May 24, 1983

GOVERNMENT ORDERS

WESTERN GRAIN TRANSPORTATION ACT


The House resumed from Thursday, May 19, 1983, consideration of the motion of Mr. Pepin that Bill C-155, to facilitate the transportation, shipping and handling of western grain and to amend certain Acts in consequence thereof, be read the second time and referred to the Standing Committee on Transport; and the amendment thereto of Mr. Benjaminfp. 25389).


PC

David Kilgour

Progressive Conservative

Mr. David Kilgour (Edmonton-Strathcona):

Mr. Speaker, as I was saying before time ran out last day, Bill C-155 is an abomination to the Prairies, to western Canada and I believe Canada as a whole. It strikes at the most inner parts of prairie economic interests. It could, in a sense, be better called an Act to say "adieu" to the Liberal Member for Winnipeg-Fort Garry (Mr. Axworthy) and to the Liberal Member for St. Boniface (Mr. Bockstael), and to all Liberal candidates in the west in the next federal election. It could be better entitled "an Act to say 'adieu' to the Liberal Party in western Canada for the next 30 years or so". And it could be better called "an Act to make prairie people hewers of wheat and non-producers of meats and processed foods for generations to come."

It is an abomination, Mr. Speaker, to the economic interests in western Canada because its basic thrust is to tell the prairie farmers that we should all go back to producing wheat and wheat alone. Diversification is unacceptable to this regime and it is going to cost it, Mr. Speaker, as dearly politically as it is going to cost those of us who live on the Prairies.

As I pointed out earlier, a number of old meat packing plants are being closed in the West and are not being replaced. This Bill will only accelerate that process. It is well known that thousands upon thousands of western yearling calves are already being shipped to central Canada feedlots because of feed freight assistance, and Ottawa-set tariffs for moving dressed and live beef.

I would like to quote from a statement, Mr. Speaker, recently made to the Prime Minister (Mr. Trudeau) about the Bill as it is now on behalf of western cattle and hog organizations. I will quote three brief portions:

The livestock producer organizations in the west are completely opposed to the revised Bill C-155 under which government subsidy payments on grain will be

paid entirely to the railways. This decision will do enormous damage to diversification and agricultural processing in western Canada-

Further down it says:

The federal government's own figures suggest that there will be a potential reduction of approximately $600 million in livestock production annually by 1990 under the "pay the railway" solution. Further analysis in Alberta shows that by 1990, domestic grain prices will be artificially increased by $35.00 per long tonne relative to export returns and that this will be sufficient to cause a reduction of 60 per cent in hog and cattle feeding. Such a reduction will mean a loss of $1.5 billion in economic activity and approximately 6,000 jobs to the provincial economy.

Finally, it says:

A subsidy paid to the railways to move raw product to other countries for feeding and/or processing is the worst possible way to encourage diversification and economic development in Canada. Its implications stretch far beyond prairie agriculture. It will mean reduced economic activity, lower exports and ultimately higher food prices for consumers.

On the question of the proposed $651 million per annum subsidy to the railways, I previously mentioned that the railways have already been given in effect downtown western Canada by Ottawa. Even Carl Snavely, who has been commissioned by Liberal Governments numerous times to determine the actual cost of moving grain, has stated that the Bill is too generous to the railways. They will receive 100 per cent of their long-run variable costs. We have seen with VIA Rail what this can mean in terms of enriching the railways unjustly.

I guess I am out of time, Mr. Speaker. The Prairies will not accept this cross of thorns. The Prairies are well aware that they have been used only as a whipping boy at election time by this Government for too long and it is going to stop at the next election.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Frank Fletcher Hamilton

Progressive Conservative

Mr. Frank Hamilton (Swift Current-Maple Creek):

Mr. Speaker, it is the hope of the men and women who work in agriculture in my area to be able to lead good family lives. This Bill and the political high jinks that have gone along with it pose a bigger and more dangerous threat to that way of life than anything I have seen since coming into this House over ten years ago. Grain policy, Mr. Speaker, should be as simple as possible and as close to "grow it and sell it" as you can get.

The old grain rate was simplicity itself. One half a cent per tonne mile for wheat and flour on the Prairies to the Lake-head, later expanded to other ports and other grains and grain products. The new formula is almost beyond belief. It uses language such as this: "The percentage to be borne by the Government of Canada for the crop year is equal to the quotient expressed as a percentage obtained by dividing", etc., "less an amount equal to the CN adjustment in respect of the

May 24, 1983

Western Grain Transportation Act

year, plus or minus the total of the interim adjustment for the current crop year by", etc. I ask you, Mr. Speaker, who can understand that?

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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LIB

Jean-Luc Pepin (Minister of Transport)

Liberal

Mr. Pepin:

I do.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Frank Fletcher Hamilton

Progressive Conservative

Mr. Hamilton (Swift Current-Maple Creek):

The confusion and complexity of this Bill is almost mind boggling. The blended rate is the rate combining the new freight rate below the 31.1 million tonne export limit and the freight rate above the 31.1 million tonne export limit. We can easily remove this problem by removing the 31.1 million tonne limit, which is nothing but a disincentive to increased production.

Now, the Hon. Member for Vegreville (Mr. Mazankowski) has advanced some very important points, one being that producers must be guaranteed an efficient, cost effective and reliable grains transportation system. When we look at the Bill, what does it do for us? There are no lower railway performance guarantees for the first three years. Under Clause 21, there will be only a notional scheme. I want to return to the word "notional". Sanctions to the railways will only be tallied and not levied. Also the chance to implement railway performance guarantees must pass parliamentary review. For three years the railways will get a free ride. I think Jack Horner must be smiling.

