STANDING COMMITTEE ON TRANSPORT
LE COMITÉ PERMANENT DES TRANSPORTS
[Recorded by Electronic Apparatus]
Thursday, November 26, 1998
The Chairman (Mr. Raymond Bonin (Nickel Belt, Lib.)):
Good afternoon, ladies and gentlemen. Welcome.
Pursuant to an order of reference of the House dated
Thursday, October 29, 1998, we will today examine
the supplementary estimates (B) for the fiscal year
ending March 31, 1999: Privy Council vote 15b and
Transport votes 1b, 5b, 10b, 15b, 27b, and 30b. And
pursuant to Standing Order 108(2), we will examine
Transport Canada's performance report for the period
ending March 31, 1998.
Mr. Minister, thank you for appearing again on short
notice. This transport committee doesn't take six
months to get to
work. As you present things to us, we react instantly,
and we really appreciate that you the members of your
department are always available for us.
Do you wish to make a short presentation or would you
like to go directly to questions?
Hon. David Collenette (Minister of Transport):
Well, since all the officials here are the total
Transport brass, I wouldn't want to upset them by not
reading the speech. But I can be somewhat brief.
I'm very glad to be here this afternoon to answer
your questions on the supplementary estimates.
You know my officials: Margaret Bloodworth, the
Deputy Minister; Ron Sully, the Assistant Deputy
Minister of Programs and Divestiture; Louis Ranger,
the Assistant Deputy Minister of Policy; Janet Milne,
the Assistant Deputy Minister of Corporate Services;
and Ron Jackson, the Assistant Deputy Minister of
Safety and Security.
I just want to touch briefly on some of the highlights
of the year that we feel are worth noting. We worked
very hard on many fronts, and we certainly agree with
you, Mr. Chair, that your committee works
expeditiously. We thank you for
the consideration of legislation that you've
had before you and of course for doing the
I need not tell you about our successful activities and
initiatives. You were a full participant in most of them and I have
made several reports to you on the subject.
But the performance report we tabled specifies in concrete
terms the progress made during the 1997-98 fiscal year.
As members of this committee, you will no doubt agree that we
have succeeded in meeting our objectives and that they were in
Canada's best interest.
The overall direction last year was of course to
complete the modernization of Canada's transportation
system. We passed the Canada Marine Act early this
spring; it received royal assent in June. I have to
say that I'm sorry we will not be able to commence
with the CPAs on January 1, as called for in the bill.
We are going to have to, via order in council, delay this
a little bit. There's a myriad of legal issues and
other matters concerning the letters patent, and we
just don't have enough time. We didn't realize how
difficult it would be. We have just written to the
ports and the harbour commissions to let them know
there will be some small delay, but it will not be a
huge delay, so I hope people understand that.
We've also had the first draft of amendments to
modernize the Canada Shipping Act, and as a result, we
commercialized the St. Lawrence Seaway. The legal
work to create the Canada Port Authorities, as I say, is
under way, but we're not yet able to enact those CPAs
on January 1.
We're developing a strategic safety plan for
During the reporting period, we were
busy transferring an additional 22 airports and 14
regional or local airports to local control.
The divestiture program is on track, but some of the
airports and ports may take a little longer. They're
more difficult, due to the concerns regarding financial
self-sufficiency and third-party issues.
We have tabled our strategy for sustainable development.
We will be launching two new studies, one on the future of
passenger railway service in Canada, and another on the grain
storage and transportation system.
We have implemented a Canadian program for deactivating
We tabled amendments to the Railway Safety Act that completely
modernized the legislative and regulatory framework of the railway
transportation system in Canada. I know that your committee is
currently studying this bill.
We have begun to draft the Transportation of Dangerous
Substances Regulations in clear language.
We have introduced guidelines whereby the Minister of
Transport can designate Canadian air carriers for regular
international all-freight air service, and signed bilateral
international agreements that provide Canadian air carriers with
new opportunities to offer their services on new markets.
I think that you will agree that these achievements are in
Canada's best interest.
To achieve all these goals we'd set for ourselves, we
developed a strategic framework with four key elements
that address all six of our departmental objectives.
The first of course is safety, which is very much a
priority at Transport Canada. It's the foundation upon
which all elements of any transportation system have to
be grounded. The record is very good, and we're working
both on our own and in collaboration with industry and
other government departments to improve this further,
with initiatives such as Road Safety Vision 2001 and
Direction 2006, public and industry awareness
campaigns, improvements to passenger restraint systems
in vehicles—the list is quite a lengthy one.
On strategic investment, ours is one of the best in the
world, but we're well aware that it needs to be
maintained and modernized if it's to continue to be
competitive. Our policies have focused on creating the
right environment to support viable capital expansions.
Although there are many demands on our limited
transportation dollars, we are setting priorities and
finding creative ways to facilitate financing and
support of strategic investment in Canada's
transportation system. But there is another strategic
investment that is often overlooked in discussions
about government policies and programs, and of course
that's the investment in people. We take our role as
employer very seriously, and we have integrated La
Relève program into its human resource policies.
Our investment is returned in high-quality work on
behalf of the people of the country.
Another priority is smart technology. We have to find
ways to work smarter to make better, more efficient use
of our systems. We have pilot projects that have used
the latest in information technology, and they have
proven quite successful in streamlining the flow of
traffic, both freight and passenger. We hope to
We're very excited by the potential
offered by intelligent transportation systems and are
working with industry and other governments to develop
tools that will reduce pollution, eliminate
time-wasters in our systems, and improve
safety and security
at the same time. Some good examples are the new
transponders used by truckers to speed up border
crossings, and smart airbags. I know you're going
to be looking into this between bills, and I urge you to
take that work very seriously, because it is going to
have more and more of an application to our
transportation system in the 21st century.
Of course our transportation system has to be
sustainable. I think you'll recall the theme of this
year's National Transportation Week, which was
transportation as Canada's national resource. This is
a very apt description, because our system of transport,
like any other resource, must be preserved and used
judiciously. We are supporting research, both in the
public and private sectors, into alternate renewable
fuels and more efficient vehicles and public transit
Steps are being taken to minimize the
impact of transportation on the environment. For
example, we are co-sponsoring, with all the provincial
and territorial transport ministers, a transportation
table as part of the process to develop a national
strategy on climate change.
Our transport system will have to face another challenge in
the very near future. As you know, the transition to the year 2000
holds potential hazards for the system's safety and efficiency.
Transport Canada has taken specific steps to identify and evaluate
the professional capacities and applications that are essential to
According to our schedule we should finish the trial phase of
all applications as well as the emergency plans by December 1998,
which gives us another year to make any necessary amendments or
changes. The trial phase for our emergency plans should be finished
by September 1999.
We are also evaluating the progress made by the transportation
industry in solving this problem. In September, I held a meeting on
the Y2K preparedness in Toronto with industry stakeholders to
assess the progress made to date, and last Monday, I addressed NAV
CANADA on its Y2K Solutions day at a conference in Toronto. My
department is continuing to raise awareness, provide information
and encourage all transportation stakeholders to make every
possible effort to solve the potential problems well before the
You know better than we do, because of the work you've
done, that it has been a very busy year. We guarantee
that you'll be equally busy next year.
