Hon. Donald J. Johnston (Minister of State for Economic Development and Minister of State for Science and Technology):
Mr. Speaker, it is my purpose at this point in the debate to draw the attention of the Members of this House to the importance of this initiative to Canada's economic development as a whole and to regional development.
Canada, as we know, has always been a country of regional particularities and it is the stronger for that. Economically strong regions in association and in co-operation mutually benefit each other, and also, of course, benefit the whole country.
Together with the budget measures announced recently by the Minister of Finance (Mr. Lalonde), the transportation plan will be one of the main driving forces of our economic recovery today. In addition, and this will be more important in the long run, it will help provide a stimulus for economic development in the years to come. Among all the measures taken by the Government to promote economic recovery and development, the western transportation measure certainly is one of its most important initiatives. Although basically aimed at strengthening the agricultural and transportation sectors of our economy, it also constitutes a multifacetted and long-term measure that will have a positive and durable impact on many other sectors of our economy. It is therefore a vital part of the Government's general strategy for getting Canada out of the worldwide economic recession.
Agriculture and transportation are two of the principal pillars of the Canadian economy. Agricultural production,
traditionally an economic mainstay, now generates 16 per cent of the Gross National Product. It accounts for 10 per cent of Canada's total exports. The efficiency and hard work of Canada's farmers has contributed greatly to our export earnings and contributed also to a situation in which Canadians spend a smaller proportion of their incomes on food than is the case in most other countries. Canadians spend on average less than 17 per cent of their incomes on food, second only to the United States in the entire world.
The transportation sector is equally important. Without a sound, efficient and reliable method of moving Canada's products to markets within the nation and from there to world markets, our country's position as one of the world's great trading nations would be severely undermined.
It is a historical fact and a fact of some interest that many of the early European explorers came here not so much to find Canada as to find a way around Canada, that is, in search of the Northwest Passage to China and the Orient, in pursuit of trade and of commerce. They failed in that endeavour, or so they thought. But when the first transcontinental passenger train reached Vancouver in 1887, it seemed to many at the time to be at long last the realization of the dreams of those early explorers. The fabled passage had been found, with the added benefit of the riches of a new land to be worked and husbanded. That it was achieved through a combination of water and rail transport rather than through water alone was a matter of minor moment. The important fact was that the great nation-building link had been established at last.
What we are seeking today, some 95 years later, with the western transportation initiative is to achieve a modernization of those passageways of commerce. The goals are the same as they were for the railway builders of the nineteenth century- the furtherance of nation building and the expansion of commerce, both goals in the interest of all Canadians wherever they live and whatever the livelihood they pursue.
The construction of the western railway system was, as I said, both in the interests of commerce and of nation building. Indeed, it was part of the Confederation bargain, necessary for the settlement of the West and for moving its products to markets. Likewise the establishment of the Crow rate in 1897 in return for the building of a new line allowed settlers' goods into the West and grain out at low freight rates. It served its purpose well in its time. But as other speakers have indicated,
May 16, 1983
Western Grain Transportation Act
another major new adjustment is now necessary, in large measure to free the new Canadian West from the constraints and distortions caused by the old rate structure. The western transportation initiative is, therefore, nothing less than a major new phase of Canada's development, which, like many other phases before it, will benefit not only the new West but the nation as a whole.
The general economic benefits of the initiative can be discussed under at least two headings. One consists of those benefits which will flow from the construction activity itself which will be felt over the short and medium term. The other set of benefits, eventually more important for our children and grandchildren, will be the modernization of the transportation system which will contribute to making the Canadian economy much more fit to meet the economic challenges of the twenty-first century.
Let me deal first with the short and medium-term effects. In the short term the initiative means that thousands of construction jobs can be started up almost immediately-laying the rails, building the bridges and tunneling the mountains. This is indeed already under way as a result of interim financial assistance to the railways. There will be an immediate need for steel rail and wooden ties, providing useful work for the steelworkers and forest product workers, too many of whom have been idled by the world recession or forced into other occupations where their acquired skills are not now put to best use. From the wages paid out to them there will be an important multiplier effect which will be felt significantly by those who service these industries, especially in the steel and forest products communities that have been so devastated by the international recession.
But that is just a start. Over the coming decade, as the system is put in place and begins to show results, many sectors of the economy will be called upon to respond. Stronger agricultural production will require more farm machinery, fertilizer and other farm inputs and services. Manufacturers will be called upon to produce the rolling stock to move not only the increased agricultural products but other western resources and products, such as potash, petrochemicals and coal which can be moved confidently to world markets by a reliable transportation system. The railways will be equipping themselves with the most advanced communications, traffic control and safety systems, providing important new opportunities for our high technology industries.
The Government estimates that the $16.5 billion to be spent by the railways between 1983 and 1992 will lead directly and indirectly to $34.8 billion in industrial sales. We estimate that nearly 375,000 person-years of employment will be created during that period with a resulting labour income of $12.2 billion.
I may also add that during this decade, Canadian industry and Canadian workers and production teams in various
industrial sectors will upgrade their skills and develop new ones. Skills, that is, expertise and know-how in the field of new means of transportation and communications, will themselves be a marketable commodity to be exported to many other countries that are obliged to modernize their transportation network.
In this new era, knowledge and information are as valuable as material products, and skills will be a new and important asset to the future of our economy as a whole. However, as 1 said before, Canada is a country made of economic regions that complement and rely on each other, and as a result, we must also consider the many ways in which the economic spinoffs associated with the construction phase of the western transportation measure can be shared among Canada's various regions.
As the Minister of State for Economic Development and Minister of State for Science and Technology, I am particularly interested in this aspect. Although we are speaking of a western transportation measure, the scope of this project is such that all regions can expect to feel the impact on their respective economies.
