vice-Chair (Mr. John Cannis)

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

The Vice-Chair (Mr. John Cannis)

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

Mr. Jim Facette

Mr. Mario Laframboise

Mr. Jim Facette

Mr. Mario Laframboise

Mr. Jim Facette

Mr. Mario Laframboise

The Vice-Chair (Mr. John Cannis)

Mr. Stan Keyes (Hamilton West, Lib.)

¹

1550

Mr. Jim Facette

¹

1555

Mr. Stan Keyes

The Vice-Chair (Mr. John Cannis)

Mr. Pat O'Brien (London—Fanshawe, Lib.)

Mr. Jim Facette

º

1600

Mr. Pat O'Brien

The Vice-Chair (Mr. John Cannis)

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

Mr. Jim Facette

Ms. Liza Frulla

The Vice-Chair (Mr. John Cannis)

º

1605

Mr. Jim Facette

The Vice-Chair (Mr. John Cannis)

Mr. Michael Murphy (Senior Vice-President, Policy, Canadian Chamber of Commerce)

º

1610

º

1615

The Vice-Chair (Mr. John Cannis)

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

Mr. Michael Murphy

Mr. James Moore

The Vice-Chair (Mr. John Cannis)

Mr. Mario Laframboise

Mr. Michael Murphy

º

1620

Mr. Mario Laframboise

Mr. Michael Murphy

The Vice-Chair (Mr. John Cannis)

Mr. Pat O'Brien

Mr. Michael Murphy

Mr. Pat O'Brien

º

1625

Mr. Michael Murphy

Mr. Pat O'Brien

Mr. Michael Murphy

Mr. Pat O'Brien

The Vice-Chair (Mr. John Cannis)

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

º

1630

Mr. Michael Murphy

Mr. Roger Gallaway

The Vice-Chair (Mr. John Cannis)

Mr. Michael Murphy

º

1635

The Vice-Chair (Mr. John Cannis)

Mrs. Guylaine Roy (Director General, Surface Transportation Policy, Department of Transport)

º

1640

Mr. John Forster (Director General, Surface Programs and Divestiture, Department of Transport)

º

1645

The Vice-Chair (Mr. John Cannis)

Mr. James Moore

º

1650

Mr. John Forster

Mr. James Moore

Mrs. Guylaine Roy

Mr. James Moore

Mrs. Guylaine Roy

Mr. James Moore

Mrs. Guylaine Roy

Mr. James Moore

The Vice-Chair (Mr. John Cannis)

Mr. Mario Laframboise

Mrs. Guylaine Roy

º

1655

Mr. Mario Laframboise

Mrs. Guylaine Roy

Mr. Mario Laframboise

Mrs. Guylaine Roy

Mr. Mario Laframboise

Mrs. Guylaine Roy

The Vice-Chair (Mr. John Cannis)

Mr. Marcel Proulx (Hull—Aylmer, Lib.)

»

1700

Mr. John Forster

Mr. Marcel Proulx

Mr. John Forster

Mr. Marcel Proulx

Mrs. Guylaine Roy

Mr. Marcel Proulx

Mrs. Guylaine Roy

Mr. Marcel Proulx

Mrs. Guylaine Roy

Mr. Marcel Proulx

The Vice-Chair (Mr. John Cannis)

Ms. Liza Frulla

»

1705

Mr. John Forster

Ms. Liza Frulla

Mrs. Guylaine Roy

»

1710

Ms. Liza Frulla

Mrs. Guylaine Roy

Ms. Liza Frulla

Mrs. Guylaine Roy

Ms. Liza Frulla

Mrs. Guylaine Roy

Ms. Liza Frulla

The Vice-Chair (Mr. John Cannis)

Mr. Roger Gallaway

Mr. John Forster

»

1715

Mr. Roger Gallaway

The Vice-Chair (Mr. John Cannis)

Mr. Mario Laframboise

Mr. John Forster

Mr. Mario Laframboise

Mr. John Forster

Mr. Mario Laframboise

Mr. John Forster

Mrs. Guylaine Roy

»

1720

Mr. Mario Laframboise

Mrs. Guylaine Roy

Mr. Mario Laframboise

The Vice-Chair (Mr. John Cannis)

Mr. Marcel Proulx

Mr. John Forster

Mr. Marcel Proulx

The Vice-Chair (Mr. John Cannis)

---

CANADA

Standing Committee on Transport

---

NUMBER 011

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Monday, February 17, 2003

[Recorded by Electronic Apparatus]

¹  (1535)  

[English]

    The Vice-Chair (Mr. John Cannis (Scarborough Centre, Lib.)): I call the meeting to order.

    I think we have enough members present to hear the witnesses, so we'll start. We have with us today the Coalition to Renew Canada's Infrastructure, Mr. Jim Facette.

    Jim, you have 10 minutes to do your thing and then we'll open it up for questions.

    Mr. Jim Facette (President, Coalition to Renew Canada's Infrastructure): Thank you, Mr. Chairman, and thank you, committee members, for this opportunity today.

    Since its inception in 1991, the CRCI has participated in the work of many different House of Commons committees. We're happy to participate again, providing a message on the need for a continued long-term plan to address Canada's physical infrastructure needs.

    As the collective voice of a broad-based coalition representing all areas of the economy, we are greatly concerned about the deterioration of Canada's national highway system and its negative impact on Canada's economic growth, job creation, and productivity. The evidence, both anecdotal and academic, is clear: investment into Canada's national highway system will net governments a tangible return on that investment, save lives, improve productivity, create jobs, and contribute to overall economic growth.

    Completed in 1998 by both the federal and provincial governments, the publication The National Highway System: Condition and Investment Needs Update reinforced these points. It also confirmed what the CRCI has been saying for years, that unless we address this problem now, the cost to rehabilitate Canada's national highway system will continue to escalate. The update report demonstrated that despite investments made primarily by provincial governments, the state of the national highway system has gotten worse since 1988. Cost estimates at that time have escalated from $13 billion to $17 billion due to this neglect. The joint study also indicates that new construction work is required, with the greatest need for twinning many sections.

    The CRCI will take this opportunity, Mr. Chairman, to congratulate Messrs. Proulx and Laframbroise for working together to advance the case for the completion of Highway 50. What Highway 30 means to Valleyfield, Highway 50 also means to the Outaouais-to-Montreal corridor. Your cooperation is a symbol of the level of non-partisan support that exists for highway investment.

    The Coalition to Renew Canada's Infrastructure is asking this committee to recommend a 10-year national highway program, with a minimum annual investment of $500 million. The Speech from the Throne drew a blueprint of what this government wanted to accomplish, a blueprint that included a 10-year program for infrastructure to accommodate long-term strategic initiatives essential to competitiveness and sustainable growth. It also included a new strategy for a safe, efficient, and environmentally responsible transportation system. We believe a 10-year national highway plan must have a part.

    If it is true that competitive cities and healthy communities are vital to our individual and national well-being, as was suggested in the Speech from the Throne, then city-to-city connectivity is vital.

    What the Liberal task force said in 1992 is as valid today as it was then:

...the economic consequences of poor roads is staggering. Studies reveal that the productivity of a region is very much dependent upon its transportation system. Traffic congestion increases the cost of transporting materials reducing an industry’s competitiveness, revenues and jobs. Bad roads and polluted waterways also have a negative impact on tourism, an important sector of the Canadian economy.

    In 1997 this transport committee came to a similar conclusion. The committee report said:

An efficient, competitive highway system is one of the fundamental requirements of a healthy economy. It has been demonstrated beyond any doubt how important a safe and competitive highway transportation system is to trade and tourism.

    Mr. Chairman, our full brief, which I believe has been provided to this committee, outlines the built-in returns on investment, including tourism, lives saved, increased productivity, unity, and trade. The short-term programs currently under way are just that: short-term. Each addresses a different part of the overall infrastructure and highway picture.

    The strategic highway improvement program and the strategic infrastructure fund each have made their mark. It is somewhat perplexing, though, that all federal highway investments do not come under one coordinated Canada-wide effort. We are pleased with the direction this government outlined in the Speech from the Throne, that being long-term. It is our hope that the 10-year infrastructure program includes a 10-year highway program.

    The list of supporters for such a program is both long and impressive. The Canada Transportation Act Review Panel dedicated a full chapter to this issue. In the end, it acknowledged that Ottawa must actively invest in an important piece of Canadian infrastructure--our national highway system.

    In our full submission, you will have noticed that we refer to the 1999 national highway system's stakeholder meeting that was then co-chaired by Liberal caucus chairman Mr. Fontana and us. The appendix to our submission lists participants representing the broad width of support as well as some action items.

¹  (1540)  

    The level of commitment from the provinces and other stakeholders has not changed. As part of its heartlands economic strategy, the B.C. government will launch major transportation investments, including over $600 million in improvements for rural roads and resource roads.

    Premier Campbell also announced last week that his government will aggressively pursue a $670 million upgrade to the Trans-Canada Highway through Kicking Horse canyon, cost-shared by the provincial and federal governments. They will make improvements to Highway 97 in the Okanagan on Highway 3, connecting Hope to the Okanagan and the Kootenays. The B.C. government will also make critical improvements to the Sea to Sky Highway to Whistler. All of these routes make up part of B.C.'s share of the national highway system.