On the legislative front, you're going to be asked to
study a number of new bills. You have the Railway
Safety Act before you. There's no rush for this. I
think there was some confusion that because I wanted to
get it into committee, the government was pressing you
for this. Obviously we want it done as soon as one can
deal with it, but this is not a matter of urgency. Take
an extra day or two. The whips aren't on; the
guillotine is not on. But we wanted to get it into
committee, rather than just have it hanging around the
House, because we feel that on a technical bill of this
nature, the better debate is in committee.
A number of other bills are on the way: the
Carriage by Air Act; the Marine Liabilities Act; the
Canada Shipping Act, part II; and the Motor Vehicle
Transport Act. Some of these will have some
controversial aspects to them and will mean that you
will have quite a load between now and June.
At the end of December we'll also get the final
results of Justice Estey's research into grain handling
and transportation in Canada's west. After all the
extended consultations he's had, I know his report
is going to be awaited with great interest by most
people, because it's a very contentious subject.
The financing of our highway system and trade
corridors is also a key challenge facing us today. I'm
sorry Mr. Casey is not here, because he's been
particularly active on this file. I know that with
funding resources as scarce as they are and in view of
the fact that jurisdiction over highways is provincial,
partnerships are likely to play an increasingly
important role in whatever solutions are developed.
But of course I need the views of the committee on
some of the contentious issues, especially the
application of tolls. We have a study, done on behalf
of the federal-provincial council of transport
ministers, which hopefully
will be public soon. But we'd
like your views, because it's inevitable that
some funding will go into highways at some
point in the future, and we want to make sure the
rules are well established ahead of any funding
I mentioned ITS a while ago, and I know
you've already passed a motion to look into these
In conclusion, we're still on track to reduce
subsidies, achieve greater efficiency, establish more
say for users, and establish more business discipline
across all the modes of transport at all times without
compromising safety. We have made great strides in
this direction, and we'll continue to position ourselves
better to respond to the needs of Canadians.
Today I spoke of some of the major achievements of Transport
Canada and I tried to show you how our strategic framework helps to
ensure a constant improvement of our policies and programs. It
allows proper and adequate investments to be made in the
transportation infrastructure. It supports trade and tourism and
contributes to removing the barriers to an integrated and
harmonious system. It has provided for the best possible use of
technology and an efficient use of all transportation modes. In
addition, it contributes to raising the standard of living by
providing safe and reliable transportation.
But the federal government cannot bear the whole load.
We have to forge new partnerships, as I said earlier,
with government, industry, stakeholders, and the public
all working together to maximize our effectiveness
through an efficient use of resources. And we will
continue to rely on your support and advice along
We have great faith in the fact that you will be
working very hard in the next six months. It will be
a heavy load, and I know from the work you've done
since the election that this committee is equal to
We welcome your input on all of these studies and bills
that will lead to a better transportation system in
The Chairman: Thank you very much, Mr. Minister.
That was an excellent report, and it will assist this
committee in the preparation of our work.
I want to take this opportunity, in your presence and
in the presence of your department heads,
to say to you how pleased I am with
the work these members of the committee are doing.
With five different political parties, at the
beginning we thought it would be an impossibility to
get any work done. I can tell you that every single
member of this committee, on all sides, is here to be
positive, to produce, and to make the country go better.
I'm extremely proud of
them, and it's a pleasure to be chair of this committee.
Also, to your department, in my riding we had an
explosion of 40,000 pounds of explosives. A transport
truck caught fire and exploded on the highway. Your
department was extremely efficient when they came
over, took control of the site, and coordinated the
efforts of everyone around. The community recognizes
the quality of work from your department. I wanted to
mention that to you.
On Bill C-58, we will be hearing witnesses Tuesday.
I'm impressed at how well informed members are on this
bill. There's a possibility that we will do
clause-by-clause Tuesday. We expect to have it done
That covers my end of it. We will now open it to
questions from Mr. Keyes, Mr. Bailey, Mr. Cullen, and
Mr. Stan Keyes (Hamilton West, Lib.): Thank you
very much, Mr. Chairman.
Thank you for your remarks,
Minister. I welcome the members of the department
you've brought with you.
I didn't see any direct reference to this in your
remarks, but I was wondering if you could elaborate for
us. There's been a lot of discussion of late about the
U.S. dumping literally billions of dollars into their
transportation system. It was worked
out that every state in the U.S. will receive some $4.1
billion for transportation infrastructure.
First I'll outline my fear. My fear is
that the U.S. will be moving quickly ahead to respond
to the future needs of trade and how trade is carried
out, not just in the U.S., but of course in North
America. I see an opportunity, as do others I've spoken
with, for us in Canada to take the initiative to make
our transportation infrastructure that much more
competitive with the U.S.'s and more integrated, in order
to lure the business of trade away from the U.S.
Is the department doing any focus work or working in
concert with, say, those involved in trade in order to
identify where we can progress that much more quickly
on our infrastructure and where we can improve our
infrastructure to compete more
strongly, to lure the truckers and not lose any shipping
that might be going to the east coast, to the west coast,
to American ports, etc.? Are we identifying where the
infrastructure can be improved, how much that would
cost, and then of course the inevitable question, how
we pay for it? Is any networking going on
between Transport and trade so that we can work with
trade in order to identify these opportunities to carry
out almost a visionary plan of what transportation
should look like in this country?
Mr. David Collenette: That's a very good
question, because you're absolutely right: the United
States is ahead of us in terms of the amount of money
it wants to spend. I think it's $275 billion U.S. over
the next six years, of which $20 billion will be spent
on smart technologies.
The fear I have is that
so many improvements will be made on the U.S. side of
the border that we will have slow processing and jams
on our side of the border. That's going to hurt us
and certainly annoy the Americans, and it will be to
the detriment of both countries.
A lot of the money that the Americans are putting in is
going into the road network. Some of it is going into the
rail network, but most of it is going into the road
network. That of course comes back to the whole issue of
a national highway program.
The federal government has been in the business of
financing highways since the First World War, and on
and off, it's ebbed and flowed. Right now it's ebbing a
bit; there are no new dollars going in west of Ontario
at the moment. That is a particular concern in western
On a daily basis, truckers choose U.S.
routes to take their loads through,
rather than going through
Canada. That obviously has a harmful effect on our own
economy, because those drivers buy fuel and provisions
in the U.S., some of them stop overnight, and all the
rest. It is harmful to Canada, because our
road network is not as good across, east to west.