Our only hope in this whole business is the grain transportation Administrator. For a moment, let us consider how the Act treats him. First, a Senior Grain Transportation Committee must be set up. These people will be picked from a hide-bound institutional maze known as the Canadian grain industry. Under them will be the Grain Transportation Administrator. Clause 13 of the Bill states:

The Governor in Council may appoint an officer to be known as the Grain Transportation Agency Administrator to hold office during pleasure for a term not exceeding seven years.

These words, "to hold office during pleasure", mean that one is just a phone call away from dismissal. This man will be without any security of tenure. He will be at the whim of every senior bureaucrat and every senior grain trade member in Canada.

We can go further and consider some of the "mays" and "shalls" of this man's duties. Clause 17 states that the Administrator may do thus and so with the concurrence of the Committee, that is, the Senior Grain Transportation Committee; he may make recommendations to the Minister and he may provide advice. However, the one 1 like is found in Clause 17(f) which states that the Administrator may, in consultation with the Committee, review the role of the Committee with a view to identifying means of strengthening that role. Talk about the executive electing the executive!

If we consider some of the "shalls", as found in Clause 18(1 )(e), the Administrator shall develop a notional scheme of sanctions applicable to the railway companies, and then a system of awards and penalties.

Everyone is familiar with the notions counter in drugstores or in Woolworths, supplying hairpins, bobbypins, nail files, etc. My dictionary defines "notional" as being "theoretical, speculative, existing in the mind only, imaginary, or given to foolish or fanciful moods or ideas". I have never seen this word used in previous legislation. Add that to a "notional scheme". My dictionary defines "scheme" as being a plan or program of action, especially a crafty or secret one.

It is interesting to note at the end of the schedule that, while we have to toil with the metric confusion, the railways can still use what I suppose are "as the Crow flies" miles, statute ones at that.

There are other methods and means of providing efficiency and cost effectiveness to rail and grain transportation which the Bill does not address. A few days ago, the Hon. Member for Timiskaming (Mr. MacDougall) asked, "Does grain really have to be weighed six times and graded three times before it is exported?" Maybe with the old box cars it was necessary, but it is certainly not with the new hoppers. Why do the railways operate on a 24 hours a day, seven-day-a week schedule? The grain companies, especially the terminals, normally operate five days a week, sometimes with eight-hour shifts, sometimes with 16-hour shifts. It is impossible to mesh these two systems. Reduction in turnaround time of our hopper cars of one day would be the saving of the equivalent of 1,000 hoppers, some $73 million. These shortcomings will remain.

We should take a good look at what our competition in the United States is doing. Almost revolutionary rail and grain handling change is taking place. More interchange agreements are needed. Concerning use of producer hopper cars, there is a potential savings of $600 per car to the producer.

The Bill will freeze us to the status quo, to our present system, for all time, and what do we have? The old rail lines and old elevators in western Canada have been written off years ago. Even the gravel ballast under the rails depreciates at the rate of 4 per cent a year. These structures rightfully belong to the taxpayers of Canada. Producers simply do not believe the railroad costing figures, yet we are asked to increase our expenses greatly without any assurance of increased returns. Canada has always said to our grain customers, "If you want our wheat, come on over and sit down and maybe we will sell you a little bit". We have never allowed one bushel of wheat to leave this country unsold. Surely this is not the way to merchandise in 1983.

I realize that this Bill does not look beyond the accumulation of our grain at terminal position, but with the billions of dollars to be spent under this legislation, surely we could try selling it from at least one overseas terminal even if it was necessary to build one, which I doubt. Let us put it where the customers are, such as in Singapore, Hong Kong or Rotterdam. Not all customers want nor can they handle grain in million-bushel lots by shiploads.

We need a crash program on research for hardy winter wheats if the Government is serious about increasing the

May 24, 1983

returns to our western grain industry. As has already been indicated, the railways will receive under Bill C-155 100 per cent of their long-run variable costs, 20 per cent overhead and 20.5 per cent of their contributions to capital. By 1990, the railways will receive a 1000 per cent increase in the freight rate compared to today. There is no provision to reduce the rates if costs should fall and even CP Rail must like this.

I ask the Minister not to freeze us to this deal. Give us the freedom of choice as to where the so-called Crow benefit goes so that our system can evolve. Let the producers decide if they want the Crow benefit payment personally or if they want it paid directly to the railways. The mechanics can be worked out. It is simple to do for Board grains and for domestically used grains it is simpler than the present formula in the Bill.

It is hard to find any humour in this Bill. However, with the many references to the Crow rate being part of the Magna Carta of the West, and the shoddy, off-handed manner of its handling by the Government, I am reminded of the setting of the original signing of the Magna Carta, the beautiful little meadow at Runnymede just outside of Windsor in England. It was an incident when the tour buses were rolling in at approximately noon one day. The official guide was well into his pitch saying, "It was 1215 when King John was forced to sign the Magna Carta by the barons of England". One of the tourists, 1 suppose from Texas, looked at his watch and said: "If the bus driver had not taken the wrong turn we would have been here in time to see that"! The Government is treating our Magna Carta the same way.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Arthur Ronald Huntington

Progressive Conservative

Hon. Ron Huntington (Capilano):

Mr. Speaker, ten minutes to debate the principle of a Bill of the importance of C-155 just gives one enough time really to clear one's throat. Let me begin my remarks by quoting for the Hon. Minister a sentence from a very famous piece of writing:

There is nothing more difficult to take in hand, more perilous, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new.

Of course, that sentence comes from a person whom the Right Hon. Prime Minister (Mr. Trudeau) admires so much, Machiavelli, from "The Prince".