The proposed distribution of spinoffs is equitable and has the additional advantage of being economically sound, in that it builds on the strength of each region so that all regions are able to contribute to a project that in the final instance, will benefit each and every one.
It is also because this is a western transportation initiative that it is appropriate that the new Canadian West should be the main focus of the economic activity generated by the project. The four Provinces of the West will, when taken together, absorb about 57 per cent of the economic stimulus provided by the anticipated $16.5 billion of expenditures over the next ten years. Over the same period more than 157,000 person-years of employment could be created in the four western Provinces with all the spin-off and ripple effects which, as I have already indicated, augmented payrolls bring in their wake.
British Columbia, with a projected share of one-third of the $16.5 billion to be invested by the railways, will be the main site of construction activity. The major challenge of doubletracking through the mountains will create thousands of contruction jobs. These will be supplemented by jobs created to upgrade terminals, expand existing and build new repair shops. The mining, metal fabrication and forest industries will be significantly affected. It is expected that the new economic activity associated with the western transportation initiative will generate 87,000 person-years in British Columbia alone.
The timely expansion of port facilities on the Pacific coast will ensure that British Columbia is properly poised to move the increased product that will be delivered on a modernized and improved railway system. The federal Government has contributed millions of dollars to the expansion of the bulk coal handling terminal at Roberts Bank in the Lower Mainland and
May 16, 1983
the Ridley Island grain and coal terminals near Prince Rupert. Work on the development of these superports is well under way.
Almost as many person-years, more than 70,000, will be brought into being in the three other Provinces of the Canadian West which will, of course, be the principal ultimate beneficiaries of the initiative as a whole. About one-quarter of the funds to be spent by the railways over the years 1983 to 1992 will be spent, we estimate, in Alberta, Saskatchewan and Manitoba. Alberta's share alone should amount to $2.7 billion. And the largest shares of these expenditures, by the way, should be in metal and wood fabrication, which can be expected to contribute to that diversification of the Alberta economy which is desired by Albertans in general. Manitoba and Saskatchewan will also receive equitable shares of the work to be done. Some 25,000 jobs will be created in these two Provinces in such projects as new repair facilities in Moose Jaw and Winnipeg. Again, as in British Columbia and throughout the nation, there will be related multiplier effects felt by other economic sectors.
The provinces in Central Canada-Ontario and Quebec- will also share in the economic activity resulting from the western transportation measure. We expect that 37 per cent of the $16.5 billion which the railway companies will be spending will go to Ontario and Quebec. In the short and medium term, the main impact on Ontario and Quebec will be the purchase of rails, rolling stock and locomotives. All this will be the result of an increase in railway capacity in Western Canada. Expenditures on transportation equipment in Ontario and in Quebec should account for 60 per cent of a total of over $6 billion that will be spent in these two provinces. During the decade, these expenditures, with those in other sectors, are expected to create 135,000 person-years in Ontario and about 60,000 in Quebec. At this point I would like to say that the entire western transportation measure will have no harmful effects on the distribution and routing of grain to Eastern Canada. Up to now, all major studies have shown that the grain transportation and handling industry will experience healthy growth and will continue to do so within the foreseeable future.
The cumulative economic impact on all four Atlantic Provinces could be 23,500 person-years, half a billion dollars in labour income and total industrial sales of $1.6 billion.
Those are some of the dry statistics of what I regard as the short and medium-term effects of the economic activity to be generated throughout the country by this most important new Government initiative. It is a plan, I believe, which allows all parts of the country to make significant contributions to this vital national project. It will strengthen all of the regions by building on their own strengths and existing natural advantages.
Western Grain Transportation Act
But I would be remiss if I did not also share with you some of my hopes and expectations about the way the western transportation initiative will strengthen the Canadian economy as a whole. This program is much, much more than a job-creation program although it is surely also that. The 375,000 person-years of work it will bring into being, which will be, as I have said, equitably distributed throughout the country, are an important element in the Government's program for Canadian economic recovery from the world-wide recession.
But the western transportation initiative is also an investment in Canada's future. In the first instance, to be sure, it is an investment in the long-term development of the new Canadian West. You have heard this before, of course, Mr. Speaker, but I assure you that it deserves repetition. The existing rate structure for western rail transport distorts the western Canadian economy and locks it unreasonably into patterns of the past, restricting its flexibility in responding to the challenges of the future. The deadhand of the past restrains the West from making the best use of its natural economic advantages. This is a loss not just to the West; it is a loss to us all.
Without an improved western transportation system, these distortions will continue to exist. As long as the existing rate structure remains, the West will be restricted in its ability to diversify its economy. There will be a disincentive to western Canadian farmers to diversify their production.
Western Canada has many other products that will be in growing demand on world markets as the recovery strengthens, presenting an opportunity for the rapid growth and development of the western economy. As always, the geography of Canada means western producers of all products, grain and non-grain, face a major challenge-getting their products to those world markets. Maintaining the Crow rate compounds the problem by leaving our competitive western producers at the end of an inadequate transportation system. The changes to the Crow provide the impetus and financial leverage required to put in place a transportation system that gives western Canada access to world markets and will enhance our image as a reliable, cost-competitive exporter.
The economic development of the entire west is at stake. And the development of the West on its own terms, utilizing its own economic opportunities, making its own economic decisions is something which can only benefit all Canadians.
Too often, economic issues are discussed as if participants were either winners or losers. That has never been, and should never be, the basic principle of our Canadian economic union. This union should be seen as an agreement under which all Canadians are winners within the context of a wise and properly administrated policy. The western transportation measures are one of those wise policies by which all Canadians stand to gain, both now and in the future. That is why these measures deserve the support of all Members of this House.
May 16, 1983
Western Grain Transportation Act
Subtopic: WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic: MEASURE TO ESTABLISH