[Recorded by Electronic Apparatus]
Tuesday, June 11, 1996
.0909 
[English]
The Chairman: Order.
I should note, given the events that are occurring today, that we have only about an hour. President Zedillo will be speaking in the House at 10:30. Members have been asked to be over in the House by about 10:20, and I want to preserve about five minutes before we adjourn to for some business of the committee.
.0910
Minister, welcome. We appreciate your willingness to come and meet with the committee. I note this is the second time in relatively short order and the third time we've had the pleasure of your company since I became chair.
Today we are to talk about this whole issue of trade, tourism and technology. Given the shortness of time, there has been a request that we restrain the remarks. I know there's a lot of interest in this particular topic.
Hon. David Anderson (Minister of Transport): Thank you, Mr. Chairman. I will remember your request to be brief. Certainly it's a pleasure to be back before you today.
[Translation]
It gives me great pleasure to speak to you today. The last time I was here, I focused on the link between a modern transportation network and Canada's national competitiveness.
I've now been the Minister of Transport for several months and I'm convinced more than ever that international trade is the key to growth and job creation in Canada.
[English]
I tried to stress yesterday, when I tabled the Canada Marine Act, that modernization in the marine sector is a key to jobs and growth. There's a direct link. The same can be said about any other aspect and any other mode of our transportation system.
I stressed the last time I was here the connection between a modernized transportation system and our international competitiveness. Since then I have been involved in many discussions about finding ways to make sure that our transportation system serves the right ends, making us more competitive, boosting our tourism and, particularly important for me from the west coast, strengthening our ties with Asia-Pacific.
That is where I see the study of the transportation, trade and tourism of this committee to be really invaluable to me as minister and to the government and country as a whole, to be able to highlight the steps the industry and the government can take together to make sure we create the jobs that are out there, if we have the right policies and the right private sector initiatives to back it up.
I would like to say a quick word about tourism. To me it's big business, one of the fastest-growing sectors of our economy, and growing everywhere in the country. It's a major component of the worldwide economy and certainly of our own. Half a million Canadians are employed in tourism in one respect or another. Throughout the country 60,000 businesses are involved and there is $18 billion in direct income and a total of approximately $27 billion overall.
Transportation is critical to that successful tourism sector. We need a transportation system that meets the need of the pleasure traveller and we need also coordination of all services - air carriers, cruise operators, bus lines, taxi services, etc.
I would like to depart for a moment and comment on the new decision on Greyhound. Jim Gouk is of course particularly interested in this because he's from the Okanagan, where Kelowna Flightcraft is located. The interesting aspect to me was the connection between bus and air, which is not something we've seen before, either in this country or I think any other.
So that's the type of integration and coordination that seems to me to hold some promise. Too often we do not have coordination between the train and plane, between the bus and the train or plane, and too often accommodation is not coordinated either.
We have computer networks now. We have opportunities and I think the hospitality industry can do more to make the traveller from overseas have that seamless web of purchase of services here in Canada that they want for tourism and not have to do that sort of companion shopping and when they leave the country and are sitting on the plane saying if only they'd known beforehand they could have done this or they'll have to try to come back again. They may never come back again and we may have missed the opportunity of extending the stay by a week or even more, because they didn't know what was there and they couldn't purchase the tickets for the tourism facilities easily.
This fall we're going to have a summit of leaders in the travel industry, which I think will allow us to build on the progress as to how we can make the transportation system support that.
[Translation]
I will soon give the floor to Moya Greene, my Assistant Deputy Minister, Policy and Coordination, who will tell you about some of the productive meetings we have recently had with representatives of the tourism sector.
.0915
Before we do that, however, I would like to talk about the second key sector for Canada's transportation network, that is, international trade, and more specifically our trade with the Asia Pacific region, a region that has one of the fastest growing economies in the world and whose annual growth has been on average 7% over the last few years - double ours in North America.
[English]
The Prime Minister said many times that Canada is a Pacific nation, and that means opportunity for the whole country, but of course especially for my part of it, the west coast. Next year we're going to host the APEC summit and we can show leadership in this area. I am also hosting a meeting of APEC transportation ministers next year and will press ahead on matters of common concern.