    In their October 11, 2002, letter to the Minister of Transport, the Honourable David Collenette, the Canadian Chamber of Commerce clearly stated their three recommendations: one, that the federal government commit to a level of capital and maintenance to invest in a highway infrastructure that is more commensurate with Canada's status as a leader among developed nations; two, that the federal government commit to achieving funding agreements and partnerships with the provinces and territories to ensure that a national highway policy is established for Canada by December 2003; and third, that the federal government identify clear and rational criteria for determining inclusion and eligibility for funding under the national highway policy, both for existing fundamental highways and for the addition of key roadways and corridors in each province and territory.

    Our own public opinion research shows that 58% of Canadians support the federal government in creating a national highway program that would be committed to investing in Canada's highway system through a share of gasoline taxes.

    The United States, our major trading partner, has made a major commitment to their transportation infrastructure. The 1997 Transportation Equity Act for the 21st Century, also known as TEA-21, provides for investment of $217 billion U.S. in transportation infrastructure. Of this total, $175 billion U.S. will be invested in highways alone. Last week Congress approved a $31.6 billion highway plan for 2003. The President is expected to approve the recommendations.

    TEA-21 will need to be re-authorized no later than October 2003. Our colleagues in the United States will be seeking a comprehensive re-authorization package for highways and transit that could reach an annual federal investment of $50 billion U.S. If we think we're behind now, we definitely will be at the back of the line if we do not commit to increasing federal investment in Canada's national highway system.

    Mr. Chairman, committee members, we often are asked about how to pay for a national highway program, about what we think about public-private partnerships, about whether they are an option.

    In June of 1998, the Liberal committee on gasoline pricing recommended that joint action between federal and provincial governments aimed at restoring Canada's national highway system be given top priority and that appropriate cost-sharing formulae and public-private partnerships be established to undertake repairs at the earliest opportunity.

    In his grain-handling and transportation review, the Honourable Willard Estey recommended that the federal and provincial governments collaborate to apply some part of the considerable fuel tax collections to the construction, maintenance, and repair of highways.

    The CRCI agrees with Mr. Estey that some of the fuel tax collections should be allocated to the rehabilitation and modernization of Canada's national highway system.

    The Canadian Chamber of Commerce, in its letter to Minister Collenette, takes the view that to alleviate the problems facing the national transportation system, funding needs to be allocated to preserve and restore transportation infrastructure.

    In regard to the question of private sector participation in rehabilitation of the existing 25,000 kilometres of Canada's national highway system, we think it is possible, but expectations must be realistic. In a report card to the Council of Ministers Responsible for Transportation and Highway Safety, a working group studied the applicability of the PPP, as it's known, and found that many financial analysts are concerned about the unrealistic expectations proponents have with respect to the scope and applicability of the PPP in Canada. However, where feasible, we believe it should be looked at in cases where new highways are needed that offer alternatives.

    In closing, Mr. Chairman, the CRCI believes the quality of Canada's highways influences corporate decisions regarding location, capital investment, productivity methods, relationships with suppliers and customers, location and availability of inventory, and access to labour.

¹  (1545)  

    A long-term plan such as the one laid out by the national highway review policy report and by Transport Canada would carry out reconstruction of our national highway system with maximum efficiency and create a larger economy.

    I'll end there, Mr. Chairman. I look forward to our discussions this afternoon.

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

    We'll begin with Mr. Moore.

    Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance): I was late, it wouldn't be appropriate.

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

    Ms. Desjarlais has a sore throat today. I know she has a lot of questions on this issue, but we'll have to save it for next time.

    We'll go to Mr. Laframboise.

[Translation]

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

    Mr. Facette, I listened to what you said and frankly, the time for studies is long passed. Do we have enough studies to enable us to table a plan, along with programs and budgets? Or, do you feel more studies are needed? Would you care to respond?

    Mr. Jim Facette: To put it bluntly, yes we have enough studies in hand. It's simply a matter of money at this time. Everything's been done.

    Mr. Mario Laframboise: Therefore, it's time for action. You mentioned the fuel tax. People always seem to refer to the excise tax, not to the GST or PST, on gasoline. On looking at the budget figures, we note that the federal government invests only 23.2% of excise tax revenues in our road network. There is still room for a program funded through excise tax revenues. I think that's what you were referring to.

    Earlier, you quoted a figure of $500 million. Would an annual investment of $500 million serve only to maintain the existing road network? Would this money also be used to expand the network? Or, is a separate budget needed for the development or construction of new roadways?

    Mr. Jim Facette: From our perspective, as things now stand, with partners, the provinces and several private sector initiatives, $500 million per year over ten years would be sufficient in terms of what needs to be done. This figure represents the 1.5¢ per litre that the Finance Minister tacked on to the fuel tax in 1995. That's one option, but it's not the only one. But it is perhaps the most viable one and it has prompted a number of people to ask questions.

    Mr. Mario Laframboise: If I understand correctly, that is $500 million over and above the amount already invested. Correct? That's in addition to the funding already announced.

    Mr. Jim Facette: Correct.

    Mr. Mario Laframboise: Fine. Thank you.

[English]

    The Vice-Chair (Mr. John Cannis): Do you have any questions, Mr. Keyes?

    Mr. Stan Keyes (Hamilton West, Lib.): Yes, thank you very much, Mr. Chairman.

    I want to welcome Mr. Facette as well to the committee and thank him for his presentation. We've heard from Mr. Facette and representatives of his group in the past, and of course all those groups and individuals who have been to our committee and corresponded with the Minister of Transport, I would suggest ad nauseam, on the subject of our highways.

    In the middle of last week, Mr. Chairman, I had the benefit of attending a conference of the Canadian Construction Association in Quebec City. At that annual meeting, I met with many members of the heavy equipment and road builders council, part of the Canadian Construction Association.

    I have to report to you, Mr. Chairman--not that I'm trying to be a witness at this committee, but to support the comments made by Mr. Facette--that time and time again, person after person after person on that council just demonstrated, with factual information, how we have to pursue some kind of an agenda on the refurbishment of our highway system in Canada. There's just no disputing it any longer. We must come to the realization as a government, I think, that the money just has to be there, not sporadically, maybe a little bit in this budget and not certain about the next budget, but some kind of long-term planning. That way we can involve the players and the industries, like the Canadian Construction Association and their councils, including the road builders and heavy equipment people and everyone else, to ensure that, yes, Canadians can expect their highways to get better over the course of the next decade.

    So there has to be that planning, and that investment has to be made. As Mr. Facette has said, and we've heard it time and time again, we can choose to ignore it now and wind up with a bill that's going to be up to five times more than we would have to pay if we started to work on these highways today.

    I have two quick comments. The first is on the percentage of gas tax going to infrastructure, specifically highway infrastructure. I don't want to have industries like the Canadian Construction Association, or the organization that Jim or anyone else is representing, to get lost in the argument of whether or not money should come from the fuel tax to pay directly to highway construction. Because, truthfully, I don't know of a government, once you're sitting on this side--I argued the same points when I was in opposition between 1988 and 1993--that would suddenly start to try to designate taxes from one area of tax collection directly to a particular interest; in this particular case, the suggestion that fuel tax and a percentage of that should go to highway construction. It's the thin edge of the wedge. You can debate until the cows come home, but it just isn't going to happen.

    So I don't want to see anybody get lost in the argument about designating tax money to any particular program, because it takes away from what we should be talking about, and that is saying, “We have to invest, let's put a figure on it and let's get to work.” Because the more we start taking these spinoff issues, the more it gets clouded. Maybe some would like it to be clouded so that we don't have to address the issue. And the issue is to take money out of general revenues, assign it to the improvement of our highway infrastructure across this country, and be done.

    To our witness, when you pick up the paper and you hear that there's the off-chance or the possibility that, for example, the Minister of Transport of the day is entertaining the idea of putting hundreds of millions of dollars, if not billions, into a JetTrain servicing Toronto to Ottawa and Montreal, does that concern you, Mr. Facette, and the picture that presents as far as priorities are concerned?

¹  (1550)  

    Mr. Jim Facette: The answer to your question is, yes, Mr. Keyes, it does concern us. In our polling of Canadians last year, they clearly told us that this is the right thing for the federal government to do. The reality is that Canada's national highway system is Canada-wide; it's 25,000 kilometres of highways that go right across this country. It touches everybody.

    There is some concern from the outlying areas of the Golden Horseshoe here in Ontario that, you know, “There's us, the rest of Canada, people, don't forget about us”, that the feds will once again focus on Montreal to Toronto. That doesn't do a lot for tourism in the Miramichi. It doesn't do a great deal for northern Quebec, northern Manitoba, and further west.

    So, yes, that is of some concern. We understand, though, that highways form part of a larger puzzle, and we appreciate that it is one part of a puzzle called the transportation system. Sure, we understand that people are going to take the train from point A to point B and that there's a lot of “romance”, I'll say, around riding the train in different parts of the country. And that's fine, that's wonderful, but don't overlook the simple fact that more than, say, 90%, if I have my statistics correct, of the tourism traffic that comes into this country from our friends south of the border comes via some form of rubber tire--bus, private car, or whatever.

    So, yes, we do get concerned, and we get concerned also about the message it sends the provinces. I have worked a great deal with many of the provinces, and they continue to say to me, look, Jim, we're ready to go; we need some direction the other way. So we get into this tennis match, as is usual in federal-provincial relations.

    So it is of some concern, yes. That said, we do recognize that highways are only one part of a big puzzle.

¹  (1555)  

    Mr. Stan Keyes: Thanks, Mr. Chairman.

    The Vice-Chair (Mr. John Cannis): Mr. O'Brien.