There is a problem with access to the border
crossings and with speedy processing, and we are
addressing that. We have a couple of pilot projects, I
think in Fort Erie and Windsor, using new
technologies to do quicker processing at the border, but
obviously we're going to need a lot more money for
The federal and provincial ministers have been meeting
for the last year, and there's a general agreement on
what the national highway network consists of. I
believe I've also got them to agree that if there is
money to go in, then there should be some
flexibility—that it's not just applied to straight
highway financing on a fifty-fifty basis, as we've done
in the past, but that money be applied
to new technologies at the border, to improving the
plazas for the processing of goods at the border on
the road, and also to encouraging intermodal
applications, getting goods from truck to rail.
On the question of water transport, we believe the
commercialization of the seaway is really going to
assist in improving the flow of goods through the
waterways. We feel that the commercialization of the
ports from Bill C-9 is going to be
helpful in improving business flows.
And of course we
are very hopeful that Maersk will designate Halifax
a port of call, which will inevitably imply some
degree of funding on Canada's part to help finance the
super-port with the post-Panamax containers. Halifax
is very well positioned, and if we get that particular
deal, it's not just good for Halifax; it's going
to be good for the entire country. It will result in a
lot of expenditures, not just in the Halifax area, but on
the rail link of CN from Halifax to Sarnia, because
delivering goods in Halifax is at least a day shorter
than taking those goods through New York and using the
American rail system, going into the midwest markets.
Mr. Stan Keyes: Mr. Chairman, I can only—
Mr. David Collenette: If the answer was too
long, I'll be shorter.
Mr. Stan Keyes: No, no, that was fine. It
needed a longer answer.
The Chairman: Go for another four minutes, and then
I'll allow 10 minutes to each member.
Mr. Stan Keyes: All right.
All I'm suggesting—and this would
be something for the consideration of the entire
committee—is that once we've studied the ITS
system and its competitive advantages, etc., and how if
we do not incorporate some ITS, we're going to fall
behind, then, on a greater or a grander scale, we need
to identify that we have to remain competitive globally
with trade. Therefore we have to get our goods to
market, and the only way we're going to be able to do
that efficiently is if we are as efficient as or more
efficient than the U.S. when it comes to the movement
of those goods.
I would say that at one time or another, this
committee should sit down and work with you to
identify where those goals are and how we can bring all
those ideas together and ask: Where are we falling
short? How is that going to affect trade in Canada?
Where are we going to put our resources? How are we
going to put our resources there? Then we can go into
the micromanagement of the issues you addressed just
recently in your remarks—how we pay for it, etc.
We have to move quickly on this front or we will fall
behind. Once the market is lost, once the
transportation of goods is lost to, say, a more
efficient tolled highway that runs from one end of the
U.S. to the other, it will be damn hard for Canada to get
Mr. David Collenette: You make all the right
points, and certainly we have no problem sharing some of
our thoughts with you, through either written
submissions or further at committees like this. The
big problem we have is money. Everybody wants money.
Quite frankly, the cause of transportation wasn't
helped by the provincial premiers, who got together in
Saskatoon in August and said, “Yes, we want
better roads; we want investment in transportation
infrastructure. But health is our number one priority,
and therefore we'll put that ahead of roads.”
Well, that's fine. I agree that health is the number
one priority, and the government has responded. Who
says the federal government doesn't listen? We're
listening to Canadians. We're listening to the
provinces. The Prime Minister and the Minister of
Finance have said that health care is going to be a
focus of next year's budget.
But there are other calls on new spending as money
becomes available, and I hope the members of this
committee become public advocates of spending on our
infrastructure, because the payback is incredible in
the easier shipment of goods and the improvement of
our living standards.
Mr. Stan Keyes: Thank you.
The Chairman: Mr. Bailey.
Mr. Roy Bailey (Souris—Moose Mountain, Ref.):
Thank you, Mr. Chairman.
For the information of the committee, I have a plane
to catch in about a half-hour, to get home to a railway
meeting tomorrow, Mr. Minister. It's a do-or-die,
saviour type of thing. I don't know whether I'll
be able to help the situation much or not.
I will be under the 10 minutes, Mr. Chairman.
I was interested, Mr. Minister, in your comments about
the Canadian Transportation Agency. As you know, I
come from the area where the major complaints come in.
I can't help wondering whether the $750,000 that went
into the increase for personnel and
special and professional services had
anything to do with the CTA hearings and the decision
regarding the Canadian Wheat Board's complaint against
Mr. Minister, I hate to disappoint you, but with
the closure of some 300 woodies, as we call them, coming
down, and with several thousand miles of track going
out, I really don't think the Honourable Judge Estey's
report is going to be too exciting. It no longer
has the same bearing as it had when it was initiated,
because many of those lines of course are gone.
In the end it took 18 months and a
large sum of money to get a confirmation that although
the law requiring adequate rail transportation for
grain applied, no penalty was required for the
railways' past action. CN paid a fine. It was a
voluntary thing on their part. I'm assuming it was
paid to the Canadian Wheat Board. We don't know for
Mr. David Collenette: They settled out of
court, if you will, but that's not the same thing as a
Mr. Roy Bailey: Well, all right, but—
Mr. David Collenette: I don't believe
they were convicted of any infraction. They decided to
settle the grievance.
Mr. Roy Bailey: In other words, it was really a PR
job, right? They weren't charged with anything,
Mr. David Collenette: You should
address that to Mr. Tellier, because—
Mr. Roy Bailey: All right. I will, Minister.
Anyway, the question I have for you is this. As far as
we in the west are concerned at the present time, the CTA
failed in its first real task. And why shouldn't they
believe that the complaint under the Canada
Transportation Act was very slow, very costly, and
essentially a futile test, because it's a fait accompli
now; it's all over?
Mr. David Collenette: I'm not going to
reflect on the CTA's decisions. I don't think I
should, given the fact that Judge Estey has to report.
But I do take issue with you. The CTA
looked at the Wheat Board complaint. In one case CN
decided to in effect settle or pay compensation, and CP
The process went quite well. It was quite
expeditious. This is a very complicated kind
of argumentation, dealing with the delays of
transportation and the costing that goes in. It's
enormously complex. The agency is charged with doing a
thorough job, and I think if they had been very
quick, you would have been saying they did not give
the proper time to all the arguments.
I'd also like to challenge you on your inference that
somehow, in the course of 1998, while Judge Estey has
been working, we have turned the corner and it doesn't
matter what he says; somehow there cannot be remedies
for the problems dealing with grain transportation.
On railway abandonment, I challenge you to give me one
example from this year of where the railways have
closed a line and there was no interest from
local groups or other companies, short-line
operators, in taking it over.
The lines that have been closed have been ones where
everybody more or less agrees there isn't an economic
sense to keep them open. Sure, everybody
would like to continue the lines; they got used to
having them there. But give me one example of where
the railways, in anticipation of Estey's report, have
shut down a branch line where there has been interest
in pursuing the matter.
In fact we have been squeezing the railways. I've
talked to Mr. Tellier, Mr. Ritchie,
my staff, officials of
the department, and officials there. The
railways have responded by saying they'll give the
extra time for any local
groups or for the provinces.