In the words of the Hon. Minister of Consumer and Corporate Affairs (Mr. Ouellet), Bill C-155 is the third major piece of legislation that has been presented in this session of Parliament, which is the longest session on record. We hear the Hon. President of the Privy Council (Mr. Pinard) list the dozens of pieces of legislation that he is so proud of every time he rises to speak in the Chamber. Yet his colleagues say that this is the third piece of major legislation that the Government has submitted in this session.

The Hon. Minister of Agriculture (Mr. Whelan) comes into the House to give notice of moving closure on this Bill. We have had 651 minutes of debate on principle. Here we are, struggling against closure on a Bill of this impact and importance to the nation.

Western Grain Transportation Act

I am from British Columbia and some may wonder why 1 am so interested in this Bill. I am interested in it because it touches the whole food chain of Canada.

What is this Government up to? It has Bill C-85, the Canagrex Bill, on the backburner. It is threatening to impose closure and rush that Bill through Parliament. Now this Government comes in with Bill C-155 and immediately puts closure on something of this magnitude and importance to every single person and region in Canada. There is something very wrong with the attitude of a Government that wants to abuse and use its arrogance and power in that manner, Mr. Speaker.

I have in my hands a couple of communications from interested parties in British Columbia who want to support Bill C-155. They urge Members from British Columbia to support Bill C-155 as presently presented to this country and to this Parliament. One is a telex from British Columbia Forest Products Ltd., signed by Mr. K. P. Benson, President and Chief Executive Officer. This telex urges Conservative Members from British Columbia to support Bill C-155 in its present form. I tell you, Mr. Speaker, and through you I will tell Mr. Benson and the British Columbia Forest Products, that there is no way, as a Member from British Columbia, that 1 will accept this kind of lobby instruction from him.

How did I receive this telex? I received this signal from B.C. Forest Products, and so did every other Member from British Columbia, in an envelope from the Privy Council Office. It shows what kind of lobbying is being done by the Government to interested parties in British Columbia and from those interested parties back to elected Members.

I have another letter of different vein from Columbia Containers Limited, Vancouver, B.C. a very interesting small business that utilized some abandoned elevator equipment and legs and put in some silos. This company started to fill the empty containers leaving the port of Vancouver with malt from the Prairies because we do not have enough export container traffic. That was an advantage which the Crow rate in its present form gave Columbia Container. This company started to fill a market void and it is very concerned that if the Crow rate does not stay the same and Bill C-155 is not passed, it will probably have to move its operation or reduce tonnage.

I can understand that company's concern, but I am also in the world of business. I have been changing my mode of operation all my life. Transportation is something that affects every single business in the world. As soon as a mode changes, as soon as something improves, you either lose a market or you gain a market. It is up to people in business to be sharp enough to anticipate what these moves are.

The Minister of Transport (Mr. Pepin) was doing very well in western Canada. He was accessible. He talked, he listened and he was courteous. 1 think the whole people out there genuinely liked him. Press reports and statements led us to believe that the Minister was going to move on the Gilson

May 24, 1983

Western Grain Transportation Act

recommendations. This meant a secondary industry could grow in the West, that once again our packing plants could become modern, our feeding systems could integrate with packing plants and we could move ahead and add to our secondary structure and strata on top of our primary agriculture in western Canada. This meant producers in western Canada would have a wider market. They would have more freedom and potentially more diversification. It meant that most industries could stabilize and rationalize and that something would happen down the road, that change would come in. We would break out of old habits and old chains and could start to utilize all that tremendous strength and wealth that we keep talking about here but do nothing about.

Then we had rumour of trouble with the Quebec caucus, trouble in Cabinet and trouble with the Quebec Ministers. They felt that payment to the producers was a threat to emerging and growing agriculture in the Province of Quebec. I have looked into that. I am told that there is no threat. I understand the Government has charts and graphs it is trying to show to the Quebec agricultural industry to prove it has a false attitude toward change. We have also had word that the Pools were against payment to the farmers and they want payment to the railroads. Frankly, I do not understand that. I think the bureaucracy of the Pools and the elected board of directors of the Pools are really not acting in the best interests of their producer members.

I was amazed to learn that both Quebec politics and the politics of the Pools favoured payments to the railroads. Then the Minister of Transport, who had gained and earned a measure of trust in the West, immediately reversed, almost 180 degrees, the pattern and plan of the Bill he was to bring in. He rushed the Bill in and there were not enough copies for interested Members. New Democratic Party Members and Members of my Party were trying to obtain more copies to distribute to very interested people in the Prairies. There were only 651 minutes of debate, in the Government's words, on the third major Bill in this session, and the Minister of Agriculture was up on his feet limiting us to ten-minutes speeches on something which touched every one of us in Canada. There is something very, very wrong.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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LIB

Yvon Pinard (President of the Privy Council; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Pinard:

That is not true.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

He has given notice of closure.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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LIB

Yvon Pinard (President of the Privy Council; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Pinard:

Ten-minute speeches are under the rules.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Arthur Ronald Huntington

Progressive Conservative

Mr. Huntington:

Yes, ten-minute speeches are under the rules, but it is difficult to touch anything of this magnitude in ten minutes; one could barely clear one's throat on something as important as this. If the President of the Privy Council were acting properly, he would negotiate with the Leaders on the other side to suspend the rules with unanimous consent so that we could have 20-minute speeches, debate and questions. Then we could open up all the matters which are not understood, such as how the Bill will touch each and every one of us involved in the food chain across the land.

The Bill is a national issue. It is not only a western farmer and grain producer issue; it is not only a western cattleman's issue. It is not just the hog producer of Quebec who is involved. Every activity in the Canadian food chain will be affected by what we do with this Bill. The Government has a fundamental opportunity within the palms of its hands to put something in which will create not an industrial strategy but an industrial environment in Canada if the correct decisions are made on the principle of the Bill.

