Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 45 - Evidence - October 4, 2018
OTTAWA, Thursday, October 4, 2018
The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:29 a.m. to discuss the government response to the fifteenth report of the Standing Senate Committee on Banking, Trade and Commerce, entitled National Corridor: Enhancing and Facilitating Commerce and Internal Trade, tabled in the Senate on June 21, 2017.
Senator Douglas Black (Chair) in the chair.
[English]
The Chair: Good morning and welcome to colleagues and general members of the public to the Standing Senate Committee on Banking, Trade and Commerce. My name is Doug Black, a senator from Alberta, and I have the privilege of chairing this committee. I would ask my colleagues around the table to introduce themselves to the minister, please.
Senator Marwah: Sabi Marwah from Ontario.
Senator Boyer: Yvonne Boyer, Ontario.
Senator Wallin: Pamela Wallin, Saskatchewan.
Senator Tannas: Scott Tannas from Alberta.
[Translation]
Senator Dagenais: Jean-Guy Dagenais from Quebec.
[English]
Senator Tkachuk: David Tkachuk from Saskatchewan.
The Chair: Of course, we have the minister with us, the Honourable Marc Garneau, assisted by Sandra LaFortune, Director General, International Relations and Trade Policy, and Emilia Warriner, Director, Transportation Infrastructure Programs.
By way of background, let me set the stage. In June 2017, our committee released a report entitled National Corridor: Enhancing and Facilitating Commerce and Internal Trade. The report highlighted that a national corridor would enhance and facilitate commerce and internal trade, and emphasized the need for further study on the feasibility of the northern corridor and the importance of participation by Indigenous peoples in its development. The report recommended that the federal government provide funding to the University of Calgary’s School of Public Policy and the Centre for Interuniversity Research and Analysis of Organizations, which is based in Quebec, for their research program on a corridor in Canada’s North.
In November 2017, we received the government’s response to our report, which was tabled in the Senate by the Honourable Marc Garneau, P.C., M.P., Minister of Transport.
Minister, it is a great pleasure for this committee to have you here today to respond to our suggestions on the importance of a national corridor and then undoubtedly senators will have questions for you and your colleagues.
Minister, if it is convenient for you, we would love to hear from you.
Hon. Marc Garneau, P.C., M.P., Minister of Transport: Thank you very much, Mr. Chair. It is a real pleasure to be here. Thank you for the committee’s report to which we replied last year.
[Translation]
I want to thank the standing committee for its work on national corridors, and for strengthening trade in goods and services in Canada. The Government of Canada takes great interest in the topic of trade and transportation corridors. I’m pleased to have this opportunity to discuss the government response to the report of the standing committee.
We can’t speak about this report without mentioning Transportation 2030, my strategic plan for the future of transportation in Canada. This plan aims to improve the safety of the transportation system while also improving the efficiency with which we can get our products to markets. With Transportation 2030, I’m delivering on my commitment to create a safe, secure, green and integrated transportation system that supports trade and economic growth, a cleaner environment and the well-being of Canadians and their families.
[English]
The National Trade Corridors Fund launched in July 2017 and is a natural extension of Transportation 2030. This program supports safe import and export flows for cargo and residents; forges collaboration with and amongst infrastructure owners, authorities, and other levels of government; and recognizes the need to strengthen climate resilience.
The National Trade Corridors Fund will invest $2 billion over 11 years in projects that strengthen the efficiency and resilience of trade and transportation corridors. Through the fund, our government is working with stakeholders and contributing to infrastructure projects that address bottlenecks, vulnerabilities and congestion along these corridors.
The first call for proposals was a great success, and 37 projects under the umbrella of this first call were approved for a total federal contribution of $774 million.
Let me give you a few examples of projects that are under way.
We are currently investing in seven projects in British Columbia’s lower mainland to improve access routes from the Port of Vancouver, Canada’s busiest port. The combined cost of these projects is over $600 million, including $223 million in federal funding. These investments will remove bottlenecks and enhance the capacity, reliability, safety and speed of goods moving to port for trade with international partners, as well as for residents.
[Translation]
Similarly, the Port of Montreal, Canada’s second-busiest trade gateway, will receive more than $64 million from the National Trade Corridors Fund for two projects that will alleviate bottlenecks near the port. A project to strengthen the Port of Montreal’s rail network will relocate existing infrastructure and build new capacity in order to improve traffic flows and reduce congestion within the constrained environment of the port.
A second project at the Port of Montreal will build a new access road to the port to provide a direct connection to the Trans-Canada Highway and add new connections to other major roads and industrial lands.
[English]
The Government of Canada is also dedicating a substantial amount of national corridors funding — up to $400 million — specifically to Canada’s territorial North. These investments will directly improve connectivity for communities in Yukon, the Northwest Territories and Nunavut, and will support economic and social development for northern residents.
After the first round of funding, we allocated $145 million for projects in the territories. For example, in June we announced an investment of $102.5 million in the Government of the Northwest Territories Mackenzie Valley Highway projects. This represents 73 per cent of the estimated costs. It’s one of the biggest developments we have made through the National Trade Corridors Fund.
This funding will support several key phases of the Mackenzie Valley Highway project. The ultimate of this project is to build an all-weather road that will connect communities and development sites along the corridor. The National Trade Corridors Fund is also investing $6.9 million to support the modernization of Yukon’s intelligent transportation systems technologies that will enable smarter connections on Yukon’s trade corridors by giving users the data and information they need to make safe and efficient decisions.