Your province is Saskatchewan. Mr. Romanow is a good
friend of mine, and I've known him for
many, many years, but I have to say, he huffs and puffs
on this issue.
Mr. Roy Bailey: Right.
Mr. David Collenette: I'd like to see
where the province is. Why doesn't the province lay
down some money and take over some of these lines?
We were the ones who provided for the
facilitator. It was Lyle Vanclief and Ralph Goodale
who provided the money to help short-line operators get
going in Saskatchewan. The province has to do its
part. You can't just keep complaining about the
federal government or the CTA.
As for Judge Estey, this is going to be the most
complex, quickly done report in Canadian history. This
man works. He's going to have his report in within a
couple of weeks, and it will be public, and I hope we'll be
quick in dealing with his recommendations.
Mr. Roy Bailey: Mr. Minister, I couldn't
agree with you more as far as the provincial government's
input into this is concerned. You're quite
right about the railways.
What I fear in this whole thing that started
in 1996 is that we're going be out slapping the wrists
of the railway when other players on the scene
are going to walk away from this inquiry. I hope
not. I hope when it comes down next month, we see
there's more blame in what happened in this event
and what prompted this inquiry. It's not just the
railways' fault. I hope that comes out in the
I have just one other thing.
Mr. David Collenette: But Mr. Bailey, excuse
me. This inquiry was not prompted by the delay of
grain shipments two years ago. It was a statutory
review provided for in the CTA in 1996—
Mr. Roy Bailey: Right.
Mr. David Collenette: —which we have
accelerated, because people like you and your party
and farm groups asked for it to be done. That's why
it's being done.
And Judge Estey is not going to blame
anybody. He hopefully is going to analyze the
problems and give us, as policy-makers, the choice to fix
Mr. Roy Bailey: Okay.
Vote 27b of the
supplementary estimates authorizes the Canada Ports
Corporation to borrow up to $30 million. My
understanding is that that corporation will be limited
in January 1999, in just a few months.
What kind of loan does the Canada Ports
Corporation expect to take out and where is the money
going to go? I would really underline that
I hope it will be used to help the suffering Port of
Halifax get its infrastructure up to to snuff so that
it can be competitive.
What is this $30 million? What's the purpose of it?
That's in vote 27b, Mr.
Mr. David Collenette: Mrs. Bloodworth is going to
Ms. Margaret Bloodworth (Deputy Minister, Department of Transport): If
you'll see, Mr.
Bailey, the actual vote is only $1, because it's
authorization for Canada Ports to borrow from other
than the government.
Some loans do exist. Sept-Îles, I believe, is the
main one. They have a loan from what's called the
interport loan fund. And you're quite right: the
Canada Ports Corporation will
disappear, so it's necessary for Sept-Îles to place
the loan with private firms. Because it's
a crown corporation, they need to be authorized by
Parliament to do that.
So it's not a loan from the
federal government. In fact it's intended to replace
some government borrowing, if you like, with some
private sector borrowing. It's an existing loan by
the Port of Sept-Îles, which will carry the cost of it,
as they do now.
Mr. Roy Bailey: I have a final question. As you know,
the Port of Halifax really needs the money. Of all
ports, I would think they need to get it. Is any of that
money going to them, do you know?
Mr. David Collenette: I don't know about the Port of
Halifax needing all kinds of money. I could tell you the
Port of Toronto needs money, the Port of Vancouver needs
money, the Port of Montreal needs money, and the Port of
Hamilton needs money. That's why we passed Bill C-9: to
allow them the flexibility to go out there and finance
But if you're talking about the post-Panamax vessels,
Transport Canada is not in the business of giving
subsidies any more. It would have to come from another
source in government. It would have to be a one-off
contribution of the government. Again, we don't
know whether Halifax has been chosen, and therefore we
don't know if any money would be required.
The government would have to decide whether you'd have a
one-off payment for the Port of Halifax to accommodate
these ships, but certainly from Transport's point of view,
the whole point of the devolution of ports to local
authorities is so that we don't continue this particular
kind of subsidy.
The Chairman: Mr. Cullen.
Mr. Roy Cullen (Etobicoke North, Lib.): Thank you,
Thank you, Minister and officials from
Minister, I'd like to talk about two items if I have a
First, you'll recall that in the last
Parliament, this committee did a report on
renewing the national highway system.
If I recall, the number to renew
this system was $13 billion to $18 billion, and of
course now it's probably $15 billion to $20 billion.
Every year that goes by, it goes up a bit.
One of the issues we raised in that report was
this notion of public-private partnerships, which means
tolls and a whole bunch of things. If I recall,
the rationale behind that was that
if we were going to finance $13 billion to $18 billion,
that would have to be the federal government and the
provinces, and we'd really need to max out the
private sector financing. To do that, we needed to
really explore what could reasonably be financed through
the private sector, what kinds of private benefits could
We recognized at the time the problems with low-density
highways. We asked what sorts of private benefits
could be bundled in a way that would make sense, what
were the limits of public-private partnerships, what
were the opportunities, and what were the constraints.
After going through that process and developing an
agreed-upon model that would be used by the federal
government and the provinces, it seems to me, if
I recollect, the idea then was that we could go
back to finance ministers and say, “This is the real
extent to which we can employ public-private partnerships
to renew our national highway system. This is the
residual that needs to be financed publicly.” But at
least then our federal and provincial finance ministers
would know that envelope had been pushed to the limit.
I don't know where that process is going. I gather
deputies have been meeting. I don't know if it's made
it to ministers yet. I'm not sure. I gather there's
some pilot potentially going on in Montreal, and if
that's the case, it may miss the point.
If I recall, from the committee's
point of view, we understood that in high-density
areas, toll roads, shadow tolling, and all that are
more viable. It's in those stretches where the traffic
densities are lower—
What kinds of private benefits
could be scoped into any request for proposal? I
wondered if you could tell us. I missed your meeting
the other day, and I meant to ask this question. Where
are we with public-private partnerships in our national
highway system? What are the limits? What are the
opportunities? What are the constraints? When will we
know what is possible with public-private partnerships
to renew our national highway system?
Mr. David Collenette: First of all,
the estimate now is about $14 billion to $17
billion to bring the national highway network up to
snuff, and that of course is the most ideal condition.
Those are figures that come from the work we've
been doing with the provinces.
I was quoted in the Hill Times as
talking about the federal government putting up that
money. Obviously we wouldn't put up that kind of
money. Any federal funding of highways is usually done
on a fifty-fifty basis with the provinces, so that's not
the federal exposure.
The work the committee did was very valuable and is
now being looked at by deputies. Some final
work is going into the report, and that should be made
public reasonably soon. Then the committee can look
at it and help me as we make some choices.
But frankly, we have to deal with issues such as the
one Mr. Casey has brought up: do we allow tolls on the
main trunk route across the country, from St.
John's to Vancouver? Some people argue that we can
allow it on parts of the
national highway system perhaps, but not on the main
Obviously New Brunswick and Nova Scotia have come to
a different view. They said, “Look, we don't have the
money. While we wait around for a new
federal-provincial program, we have to get the
highway built.” So they built a highway with tolls.