[Translation]
Over the coming months, I will be working with my Cabinet colleagues to coordinate our policies and take the necessary measures so that our entrance onto the Asia-Pacific market works as efficiently as possible. We also have to take measures to broaden trade rules in transportation. For more than 25 years this sector has been protected from changes in trade.
[English]
We certainly have in North America goods and services traded freely, but the carriers that deliver those goods and services are still bound by many of the old rules. We're trying hard to change the old rules, working through our NAFTA colleagues for standardization across the whole of North America.
In addition, with air we're going to try to continue with our process of liberalization with the nations of APEC. In the marine area, we're working with the World Trade Organization, International Maritime Organization, and others to eliminate barriers to the provision of international shipping services.
In your study of transportation, Mr. Chairman, I trust you will be looking towards future policy and innovations. Of course fiscal realities must weigh heavily in all our deliberations.
Highways are a case in point. We must look at such things as public-private partnerships and new financing mechanisms. We must certainly come up with ways of improving our competitive situation and our tourism but not with ways that add to our deficit.
So your work is going to be particularly valuable if you can advise the government on how we can best advance the strategic interest in the areas of international trade and tourism, but bearing in mind of course the financial constraints.
Transportation is a strategic asset. It can drive the Canadian economy. I'm looking forward to working with you to make sure that the modernized transportation system that we're going to have meets our ends, the right ends, making us more competitive, boosting our tourism and strengthening our links.
Mr. Chairman, I hope that was brief enough. That's it. I'll answer questions. Moya is with me here; David is with me as well and we can go over some of the concerns you may have.
The Chairman: Mr. Gouk. Mr. Gouk, you will note the abbreviation in the minister's remarks.
Mr. Gouk (Kootenay West - Revelstoke): I note that. I'm pleasantly pleased.
Mr. Anderson: He only wanted me to say one word, and it was ``yes''.
Mr. Gouk: Given that you said that before you came here, I didn't even expect the need for that this morning.
Moving right into the highway sector, everybody acknowledges the need to do something on the highway but nobody's ever done anything. The reason nobody does anything is money, of course, the reason that stops most things. However, for a long time now provincial and federal governments have collected money from the transport sector, money that greatly exceeds the amount of money that is spent back both at the federal and provincial levels and most especially at the federal levels.
Has the department either studied or are they contemplating studying how much of the gas tax, the fuel tax that is charged, it would take to do a proper systematic rebuilding of our national highway infrastructure, and are they giving any consideration to the commitment to dedicating some specific portion they will account for to pay for that infrastructure?
.0920
I note further that one thing suggested in an outline was the possibility of a further tax on trucks according to axle weight and so on. If such a thing is ever implemented, would the government be prepared to commit to dedicating that funding and holding it separate from consolidated revenues in a special account so that the money would be spent only on the infrastructure it's collected from?
Mr. Anderson: Some of the questions you've asked are probably better answered by the Minister of Finance because they deal with finance policy. Let me give some general comments as opposed to specific government policy in this area.
Overall you've seen federal and provincial governments over the years avoiding dedicating taxes to any particular sector. There are a number of financial reasons for this. One is that everybody is willing to pay for the easy stuff, the popular stuff, and they're happy to dedicate taxes to that. But the hard-core government activities that may not have such popular appeal or indeed may not have a tax associated with them tend to get overlooked when you dedicate too many taxes to specific ends. I know of no province or no federal government that has ever decided on an appropriate figure.
I do know that in the United States they've had the highways trust, as it used to be called, the Eisenhower legislation, which has continued in one form or another even to the present day. It was dedicated to the interstate system. But there again, once they had created the interstate system there was enormous pressure to try to get that money diverted to other uses of the federal and state governments. You probably recall, as I do, the ads that used to be taken out by Caterpillar and the other manufacturers of construction equipment, that the sacred word is trust. This is a trust. The money is to go into highways. The U.S. state and federal governments rejected that approach more or less out of hand.