I am against the principle of this Bill because it has not used the House and its powers to discuss and debate it. There are various matters involved which are contrary to the health and wellbeing of the future of the nation. I see Mr. Speaker indicating that I am out of time. I am against the principle of this Bill. I urge the Minister to withdraw it, redraft it and put its subject matter into committee so that we can return with something that is meaningful and good for the country.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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NDP

Douglas Keith Anguish

New Democratic Party

Mr. Doug Anguish (The Battlefords-Meadow Lake):

Mr. Speaker, in the brief ten minutes which I have today, as the previous Hon. Member just mentioned, there is hardly time to go into the depth and complexities of Bill C-155, an Act to facilitate the transportation, shipping and handling of western grain and to amend certain Acts in consequence thereof.

The Bill is really an omnibus piece of legislation. It deals with the rail transporation system, with very rich western coal lands and with the statutory rate for the movement of grain. Although people may say that some of the leadership of prairie farm organizations do not represent grassroot farmers at the local producing level, I think farmers are saying clearly that they do not want the statutory Crow rate changed. It is one of the few subsidies western farmers are receiving.

With it being removed or increased to the magnitude of the plan of the Minister of Transport (Mr. Pepin) in Bill C-155, we are looking at about $1 billion being lost by prairie farmers. In terms of the prairie economy, it is much more than $1 billion. If we listen to agricultural economists, they will tell us that an agricultural dollar has a multiplier effect of anywhere from four to seven times. We could be dealing with as much as $7 billion out of the Canadian economy by the year 1990. A very heavy portion of that will be placed on the backs of western grain farmers. Although we in the New Democratic Party agree that there is a need to upgrade the Canadian rail transportation system and badly want jobs to put more Canadians back to work, we do not feel that the entire cost should be placed on the backs of western Canadian farmers.

Grain producers contribute some $6 billion to the balance of trade. Approximately 20 per cent of all wealth in Canada is derived from agriculture. If we want to upgrade the transportation system, it should be done with the participation of the entire Canadian economy, not just a few agricultural producers and farmers in western Canada.

I will not go into the history of the Crow rate because of the brief time I have. Back on February 17, 1982 I talked at length about the Crow rate under the borrowing authority. I referred to its history and importance to western Canadian

May 24, 1983

grain producers. On February 1, 1983, after much discussion the Minister of Transport introduced his plan in Winnipeg. Now we see it reflected in Bill C-155. Between the time of the public announcement on February 1 and the time the legislation actually came into the House, there was clearly no consensus within western Canada on this Bill.

The Minister of Transport promised three additional changes to the initial February 1 announcement. First he promised that payments would go directly to the railways; second, that the cost of transportation would be linked to grain prices; and third, that there would be an increased number of commodities under the new statutory rate. 1 believe it was a very devious and Machiavellian plot by the Minister of Transport.

The promises were made but when the legislation came before the House they were not all reflected in Bill C-155. It is true that within the piece of legislation the payments directly to the railways were included. There was some increase in the commodities under the statutory rate or what the Minister of Transport is proposing as the new statutory rate, but there are other commodities which will never make it. I will explain that in a few moments. The linking of the cost of transportation to the price of grain was not included.

The Minister will tell us that these promises will be brought in in amendments at committee stage. If the Government plans on pushing through the legislation as fast as it has already indicated in the House and if those changes are made in the latter stages of the Bill, the promises will never appear in the final version of the Bill. This will be blamed on someone other than the Minister of Transport who made the promises. I do not think they will ever see the light of day because the Liberal Government will bring in closure in committee and stop the process just as it wishes to do on second reading. Those promises have some very big holes in them, and I think the Minister knew that when he made them.

The NDP made a proposal to the Government, but we have not received a response to it. As I mentioned, Bill C-155 is a very complex piece of legislation. We asked that instead of its being an omnibus Bill as it is now, the Minister of Transport look closely at our proposal to break it into three separate areas. First, the upgrading of our transportation system is very important and we want to see that done, but it should be taken out of this legislation and presented in a separate Bill. The second area that should be taken out of this Bill is the leasing and dealing with the very rich coal lands in British Columbia, Alberta and other parts of western Canada. We should no longer be giving guaranteed annual incomes or such prosperous gifts to the railway companies. Third, we want the statutory rates split from this Bill.

Those are three very distinctive and separate areas of the debate which obviously go in different directions. We want an upgraded transportation system. In Meadow Lake in my riding there used to be a million-bushel storage for grain in the elevators. The hopper cars that have been purchased can go

Western Grain Transportation Act

into Meadow Lake but cannot haul the grain out because the rails are in such bad shape that they cannot handle fully-loaded hopper cars on that branch line. Of course, we want an upgraded transportation system. The gifts from the coal fields to the CNR and CPR must stop. We want the freight rates maintained.

The Minister of Transport has heard that loud and clear. We in the NDP believe we should stop giving a guaranteed annual income to the railways. The railways should be paid for their actual losses for hauling grain. Payment should be made directly to them. When money is spent on upgrading our transportation system, or helping out the railways, there should be dollar-for-dollar equity for the taxpayers' money that is spent on the railway companies.

The message in western Canada has been loud and clear concerning the statutory Crow rate. We want the statutory Crow rate maintained because it is the only real subsidy, the only extra benefit for our grain producers. That is why it should be dealt with separately from the omnibus legislation before us. What the western Canadian farmers are saying has been heard many times by the Minister: "Keep the Crow, let Pepin go".