As I've said to Mr. Casey ad nauseam, New Brunswick and
Nova Scotia were fully within their rights to do that.
But we have also said, because of the concerns that
have been raised by him and others at this committee,
that before we institute a new program, we want to make
sure this issue is dealt with: Should we have
direct tolls on any parts of the national highway
network, or only part of it? That's a public policy
decision we should make up front before we spend.
On the question of public-private partnerships, that
doesn't necessarily mean tolls. You referred to shadow
tolling, which as I understand it is a concept used in
some countries, such as Britain. This is a
mechanism to flow public funds for the construction of
highways but using the private sector to design,
build, finance, and operate highways. They receive in
effect payments on throughput based on the economy in
the area and all the rest. This is another way to get
the private sector to build the roads, but in effect
the public treasury is sponsoring or funding these
highways. That's one route.
There is the direct route, which we have in
Ontario with 407, a direct-tolled highway.
That is probably a good example of giving people
choice. The public highway is 401, which is
overcrowded, as we know, but it's there, and the
operation and maintenance are paid for out of
general revenue. But 407 gives you a faster route
across the top of the city, and if you really want to
save time and you can afford it, then obviously you'll
pay. There's an example of where public-private
partnerships can work out.
The Ontario government wants to sell the highway.
It's a bit controversial; I won't get into that. But
there's a role for the private sector in the
designing, building, financing, and even operating of
highways, as they have in airport reconstruction or on
the bridge to Prince Edward Island.
Private money is available, but let's not kid
ourselves; this is not a cheaper way to do things.
This is a way of allowing government to be not directly
exposed to the payments on their books. Some would
argue that this is a more expensive way to construct
infrastructure, because the private sector has to
get its return, and this is part of the issue that's
going on right now in New Brunswick and Nova Scotia.
Mr. Roy Cullen: Thank you. Just to pick up on
that point, what we also heard is if it's to design,
build, operate, and maintain, a lot of efficiencies
can be built into that as well, in how these all
balance out in the end.
The other notion was that if you're dealing with a
national highway system—and we dealt with it at a very
conceptual level, and that's why I'm looking to the more
detailed response from the department and from you, when
it's ready—the idea is that you'd have a
choice. You'd either pay the toll or do the shadow
tolling, but in a national highway infrastructure,
you'd have the choice of doing one or the other.
These were just some thoughts we had that, in
terms of us moving forward, are going to be integral
to the solution: What are the opportunities, the
limitations, etc.? So I look forward to the report
I'd like to switch gears for a moment, Mr. Chairman.
The Chairman: You have about a minute and a half
Mr. Roy Cullen: Okay.
Minister, you have a
very clear and strong vision for Toronto in
terms of linking Pearson
Airport to downtown, to Union Station and the bus
station—this link to downtown. I wonder if you
could tell us how that's progressing.
What are the obstacles, if any? What are the
opportunities? Is the timetable moving forward? Are
people basically onside and on board to make sure
this comes to fruition?
Mr. David Collenette: Everybody wants us
to move ahead, and it is moving ahead. The railways
want to sell Union Station. The Toronto Terminals
Railway Company wants to sell it, with the attendant
trackage from the Don Valley Parkway to Strachan
Avenue. We believe CN could be prevailed upon to
sell the Weston subdivision, which is from Strachan
Avenue up to Malton Station, which would allow a
The problem we have is that the railways have been in
litigation with the City of Toronto, which owns most
of the land underneath the station, for back rent.
That has prohibited any movement on this file at
this time. But there are discussions going on, and I
think with a bit of creativity, ingenuity, and hard
work, we will have a solution. The solution might
involve the establishment of a public authority in
consultation or in conjunction with the private sector
so that the federal, provincial, and municipal
governments can come to the table, but most of the money
can come from the private sector to refurbish and
restore the station, much in the way Grand
Central Station has been done, or Union Station in
And of course the issue is whether or not we would
then be in the position of having a concession. If
the railway line from close to the airport were part
of any deal, then there would be a concession whereby
the authority could call for proposals to build a rail
link to the airport. So it's very exciting. There's a
lot of discussion going on, involving the federal
government, the province, the City of Toronto, Go
Transit, VIA Rail, and the private sector, which has
exhibited some interest—and of course the two railways.
Finally, for those at the table who are not from
Toronto, there are applications on rail-air links in
Montreal, which I'm quite excited about. A
lot of work has been done, and it's going to be a lot
cheaper than Toronto. And as I said before, there is
very much interest in Vancouver in alleviating the
overcrowding from the Vancouver Airport to the city
core using a rail link.
The Chairman: Thank you. I have five more names
on the first round, at 10 minutes each. Because we're
taking our full 10 minutes, we'll be here until 5.10 p.m.
on the first round only. I've allowed 10 minutes each,
and that will continue, but maybe if we can shorten the
questions a bit, we can proceed faster.
Mr. David Collenette: I'll shorten the answers, Mr.
Chairman. As you know, I
have to leave at about 4.45 p.m. I have to go to
Montreal. My officials, though, will stay all night if
Voices: Oh, oh!
The Chairman: If we shorten the questions
and the answers, we can all
be out of here very early.
I'll read the list: Mr.
Calder; Monsieur Mercier, Mr. Dromisky, Mr. Price, and Mr.
Mr. Murray Calder (Dufferin—Peel—Wellington—Grey,
Lib.): Minister, as you know, in the Standing Committee on
Agriculture and Agri-Food, we're taking a look at what's
going to happen when we start the negotiations of the WTO.
The preliminary will start next August and then we'll get
serious about it in the year 2000.
So when you make the statement that you don't want to
have the U.S. transportation system get ahead of us,
which I agree with totally, I have to ask this. If we
wanted to compare the St. Lawrence Seaway with the
Mississippi system, I know that army engineers are doing
a lot of the maintenance on that, and the United States
is able to get around that by saying they do that
because that's the only thing they have in place
to train them. But obviously it's a transportation
subsidy, because they're not charging for those services
rendered, and obviously the cost of using that
system goes down, because it's being maintained by the
government. We don't do anything like that within
the St. Lawrence system, and that's just one example I
can think of.
When we get into these negotiations with the United
States, how are we going to have our system
stand up against their system without them applying
Mr. David Collenette: This is a little bit out
of my territory. In dealing with the United States,
they're the great free enterprisers, and it reminds me
of the line from George Orwell's Animal Farm: “All
animals are equal but some animals are more equal
than others.” The way the Americans work is that there
are supposedly rules, but they get around them.
Mr. Murray Calder: Yes.
Mr. David Collenette: You mentioned the core
of army engineers, which does a lot of work. We don't
have the same luxury of having our defence department
do it, and that's a subsidy to industry. It's a
question of trying to expose and root
out these subsidies and deal with them in the forum of
negotiations. But you'll have to talk
to Sergio Marchi about that. That's really his area.