We have at the present time pretty substantial taxation of gasoline. About 60% of that taxation is provincial and about 40% is federal, roughly speaking. It varies by province. We do not see at the present time much chance, given our financial situation in the country, of major dedication such as you have suggested. This is within Transport, just looking at the government in general. The decision, of course, let me repeat, is that of Finance and not ours. We see this as a major battle that isn't likely to have much success.
Back to the issue of funding highways, which is the core of this, I think it would be great to have more than we're doing now. I have to say this as an enthusiast for transportation and for highways. On the other hand, we put a little over $300 million into highways in Canada at the present time, plus another $300 million for the prairie provinces because of the special program for the phase-out of the western grain transportation subsidy. The prairie program is not $300 million a year. It's$300 million overall for I think five years, so it's about $60 million a year extra there.
In addition, as you know from the by-election in Labrador, we get certain pressures to do such things as the trans-Labrador highway, and your own party supported expenditures in that area as well as our own.
So we have a total of about $400 million going into highways now. What we do not have is this money being spent strategically for clear transportation purposes. It is to replace a subsidy that used to go to the railroads here, or it's to do something else there, for instance the grain subsidy cancellations.
I would like to see in the next little while a consideration perhaps by this committee of a number of possible improvements in the national transportation system, the national highway system, where in conjunction with the provinces, however financed, we start improving some of the choke points in our system. Personally I think that's one of the fastest ways of creating jobs in Canada, and not just highway construction jobs. Those are probably not as important as the jobs that come from the traffic that will flow on those roads. We will have trade with the United States increase dramatically. Get rid of some of those choke points and we'll have more trade. I certainly would be enthusiastic to hear the committee's views on this aspect of transportation.
I failed to obey your instructions, Mr. Chairman...much too loquacious.
.0925
Mr. Gouk: There is one other part I mentioned there. If there are to be any new fees, such as axle-weight fees for trucks and so on, is the department contemplating a consideration to dedicate that new revenue strictly to the transportation repair mode, or will it go to consolidated revenues and then we beg for our own money back?
Ms Moya Greene (Assistant Deputy Minister, Policy and Coordination, Department of Transport): We're not contemplating any specific fees at this time, Mr. Gouk.
There's a fair bit of work to be done before you actually design the funding mechanism. Moreover, with respect to fees that would be primarily linked to trucking in provincial governments and the weight of trucks in provincial governments, we would probably want to work with our provincial colleagues if that were seen to be an appropriate mechanism for funding a portion of the national highway system. As you know, monitoring truck traffic for weights and dimensions is a provincial activity, not a federal one.
I would stress that we're not contemplating any specific kind of fee, or indeed any specific kind of funding mechanism on that. As the minister mentioned, at the end of the day these questions touch upon the fiscal priorities of the government. That's the responsibility of the Minister of Finance.
Mr. Gouk: Not zeroing in on this specific thing but using it as an example, as the minister said, given our financial affairs these days, I assume the Liberal approach would be to have additional revenues to pay for some of these expenditures, at least in part. If there are to be any new revenues, whatever the source may be, will they go the old route of going into consolidated revenues where we have to line up to get some money out, or is there a possibility of them being dedicated and held separate to be used only in the highway infrastructure system?
Mr. Anderson: While we might prefer the latter, I have to go back to saying that the decision would be that of the Minister of Finance. My expectation is that Finance will not look with favour on dedicated taxes going to specific projects. They prefer to have them go into consolidated revenue; otherwise you would never get around to... It's hard to find a tax you can line up, for example, for education or a tax you can line up and say a percentage of it will fund welfare. There's no connection between some of the welfare costs or education costs and the benefits.
This is an area where you do have that link, but it was always resisted by Finance in the past. I just cannot give you an opinion on whether they would do this in the future.
The Chairman: Thank you. This is an issue we'll be considering in the work we do this fall.
Mr. Jordan.
Mr. Jordan (Leeds - Grenville): This is rather refreshing. In the years I've been on the transport committee we've talked about marine and air almost exclusively, and rail to some extent. Now we are dealing with the one that affects most of us most of the time. I find this encouraging.