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Hon. Marcel Lambert (Edmonton West):

Mr. Speaker, I am frankly astonished by the attitude of the Minister of Transport (Mr. Pepin) and his Cabinet colleagues, and although on the other side of the House they are insisting that closure is not being imposed at this time, the Minister of Agriculture (Mr. Whelan), the most diplomatic Minister in this Government, indicated quite clearly that he would shortly be presenting a motion under Standing Order 82, which for all practical purposes would impose closure on a debate concerning transportation in Canada.

This is not simply the Crow rate as it applies in Meadow Lake, Saskatchewan. It is something that is fundamental to a national transportation policy. The Atlantic Provinces will be severely affected by this Bill. Central Canada will be affected as well. The hardest hit will be the prairie Provinces. There are some rather stupid results coming out of this in so far as British Columbia and the shipment of grain to British Columbia is concerned. These proposals purportedly only affect the movement of grain for export and the many controls and costs involved. Therefore, high-quality grain being shipped into British Columbia will naturally be hit.

I am going to put on the record, if no one else has, what the Alberta Cattle Commission has said about this Bill. Possibly my colleague from Medicine Hat (Mr. Hargrave) has already referred to this. I will put it on the record in its entirety because it is an important reaction to the volte face by the Minister of Transport (Mr. Pepin) and this administration, a volte face which the Prime Minister (Mr. Trudeau) when meeting the western agricultural leaders less than a fortnight ago said was very much a change-about and a capitulation to

May 24, 1983

Western Grain Transportation Act

certain vested interests and the Quebec caucus. The Quebec caucus was under pressure from its farmers because the Quebec provincial Government has embarked upon a distortion of the raising of beef in this country by outsized subsidies, then insisting that there shall be low rates on feed grain.

Over the past ten years in my city I have seen the closing of packing plants and the laying off of work forces, not in the hundreds but in the thousands. Unfortunately, that has been proportionately portrayed in all major western centres and in many smaller ones as well. What should be the heartland of beef raising and processing in this country is now in a very sad state. We do not get anything better out of it, that is the point. We sell a lot of cattle for export to the United States. However, if the western cattle industry is reduced, there will not be that volume of stock to sell to the United States. This volume has been traditional and will not in any way be replaced from Ontario and Quebec surplus beef. It is a fool-headed exercise to try and distort the development of beef in eastern Canada. That is only one of the results.

I cannot see loading down the railways systems with excessively high costs of maintaining rights-of-way to everywhere if it is only to haul grain. There must be some better way of moving grain, such as changing the elevator system. That is part of the rationalization. I find the attitude of the NDP and its agricultural affiliate, the NFU, to be tantamount to the Luddites in so far as the movement of grain and freight rates in western Canada are concerned.

Let us look at what the Alberta Cattle Commission says. The Alberta Beef Bulletin of May, 1983 begins with this desperate cry:

The Federal Government has announced it will adopt a 'pay-the-railways' solution to the Crow rate issue, despite the advice of economists and consultants, despite the advise of Dr. Clay Gilson who was appointed by the Government to advise it on Crow reform, despite the advice of its own Transport Minister Jean-Luc Pepin, despite the fact paying the Crow benefit to the railways will continue and accelerate the damage being done to the livestock and secondary processing industries in the West, despite the fact the Government is told Canada will get a less efficient and more expensive grain handling system for its tax dollars, despite, despite, despite.

Quebec has been integral in scuttling the Gilson and Pepin plans. Certainly producers and the Provincial Government are aware of the distortions and damage created by the artificially low Crow rate. Certainly Quebec is aware that, while increasing grain transportation rates would allow more market-fair prices on the Prairies, a 'pay-the-producer' solution to Crow reform would not change their feed grain prices. Certainly Quebec has been told that the anticipated increase in livestock production in the West which would follow a Gilson or Pepin type solution, would be exported and not affect Quebec markets. Quebec may not believe this, but the exports are already occurring. Certainly Quebec is aware of all these facts, and it is equally certain Quebec could not care less.

So Quebec has wielded its considerable political clout and the Federal Government has bowed to it and sold out the Western livestock industry. According to the Government's own publications, the Crow is costing the West SI50 million annually. Yet the Government will move to preserve the system which creates the losses and will see a systematic erosion of the livestock sector in the West.

The last point I should like to make, Mr. Speaker, is that I do not think the railways should receive all the subsidies. A former minister of transport, Jean Marchand, was asked about the role of the railways at the Western Economic Conference and he insisted that they would open their books, but they have

consistently refused to do so. In my opinion the railways must come clean on the matter of costs. 1 do not believe they can show figures. We have never had one iota of real information from either the CNR or the CPR. They have some excess feather-bedding around in their systems which they have charged up in the same way as they charged rail transport to VIA Rail, thus booming the cost of passenger traffic. Not one page of justification for those costs filed by the railways has ever been shown to us.

If there is going to be any benefit to the railways-and undoubtedly there will be-by the improvement of their facilities and the twinning of track where necessary and so forth, they have an obligation to come clean with the people of Canada and their customers. They must establish a trust between themselves and us. Before we pay anything they must exhibit a better attitude.

I am opposed to this Bill, Mr. Speaker.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Thomas Gordon Towers

Progressive Conservative

Mr. Gordon Towers (Red Deer):

Mr. Speaker, once again it is with sadness that I stand to speak to a Government proposal. It seems there is a continuation of these things that divide our country but it is possible that the Government has never done anything to divide the country as much as this Bill will. It is ironic that the Minister of Transport (Mr. Pepin) and the Prime Minister (Mr. Trudeau) have been able to alienate western Canadians so quickly.

For a time a lot of residents and farmers in western Canada thought they had a friend in the Minister of Transport but at the flick of a switch he turned his back and walked away from them. It would have been far better if he had never said he was going to do something for western Canada. At the present time he has alienated everybody.