    Mr. Pat O'Brien (London—Fanshawe, Lib.): Mr. Chairman, thank you very much.

    Thank you, Mr. Facette, for your presentation.

    I think back to my 11 years on municipal council, where I was proudly known as a “roads guy”. I continue to be that, although I haven't been on this committee before now.

    First of all, I certainly second the comments of Mr. Keyes, my colleague.

    I want to ask you what your view is on a direct federal-municipal funding link that would maybe seek to involve willing provinces but wouldn't let an unwilling province sidetrack infrastructure needs at the municipal level and obviously major links like the 401, which goes past my riding of London, Ontario.

    To what extent do you think that's a realistic notion, and to what extent do you see the interplay of the three levels of government here being a bit of an impediment to what you're trying to achieve and what many of us would like to achieve?

    Mr. Jim Facette: Thank you. That's an excellent question, Mr. O'Brien.

    I'm not a constitutional lawyer, so when we're talking about investments in the national highway system I'm not sure, if you're into a bit of a jurisdictional problem, if you don't deal with the province...trying to skip over them to the municipalities. As I recall, the Trans-Canada Highway Act of 1949 and subsequent acts to it designated the responsibility, not necessarily in black and white, for the maintenance to the provinces.

    So there may be some challenges there. I'm not aware of all the small intricacies involved with that.

    That said, the reality is that we think the work is that important that it needs to get gone. Highways have constantly become caught in the priority battle of different governments for all kinds of different reasons. Three-way agreements between municipalities, provinces, and the federal government have worked well for municipal infrastructure. If you look at water and sewer projects of the current infrastructure program, it's worked, and it's worked well. I have to be honest, since 1993 I have not heard a whole lot of negative issues around it. I mean, I would be hard-pressed to find another file in Canadian history that's gone so smoothly in federal-provincial-municipal relations. I think it's unheard of.

    Do I think it's possible? Yes. Should it be an impediment to getting the job done? No. I think at the end of the day anybody in the diplomatic community and anybody in the facilitation business will tell you that if we have a challenge or a chasm to jump over we have to focus on what we have in common in order to build those links we have to build to get there.

    So I would encourage governments to work with what they have in common first, that being the objective, and try to develop details that will get everybody there and make it a win-win for everyone. But there may be some constitutional matters in those agreements. I'm not aware of them all. That said, I certainly think that they're necessary and that everybody should get along. There's no reason why not. It's a non-partisan issue.

    As I said here a few moments ago, Mr. Proulx and Mr. Laframboise are working together on one particular project in Quebec. I mean, the lead item in the paper on the weekend was, “Surprise, this is happening!” Why should it be a surprise when two parliamentarians want to better an economic region of any one given province?

    At any rate, Mr. O'Brien, I hope I've answered your question.

º  (1600)  

    Mr. Pat O'Brien: Yes, you have, thank you.

    The Vice-Chair (Mr. John Cannis): Thank you, Mr. O'Brien.

    Ms. Frulla.

    Ms. Liza Frulla (Verdun—Saint-Henri—Saint-Paul—Pointe Saint-Charles, Lib.): Mr. Facette, going back to what Stan was saying--that is, about not getting stuck with saying, “Well, how do you pay it, and do we take part of the tax?”--I agree with Stan. Still, some people came to us and talked about a toll. There's a big discussion now in England about this imposition. This means also sometimes, as I think for the 401, a private sector partnership with the government.

    What do you think about all of this?

    Mr. Jim Facette: Thank you, Ms. Frulla.

    It can work, but you have to look very closely at the 401. You have to look very closely at the European situation. The 401 serves a very densely populated area, and it has an option. The 407 has an option, and it's called the 401. The 407, the facility, the road itself, is privately owned now. They're making money, and good for them, but again, you have that dense population. In Montreal, where you're from, that possibility might be there, but the reality is that...and the bankers will tell you this. When my membership...when they put together a consortium to build these things, the first thing they do is put together a team of architects, engineers, builders, consulting engineers, and everybody else. Then they go to the bank, to the bonding community. The first thing that the banks, the financiers, ask the consortium is, of course, what is the revenue stream? Where's the money coming from to pay for the tolls? Who's paying it? And they often will discount all the studies on tolling and bring them down. Some tolling numbers do tend to be a little bit more exaggerated than what they should be. So you have to be very careful.

    The other region in Canada where it might work is the Vancouver area. It could work. The population might be dense enough. But I have to tell you, the Coquihalla Highway, which was the first toll highway built in this country, doesn't pay for itself. The tolls to Coquihalla do not cover maintenance costs. It is subsidized. So it's very difficult.

    In England and in other parts of Europe, you have that dense population where the volume is there to pay for it. But if you want to put a true toll on the Queensway that goes through here in Ottawa, or Highway 40, the tolls are going to have to so high that no one's going to pay for it to pay for itself. The volume's not there.

    So it really is project-by-project specific. You really have to look at the numbers.

    When they were looking at tolling the new front end of the Moncton highway in New Brunswick, one of the conditions they had to put on before the tolls were taken off was a guaranteed revenue stream--trucks--because it wouldn't work otherwise.

    My people, the people I represent, are not going to put together consortia and they're not going to invest private money if they can't make a profit. I'm sorry if “profit” is a bad word for people, but that's the reality. They want a return on their investment. They have shareholders to report to. That's just a reality. But they know that the public will not accept tolls that are way up.

    So it can work, but it really depends on the project.

    Ms. Liza Frulla: Thank you.

    The Vice-Chair (Mr. John Cannis): Any other questions for Mr. Facette?

    Let me just add, if I may, that last week I visited with a Grade 8 class from my riding in Scarborough. And this sort of picks up from where Stan and Pat and others commented. I was very surprised and very pleased to see how these Grade 8 students asked about our highway infrastructure, and talked about how important it was to them.

    I've sat on this committee for quite some time, and in the past I sort of substituted, and it seems to me this is one of the committees where members work so well together. There may have been some instances where we've disagreed, but on most issues, as I'm sure you found in the past...and today you see it in the example of the parliamentary secretary and Mr. Laframboise working together for the betterment of highways or the community as a whole.

    I also want to comment on the fuel tax that you talked about. In my humble opinion, I too can't see a designated tax coming in being allocated to highway infrastructure, simply because, in my view, that'll set a precedent. And you have a breakdown of how much should be set aside for this and for that, which in essence should come from general revenue, based on revenue. But you compared us with the U.S., and it's unfair, many times, to compare us with the U.S. I mean, they're 270 million people, and we're 30 million, or almost 31 million, people. I have heard Americans up here visiting us comment very positively on how our road systems are well looked after.

    They could be better. We all know that. But I think we've made not too bad an effort. Given the provincial-federal relations that exist there, I think we've overcome and we're headed in the right direction.

    I too want to close by just telling you that I think all members on this committee and most Canadians--as you clearly pointed out, 58% of Canadians--do support and do want safe, good, dependable highways. And that's really what the kids were commenting on. They've heard in the news about the accidents. Of course, we have to look after our major trucks that are on the roads, with tires flying and what have you, caused by the infrastructure not being kept up.

    So I want to thank you for your comments.

    I'll ask once more if there are any other questions that anybody wants to ask. I know Bev is dying to, but her laryngitis is preventing her.

    Jim, thank you very much. We appreciate your presentation.

º  (1605)  

    Mr. Jim Facette: Thank you for the committee's time, Mr. Chairman. We appreciate it. Good luck in your deliberations.

    The Vice-Chair (Mr. John Cannis): Our next presenters, from the Canadian Chamber of Commerce, are Mr. Murphy, senior vice-president of policy, and Mr. McKinstry, policy analyst.

    Gentlemen, welcome. Thank you for coming. The floor is yours.

    Mr. Michael Murphy (Senior Vice-President, Policy, Canadian Chamber of Commerce): Thank you very much, Mr. Chairman. It's a pleasure to be here. With me today is Rob McKinstry, a member of our staff.

    It is a pleasure to be here and to have the opportunity to talk a little bit today on behalf of our members about highway infrastructure. The subject of infrastructure generally is an important one to the economy of the nation, and one that the Canadian Chamber puts a great deal of focus on.

    In terms of our membership, what I'd like to do today is focus on three elements of the discussion, if I could--the need for a long-term, national, multi-modal infrastructure strategy as a fundamental piece; the recognition of transportation infrastructure as an integrated platform; and finally, the need for the federal government to dedicate long-term infrastructure funding.

    The fundamental aspect of transportation is infrastructure. The Transportation Act itself considers the relationship between shippers and carriers but says very little about the maintenance and enhancement of our infrastructure. Transport Canada states that federal revenues from transportation activities reached over $5 billion in the fiscal year 2000-01. These revenues included federal fuel excise taxes from rail, air, road diesel, and road gasoline. Federal spending on direct subsidies and grants to transportation was a little over $2 billion during this same period.

    In the February budget of 2000, some $2.6 billion for an overall infrastructure program was added, as well as $600 million for strategic highway infrastructure. And as you know, more financing was included in the 2001 budget when a $2 billion Canada strategic infrastructure fund and a $600 million border fund were introduced.

    The Canadian Chamber views these infrastructure investments as critical, and we encourage the federal government to continue to work with provincial and municipal levels of government, the business community, and the general public in developing a coordinated plan to use infrastructure funds in the most effective manner possible.

    The infrastructure of each mode of transportation is a component of an integrated transportation system. To a certain degree, each component is dependent on the others to bring people and materials to a location or to deliver shipments to a final location. Most end-to-end movements involve more than one mode of transportation, with various modes acting as part of a larger network.