Highways are traditionally thought to fall under provincial jurisdiction. Have you made any approaches to provincial ministers of highways to see if they have any interest, first of all, in this kind of dialogue, and then proceeding with it on some shared basis? As you say, particularly in a far-flung country such as Canada, transportation is so vital to the economic well-being of Canada as a nation if we're going to compete. I can't imagine anyone saying they're not interested. Has anyone from the provincial level come to the federal level and said, why don't we talk about this? Or are you imposing this dialogue on them? What kind of reaction are you getting?
Resources are scarce - there's no question about that - but I'm a little nervous if you think the only way you can progress with this is by imposing a tax on somebody who uses the highway. I think there's a limit there.
.0930
If you think of the general well-being of the nation, I think money will be generated from an improved surface transportation network. If you're going to wait and say we can't go ahead with it because if we did we'd have to impose this and that would be too much, I don't think you're likely to get too far on that. I think you have to make it more a nation-building initiative and have resources coming out of general revenues to the extent that you can. There's a limit, of course, but I think you have to start thinking of it that way rather than how much can we nickel and dime somebody who's going to use the road. How do you estimate its worth to that company, individual or industry? I don't think you're going to move very far or very fast if you only look to that as a source of revenue to build a national highway system.
Mr. Anderson: Thank you for the comment and encouragement. It's also encouraging to have this committee doing what it's doing for the department. I assure you, we're very grateful.
With respect to proceeding, one of our tasks is to persuade public opinion generally, and those who direct it, that highways are an investment in jobs and the economy and that tax revenue will be generated by the activity you just mentioned. So that's one thing we'll have to work on.
To switch to your comment on the provinces, we are in discussions with the provinces. I'll ask Moya to comment on the details of that. With the provincial ministers of transport we have identified 25,000 kilometres of what is called the national highway system - it has been plucked out of the 180,000 kilometres of highways in Canada generally - and we do have agreement as to what is that national system. Where there might be some fine-tuning, and your committee might want to look at this, is where we have north-south trade links that could be improved. There are five or six proposals for NAFTA highways from Mexico City to Winnipeg, Mexico City to Toronto, or Mexico City to Vancouver. I think we're going to have to -
Mr. Jordan: But it is also Canada to the U.S., not just Mexico.
Mr. Anderson: Absolutely, but of course to get to Mexico you have to run through the U.S., so it's everything along the way.
Mr. Jordan: I see what you mean.
Mr. Anderson: It is just the two terminals, and of course the terminal would not be Toronto; it would extend to Quebec City ultimately. The concept is of a corridor to assist NAFTA trade. As far as I am aware, and Moya will correct me if I'm wrong, that is not something that is fully worked into the national highway system that we talked about in the past with the provinces.
With that invitation to be corrected, I turn myself over to the expert.
Ms Greene: Ministers never to need to be corrected. They're never wrong.
Mr. Gouk: Only from the opposition's point of view.
Ms Greene: That's correct.
With respect to provincial discussions, in the past four or five years we've started to do some serious work with our provincial colleagues to define the system and think about ways in which we could have a constant basis of funding the system. As you know, provinces have different priorities and they're strapped just like all governments are these days. But by and large I would say there's a high degree of consensus on at least two points: first, the national highway system is the critical transportation system for our country, given how people and freight move in this country; and second, ever since we built the national highway system, we have been spending in an irrational way. Everybody's spending money. As the minister mentioned, the federal government is spending about $300 million a year, and the provinces are spending many times that amount. So the issue is not so much the spending, but whether or not the spending is being done in a way that targets the key segments of the system the minister mentioned.
.0935
I think there is a lot of interest in moving forward with something, whether or not all of the priorities - and they are different - can mesh in a sensible way that ensures that moneys are directed to where they can be put to best use for the growth purposes you cite. I think that's the biggest issue, the biggest challenge.
Highways is a highly political area, and it's probably because it has been intensely political historically that some people are worried the allocation of new expenditures may not yield the kind of economic growth one would expect.
Mr. Jordan: I don't think the federal government could ever be accused of being political about anything -
Mr. Anderson: Heaven forbid.
Mr. Jordan: - and the provincial government.
That's all I had to say.
The Chairman: Thank you for that, Mr. Jordan,
Mr. Mercier.