At first there was a division of opinion between grain growers and the red meat producers but now they have come together to object to the Minister's proposal. The President of the United Grain Growers would not attend the latest meeting with the Prime Minister in Jasper because he had already said he was not going to change his position. It is just ludicrous for the Prime Minister to meet representatives of agriculture in western Canada if he is not going to make some changes to the proposals the Government presented to them. That makes the producers in western Canada very, very angry. As well, it will have a devastating effect on the economy of the western agricultural community.

When the Government brought in the National Energy Program we warned it of the effect the program would have not just in western Canada but also in eastern Canada. That warning has proven to be true. Now we find the Minister of Transport proposing another program that will have a devastating effect on western Canada, a program which could be likened to the National Energy Program.

Several proposals have been made. First, there was the report of Mr. Justice Emmett Hall which was discussed at length. Then we had the Snavely report which was also discussed at length; and now there is the Gilson report. The three reports were presented to the House; all were discarded and

May 24, 1983

the Government came up with its own proposal. This led the people of western Canada to believe that something would be forthcoming from the Government but these hopes have been dashed.

I have to warn you, Mr. Speaker, that 30 years ago grain prices were almost the same as they are today. The only way farmers have survived in western Canada is through their efficiency. They have made their operations so efficient that they have been able to survive. But I have to tell you, Mr. Speaker, that they are approaching the breaking point. There is no room for them to stretch any more. The cost of their operations has gone up about tenfold in the last 30 years.

Hon. Members opposite do not seem to realize that ultimately the western grain producers has to sell his grain on the Third World market. The Third World is $600 billion or $700 billion in debt and cannot afford the extra cost of the grain. Just the other day the Hon. Member for Vegreville (Mr. Mazankowski) pointed out that a lot of the Government's premises are based on $8 barley and $12 wheat. That is fine; the western grain grower could stay in business with those prices but when he has to sell to the Third World countries at a price they can afford, there is no room left. The world market sets the price for grain.

The Government says that the railroads are going to assess the farmer exactly what they consider to be the cost of moving that grain. This is something which I never did like about the Snavely report because it simply took into consideration the figures which the railroad provided. My colleague, the Hon. Member for Edmonton West (Mr. Lambert), touched on that.

We cannot accept that, Mr. Speaker, because there has to be room in there somewhere for improvement. There must be a guarantee that there is going to be some improvement. For instance, when Dr. Hugh Horner was on the Grain Transportation Authority and he went out to examine what was happening on the West Coast, he mentioned-and I have confirmed with some railroad officials that it could happen-that there were 50 switches on one trainload of grain required in order to get that grain unloaded. To me, that is ridiculous. It is ridiculous for the CNR to pull their grain trains in, unhook its engines, and put on the CPR engines because the unloading facilities are on CPR tracks. That is absolutely ridiculous, Mr. Speaker, and there is no guarantee that the grain producer in western Canada is going to be protected against that. My goodness gracious, I would not be surprised if we could cut the cost of moving that grain in half if there were people in there who had the desire, the knowledge and were required to improve the system. That is what is needed. That guarantee must be in the system, Mr. Speaker. We cannot put our producers at the feet of the railroads, which is exactly what the Minister has done. He has turned his back on the western grain producers. We cannot allow that to happen, and to whatever extreme we must go in order to protect those producers, I hope you will understand we are doing it for their

Western Grain Transportation Act

protection and we have the backing of 100 per cent of the western farmers.

I appreciate the opportunity, Mr. Speaker, of explaining this to you at this time and I hope that the Hon. Members opposite will be cognizant of what the real issues are-that the grain producers must have some protection and cannot undertake any extra costs at the present time because too many of them are going broke already.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Elmer MacIntosh MacKay

Progressive Conservative

Hon. Elmer M. MacKay (Central Nova):

Mr. Speaker, 1 have a sense of deja vu today because it was in an all-night emergency debate involving western grain transportation that 1 first rose to speak in the House of Commons. I remember very well that it had to do with the Temporary Wheat Reserves Act. There was great indignation at that time about the Minister of Transport, the Hon. Otto Lang, having bypassed the Western Grain Stabilization Act, or having anticipated it, as I recall, bringing forward a policy which raised the ire and indignation of many Members on this side of the House, including Members from eastern Canada. I remember in those days-and the Minister of Transport (Mr. Pepin) will remember also-the famous LIFT Program, "Lower Inventory for Tomorrow". That was going to be the panacea for western grain producers. Actually, it turned out to be one of the worst programs which was ever implemented.

Mir. Mazankowski: "Lower income for tomorrow".

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Elmer MacIntosh MacKay

Progressive Conservative

Mr. MacKay:

It was lower income for tomorrow instead of lower inventory, as the Hon. Member for Vegreville (Mr. Mazankowski) has pointed out.

I get the feeling as I stand here today, Mr. Speaker, that we are seeing another Minister of Transport, this time from the eastern part of our country, dealing with western problems relating to transport and the growing of wheat who will also find that his policies are exactly what was not needed at this particular time. I ask as an interested Member of Parliament, how will we monitor the railways to see that the vast amounts of money which they are paid are expended for the purposes which this legislation envisages? At a time when we are still undergoing a very fragile recovery of our economy, how is this going to help the western grain producers and, indeed, the heavy equipment producers who are going to be victimized by increased costs of transportation?

I was here in the House the other day when the Hon. Member for Brant (Mr. Blackburn) pointed out, as I recall, that two industries with which he was very concerned, namely, Massey-Ferguson and White Farm Equipment, are going to be victimized because of the adverse consequences he sees as implicit in this piece of legislation. I believe many of us tend to look upon this as merely a piece of legislation dealing with the Crow, as the media and the public are wont to call it. It is really much more than that. It has to do with the fabric of our national transportation policy. The tendency of this Government to change and manipulate programs and institutions, often without a clear understanding of the effects and the proper perspective of the final product, I believe, is what is

May 24, 1983

Western Grain Transportation Act

causing some of the hesitancy and some of the difficulties in Members of Parliament accepting this piece of legislation at this time.