If you take rail, for example, Canadian Pacific and
Canadian National think
of themselves as North American railways. With the
acquisition of Illinois Central and with some of CP's work
recently in opening up a new line in Pennsylvania that
will connect on the east coast of the U.S., they're
really serving notice that they are competing with the
U.S. railways head-on. Maybe CP will acquire a company
Then it gets into taxing regimes and
inequities between the way the railways are treated
from a tax point of view, which can help or hinder the
railways. Of course the railways want a fairer
capital cost allowance regime from the finance
department. They also want lower municipal taxes in
Canada. They also want lower fuel taxes. In
Saskatchewan, for example—I don't want to pick on
Saskatchewan this afternoon; I quite enjoy going
to that province—the fuel taxes are among the
highest in the country. That's harmful to the
In terms of water transport, we do have somewhat of a
disadvantage, for the reasons you've
mentioned, and we've tried to deal with that with
the commercialization of the seaway to make the
facility better and more competitive in the way
A lot of the issues you raise really
have to be discussed in the context of international
trade negotiations, but you're right to put your finger
on it: no matter what we do, it just seems the U.S.
has other ways of getting around things.
Mr. Murray Calder: Okay.
My next topic is Y2K. You say in your presentation
that you have taken definite steps to identify and
assess business functions and applications and that
you're going to test contingency plans by December
1998. What does this mean for Pearson Airport, for
instance? Does it mean sometime this year you're
going speed up the clock so that it's the year 2000
and we're going to see how the system works, if it
flies or crashes? How are we going to do that?
Mr. David Collenette: The deputy or Mr.
Jackson will deal with those issues.
We have been extremely conscientious. We're very much
aware of the problems in the transportation field.
We're dealing with the stakeholders. We've had the
conference, as I mentioned, which I convened. NAV CANADA
Is particularly concerned, and Monday in Toronto they
had experts from not only Canada but the U.S. and
Europe deal with the air navigation system. We
have a good story to tell in government generally, but
especially in transport.
Ms. Margaret Bloodworth: Perhaps, Mr. Calder, I
could back up just a minute before dealing with that to
say I see us dealing with the Y2K issue on three
First of all, the department as an
organization has a number of systems that we have to
make Y2K-compliant. The December 1998 actually refers
to when we will have all our internal systems tested.
A few will slip over into January, but our
intent was to make sure that we had a full year, because
everyone who's tested has found there are some
things to correct afterwards. So that's one level, and
in our case, it's not a huge system. We're not one who has
a huge system, but we do have a large number.
The second level is as a regulator, and the minister
has referred to the steps. Certainly he personally has
taken a big role in making sure that the industry is
sensitized and that we're ready to make the call if
there is a safety problem. We're cautiously optimistic
there won't be, but we're taking all the steps we need
Part of that is
contingency planning, and contingency plans are to be
ready, including having reviewed them and tested them,
by next September. We're part of feeding into the
overall government system, which is being headed by a
group in the national defence department. We will lead
in the transport field. While we hopefully will not
have to shut down Pearson Airport, there's no question
we will be testing systems. For example, Halifax
Airport is an airport we still run, and we will be
testing those systems. We'll pick times that don't
disrupt people, but it may have
some implications if some particular system doesn't
function. Our intent is to test the systems
individually before January 1, 2000 so that we'll have
a small problem rather than a big one.
The third level is the level of the transportation
system as a whole. The safest system would be one that
didn't operate at all; we'd have a very safe day, but it
wouldn't be very good for the country. So we're also
interested in the whole business continuity, and a lot
of that relates to the role as a regulator. We're
helping industry share best practices and we're
encouraging them to set up forums, such as the one the
minister chaired in September and the one he was at with
NAV CANADA. There will also be a marine one and so on.
We're encouraging all partners in the transportation
sector to address all of the issues.
Ron, did you want to add something on the safety side?
Mr. Ron Jackson (Assistant Deputy Minister, Safety
and Security, Department of Transport): I would only
add, Deputy, that we are looking at the Y2K risk in the
transportation system, which we regulate from a safety
perspective, as we would any other transportation safety
As you know, the system today is largely made up
of embedded technology, computers, and so on that
make it run, and they can fail at any time today,
notwithstanding the fact that there may be a Y2K
problem down the road. But we do have the regulatory
tools today to make sure that if the system is not safe,
we can take steps to mitigate the risk and make it
safe. In our dealings with the industry with respect
to Y2K, we will be dealing with that exactly in the same
The Chairman: Mr. Mercier.
Mr. Paul Mercier (Terrebonne—Blainville, BQ): I have two
questions. Here is the first one.
Among the recommendations we made to you, there's one that you
could not respond to positively. It is the one where we asked that
Ottawa agree to pay its share of the $25 million to implement the
second phase of the high speed train study. I suppose that there
are perfectly valid financial reasons for that, but it is equally
obvious that without a second phase, the money we invested in the
first phase will be lost because the study will remain incomplete.
May we hope that in the next budget, for 1999-2000, money will
be found to continue this study? This is my first question.
Currently, Canada is becoming the only G-7 country without a high
speed train and without a plan for an HST. In this sector, the
United States are also ahead, as you just said.
The Hon. David Collenette: Mr. Mercier, I already answered
this question several weeks ago, but it is an important question.
As I already said, my dream would be to have an HST between
Montreal and Toronto or between Quebec and Windsor. The question
however is the following: are the governments of Canada, Quebec and
Ontario ready to fund such an undertaking? This undertaking will
compete with airline companies. In addition, many other things are
putting pressure on provincial and federal budgets, like health or
In my reply to the Transport Committee, I said that before
spending another cent on another study, we wanted to discuss the
matter within our department to assess whether we can really fund
such a system and if starting this would be in Canada's interest.
If we provide $25 million for a study with Quebec and Ontario, it
will be a great step towards carrying out the project.
We're not only talking about $25 million. With contributions
from private companies, the total amount could be $100 million.
This is a big step to take. Before taking this step, we want to be
sure that the project is in the best interest of Canadians.
Mr. Paul Mercier: Do you have a timeline?
The Hon. David Collenette: Excuse me?
Mr. Paul Mercier: Have you envisaged a date for this study—
The Hon. David Collenette: It should be in a few months,
perhaps in January, February or March. The work is currently being
done in our department.
Mr. Paul Mercier: Here is my second question. Without an HST
or while waiting for an HST in the Quebec-Windsor corridor,
passenger trains are handicapped as they find it hard to co-exist
with freight trains. Moreover, along this whole section of track,
there is a CN line and a CP line as well. Basically, the question
could be solved if the two companies agreed to share passenger and
freight transportation. However, if the companies do not come to an
agreement, I believe that the government will have to intervene. Is
the process on its way? Are both companies discussing it? Where are
we with this issue that is so vital for the future of passenger
The Hon. David Collenette: The two railway companies are well
aware of this committee's recommendations and they know that I
accepted your recommendation on access to tracks. As I said, we
must strike a committee before March 1st to solve the problem. I
spoke with the two railway company presidents about our
government's position and they know that if there is no agreement
regarding railway passenger transportation, the government will
step in. We have the necessary means and constitutional or
legislative authority to intervene. I am very pleased with the
attitude of CN and CP. They are well aware of our position and are
currently trying to find routes, between Montreal and Toronto, for
instance. Discussions are currently going on between VIA and CN in
order to find a way to provide more express trains per day. This is
a sign of goodwill from CN.
