MR. SPEAKER, I AM PLEASED TO SPEAK TODAY ABOUT THE CONSERVATIVE GOVERNMENT’S DECISION CONCERNING THE FEDERAL HOPPER CAR FLEET.

ON MAY 4, 2006: ANNOUNCEMENT - MAXIMIZE BENEFITS FOR FARMERS AND TAXPAYERS

• WE WILL NOT TRANSFER THE CARS TO THE FRCC
• WE (GOVERNMENT) WILL RETAIN OWNERSHIP OF THE HOPPER CARS.
• FARMERS WILL BENEFIT GREATLY BY THIS DECISION.

PROPOSED AMENDMENTS TO THE CANADA TRANSPORATION ACT, TABLED AS BILL C-11 IN THE HOUSE ON MAY 4, WILL ENABLE THE CANADIAN TRANSPORTATION AGENCY TO:

• ALIGN THE MAINTENANCE COSTS IN THE REVENUE CAPS OF THE RAILWAYS
• WITH THE ACTUAL COSTS OF MAINTAINING A HOPPER CAR IN REVENUE SERVICE.
  

GREAT BENEFIT TO WESTERN GRAIN PRODUCERS THROUGH AN ESTIMATED SAVINGS OF APPROXIMATELY $2.00 PER TONNE OF GRAIN SHIPPED. THIS IS THE EQUIVALENT OF LOWERING THE REVENUE CAPS BY $50 MILLION PER YEAR. MORE IMPORTANTLY, $50 MILLION WILL BE SAVED EVERY YEAR. THIS IS THE BEST OPTION FOR FARMERS.

ON MAY 16, THE FRCC ACKNOWLEDGED THAT THE GOVERNMENT’S DECISION TO RETAIN THE CARS WAS THE BEST FOR FARMERS.

THE FRCC WOULD HAVE TO CHARGE A LEASE FEE TO THE RAILWAYS FOR THE USE OF THE CARS IN ORDER TO GET THEIR REVENUES THEREFORE IT WOULD COST FARMERS MORE THAN THE GOVERNMENT’S OPTION.

THE FRCC HAS ACKNOWLEDGED THAT ANY SAVINGS IN THE MAINTENANCE COSTS, UNDER THEIR PLAN, WOULD BE OFF-SET BY LEASING COSTS THAT WOULD HAVE TO BE ACCOUNTED FOR UNDER THE REVENUE CAP.

ANY POTENTIAL SAVINGS THAT THE FRCC MAY HAVE CLAIMED WOULD NOT BE AS GREAT AS THAT FLOWING FROM THE GOVERNMENT’S DECISION TO RETAIN THE CARS.

IN FACT, ANY ANTICIPATED SAVINGS FROM ITS PLAN WOULD HAVE BEEN NEGLIGIBLE.

TAXPAYERS WILL ALSO BENEFIT FROM THIS DECISION, MR. SPEAKER. EACH YEAR THE GOVERNMENT COLLECTS $10 TO $15 MILLION FROM THE RAILWAYS FOR THEIR USE OF THE CARS IN NON-REGULATED MOVEMENTS OF GRAIN AND OTHER PRODUCTS. BY RETAINING THE CARS THE GOVERNMENT WILL CONTINUE TO COLLECT THAT REVENUE WHICH WILL BE EQUAL TO, OR COULD EXCEED, THE PROCEEDS FROM THE TRANSFER OF THE CARS TO THE FRCC.

THE RAILWAY CARS MR. SPEAKER, LET ME MAKE ONE POINT VERY CLEAR. THE FEDERAL GOVERNMENT FLEET IS IN GOOD OPERATING CONDITION.

TRANSPORT CANADA HAS COMMISSIONED INDEPENDENT STUDIES THAT DEMONSTRATE THIS FACT. IN ADDITION, MR SPEAKER, TRANSPORT CANADA’S RAILWAY INSPECTORS ARE VERY VIGILANT ABOUT THE SAFETY PRACTICES OF THE RAILWAYS.

MR. SPEAKER, THESE CARS HAVE BEEN USED IN CONTINUOUS SERVICE FOR THE BENEFIT OF WESTERN FARMERS FOR THE LAST TWENTY-FIVE YEARS OR MORE. THE MAJORITY OF THE FLEET WILL CONTINUE TO OPERATE IN A GOOD AND SAFE CONDITION FOR ATLEAST ANOTHER TWENTY FIVE YEARS.

OUR FUTURE OVER THE COMING MONTHS, THE GOVERNMENT WILL BE NEGOTIATING NEW OPERATING AGREEMENTS WITH THE RAILWAYS.

AT THE SAME TIME THE GOVERNMENT WILL ALSO NEGOTIATE A REFURBISHMENT PROGRAM WITH THE RAILWAYS. THE REFURBISHMENT WORK ON THE HOPPER CARS WILL INCLUDE, AMONG OTHER THINGS, APPROPRIATE ATTENTION TO THE GATES AND HATCHES THAT MAY NEED REPAIR.

MR. SPEAKER, SOME CARS ARE APPROACHING THE END OF THEIR MANDATED USEFUL LIFE AND NEED TO BE REPLACED.

THE GOVERNMENT WILL ENSURE THAT THE RAILWAYS FULFILL THEIR STATUTORY OBLIGATION TO PROVIDE EQUIPMENT SUITABLE FOR THE CARRIAGE OF GRAIN, NEW CARS WHEN NECESSARY, UTILIZE HIGH CAPACITY CARS AS MUCH AS POSSIBLE.

IN CLOSING MR. SPEAKER, I WOULD LIKE TO REPEAT THAT THE GOVERNMENT’S DECISION NOT ONLY BENEFITS FARMERS, BUT IT ALSO BENEFITS TAXPAYERS. INDEED, IT STRIKES THE RIGHT BALANCE FOR ALL CANADIANS.

THANK YOU, MR SPEAKER.