    The costs of inadequate infrastructure are substantial. First, there is the impact on the environment. Second, there is a loss of transportation activity and the economic loss that accompanies it. It is not unusual, for example, for Canadian trucks to travel along east-west corridors primarily through the United States. Similarly, Canadian railways and ports are in direct competition with U.S. competitors. This bypass trend has a negative impact on the Canadian economy. Once traffic is lost to the U.S., it is very difficult to win it back. Moreover, investment in Canada will diminish if the system itself is not attractive and conducive to economic growth.

    Finally, there is the impact on Canada's regional and social development. It's a quality of life issue for many Canadians and Canadian communities, both urban and rural; a negative impact here when transportation infrastructure is not adequate. The highway system, as you well know, is some 25,000 kilometres, and extends from coast to coast and connects all provincial capital cities, major population and commercial centres, and important ferry terminals and major access points to the United States. The NHS facilitates both interprovincial and international trade.

    Levels of road use and traffic have risen in nearly every region, and the NHS has been under increasing stress. Nearly 80 billion vehicle kilometres were generated in 1996, up almost 9% from 1993 and almost 40% from 1986. Traffic is most heavily concentrated around Canada's urban areas, although rural areas are significantly dependent on viable highway infrastructure.

    Transport Canada has recognized that road accidents are the most serious transportation safety problem. Highway-related accidents kill many Canadians and injure more than 25,000 Canadians per year, with large costs to the Canadian economy. Specific highway design features can significantly reduce the occurrence or severity of highway crashes, and can significantly contribute to the economic justification of highway investments.

º  (1610)  

    Investments in safety across the system should remain a top priority for the federal government. The government should consider moving toward a no-stop national highway system. Additionally, our highway system must make greater use of intelligent transportation systems so that technology can improve the safety and efficiency of our highways.

    The most recent report commissioned by the Council of Ministers Responsible for Transportation and Highway Safety indicates that the NHS is in need of significant work to restore it to satisfactory levels. I'm sure you're well aware of the amount of money required here. Estimates range into the multiple billions of dollars.

    The Canadian Chamber believes that Canada's network requires a comprehensive system policy framework to realize our potential in a competitive market-based system. The Government of Canada needs to show leadership in developing this policy framework, reiterating our commitment to a market-based system and providing a set of principles and priorities that will guide the implementation of the policy. Without a coordinated, long-term, strategic approach, our competitive position will erode. This strategy should relate to all modes of transportation as well as the needs of both shippers and carriers.

    In particular, the policy framework needs to recognize the following principles: our integration into a global and North American economy; the need for a national multi-modal strategy; the increased integration, cooperation, and competition among modes of transportation; the approach to devolution; enhancing the financial, social, and environmental stability of the system; and strengthening our economic union by harmonizing standards throughout Canada and enhancing interprovincial trading links.

    Public policy should reflect these realities. Competition rules and regulations need to balance the interests of users with those of providers, while our policy framework needs to provide the environment where carriers can grow and compete.

    The Government of Canada should take a leadership role in ensuring a world-class infrastructure. The government should not regard its investment in infrastructure as subsidizing a particular industry or mode but as providing Canadians with the platform they require to compete and prosper. We strongly believe cost-benefit analyses should be performed to ensure that the best use and maximum efficiencies are achieved for each of the modes.

    We recommend that a number of actions be taken. The first is certainly an amendment to the Transportation Act to acknowledge the importance of infrastructure as part of the transportation system. We believe there should be created a national infrastructure investment strategy. We do believe committing revenues from fuel excise taxes towards a fund for the maintenance and renewal of infrastructure is very desirable. Funds should be directed toward the modes in which they were derived, and should operate for many years in terms of being able to mobilize the kind of resources and capital that would be required.

    As well, federal government infrastructure development objectives must be clearly identified and communicated to the public and to all other levels of government. A broad range of private sector investment must be pursued. Selected infrastructure projects must contribute to the productivity, competitiveness, and quality of life in Canada. And a formal process for evaluating unsolicited public-private partnership submissions must be developed.

    The strategy should also include a federal-provincial-territorial agreement on long-term funding formulae to provide for the ongoing maintenance and construction of the national highway system. This funding program should also include provincial, territorial, and federal priorities related to trade corridors, border crossings, strategic economic transportation corridors, and intermodal rail facilities as part of a broader investment strategy.

    We should also be looking to create a national corridor planning and development program as well as a coordinated border infrastructure program.

    In closing, Mr. Chairman, I would like to reiterate that we're delighted to be here today and would be happy to try to answer any questions you may have.

    Thank you.

º  (1615)  

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

    We'll start off with Mr. Moore.

    Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance): Does the Chamber have an announced or decided position on the proposed JetTrain between Windsor and Quebec City?

    Mr. Michael Murphy: On the specifics of what we have seen announced or discussed, no, we don't. I think if you look at the prospects, and as I just tried to iterate here, our view is very much that infrastructure, as part of the national transportation system in Canada, which is so fundamentally important to economic development, really needs to be done on a multi-modal basis.

    I mentioned cost-benefit analyses, a strong feature in terms of deciding what are your principles in terms of developing that kind of strategy for the country. If you look at all of the elements of the system...and we have, in our membership, all of those elements. We have virtually all of the types of shippers, and of course we have communities represented through our local chambers across the country. All of the modes are very much on the minds of our members, and I think there's an opportunity to do something right here by doing it in a coordinated way.

    So to the specifics of one individual proposal, we don't have a view on that. We wouldn't have a view on any individual proposal that anybody in the sector would put forward.

    Mr. James Moore: That's fine.

    Thank you.

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

    Mr. Laframboise.

[Translation]

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

    It's understandable that you want a national, comprehensive, intermodal and adaptable plan. Do you feel enough studies have been done and that now is the time to put forward a long-term investment plan?

[English]

    Mr. Michael Murphy: I think it's the desire of our membership across the country to get on with the job. I don't think there's any doubt about that.

    Do we have all of the studies done in every single aspect of the transportation system to be able to determine the right decisions in terms of where we're going to spend our money? That is still open to question. One example we use is related to the trans-Canada system. Where we have locations in the country where the Trans-Canada Highway is ultimately the only aspect for inter-city transportation, and where you end up in a situation where you might have, through winter conditions or an accident, a blockage in that single source of supply--if I can put it that way--of highway, we might need to do a little more study to figure out where are those strategic points in the country where twinning, for example, might be an obvious option.

    The other areas are going to require a strategic thought process to get you through to the point where you can ask, what is the best single mode to use in all of these circumstance? We have lots of potential for competition out there, which we firmly believe is a useful thing. As to whether we understand completely how each of the modes could service each one of the elements of the system today, I'm not quite sure we're all the way home on that.

º  (1620)  

[Translation]

    Mr. Mario Laframboise: Do your members feel that if money is not soon invested, our road network will continue to deteriorate in a major way? Do you sense that your members feel this way?

[English]

    Mr. Michael Murphy: Yes, in the sense that we have already identified the need for a coordinated infrastructure program, and part of the need is understanding the current state of condition of our infrastructure today. Is it adequate in all ways in terms of offering us the best opportunity for a competitive system? We don't think so.

    So I would answer your question by saying, yes, there clearly is an understanding that more needs to be done.

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

    Mr. O'Brien.

    Mr. Pat O'Brien: Thank you, Mr. Chairman.

    Mr. Murphy, thanks for your presentation.

    I have a couple of questions. On page 7 you say, “The federal government should not regard its investment in infrastructure as subsidizing a particular industry or mode”, but on page 8 you seem to talk about a dedicated tax when you say, “Funds should be directed towards the mode from which they were derived.”

    Aren't they at least a little bit in contradiction?

    Mr. Michael Murphy: No, I don't think so. First of all, let's understand the taxes that we're speaking about here in terms of excise taxes on fuel. I think we have very strong consensus among our membership that something needs to be done in either eliminating these kinds of taxes.... After all, they had an origin with respect to fighting deficits in Canada, something we obviously support. But there are other taxes we have managed to eliminate in Canada at the same time.

    So what we did was decide, well, if that would be the logical thing to do with taxes in that area, but we have a desperate need here for continuing investment in the development of a strategy to coordinate that investment, then in our case, the idea of putting forward some specific dollars associated with those taxes seemed like the right thing to do. Because what we're talking about is infrastructure spending. That is, we believe, one of the three or four most important things the government can spend its money on.

    So from that standpoint, we are very supportive of doing that, particularly as it relates to contributions toward enhancing productivity and competiveness in the economy. Infrastructure will do that.

    Mr. Pat O'Brien: Thank you.

    My second question relates to again page 8, where you talk about a fund that would operate for 10 years and mobilize municipal, provincial, and private sector capital. And then on the same page, at the end, you talk about a strategy recommendation for a “federal/provincial-territorial agreement”, but you are silent about a municipal contribution.

    Mr. Facette, in his presentation, mentioned the overwhelming acceptance of the infrastructure programs that this government has put forward. Some have worked a little better than others, in my view. And I think my colleagues would share that. I think the one that worked the best was the first one we offered--that is, a third, a third, a third--driven by municipalities and not dictated by provinces. I'd like to have your view on the one-third, one-third, one-third formula and where the priorities should be established.

    Frankly, it was my view that it was much more successful when it was municipally driven, but the provinces simply wouldn't go for that on the second project.