Mr. Paul Mercier: Do they have until March 1st?
The Hon. David Collenette: Yes.
Mr. Paul Mercier: Thank you.
The Chairman: Is that all, Mr. Mercier?
Mr. Paul Mercier: Yes.
The Chairman: Thank you.
I'd like to thank Mr. Dromisky for allowing opposition
members to ask questions while the minister is still
here. Mr. Dromisky has passed.
Mr. David Price (Compton—Stanstead, PC): Thank
you very much, Mr. Chairman. I'll make mine quite
Mr. Mercier has covered part of my
question on the Quebec-Windsor corridor. Just to
finish up on that, at one point ABB and Bombardier
were both working on projects. Are they both still
working on projects or propositions to present?
Mr. David Collenette: ABB, as I understand it,
wanted to use existing tilting train mechanisms—a
technology deployed in Europe—on the track
we have now. This solution is being used in
Britain and I believe perhaps in Italy or Spain, one
of those countries.
Mr. David Price: And somewhere in the States.
Mr. Ron Jackson: Amtrak.
Mr. David Collenette: Yes, and Amtrak in the U.S.
That of course is a cheaper way of getting faster
But the LRCs have a tilting mechanism. It didn't work too
well at the beginning, but it does work. It's been more
refined since Bombardier worked on it 20 years ago.
The other proposition of course involves Bombardier
and I guess Lavalin, Gec Alsthom of France, and
some financial houses, which is in effect to put the
TGV, as you see it in France, into Canada. That's what
Mr. Mercier is talking about.
As I said, before we spend a nickel on
further studies, we want to make sure it really is
going to be the right thing to do. I have an open
mind, and as I said—
Mr. David Price: But have they brought forth
actual propositions on it yet?
Mr. David Collenette: Well, they have a
concept in mind. They've certainly talked to me about
it privately and they've talked to a lot of people around
Ottawa and elsewhere. They've done their
homework. In fact it's been public. But they want $7
billion from governments—$3.5 billion from us and
$1.75 billion each from Quebec and Ontario. The question
is, should we be spending that kind of money in direct
competition with private airlines?
France had it easy, because the government owned Air
France and the government owned SNCF, the state railway.
So they made a public policy choice on, say, Paris to
Lyon and elsewhere that they would finance trains
rather than run airplanes. We don't have quite that
luxury, because we own the passenger system, yes, but we
don't own the rail beds any more and we don't own the
Mr. David Price: Of course the other question I
had was on the highway system, but Mr. Cullen covered
it fairly well, so I'll leave
my time to someone else.
The Chairman: Thank you.
Mr. Rob Anders (Calgary West, Ref.): Mr. Minister,
I just want to say that deputy ministers are often a
very convenient thing. One of my colleagues asked you
earlier about the up to $30 million that is allowed to
be borrowed by the Canada Ports Corporation. The
deputy minister brought up that there was only $1 in
terms of the votable amounts, and yet when I check the
financial summary tables on page 45 in the
performance report, I notice that the entire
outstanding loan balances of the Canada Ports
Corporation are actually to the tune of $46 million.
The intention in the answer that was given was that
the government money would be replaced with private
money in terms of the loans. Even if you take that
into account, that still leaves more than $16 million
So my question is, why do we have something that's only
going to exist for a very short period of time having
an ability to go ahead and borrow $30 million? And if
the intention is to transfer the public loans to private
loans, why do we have a $16 million discrepancy?
That's the first question.
The second question is this. At your last appearance,
you stated that no new tolls would be levied on any
future jointly funded highway built with federal money
without federal consent. In fact you told us
you'd already amended the Canada-New Brunswick highway
development to reflect your resolve. Will these new
appropriations fall under the new amended contract?
Those are my two questions.
Mr. David Collenette: On the last one, we
have, as I said, brought this into play with the new
agreement we have with New Brunswick for the $150
million on the twinning of the Trans-Canada Highway
between Fredericton and the Quebec border. We've
already done that.
We don't have any more money anyway, other than that
agreement—we don't have any new money—so
it's a bit academic. What we're saying is that until
we get the public policy issue resolved on where tolls
would be allowed, if at all, we will not allow federal
money to go into arrangements where tolls are levied.
We've been pretty clear on that, and we hopefully
will be able to come up with our view on that by
I'll let the deputy answer. It's convenient to have
deputies, because deputies are there with the officials
doing the minutiae of work, whereas ministers concern
themselves with the broad policy.
But as I understand it, yes, the Canada
Ports Corporation will cease to exist at a
certain point in time, once we establish the CPAs, but
there will be continuing liabilities, because of
loans that have been made in the past by the CTC.
Maybe the deputy could answer the question more fully.
Ms. Margaret Bloodworth: Mr. Anders, one thing
listed there is the interport loan fund.
That is a fund that the Canada Ports Corporation has,
with which they loan money out to some of their ports.
Whatever is left in that fund will return to the
Government of Canada when it's wound up. We don't know
the exact amount of that, but we expect it to be a
significant amount; I'm talking about tens of millions
of dollars. We will know at the end of that. That
will happen because money originally went in
from the federal government.
But in addition to that, there are a number of
other loans, one of which is a
loan that the Port of Sept-Îles has, and that's the $30
million. In the process of moving to a Canada Port
Authority, they are going to place that with private
lenders. That's not a problem for the Port of
Sept-Îles. They're quite capable of carrying it. They
carry it now effectively, but they are going to move it
to private sector funding.
There are other debts that
will not disappear, at least not right away. There is
a debt on Ridley Terminals. That doesn't show in our
books, I believe because it's through the
Export Development Corporation, but Ridley Terminals does
have a fairly significant debt on it. There's also a
debt on the Port of Belledune. It's not yet been
decided what will happen with that debt, and I'm not
sure the exact amount of that. Perhaps Louis
knows the amount.
In the course of settling and eliminating the Canada
Ports Corporation, they will no longer be there as a
federal government entity, if you like, to loan to
ports. So the loans either have to be put in to
private lenders—which those ports that are commercially
viable will do, because they can finance them—or they
have to return to the government in some
way to still hold.
The two I'm aware of
that will not disappear at the end of
Canada Ports are the one on Ridley Terminals,
which would show up in the Export Development Bank's
books, and the Belledune.
I'm not sure of the
amount of Belledune. Do you know, Louis?
Mr. Louis Ranger (Assistant Deputy Minister,
Policy, Department of Transport): I don't have it
Ms. Margaret Bloodworth: We can certainly get that
amount for you.