[Translation]
Mr. Mercier (Blainville - Deux Montages): Mr. Minister, I have three questions. First, you said, with reason, that we need to link up the rail and air transportation networks. Here in Canada, we have a rather rare situation in that our main airports, Pearson, Mirabel and Dorval are not linked up to our rail system. What do you think of that situation?
Second, we have heard recently that Mr. Chrétien and Mr. Bouchard are discussing high speed trains. Would you have something to say about that.
My third question is about road transportation. This is a provincial jurisdiction so how do you think that the federal government can become involved without being accused of using it spending authority to infringe upon an area of provincial jurisdiction? Those are my three questions.
Mr. Anderson: In answer to your first question about rail and roads linking the airports in our big cities, it is true that we want to improve this as much as possible. There are two issues.
Airports fall into federal jurisdiction and therefore all roads and railway lines linking the airport to the city are a federal responsibility. To date, this has rarely been accepted. The federal government has at times contributed to the construction of a bridge or road but usually that is left to the province. I'm very interested in Mr. Brassard's proposal to improve the road and rail link between Dorval airport and Montreal. To date I have received no formal request on the part of Mr. Brassard; I do not think we have received a letter about that but I will look into the situation.
As regards your second point on the high speed train, I think this is a very interesting issue because we have the technology thanks to Canadian companies such as Bombardier. However we have to make sure that the system will be used; we do not want a new transportation system that will be competing with existing systems that would not be fully used. We must not forget that we currently have a high speed air transportation system that 40% of people travelling between cities in the Windsor-Quebec corridor use. Before moving these travellers to high speed trains, I want to make sure that it is actually possible because of the high costs involved.
That is why I was pleased to hear Mr. Bouchard's comments two or three days ago; he said that the company would carry out a study with no financial contribution from either level of government. When that analysis is finished, both governments - and the Ontario government, I hope - will consider the new proposal. We will then see whether a more comprehensive study of the four stages initially proposed is worthwhile. We will see.
.0940
I am pleased that the idea is still alive and that we are considering that possibility. After a more comprehensive study of the issue has been carried out, we will be in a better position to know whether it is worthwhile or not.
Your third question was about provincial jurisdiction. As I said in my answer to your first question, yes, we are trying to respect provincial jurisdiction. That, in fact, is why we have had problems in spending so much federal money on the Quebec bridge and especially on the road system in the province of Quebec.
We have finally reached a compromise which I have accepted with pleasure. For the first time, the province of Quebec has recognized that even though the road system falls under provincial jurisdiction, it is not always appropriate to ask the federal government to provide all the funds to maintain the bridges. In Quebec alone we have spent $310 million out of the $340 million that the federal government provides for bridges and tunnels - that is 90.5%.
We are now beginning to understand that the position of both parties needs to be reviewed in order to better understand provincial and federal responsibilities and jurisdictions. And I am pleased this is happening.
The Quebec City bridge is a good example. There is no question of the federal government trying to interfere in a provincial area, but sometimes it can help. That is often the case for interprovincial roads - that is the federal government's responsibility.
Mr. Mercier: When you talked about the rail links to airports, you mentioned Dorval. You did not talk about Mirabel, where ADM expects to eventually transfer flights.
Furthermore, I notice that one of the scenarios and itinaries proposed for the high-speed train has it passing through Mirabel. Would it be possible to consider both possibilities at the same time, as transportation will not be concentrated in Mirabel, and high-speed train will not be operating, immediately? Could Bombardier also consider the itinary of the high-speed train taking into account that Mirabel may one day again become involved in passenger transportation?
Mr. Anderson: Thank you for your question. First, the decision to only have cargo and chartered flights at Mirabel was made by the ADM administration. This was a very very difficult decision to make. I am not the one who made it, they did. I admit that that was the best decision to make, given all the difficult choices.
Mirabel still has a rather attractive future. Most of the activities are currently in Dorval, but if Montreal has the economic growth that we have been expecting for 20 years but that still hasn't actually happened, if the North-American headquarters of Swiss, Belgian, French, Italian, Spanish, and English companies are established in Montreal rather than in other Canadian or American cities - as has happened over the last 20 years - and if airline business is concentrated in Montreal - it is mainly business people who create these systems - I think that Mirabel's situation will improve.