This administration in the past has instituted many reforms in the fabric of our Parliament and of our country. Without straying too far from the rules of relevance, Mr. Speaker, 1 cannot help but remember, and you can look it up in Hansard, when the Hon. Paul Hellyer said proudly that we were in the very forefront of the nations of the world in integrating our armed services. This was something else which was going to be a great innovation, but 15 years later approximately I do not know of any western nation which has followed our lead, or whose military and armed services have received less attention than ours.

Let us look at the National Transportation Act which used to be such a cause of concern in the House. I believe the Hon. Member for Vegreville can correct me if I am wrong, but I do not believe Part III was ever proclaimed. We have a mishmash of conflicting and counterproductive regulations across this country which continue to hurt the trucking industry very badly. Let us look at VIA Rail, which the Minister announced in the House with such high hopes.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Donald Frank Mazankowski

Progressive Conservative

Mr. Mazankowski:

Again avoiding Parliament.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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PC

Elmer MacIntosh MacKay

Progressive Conservative

Mr. MacKay:

Again avoiding Parliament, as the Hon. Member for Vegreville has said. After the high hopes which were held out for solving another transportation crisis, not involving grain this time but involving people, what have the results been of the much heralded VIA Rail? I suppose the kindest thing one can say is that the reviews are very mixed.

Now we are coming to yet another great initiative of this Government. However, the Premier of Saskatchewan is on record as saying, after looking at the details of the program of the Minister of Transport, that he would have preferred to leave the existing program in place.

There are many anomalies which continue to surface about this particular piece of legislation. I see the "Western Grain producer" had a front page story quoting the Deputy Minister, Mr. Kroeger, as saying that the freight rate is going to go up about two cents a bushel. Then we have the 3 per cent of 13 cents formula which does not add up to that at all. Apparently there must be two kinds of inflation in this country, consumer inflation and railway inflation. I believe there are a lot of things which must be explained before this legislation receives the confidence of the people of Canada.

We have to look at what our competitors are doing, Mr. Speaker. The western grain producers are probably, if not the most efficient, certainly one of the most efficient sectors which contributes to our economic development and our export sales. However, what do other countries do to protect their producers? I believe that in Australia under the Victoria State Railway system the farmers pay less than 50 per cent of the average cost of moving grain.

In Argentina, which is a major competitor of ours, effective October 7, 1981 the National Grain Board of that country

provided free rail freight for grain from the nearest station available to the shipping port.

What does the European Economic Community do? They make sure that wheat farmers receive a direct subsidy of $2.53 a bushel.

In the United States they are paid an average subsidy of $13.81 U.S. a ton for wheat and $6.84 U.S. a ton for barley. This payment-in-kind program will provide about $11.4 billion in further support to farmers.

The problem here, Mr. Speaker, in my opinion, is that this legislation is really a massive attack on one of the fabrics of Confederation. To put it in terms of eastern Canada, it is almost as if suddenly there was a dramatic change made in the guarantees which would provide water transportation to Prince Edward Island, it is that basic. It is almost as if suddenly the basic concept of equalization payments was questioned. It is compounded, of course, by the fact that the Government-and it is unfortunate for the country-does not have adequate representation in western Canada. Our Party does not have adequate representation in another region of Canada, in Quebec. These suspicions and these fears are fuelled by that kind of situation which exists in the country.

Don McGillivray, who is a very astute financial columnist, has an article in today's Ottawa Citizen which is quite relevant to this discussion. He says that:

-the Commons hasn't been shown the whole of the Crow rate legislation.

I am sure that is a matter of great concern to all of us. He

says:

One key part that is supposed to protect Prairie grain farmers from unduly high rates is being kept back, only to be revealed after the Commons has given approval in principle.

That is a very poor way to do business, Mr. Speaker. He continues:

This secret provision is a link between the price of grain and the freight rate to be paid on the grain. When he brought in the bill, Pepin said this was an "important feature designed to protect grain producers from freight rates that would threaten their financial security."

Members representing Prairie farmers would, naturally, like to see the exact terms before the bill is given initial approval in the Commons.

The second reason for the present impasse is even more fundamental.

The proposed change in the Crow rate represents the attempt of a government to impose a historic change on a region from which it has no members.

That is the point I just made. He goes on to say:

The Liberals hold all but one seat in one region of the country-

The opposition parties hold all but two seats in another region of the country-

Such a polarized House deserves extra care by the government, especially where legislation concerns the established rights of that part of the country where the Liberals have no members.

It should move cautiously in wiping out something such as the Crow rate, which-rightly or wrongly-has been regarded as a "Magna Carta" of the West.

Surely the Government owes it to the House to spell out with great precision some of the effects before we pass this legislation. Let us not get into a situation such as we have seen

May 24, 1983

with VIA Rail or the unification of our Armed Forces where the cure has perhaps been worse than the disease. Let us have another very close look and take as much time as necessary before passing legislation as fundamental as this is to our country.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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NDP

Simon Leendert de Jong

New Democratic Party

Mr. Simon de Jong (Regina East):

Mr. Speaker, in the short time available to me in this debate I would like to cover a few areas which I think are pertinent to the debate on Bill C-155. I would first like to register my full opposition to the Bill. It will drain between $600 million to $1 billion out of the Saskatchewan economy every year. That means roughly $600 or $700 for every man, woman and child will not be spent in Saskatchewan. It means less wholesale and retail sales in Saskatchewan. It means less jobs in Saskatchewan. The social and economic fabric of my Province cannot stand such an assault on its economy. In my district alone, Mr. Speaker, in the Port Qu'Appelle area, assuming a 3 per cent average volume increase over the next ten years, that would amount to around $3 million taken out of the Port Qu'Appelle economy. That is something that area cannot afford. If we are to maintain the local economy, we need that $3 million circulating and supporting the implement dealers and garages, the local hardware store and grocery store which in turn create employment in the Port Qu'Appelle area. In terms of its social and economic impact on Saskatchewan, this legislation is madness.