º  (1625)  

    Mr. Michael Murphy: Well, not to be too critical of the program that you strongly support, I think one of the concerns with the original infrastructure fund, if you go back to the mid-nineties, was the notion of what was a strategic investment. I think we could probably agree that not all of the dollars that went into that fund were invested in what I would term “strategic” investments. Some officials and others in various communities could define strategic in a lot of different ways. I think that's certainly a concern.

    However, at the broader level of saying “Do we need a multi-level government involvement here?”, absolutely, specifically when it comes to transit, for example. We believe transit is one of those areas that will make a contribution to productivity and competitiveness within urban areas in particular. We know where a lot of these congested urban areas are.

    So if you look at transit and the role that the municipalities are required to play there, there's no question they should be at the table.

    Mr. Pat O'Brien: Thank you.

    My last question is the same question I put to Mr. Facette, and I'd like to hear your perspective on it. Should the federal government, any federal government, bypass unwilling provinces, if you want to put it that way, and directly guarantee funding to municipalities for the infrastructure needs within those municipalities? I understand we're talking Trans-Canada Highway and so on as our major infrastructure, but roads are awfully important within a municipality itself, obviously.

    Is it the Chamber's view that we should fund municipalities directly and give them a predictable amount of money, or should we continue to work through the provinces, recalling of course that the municipalities are creatures of the provinces?

    Mr. Michael Murphy: Yes. I think your previous witness appearing here indicated that he wasn't a constitutional expert, and I certainly won't claim to be one either, but in terms of public policy I think there's a strong case to be made, as we say, very much to have governments working together. This is fundamental to the importance of the economies, not only of the country as a whole in our national system but of provincial governments as well and major cities. As you point out, of course, we're speaking today primarily about the national system here as a backbone.

    But from the standpoint of how municipalities should go about raising more money, I think a number of things can be done in terms of figuring out how to allow for cities to obtain more revenue sources. In our view, all of that would have to come from existing sources today. In other words, you're not just going to increase the tax burden on Canadians so that we now have another level of government that can access more taxpayers' dollars.

    I think there would have to be clear trade-offs here, and it's obvious those trade-offs would have to come in terms of discussions between municipalities and their provincial governments. I think that's the way that would have to go.

    Mr. Pat O'Brien: Thank you.

    The Vice-Chair (Mr. John Cannis): Thank you, Mr. O'Brien.

    We have Mr. Gallaway.

    Mr. Roger Gallaway (Sarnia—Lambton, Lib.): Thank you, Mr. Chair.

    I have but one question, or at least I think I have but one question. You've made a number of recommendations. I can't say that I disagree with any of them. But what we seem to be grappling with here is the business of.... We talk about a national highway system. We talk about a Trans-Canada Highway. You've introduced the concept of corridors.

    In light of the fact that the corridors in Ontario carry about 75% of all exports from this country, which is about $1 billion-plus a day, how does the federal government, if it were to one day wake up and have an infrastructure program, balance the rural demands and needs of road infrastructure with those of corridors, which are very vital to the economic lifeblood of the country?

    How do you apportion money to Ontario, for example, allegedly the richest province, for roads when we heard in this committee last week that there are requests from other provinces for, essentially, roads connecting municipalities?

º  (1630)  

    Mr. Michael Murphy: It's obviously a difficult question. You have finite resources here, obviously, and that's the big challenge when it comes to infrastructure.

    In terms of the last round, if you look at what happened from a federal standpoint, which I'm more familiar with than any particular provincial situation, $600 million was allocated specifically to do good work related to border infrastructure. And “border”, we have to be careful to understand, is not only the points at which you access by truck or by rail. It could be an airport. It could be any number of things. For most purposes, though, we have half a dozen major transfer points between ourselves and the U.S., for example.

    I think it was a good thing to kind of identify that, as opposed to putting together, say, $2.6 billion for an overall infrastructure program, that the government went a step further and said, “We'll do $2 billion here, but in that budget we're going to dedicate $600 million to border.” That may not be a bad model as long as we've come to a good understanding in the country of where the major pressure points are. Again, where's the return on the investment? In the case of border, I think you'd be hard-pressed not to agree.

    Mr. Roger Gallaway: Thank you.

    The Vice-Chair (Mr. John Cannis): I'd like to ask you a question or two, if I may. In your presentation you talked about a federal-provincial-territorial agreement on a long-term funding formula. As much as we share this specific area with the provinces, in the nine years or so since I've been here, since 1993, we've seen the federal government....

    For example, you see the cooperation in this committee. Historically we've worked together. An example was given today.

    One of the problems I have found--and maybe you can advise us how to overcome this--is that when we talk to the provinces they say they want to play ball, and then when we come to the ballpark, they start separating the team, and they renege.

    To be very blunt with you, given sometimes our funding for health in years past, from the National Forum on Health...and the money is given after that to the premiers, most recently. I don't trust the provinces that they're going to be diligent, that they're going to be cooperative, that they're going to say, “We're getting this money and it's going to go to highways.”

    When we, the feds, say, “Let's put some conditions here, thatx amount of money to address the needs of highway infrastructure will indeed go to that,” we've seen in the past that they've taken the money and want the feds to have no say in terms of its administration, its expenditures, and what have you. How do you see us overcoming this with the provinces?

    I'd like you also to explain to me your statement here: “...a broad range of private sector investment (acquisitions, partnerships, outsourcing)”. Can you just elaborate on that statement, on what can be done? It's a very nice statement. I think you're covering a lot, but maybe you can just break it down for us a little bit.

    Thank you.

    Mr. Michael Murphy: Okay. If the first one is how to make the country work better, that's a tough challenge.

    Let me just speak for a minute about accountability. It's a subject we speak about a lot within our organization. In terms of public expenditures, how do we understand that we are getting the best bang for the buck, if I can put that way, in all areas? We saw it, as you pointed out, highlighted significantly in the health care area recently.

    The model there is probably not a bad one in terms of trying to bring the right players together and reaching some kind of agreement that's going to benefit the people it's intended to benefit. In this case it's individual Canadians, it's shippers, it's carriers in the industry. That's the focus, I think, in terms of trying to do that.

    Now, whether that means specifically putting in accountability between levels of government, our preferred approach on this has been to have governments come together and agree that there should be accountability in terms of how this is going to work. The accountability can come back to...call it to the taxpayer, call it to the users, call it to whoever, in terms of “Why are you doing this? Why are we saying that this pot of money should be put together?”

    It's not necessarily the notion of saying, okay, here are dollars that are transferred to you from one level of government, and now we're going to look over your shoulder every day and figure out whether you're doing a good job. We want, as taxpayers, and I think in terms of business people across the country....

    To be frank, we look at federal-provincial discussions and say that no matter how you look at it, there's still only one taxpayer here. It's not as if we're somehow drawing money out of different places. It's all coming out of our own pockets. So we're the ones who are interested in the accountability and the idea that somehow it's more important to think about governments looking one at the other in terms of accountability.

    I think from our standpoint it's really important to make sure that we get the right players in the room and come up with a strategy here. This is not going to be a simple one- or two-budget kind of item that will require a quick fix. This is not a matter of tweaking at the edges. I think we need a fundamental change here in terms of how we go about doing infrastructure. We've seen the model in the U.S. and we've seen it elsewhere.

    So I would answer your first question that way.

    On the second element, in terms of public-private partnerships, as you're bringing the players together to develop this kind of an approach, whether or not you even go to some sort of agency developed to handle infrastructure--and we certainly have looked at that as a possibility--who has a role in there? We have evidence of private players and....

    Maybe I'll start at the beginning in terms of how we do infrastructure in the country broadly. In other sectors of the economy the private sector plays a huge role. You can think about telecommunications, you can think about other areas of infrastructure, and the private sector is investing a lot of money. That's true in transportation as well. There are clearly sectors within transportation where the private sector is making significant investments.

    Historically, I think we've been looking at the highway system as one that has been a publicly funded infrastructure. I think our thought process here is to say that we should look at all of the options, because this is just too fundamentally important to say, well, just because we've done it one way historically that's all we should be looking at on a going-forward basis.

    So from our standpoint, on the opportunity to create the potential for the right environment for these kinds of partnerships, I don't know if we've explored that enough.

º  (1635)  

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

    Are there any other questions?

    Thank you very much. We appreciate it.

    Our next presenters, colleagues, from the Department of Transport, are Guylaine Roy, director general, surface transportation policy, and John Forster, director general, surface programs and divestiture.

    Welcome to the committee. The floor is yours.

[Translation]

    Mrs. Guylaine Roy (Director General, Surface Transportation Policy, Department of Transport): Thank you very much, Mr. Chairman.

    My name is Guylaine Roy and I'm the Director General of Surface Transportation Policy for Transport Canada. With me is my colleague John Forster, Director General, Surface Programs.

    It is a pleasure for us to provide information on Transport Canada's highway policy and programs. I understand that we have 10 minutes for our opening remarks and 30 minutes for questions.

    Let me start by providing a brief overview of Canada's highways. I believe you have a copy of our presentation in both languages.

[English]

    Canada has a vast network of more than 1.4 million kilometres of roads. While most of these are urban streets or local rural roads, approximately 215,000 kilometres are highways.

    The economic importance of our roads is undeniable. For example, 70% of manufactured goods for the domestic market are carried by trucks. As well, in 2001 over $1.5 billion of trade crossed the Canada-U.S. border every day. More than 65% of that trade is carried by trucks. From 1997 to 2000, Canada's exports to the U.S. grew at an annual rate of more than 13%.