.0945
We are not the direct cause, nor are our policies or the provincial government's policies. It is the airlines' policies, those of Canadian Airlines International Ltd., the Portuguese Airline, Lufthansa, Alitalia and many others, that determine this. All they have to do is use Mirabel.
Don't forget that people in Montreal and the province of Quebec travel a little less by plane than people in other big North-American urban centres. I don't know why, but there aren't as many travellers. The international community of North-American headquarters that we expected to see in Montreal unfortunately decided to use Boston, New York, Toronto, Calgary and sometimes even Vancouver.
An attempt has been made to change these dynamics by encouraging Montreal's economic growth. It will not be easy. A rail link or at least a good road between Montreal and Mirabel would however improve the airport situation.
Mr. Mercier: The ADM's project has Mirabel becoming the location for most of the flights in 10 or 15 years; furthermore, I believe that one of the six itineraries proposed for the high speed train goes through Mirabel.
Could we ask Bombardier to study these potential itineraries in case Mirabel were to become once again the main centre for flights?
That is my question.
Mr. Anderson: Yes, we could ask Bombardier to do that. It would be a very good exercise.
Because of the distance, 40 km, it is not to our advantage to have a high speed train. A high speed train is not the best system for distances of 40 km. But we could still ask Bombardier to do that study.
Mr. Mercier: The Quebec-Windsor route would pass through Mirabel.
Mr. Anderson: Yes, that would be a good idea. However, we still do not know whether we will have a Windsor-Quebec line or whether we will start with a much shorter line, for example between Ottawa and Montreal.
We still have not made any decision about a high speed train. It is quite possible and that could change the situation in Mirabel's favour. You are right.
[English]
The Chairman: Mr. Minister, I note as always that there's a great deal of interest. I have time for one more round, but I'd like to start off with a question myself.
The committee has a great deal of work before it this fall, with the marine bill just tabled today and the railway safety legislation. We have a proposal, in keeping with your request that we travel to some of the major ports on the marine legislation, to put the two studies together so that we do not have to repeat that travel, and to put on the table an interim report on this question of trade and transportation at the end of November. I wonder if you care to comment on both the travel and the timeframe.
I also note in this circulation that there's a list of highway reports to be made available to the committee. Will it be possible to have all of these reports by the end of June so that staff could begin that work before we actually get into the travel phase this fall?
Mr. Anderson: As far as I know, Mr. Chairman, the reports are done and we will make sure Mr. Cuthbertson gets them any time.
.0950
With respect to travel, we will certainly get some indication of the response to the marine bill, which was tabled only yesterday. This committee did a great deal of work previously and it may be that you do not have to visit every port. The suggestion is out there, and it will be a judgment call for you and your committee members as to the importance of such travel.
My suggestion to travel was only to say we are completely open to your suggestions with respect to this legislation. There are a number of contentious issues. One is governance and appointments. The second is taxation and how to handle that issue. There are a number of issues on which you perhaps will find an enthusiastic chorus of witnesses, which may require you to travel. I think we can play it by ear. We'll perhaps wait until we hear the calls for your travel before we decide on an agenda.
The Chairman: Mr. Gouk.
Mr. Gouk: I'd like to touch very briefly on each of the four media. I have a question for each.
I'll start with high-speed rail because that was discussed most currently here. I was approached by Bombardier to consider the possibility of a government and private enterprise partnership a couple of years ago. I'm shocked to see that the anticipated cost has gone up 400% to 500% from what they talked about then.
My position then was that if this thing was going to make money, as Bombardier was suggesting, then why in God's name would they want the government as a partner? And if it's not going to make money, why should taxpayers find another hole to shove their money into?
Is the government seriously looking at doing this as a partner, where there would be significant expenditure of something? The only reason the private sector doesn't invest in these things is that they're not likely to make money, which would then put the government in a position of subsidizing a transportation medium to compete against others.