The Chairman: Before we carry on, I'll just make a
comment. I know some members are required at other
places. There will not be amendments. Any amendments
from this morning would have to be brought directly to
the House. So we don't have to have a quorum. You're
welcome to stay, of course.
Mr. Rob Anders: Thank you.
According to the 1997-98 public
accounts, Transport Canada spent $10,777,284 on bridges
in the Montreal area. If you want to follow along,
this is on page 132 in the supplementary estimates.
The supplementary estimates call for an additional
$1,304,000—a 9.6% increase. I'd like to know how the
these bridges are managed, exactly why we need the
additional funds this year, and whether or not there are
any plans to commercialize these operations along with
the ports, the seaway, the airports, air navigation
And if I can touch on this as well, I'd
also like the minister to explain how subsidizing the
costs—meaning keeping them artificially low—of
Montreal suburban commuters is helping alleviate urban
congestion, something the minister has referred to many
Mr. David Collenette: There are historical
reasons that these bridges are with the Government of
Canada, and there has been some discussion about
divesting ourselves of the bridges to the province.
There's another argument that says we should keep these
Obviously they are main arteries into
Montreal, and while we have them, they require a
lot of money for the upkeep. You may remember the bit
of a fuss last Christmas around the Victoria Bridge in
Montreal, which is two wings attached to the railway
bridge owned by CN. Under a complicated arrangement,
CN owns the bridge, but the Government of Canada
provides for much of the upkeep and was required
to repair the bridge. We struck a fifty-fifty deal
whereby those repairs should be split between CN and
We do have other bridges in the system. We own the
bridge in Vancouver, the Arthur Lang Bridge, which is
the one that is close to the airport.
reasons, 40, 50, or maybe even 60 years ago, the federal
government was in the bridge business, but we've been
getting out of it. Yes, we'd like
to get out of a lot of this kind of infrastructure,
because as you correctly state, this is an
interurban or interprovincial operation. But it's a
question of how we get out, and if a province is willing
to take it over, how much money we are prepared to pay.
The federal government also has a stake in bridges
across the Ottawa River into Quebec—the
Interprovincial Bridge and the other bridges as well.
I'm not sure whether we have one of them. I think the
National Capital Commission has them and Public Works
has them. This is an issue we're going to have to look
at as to whether we centralize the administration of
all these bridges in Transport Canada, pending some
resolution or devolution to provinces and the like.
I don't know if the deputy has a specific point, but I
have to leave now; I apologize. But I'll always come
back, Mr. Chair.
The Chairman: Mr. Minister, this 10 minutes was
for Mr. Anders. We do appreciate your presence and we
understand that you have to leave. Everyone who needed
to speak to you or ask questions got their 10 minutes.
We will continue if there are members who have other
questions of the department, but thank you very much,
Ms. Margaret Bloodworth: I could answer the
specific question about the Mercier Bridge and the
Melocheville Tunnel, which Mr. Anders referred to.
Those ones are two particular facilities that have
come into the Jacques Cartier incorporated company,
because they used
to be part of the seaway. When the seaway authority
was commercialized, they came into that organization.
The costs of running them are actually more than
covered by the revenue that comes from non-navigational
assets that will also go into that corporation. But
this is the authorization to continue to
maintain them for this year.
Over a period of five
years, the revenue from the non-navigational assets is
about $23 million, whereas the cost of maintaining
those two facilities will be about $11.3 million. So
overall, by taking those two structures into the
Jacques Cartier Bridge corporation, which is a crown
corporation, the federal government won't be out money
on that. They will be covered. But there's no question
that we have to have authorization to pay for the
maintenance for the rest of this year, because the
Jacques Cartier Bridge corporation took them over on
The Chairman: This completes the first round. Is
there a need for a second round, colleagues?
Mr. Rob Anders: I have a question.
The Chairman: Could you ask it in one minute?
Mr. Rob Anders: Okay.
The Chairman: And we'll ask our guests to answer it
in two minutes.
Mr. Rob Anders: Sure.
I'd like a more detailed explanation of the following
passage from page 12 of the performance report:
Conveying federal property to local operators could
take longer and cost more than anticipated due to
third-party interests, provincial issues and
unforeseen costs, such as environmental work. Some
of these factors may restrict the economic viability
of the facilities to be transferred.
That excerpt brings a few questions to mind. Which
federal properties are slowing the
commercialization process down? Secondly, why will
commercialization cost more? Thirdly, how much more?
Fourthly, why didn't the department anticipate the costs
as well as the third-party interests? And lastly, how
will these factors restrict the economic viability of
Ms. Margaret Bloodworth: Let me start and then
I'll turn to Mr. Sully to complete.
Whenever we divest facilities that have a cost to us,
there is usually an upfront cost. When we're divesting
them, we may see and we often do see savings over time,
but there is an upfront cost. For example, with the
port divestiture fund, we often transfer ports with
some money out of the federal purse, which may in fact,
in that given year, be more than it cost us to actually
run it. We're doing it because we've divested it
forever to somebody else.
In terms of the third-party interests and the
provincial issues, in some of the ports, the provinces
own the harbour beds, for example, so there has been
some complication of issues in finding out exactly who
owns what and what they're prepared to transfer. And
some provinces have not been keen to transfer. We've
had some prolonged discussions with Newfoundland, for
Another example of a third-party interest is
the aboriginal interest. The Delgamuukw decision did
cause us to relook at some of the facilities we have,
particularly in British Columbia and some in the
Maritimes, although affected elsewhere.
it's referred to several times in the performance
report—yes, there is a cost to divestiture, but we're
doing it for long-run savings, if I can put it that
way. But the immediate cost in many cases—and that's
why we have a port divestiture fund of $125 million— In
many cases we are divesting these ports with some
money along with them.
Do you want to add anything, Ron?
Mr. Ronald Sully (Assistant Deputy Minister,
Programs and Divestiture, Department of Transport):
Only to address your last question, Mr. Anders, which
was why didn't we know about it going in?
I'm sure you can appreciate that in the case
of NAV CANADA, for example,
where we were transferring over 500 properties,
leases, or instruments we had on the properties, and in
the case of ports, where we're transferring over 500
smaller ports and harbours, it's difficult to know with
any precision, going into a process, exactly what it's
going to cost when it comes to issues such as
environmental remediation. Just in the case of Nav
Canada, for example, we have found that it is costing us
more and it is taking us longer. We have to do a
baseline survey on every one of those properties, and
then we have to negotiate with NAV CANADA on what will
be the extent of the remediation we will carry out.
That's what adds to the uncertainty, that's why
it's taken longer, and that's why in some cases the
costs are up.
The Chairman: I will accept another one-minute
question from anyone.
Mr. Anders, do you have another?
This concludes our study then. Thank you very much
I'd like to tell everyone that on Wednesday of
next week there will be a presentation in room 371
West Block on intelligent transportation systems. It's a
public meeting, and you are all invited.
Thank you very much, everyone.