    Canada's highway network also plays an important role in our social fabric, linking our rural regions and providing Canadians with access to jobs, education, and health care.

    You are aware that for the most part in Canada, highways fall under provincial and territorial jurisdiction. Provincial and territorial governments are therefore responsible for the design, construction, financing, and safety of most highways. This includes routes that comprise the Trans-Canada Highway and the national highway system.

    These are the two key designations used in Canada to describe our important highway assets. I think it would be useful to spend a few moments to explain what they mean.

    As you may be aware, Parliament enacted the Trans-Canada Highway Act in 1949 to implement a cost-shared initiative with provinces to build a two-lane highway from St. John's, Newfoundland, to Victoria, B.C. That project was completed in 1971. Its total distance was over 7,600 kilometres. Since then, provinces have designated additional highways as segments of the Trans-Canada Highway. Such designations have increased the Trans-Canada Highway by over 4,800 kilometres.

    In September 1977, the council of ministers responsible for transportation recognized the potentially detrimental implications for national trade and travel resulting from the state of highway infrastructure in Canada. The council sponsored a national policy study for Canada, which among other goals would establish future needs and define standards for the Canadian primary highway system.

    In 1988 a national highway system was identified and endorsed by the council of transportation ministers. It comprises 24,400 kilometres of the most important interprovincial and international linkages within the existing network of highways.

    I understand that you also have as a handout the map of NHS and Trans-Canada Highway and a brief description of the NHS and the Trans-Canada Highway. We've included the precise criteria used to identify the national highway system.

    While the system represented less than 3% of the total network, it was estimated that over 25% of all highway travel in Canada takes place on the national highway system. Any changes to the current definition of the national highway system requires the approval of the council of transportation ministers.

    Federal ownership of highways is mostly related to highways through national parks--the Alaska highway in northern British Columbia and key bridges, such as the Jacques Cartier and Champlain bridges in Montreal, the Blue Water Bridge in Sarnia, and the Confederation Bridge to P.E.I.

º  (1640)  

[Translation]

    The federal government has contributed to highway funding through a series of cost-shared contribution programs with the provinces and territories over the past 80 years. This has been for a variety of reasons. More recently, the federal government has been concerned with the condition of the national highway system and its ability to handle the increasing volume of traffic.

    The 1997 National Highway System Update Study, prepared as you know by representatives from the provinces, two territories and Transport Canada, estimates the infrastructure needs for the NHS, including resurfacing and additional capacity, at over $17 billion.

    Given our limited resources, the federal government has decided that highway funding programs should focus on the bottlenecks and safety issues associated with the National Highway System, as well as easing congestion at our borders and the deployment of intelligent transportation technologies to improve safety and efficiency.

    Over the years, proponents of increased federal spending on highways have advocated the dedication of a portion of the federal fuel tax revenues for transportation infrastructure, such as is the case in the United States. However, it is the Government of Canada's policy that all revenues from the federal excise fuel taxes, as with other taxes, become part of the Consolidated Revenue Fund.

[English]

    Over to you, John.

    Mr. John Forster (Director General, Surface Programs and Divestiture, Department of Transport): The federal government's support to provinces and territories to help build their highway systems has been enhanced in recent budgets. In 2000 the government announced $2.6 billion in new infrastructure funding, $600 million of which was for a strategic highway infrastructure program, known as SHIP.

    SHIP was announced by Minister Collenette in 2001. Under SHIP, $500 million goes to the provinces and territories for highway construction on the national highway system. Each jurisdiction is given a minimum allocation of $4 million and the balance is then allocated based on population.

    To date, 11 of the 13 agreements have been signed--Quebec and Ontario have not yet signed their SHIP agreements--and more than 32 projects worth over $300 million have been announced.

    Under SHIP we've also allocated $70 million for border projects and planning studies. Three projects have been announced--at Lacolle, Quebec, the lower mainland of British Columbia, and improvements to Huron Church Road in Windsor.

    The third component of SHIP is a $30 million program to deploy new technology known as “intelligent” transportations systems.

    Transportation is also eligible under two new infrastructure funds announced in the December 2001 budget--the $2 billion Canadian strategic infrastructure fund, or CSIF, and the $600 million border infrastructure fund, or BIF. These two new programs are under the responsibility of Minister Rock, but Transport Canada works very closely with Infrastructure Canada and will deliver the transportation projects under these programs.

    The strategic fund supports very large strategic projects. They include highways on or linked with the national highway system, and rail, but also tourism, water, sewage, and broadband. There is not a province-by-province allocation of these funds, but the projects reflect key federal, provincial, and local priorities and can involve public and private sector funding.

    To date, three transportation projects have been announced under CSIF--a $400 million investment to twin the Trans-Canada in New Brunswick; a $525 million project to twin Highway 175 between Quebec and Chicoutimi; and $150 million to start the Autoroute 30 bypass south of Montreal.

    The $600 million border fund will support projects at Canada's key border crossings to reduce congestion, expand capacity, and increase security. To date, one project has been announced. The Prime Minister and the Premier of Ontario announced up to $300 million in joint funding to improve Canada's busiest crossing at Windsor, and we are working with Infrastructure Canada to identify further projects for funding under the border fund.

    In addition, there are other older programs within the federal government that fund highway infrastructure. These include such things as the prairie grain program in Saskatchewan, managed by agriculture, and older programs that are winding up--for example, when the freight subsidy in Atlantic Canada was removed.

    In summary, although highways aren't a provincial and territorial jurisdiction, the federal government has, from time to time over the last 80 years, assisted provinces to build their highway systems. In the last two budgets, the government has announced over $5 billion in new infrastructure funding, which can support highway and road projects. We're working with Infrastructure Canada to identify additional transportation projects for these funds. I would expect also the private sector will play a greater role in the financing and building of major transportation projects in the future.

    Infrastructure continues to be an important federal priority. In the Speech from the Throne, the government announced its intention to launch a new 10-year infrastructure program. Like all of you, we will await tomorrow's budget to discover how this program will begin to unfold.

    Thank you, Mr. Chairman. We'd be happy to try to answer any questions.

º  (1645)  

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

    Before we go to questions, there's an announcement I would like to make. We've been notified that the Minister of Transport has confirmed that he will appear before the committee on Wednesday, February 26, from 3:30 p.m. to 5 p.m.

    We'll now go to questions, beginning with Mr. Moore.

    Mr. James Moore: Thanks to you both for appearing here today. I very much appreciate it.

    I have two questions. First, there were plans floated in the summer about the idea of twinning the Trans-Canada Highway from coast to coast. Were actual plans drawn up by your department on the request of the Minister of Transport, and was there any estimation as to how much that would cost?

º  (1650)  

    Mr. John Forster: We have not done any sort of formal study of the cost of twinning the Trans-Canada Highway, and neither were we requested to do so by the Minister of Transport.

    Mr. James Moore: A second question is that, as you say, if you include everything, about 95% of all roads, streets, and so on that are driven on by Canadians are engineered, built, and maintained by provinces and municipalities. Obviously there are places--for instance, Huron Church Road and the Peace Arch border crossing--where the feeders that are engineered, built, and maintained by the provinces and municipalities are inadequate.

    Can you tell us which communities, which provinces, are doing the poorest job of linking up the federally built border crossings with the provincial highways?

    Mrs. Guylaine Roy: Well, we're not in a position to comment on the competency of municipalities. When we're asked to work with municipalities and provincial officials, we always work in a spirit of collaboration and we always find that everybody is very professional.

    Mr. James Moore: And you won't collaborate with the committee, then.

    Mrs. Guylaine Roy: When we work with officials we assume that they are competent people, that they know their network and their municipalities. If we go and work with colleagues from the Province of Quebec on a project in Montreal, very often we have to work in collaboration with, say, the city or the province.

    So there are lots of competent people in various organizations, and we work with these officials.

    Mr. James Moore: Fair enough, but certainly there are border crossings where there are more problems than there are others in terms of linking national highway and broad highway infrastructure and then going through smaller and medium-sized communities in order to keep our borders flowing effectively. Some border crossings are more effective than others. Which ones are the least effective?

    Mrs. Guylaine Roy: Let's take the very obvious example of Windsor. A very high volume goes through the city of Windsor. There's a big challenge there, with many trucks crossing every day and going through the city of Windsor. So this is a big challenge. In a smaller crossing you don't have a border crossing right close to a municipality.

    So if you take the example of Windsor, it's quite a challenge to handle that volume going through municipal roads. If you take a smaller border crossing that's not close to a big city, then the challenge is different.

    I would say that every border crossing has its own challenges. Obviously if you have bridges you're more constrained in terms of the crossing than if you have a land border crossing, where you have more space if you need to expand, for example. So every one of them has its own challenges, I would say.

    Mr. James Moore: Okay.

    That's it.

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

    Monsieur Laframbroise, s'il vous plaît.

[Translation]

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

    A number of presenters have emphasized to us the importance of Canada developing a national highway infrastructure plan, as is done in other industrialized nations. Canada would be the last country to institute a national highway infrastructure plan. If we were to recommend such a plan, would you have the required studies in hand to prove that the government should go forward with this initiative?

    Mrs. Guylaine Roy: Let's focus for a moment on the current $600 million Strategic Highway Infrastructure Program administered by Transport Canada and the Canada Infrastructure Program under Mr. Rock's direction. When parties bid on transportation infrastructure projects such as highways, the provinces forward the data or information they have to us so that we can evaluate the proposal. In Canada, data on highways is compiled by the provinces, as most highways come under provincial jurisdiction. For example, when a province submits a specific highway project proposal to the federal government, it usually has the information it needs.