Why is this assault taking place, Mr. Speaker? The Government justifies it because it claims these old rates are out of date. In fact, the Prime Minister (Mr. Trudeau) calls us reactionary because we oppose what the Government, rightly or wrongly, feels is a progressive measure. Well, let us have a serious look at this. The Government claims that the Crow gap, the difference between what the farmers pay to move wheat and what it costs the railroads, is so great that the farmers must begin to make a higher contribution to moving the grain. Yet all these figures are based on a study that a certain Mr. Snavely did at the beginning of the 1970s.

I would like to spend a few minutes examining some of his assumptions because they are at the heart of this proposed legislation. Mr. Snavely admitted in his report that his figures tend to favour the railroads. At page 236 of his report Mr. Snavely says this:

Our selection of gross ton-miles and revenue ton-miles as physical measures of the inputs and outputs of railway operations tend to produce results which bias, to the high side, the contribution required of heavy loading, long-haul commodities such as statutory grain.

To go into a little more detail, Mr. Speaker, Mr. Snavely used figures based on the revenue ton-mile basis for the movement of statutory grain to determine the cost of moving grain. Using that basis accounts for an average of 19 per cent of the workload of CN and CP. However, it accounts for only 9.6 per cent of the workload when car loadings are taken as the unit of measure and 13.6 per cent when loaded car-miles form the basis of measurement. In other words, Mr. Speaker, it really depends on what measurements you are using. Mr. Snavely admitted using the ones that tend to favour the railroads and increase the cost of moving grain. He could have

Western Grain Transportation Act

used other measurements which would have drastically reduced the cost of moving grain. But that is not all. Mr. Snavely also determined, and 1 quote:

Donations and grants were treated as common equity in the development of the capital structure.

What does this mean, Mr. Speaker? It means that all the public gifts and subsidies that the railways have received in the past are used as a capital expenditure on which the railroads have a right to a return. In other words, included in the cost of moving grain is a capital return on gifts to, and public expenditures on behalf of, the railroads. This becomes acutely insane, Mr. Speaker, when we apply it to the branch line rehabilitation program. Under this program public moneys were used to rehabilitate existing branch lines. How does Mr. Snavely deal with these public investments or subsidies to the railroads? He claims they are part of the capital expenditures and so therefore the railroads are entitled to a rate of return of some 25.4 per cent on this money. For example, in 1980 the public paid the railroads some $67 million under this program. Mr. Snavely figured that about $39 million of this is a capital cost. Therefore, he grants them a rate of return of some $9.9 million on that sum. In other words, he is allowing them a rate of return on money they never spent. It is public money. That rate of return effectively increases the Crow gap by some $37.9 million.

Complicating the matter even more is the assertion by the railroads that they should receive higher payments under this program because of the enhancement of the value of their assets through the payments under the rehabilitation program. Snavely supports this position. In other words, the more we give them the more we owe them. It is insane, Mr. Speaker. It is a rip-off of the highest degree.

The final piece of lunacy, Mr. Speaker, is when Mr. Snavely deals with those branch lines where there were neither public investment for upgrading or maintenance and where the railways did not invest any money themselves. He subtracts the amount the railroads actually spent on maintenance from the amount he says they should have spent to keep the branch lines in proper repair, and he calls this amount the maintenance shortfall. He then grants the shortfall a cost of capital rate of 25.4 per cent to arrive at a figure of $34.6 million for 1980. The total is then charged to the cost of moving grain. These imaginary dollars effectively increase the Crow gap by $34.6 million. Snavely has gone beyond granting the railroads the right to a return on capital which they did not invest. He now grants them the right to a return on capital which no one invested, as well as a claim for reimbursement of maintenance that they did not do.

The Crow gap, the imaginary amount which the farmers are supposed to begin to make up to the railroads, is a false amount. We in this Party cannot accept it. No farmer in western Canada can accept it. The first requirement, if the Minister is interested in having an honest debate on the

May 24. 1983

Western Grain Transportation Act

question, is to have the books of the CN opened, and particularly those of the CPR, so that the public can determine what it really costs to move grain, and to come to some accepted definitions and measurements, again to determine the real cost of moving grain. When we have those figures, then we can sit down with the Wheat Pools and farmers' organizations across Western Canada and perhaps begin some serious discussions. However, as long as those figures do not exist, this exercise is an exercise of Alice in Wonderland, or perhaps it is really a ploy to give more money to the railroads at the expense of the economy of western Canada, Saskatchewan in particular.

We do not even know the effects of this proposed legislation. Concerning production of papers, on July 23, 1982 1 asked for any documents the Government might have in terms of subsidies paid in the United States to American farmers compared to the subsidies we receive. My question was addressed to the Government as a whole and the reply was that the Minister of Agriculture (Mr. Whelan) was not aware of the existence of the documents requested. Unless the Government has not conducted any studies on the type of subsidies American and Canadian farmers receive.

Topic:   GOVERNMENT ORDERS
Subtopic:   WESTERN GRAIN TRANSPORTATION ACT
Sub-subtopic:   MEASURE TO ESTABLISH
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May 24, 1983