Mr. Anderson: Mr. Gouk, the question is a very good one. I read with great care the statement by the Premier of Quebec following his discussions with the Prime Minister. The only thing that has been agreed to is that the company will work on a proposal to present later to government. This is a free country and any company anywhere in the country can work on a proposal to present to government. Whatever it might be out there, whoever is out there, they're all entitled to do exactly what Bombardier is doing. There is no commitment in the statement of Mr. Bouchard or the statement of the Prime Minister made in the press conference following that meeting that would indicate there is to be a federal or even a provincial dollar invested in studies until such time as this reworked proposal comes back.
My suspicion, Mr. Gouk, and it's just a suspicion, is that perhaps the figures that have been bandied about also appeared high to those who had looked at it a few years ago just as you did.
Mr. Gouk: The other side, of course, is fast and economical transportation. I find it interesting that you started off your presentation this morning mentioning Greyhound Air. We have two innovative new air carriers, both in the west, offering much lower air fares. That undoubtedly is going to affect the overall price of air travel, certainly in western Canada and down to central Canada.
Have you received any indication that there might be such an innovation in air travel coming from the eastern half of this country, particularly given the concern we heard at this table during the privatization of ANS? The carriers in Quebec, amongst other places, are very innovative and they represent a huge resource of the aviation community. I'm curious why there's nothing forthcoming as there is in the west, unless you have some information I don't.
Mr. Anderson: Mr. Gouk, you tempt me to make remarks about the innovative nature of the people of our province, which contrasts so sharply with that of other provinces, but I won't. I will simply say that nothing stops any other airline from making a similar approach. We hope the transportation sectors in Quebec, Ontario, the Maritimes and the prairies will follow suit.
I should add that Greyhound intends to fly all the way to Ottawa. It has not yet established that service. So it's not entirely a western service. Winnipeg will in fact be a major centre for operations, which I regard as sort of central midwest.
The Chairman: The centre of Canada.
.0955
Mr. Anderson: Yes, Mr. Chairman, I said it.
I see this as a good example of the way entrepreneurs in a region - the B.C. region in this particular case - have opportunities within our federation to expand their operations dramatically. The operations are there. If we get out and hustle for them, our entrepreneurs are as good as any others.
Mr. Gouk: I have two other things. I'll throw both of them out and you can comment on them, because they touch the other two sectors.
First, are there any plans towards initiatives or support for tolls as a government soluton to rebuilding the highway structure? I'd like to know the government's position on that. Second, to touch on the marine sector, do you have any comment in terms of looking into the flags-of-convenience situation?
Mr. Anderson: On tolls, there's a billion-dollar road being completed at Highway 407 in Ontario. There are also toll roads being built in Nova Scotia. Again, it's a provincial jurisdiction and they're proceeding.
We have Mr. Bouchard's original proposal to fund the TGV rail system entirely from road tolls in Ontario and Quebec. Somewhere along the line Mr. Bouchard's proposal was not picked up, and I was surprised that this cross-subsidization aspect had not been commented upon by highway users. Nevertheless, there is no ideological commitment on our part one way or the other.
If people come up with good suggestions for tolls, and if this committee comes up with good analyses of those proposals that come to it, we are not saying our minds are closed. If you people come up with good ideas, we'll be looking at them. Obviously this is a change from what is traditional in Canada.
I should add that in addition to raising revenue, tolls have the very attractive advantage of spacing traffic on a highway over the day. Highways are generally built for the the choke times of early morning or late rush-hour traffic - the city highways. If you create a toll system, you have the opportunity of diverting certain people to 2 p.m. If you know that there's a $2 toll on the highway at 5:55 p.m., but from 3 p.m. to 4 p.m. or 1 p.m. to 2 p.m. it's 25¢, you may decide to go early. Toll systems do represent a tremendous opportunity to space traffic so that you don't need to spend as much on your infrastructure to get the same result in terms of vehicles moved.
Tolls can be extremely sophisticated these days, with transponders on vehicles. Singapore is spearheading this type of... When you go out of your driveway you're instantly recorded on a satellite system from your transponder, I understand, and they just chock up the miles. So those who use the vehicles and the roads are the ones who pay the freight. I'm not sure that we would want to have an identical system, but we may want to have some aspects of that worked into ours. That's up to you.