    Some projects are more complex than others. Have all the required studies been done? In some cases, we may have the data we need, but other projects may be more complex.

º  (1655)  

    Mr. Mario Laframboise: I'm not asking you a question about any one project in particular. I'm talking about the need to have a national plan in place. For years now, you've been doing studies and concluding, among other things, that the road network is deteriorating. Several committees have also been struck.

    I agree with those who feel Canada must institute a national highway infrastructure plan. Such a plan could have several components, including a border infrastructure component. It would likely encompass and improve upon existing programs. Do you have everything you need to demonstrate to Canadians that the time for a national highway investment strategy is now, failing which the road network will deteriorate to the point where it will be difficult to come up with the funds required for network repairs?

    Mrs. Guylaine Roy: The 1998 study that has been discussed at some length calls for an investment of $17 billion in the National Highway System. This study was sponsored by the federal and provincial governments. Subsequently a specific $600 million program was announced by Transport Canada.

    The federal government is slowly waking up to the nation's infrastructure requirements. For example, in 2001, a $2 billion program for highways, local transportation and so forth was announced.

    The federal government has also recognized the need for border infrastructure projects, announcing a planned allocation of $600 million. In the last Throne Speech, the government also announced a 10-year program targeting all transportation infrastructures. The government, through Transport Canada, is gradually taking steps to address infrastructure requirements. It has committed to a 10-year program.

    At this time, I'd like to focus on some of the comments made by the other witnesses. With respect to transportation, we're looking at highways as well as public transportation needs. We're looking at different areas not necessarily related to highways.

    Summing up, studies have been done, various programs have been implemented and the federal government has committed to a 10-year program. Therefore, in my view, considerable progress has been made in resolving infrastructure problems, and that includes transportation infrastructures.

    Mr. Mario Laframboise: The $2 billion Canada Infrastructure Program is not necessarily tied to the National Highway System. The government could choose, among other things, to invest in a road or highway linked to the NHS, but is not under any obligation to do so. Under the Infrastructure Canada Program, the road or highway doesn't necessarily need to be a component of the NHS. If it wants, the government could decide to invest in a roadway that is not part of the NHS.

    Mrs. Guylaine Roy: I'd like to make a small correction. The program you spoke of is worth $2 billion and is administered by Industry Minister Rock. Under the program's “highways” component, the highway must be part of the National Highway System. This is also a requirement of Mr. Rock's program, but mention is also made of highways linking with the NHS. Basically, the program is very similar to the $600 million program administered by Transport Canada.

    Mr. Mario Laframboise: The two programs are similar, but not identical.

    Mrs. Guylaine Roy: As far as highways are concerned.

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

[English]

    Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chair.

[Translation]

    Welcome, Mrs. Roy and Mr. Forster, to our committee.

    I'd like to go back to a question raised earlier by Mr. Laframboise. I'm trying to get my head around the $600 highway infrastructure program that is included in the $2.6 billion quoted.

    Mr. Laframboise put a question to you and your response was somewhat shaded. You stated that the road in question had to be either part of the NHS or linked to it. Did I understand you correctly?

    Let me give you an example. Mr. Laframboise and I want to be blunt about this. It's no secret that the highway we're interested in is Highway 50. Unfortunately, Highway 50 is not included in the Quebec government's list of priorities. Given that Highway 50 is not covered by the NHS agreement, would this highway be eligible under the $2.6 billion highway infrastructure program? That's the question Mr. Laframboise really wanted to ask you.

»  (1700)  

    Mr. John Forster: Highway 50 is not eligible under the Transport Canada program. The criteria are the same as those in place for the Infrastructure Canada Program. It's possible to build very short segments of highway. The idea is to

[English]

small links to and from the national highway system, as eligible under the fund.

[Translation]

    For example, Highway 30 in Montreal branches off from a section of the National Highway System and links up with another section of the NHS. It bypasses the major cities. All of these links are eligible for program funding.

    Mr. Marcel Proulx: Therefore, am I to understand from your explanation that Highway 50 is not eligible because it is not part of the NHS?

    Mr. John Forster: That's correct.

    Mr. Marcel Proulx: Moving on to another question, what's stopping the Quebec government from including Highway 50 or any other highway in its list of NHS priorities?

    Mrs. Guylaine Roy: Are you asking us to venture a guess as to why the province of Quebec is not saying it wants Highway 50 to be considered part of the NHS?

    Mr. Marcel Proulx: Highway 50 or some of the other highways.

    Mrs. Guylaine Roy: As I mentioned in my opening remarks, members of the Council of Ministers responsible for transportation and highway safety agreed on which segments would comprise the National Highway System. They agreed that if a province wanted some changes made, it would have to make a submission to the Council and that unanimity would be required if any segments were to be added to the NHS.

    As I stated earlier, a province that wants to have a segment added to the NHS may present its case to the Council of Ministers, and then await a response.

    Mr. Marcel Proulx: As I understand it then, Quebec could ask that Highway 50 be included in the NHS. Clearly, this agreement includes criteria that apply to roads. You've listed the criteria for routes that comprise the NHS and the Trans-Canada Highway. One criteria stipulates the following: “[...] route that provides for interprovincial trade or travel...”. These routes must also be connected with “another transportation mode served directly by the highway mode.”

    Therefore, given Mirabel's status as an international airport for cargo shipments, shouldn't Highway 50 be eligible under this agreement?

    Mrs. Guylaine Roy: As I said, the province of Quebec could make its case to the Council of Ministers responsible for transportation and highway safety. The Council meets every fall. The province could submit a request at this time and it would be reviewed by the provinces and the federal government.

    Mr. Marcel Proulx: In fact, if I'm not mistaken, rumour has it that another province intends to propose changes to its priority lists at the next meeting of the Council of Transportation Ministers. If memory serves me well, that meeting is slated for this fall. No doubt you've heard this rumour too.

    The federal government didn't just invent a process for changing or improving the agreement. The actual agreement spells out this process and everyone knows that. All of the provinces know full well that the agreement can be modified.

    Thank you, Madam. Thank you, Sir.

    Thank you, Mr. Chairman.

[English]

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

    Ms. Frulla.

[Translation]

    Ms. Liza Frulla: Thank you, Mr. Chairman.

    Mrs. Roy, you stated that a $600 million highway program, namely the Strategic Highway Infrastructure Program, was announced by the minister in 2001. Quebec and Ontario have not yet signed their SHIP agreements. Can you tell us why they have yet to do so?

»  (1705)  

    Mr. John Forster: I can answer that question. Last year, we concluded our negotiations with Ontario. The provincial Transportation Minister subsequently submitted the terms of the agreement and program that had been negotiated to his Cabinet. For some reason, it rejected the agreement. I have no idea why. We are still waiting on the province to resume our talks.

    We concluded a SHIP agreement with Quebec for the project in Lacolle, under the border projects program. An agreement was signed between the Quebec government and Minister Collenette.

    As part of the broader agreement, $108 million was announced for highway projects in Quebec. We discussed a number of components of a draft agreement. In my view, we resolved 90 per cent of the outstanding issues. Quebec subsequently decided to wait a little to negotiate under the other programs, namely the SHIP program and the border program, with a view to determining under which program other projects could be funded. That way, it would have a better idea of the projects it wished to propose for funding under the federal SHIP program.

    Therefore, we're waiting on Quebec and Ontario. We're ready to sign agreements with these two parties as early as tomorrow.

    Ms. Liza Frulla: Most of the witnesses who have spoken -- and I've heard from fewer of them than my colleagues since I only just arrived -- have lamented the sorry state of our highway network. Mention has been made of a more stable source of funding than currently available under certain programs. We're dealing with a hodge-podge of programs, such as SHIP, Minister Rock's program, border projects and technical projects.

    Given your experience with program funding, would you say it's preferable to have a stable funding source for maintaining the network in good repair, one that would of course involve the provinces and municipalities? Funding would not be dependent then on programs or subject to economic conditions. People are saying that our highway network has been falling into disrepair for years now.

    Mrs. Guylaine Roy: In 1999 and 2000, Minister Collenette often said that it was critically important to invest in the National Highway System. He was responding to a 1998 study that concluded an investment of $17 billion was needed. He worked diligently to secure additional funds for highways. Subsequently, $600 million in funding was announced in the 2000 budget. As you mentioned, another program, this one sponsored by Mr. Rock, was announced in 2001 and the government committed to a 10-year infrastructure program. Gradually, the government is acknowledging the need for infrastructures and investments over the longer term.

    The program announced by Mr. Collenette in 2000 covered a period of five years. The 2001 program sponsored by Mr. Rock also extended over five years, although the commitment was for ten years. To my knowledge, there haven't been many 10-year infrastructure programs. This substantial commitment was announced in the Throne Speech and we'll see what the budget contains. Therefore, the government is moving toward commitments for the longer term.

    As for the comment about a hodge-podge of programs, my sense is that the federal government has endeavoured, through SHIP, to concentrate its infrastructure funding on highways, on public transportation, and in some respects, to consolidate its efforts through the SHIP program administered by Mr. Rock. Obviously, a number of programs are still in place, a $600 million program for highways, and another that also applies to highways. The aim is for both departments to conclude an agreement to work together. Progress is being made on this front. The deputy ministers and ministers are working together to develop a concerted approach to this issue. I don't know whether I've actually answered your question.