The Chairman: We might want one on Mr. Gouk's car.
Mr. Grose.
Mr. Grose (Oshawa): I am interested in your last statement about changing traffic flows by adjusting tolls. Obviously you've never used the 401 in or out of Toronto on a Friday or Sunday night. You're not going to change those people. They're going at that time and that's it. Other than that, I'll restrict myself to train transportation.
I come from a time when people did take trains to get from point X to point Y, and I watched them slowly go away from trains. The mindset is a cultural thing now - no one even considers the train. You could spend billions of dollars on a high-speed train, charge no fares, have free drinks and dancing girls, and you still wouldn't fill the train, because no one even considers it, and you're not going to change people.
Let's stop spinning our wheels on this. Let's look at what people are doing and improve the facilities they're using. You're never going to get them back on the train. We've been playing with it for years. The railways didn't want it any more so VIA Rail took over, and now they're losing a ton of money. For example, all of us MPs have a free pass to ride on trains, but how many of us ever use it?
Mr. Fontana (London East): Not any more.
Mr. Anderson: Until yesterday.
Mr. Grose: It's gone, but no one used it anyway.
It's an example of the fact that it's a mindset, so let's forget it and get on with business.
Mr. Anderson: Ivan, the comments you made are obviously very realistic and sensible ones.
You say it's a cultural thing. If I could sort of knock off the last four letters of that word, it's also becoming a cult thing to use the train. This is with respect to tourism, and in some areas it's also with respect to transportation. I do not share your pessimism completely, although I entirely recognize that we now spend $230 million of subsidy for VIA Rail this year. That's going down. I promise you it will go down. But that's a ton of money to put into a system where you've had - not now, I have to add, but up to recently - some lines that had a $700 per passenger subsidy for every person who used the train. We have improved that dramatically. That particular line I'm thinking of is the Jasper to Prince Rupert line. It's now down to only a $100 subsidy per person who uses the train.
We do not feel that's successful, and we have made it perfectly clear to the people in Prince Rupert. We have made changes to the system. People in Prince Rupert, Prince George, and elsewhere northern B.C. and Alberta - Edmonton, Jasper - know full well we're not going to continue with that type of system if they don't get the ridership up. It's a opportunity to perhaps... I completely agree with you that we should not constantly be fighting human nature, if that's the case. But if there are opportunities that have not been effectively exploited we want to make sure we get the last one.
I might add that there are other railroads where although the total dollar value is not as high, nevertheless the percentage is over 80% subsidy. I'm thinking of one in British Columbia that is that type of VIA Rail service. We can't afford to continue that. I say bluntly to all of you that we can't continue to afford that kind of subsidy forever. On the other hand, I'm not going to...
You and Joe Fontana will be discussing the possibility of getting people back on the trains. I think we can increase ridership. I think it's still possible. I think we're reaching a point on the 401 on Friday afternoon where people start looking at trains as an alternative - the example that you gave, the 401. I think then we could perhaps radically change those figures.
It doesn't take a major shift of numbers to change the subsidy figures quite dramatically. That is something Mr. Fontana is quite an expert on.
I simply say that I've not given up on standard trains - medium speed and low speed, under100 miles an hour - but it makes me a little more skeptical about those who are talking about high-speed trains when in fact there doesn't appear to be the loyal ridership for a train. That's why I prefaced by remarks earlier by saying that unless you can persuade me that 40% of the people who now put their backsides on airplane seats to get to where they want to in the corridor are willing to transfer to a train seat, it really doesn't make a lot of sense to build it. But if there is that possibility of transfer, we're open to discussion and consideration.
The Chairman: Thank you, Mr. Minister. I note that our time has been exceeded and we all have to get over to the House for the President of Mexico. I appreciate your willingness to take the time to come to the committee and I appreciate the support we've received from the department. I look forward to the provision of those reports.
I'd like to ask members of the committee to remain behind for I promise you no more than five minutes. I would like all but committee members and staff to say goodbye.
Mr. Anderson: Thank you.
[Proceedings continue in camera]