»  (1710)  

    Ms. Liza Frulla: Nonetheless, a great many people are involved in this issue. Ministers are working together to develop a concerted approach, deputy ministers are working together, as are the various provinces, and the municipalities. That's a lot of discussions about a network that, according to stakeholders, is deteriorating rapidly.

    Mrs. Guylaine Roy: I agree that there are many stakeholders. As I said, the government is endeavouring to strike a balance of sorts between investments in highways and investments in public transportation systems. The key to all of this is cooperation between the...

    Ms. Liza Frulla: Efforts are being made to set up a common fund, but we're dealing with two different sectors. For example, there's the case of the Montreal Metro which needs to be updated. That may also be true of the Toronto subway system. They will surely be seeking funds for this purpose. Is it a good idea to have a common fund? Wouldn't it be preferable to have separate programs for highway infrastructures and for public transportation systems? This would give us a better idea of needs.

    Mrs. Guylaine Roy: I can't really comment on what the government has decided to do.

    Ms. Liza Frulla: No, but in an ideal world?

    Mrs. Guylaine Roy: Nonetheless, this balances out investment in the transportation sector. The provinces have to decide if they want to invest in transportation. They must discuss priorities. Public transportation can be one such priority. Another could be investing in rail transportation. A broad range of areas can be considered. I admit that is more complex, but it gives us an overview of the entire sector. For example, should we be investing an multimodal facilities? This allows us to develop a more strategic approach, but it further complicates the issue because funding is not broken down by program.

    Ms. Liza Frulla: Thank you.

[English]

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

    We have Mr. Gallaway first, Mr. Proulx afterwards, and we'll close with Mr. Laframboise.

    Mr. Gallaway.

    Mr. Roger Gallaway: Thank you, Mr. Chair.

    I have that one question again.

    Mr. Forster, you make reference to the border infrastructure program, and you make reference to the moneys announced for the Windsor crossing, although no money has actually been expended there yet. It's just simply an announcement regarding the parameters.

    I'm totally selfish; I come from Sarnia, which you visited last week, and I'm wondering what you foresee--I mean, this money is now 14 months old, being announced in the December 2001 budget--in terms of actual projects getting up and running when there are in fact willing partners, willing municipalities, and there's consensus within a community to deal with a problem and how that problem should be addressed.

    Mr. John Forster: Yes, we had a very good meeting in Sarnia last week with the bridge and the village and the city and the Chamber of Commerce. They laid out a range of projects for us to consider. We were there with Infrastructure Canada and a member from Mr. Rock's staff.

    We are in the process of doing a similar meeting at the other key crossings in Ontario. We've had one at Niagara and we will do another one at Fort Erie as well. And I think then we'll be able to sit down with the infrastructure office and Ontario and say, “Right, for Ontario”--outside of Windsor, which has been announced--“what makes sense and what are the priorities?”

    I think it certainly helps...and I don't think it was lost on anyone that it's very refreshing to walk into a community where there is such consensus on what needs to be done. It makes everybody's job a lot easier. For us, it's a question of finishing our trips to the other border crossings and looking at what needs to be done there as well.

    So I would hope, then, with Ontario we'll be able to announce what projects can be done and get on with it.

    Border projects are difficult in themselves just because there are so many players. And it's even worse on the United States' side than Canada's side because they have so many more agencies. They're a bit tricky in terms of lining up, not just the province but the city, and you have customs and immigration and all the border agencies to discuss as well.

»  (1715)  

    Mr. Roger Gallaway: Okay, thank you.

    The Vice-Chair (Mr. John Cannis): Monsieur Laframboise, s'il vous plaît.

[Translation]

    Mr. Mario Laframboise: I have a question concerning Highway 50.

    There's always a catch when you deal with the Liberal Party. Mr. Chevrette tabled five memoranda of understanding when the SHIP program was announced. Highway 50 was included in the five memoranda of understanding. There was no response from the then Minister of Transport. The latter did not say that Highway 50 was ineligible under the program. As you know, the federal government covered the cost of half of the 35 kilometres of this highway that have already been constructed. Two segments of Highway 50 have already been built, with the federal government picking up its share of the tab.

    I find it odd to hear you say today that Highway 50 has not been a priority for the province, whereas as you know very well, the province tabled a memoranda of understanding for the construction of this highway and the federal government has already paid for half of the 35 kilometres of roadway that have been laid. You maintain that Highway 50 is not part of or is not linked to the NHS.

    I find it odd to hear you say that Highway 50 is not a priority, when in fact the federal government has already paid for half of the 35 kilometres already built. I'm amazed.

    Mr. John Forster: Mr. Chevrette did indeed submit proposals for five major projects. That was prior to the 2001 budget. All that was in place at the time was the SHIP program, the $600 million Transport Canada program.

    Mr. Mario Laframboise: No, it was after the budget. I have here a letter. The announcement came after the budget, that is on December 18, 2001.

    Mr. John Forster: The proposal was made around the same time, in December 2001. At the time, it was felt that it was important to wait and see how the SHIP program would work. Discussions have since been held and the Premier of Quebec and Prime Minister of Canada have agreed on certain priorities within the framework of the Canada Strategic Infrastructure Fund. The first priority is Highway 175, and the second, Highway 30, but not necessarily in that order. These two projects were given priority by the two levels of government. Quebec has submitted project proposals for Highway 185 and for other routes in Quebec. At the time, there was only enough funding for routes 175 and 30. Over the next ten years, consideration can be given to projects involving Highway 50, but for now, this road is not eligible for funding under any existing program. It's difficult for us therefore to approve the request for funds.

    Mr. Mario Laframboise: That's because funding is in short supply, and I can understand that. Moreover, that explains why earlier, we wondered why the Quebec government hadn't submitted...Money is the problem. As far as the NHS is concerned, it could submit a proposal for Quebec's remaining $105 or $108 million. It would take only 10 minutes to draft the request and spend the money. However, there isn't enough funding available to satisfy all of the requests.

    Mr. John Forster: It should also be noted that the project proposed by Mr. Chevrette was fairly important. Five major project proposals were submitted and there is not enough funding available under the two programs to carry out the five projects.

    Mrs. Guylaine Roy: I'd just like to add something.

    You state that Minister Chevrette had put forward proposals which included projects for Highway 50. In the case of Transport Canada's Strategic Highway Infrastructure Program, one of the criteria for funding eligibility is that the route must be part of, or linked to, the National Highway System. When Mr. Chevrette submitted his request in December 2001, the parameters of the program administered by Mr. Rock's department had yet to be announced. Minister Chevrette submitted a proposal for Highway 50, but as I said, to be eligible for funding under Mr. Rock's program, the highway in question must be part of, or as John mentioned, linked with the NHS.

    You stated that Mr. Chevrette submitted a project proposal. It could be that when he submitted the proposal, the parameters of the program administered by Mr. Rock had not yet been announced. While the program was in fact announced in the budget, the details were not unveiled until later.

»  (1720)  

    Mr. Mario Laframboise: You seem to be very familiar with this issue. Why then did the federal government pick up the tab for 35 kilometres of Highway 50?

    Mrs. Guylaine Roy: John will be able to provide additional details. The expenditure was incurred under a former Transport Canada program. When the request for funding for Highway 50 was made, Transport Canada's Strategic Highway Infrastructure Program was in place and one of the program criteria stipulated that the highway must be part of the National Highway System. As I mentioned earlier, a study conducted in 1998 estimated infrastructure needs for the NHS at $17 billion. When Transport Canada unveiled its $600 million program, it was agreed that the funds should be invested in the NHS. This explains why, when Transport Canada's $600 million program was announced in 2000, this eligibility criterion was included. The needs associated with the NHS were so extensive that the criterion was put in place for the $600 million in question, and the eligibility criterion was also extended to Mr. Rock's program.

    Mr. Mario Laframboise: I'd like to draw your attention to the words “or linked with”. I consider that Highway 50 falls in this category, but you're entitled to think otherwise.

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

    Mr. Proulx.

    Mr. Marcel Proulx: Thank you, Mr. Chairman.

    I'd like to recount a brief bit of history, because I wouldn't want my colleague Mr. Laframboise to leave here with the wrong impression.

    Half of the cost of the western portion of Highway 50, which starts in Hull on land owned by the National Capital Commission, was covered under another program stemming from the Outaouais highway network agreement concluded between the Quebec and federal governments in 1972. The agreement covered not only Highway 50, but Highway 5, La Vérendrye boulevard, and so forth. The federal government invested a substantial sum of money in the Quebec Outaouais, including the 25 or 30 kilometres of roadway between Hull and Buckingham--Masson.

    Could you explain why the federal government also paid for part of the far eastern section of highway 50? I assume the federal government covered 50% of the cost.

    Mr. John Forster: The eastern section of the highway was constructed under two programs. Several kilometres were built as part of the required infrastructure for Mirabel airport while several other kilometres were constructed under the former highway agreement concluded with Quebec in the early 1990s. That was the program preceding SHIP. When SHIP was announced, new criteria were developed, as Guylaine mentioned.

    Mr. Marcel Proulx: Thank you. Merci, monsieur le président.

[English]

    The Vice-Chair (Mr. John Cannis): That ends this round. I don't have any questions. The questions I had have been addressed.

    We'd like to thank you very much for being here with us today. We appreciate your time. Merci.

    We have some business to take care of, and for that we will go in camera.

    [Proceedings continue in camera]