These projects will reduce the cost of essential goods for people in the North and help to promote long-term prosperity for the region.
[Translation]
As I already mentioned, applications for funding are assessed on how well a project advances the program’s objectives. These objectives are to support the fluidity of Canadian trade and improve supply chain performance; increase the resilience of the transportation system in a changing climate and ensure that it adapts to new technology; address unique and urgent needs in the territories related to transportation safety; and leverage investments from a variety of public and private partners. Projects are more likely to succeed if the private sector is involved.
In addition to investing in physical infrastructure projects, we’re also funding studies on issues such as the development, resilience and climate change adaptation of infrastructure.
[English]
To build on the success of the first national call for proposals for the National Trade Corridors Fund, I will be launching later this year a second call for proposals, this one specifically for the territories, Yukon, Northwest Territories and Nunavut. Through this call, we will allocate funding from the $400 million envelope that is reserved for the territories to address unique transportation priorities in the territorial North.
The government also agrees with you — the committee — that the active involvement of Indigenous peoples is critical for the success of infrastructure projects.
[Translation]
I would add that, in a more general sense, the active involvement of Indigenous Peoples, based on recognition and respect for their rights, is crucial to advancing reconciliation and renewing a nation-to-nation relationship.
In addition to funding opportunities under the National Trade Corridors Fund, the Government of Canada also has other programs and services that aim to improve connectivity in northern and remote regions. Crown-Indigenous Relations and Northern Affairs Canada supports connectivity for First Nations by investing in on-reserve roads, bridges and energy systems, as part of a broader economic development strategy.
Crown-Indigenous Relations is also working to create a new comprehensive strategic framework for the Arctic and the North that reflects the challenges and opportunities emerging in the region. The scope of the framework will include people, communities, economies, the environment, science, the global context and, of course, infrastructure.
My officials are working closely with federal, territorial, provincial and Indigenous partners on this framework to ensure that transportation is well-reflected. We recognize the importance of transportation in the North and its immense impact on the daily lives of northerners, both socially and economically. Once adopted, the framework will be a long-term vision to 2030, and will inform future federal priorities and investments in the Arctic.
[English]
The fund is but one component of the historic Investing in Canada Plan, which will see the government invest more than $180 billion over 11 years to address long-term infrastructure needs and to support job creation for the middle class.
The rural and northern communities stream of the Investing in Canada Plan is involved in a wide range of relevant activities, including expanding road access and pursuing renewable sources of energy.
Furthermore, as part of the Investing in Canada Plan, the government has established the Canada Infrastructure Bank. The bank will invest $35 billion in transformational infrastructure projects that have revenue-generating potential. At least $5 billion of that money will be invested in trade and transportation projects across the country and another $5 billion in green energy projects.
[Translation]
The government also recognizes the importance of improving communications, and especially Internet service, in northern regions. I know that you’re interested in communications. That’s why Innovation, Science and Economic Development Canada’s connect to innovate program is investing $500 million over five years to expand and improve broadband access in rural and remote areas, including the North. The Canadian Radio-television and Telecommunications Commission has declared that all Canadians, wherever they may live, should have access to basic broadband Internet service. The commission has established Internet speed targets and has created a new $750 million fund to help meet them.
The Government of Canada is making important investments to improve trade corridors. The aforementioned programs will bring sustainable economic growth to Canada and will support middle-class families and communities across the country.
Again, I want to thank the committee for its work on this file. I would be happy to answer your questions.
[English]
The Chair: Thank you very much, minister. We have a long list of questioners.
Senator Boyer: Thank you very much for appearing and for the comprehensive presentation. You talked about it being critical that Indigenous people are involved in the infrastructure projects. What mechanisms has the government put in place to ensure that nations can meaningfully engage in these potential projects?
Mr. Garneau: That is a very good question. At Transport, we have a great deal of interaction with Indigenous communities, whether it is on this particular program, which is the National Trade Corridors Fund, a program like the Oceans Protection Plan or a specific project like addressing the departure of Greyhound Canada bus lines from the four Western provinces.
We now have a mindset that very much involves interaction with Indigenous communities because it affects them and they want to be part of the process. In any of the programs we have where there is potential involvement of Indigenous people there is a process to seek their input about how we approach these projects.
Our government is proud of this. We have committed to reconciliation. To achieve it, we must interact in a meaningful way and look at things in a different way. It is a paradigm shift from the way we looked at projects in the past. It is something that we are committed to at Transport Canada.
I have met many First Nations on several issues and will continue to do so.
Senator Boyer: Are you consulting with the Metis and Inuit as well?
Mr. Garneau: Yes, all Indigenous peoples.
Senator Boyer: Thank you very much. I look forward to it.
Senator Tannas: Thank you for being here. I appreciated your presentation. I also appreciate that you and your department have a big file, with lots on the go, in the here and now. You have a plan for 2030, which is terrific.
What we were attempting to do with this was look beyond that and take some of the realities and trends of today and ask: What are some of the things that will be important in the next 100 years and will take a long time to bring together? However, like many things that take a really long time, somebody had to think about them way back to arrive at that time. Otherwise, we just never get to the point where we can do it.
We spent the time on the national corridor idea, which has been around since the 1960s and follows a path along the southern edge of the boreal forest. It would service things like the Ring of Fire and provide a transportation corridor from sea to sea that could involve railways, roads, electrical superconducting transmission — when that comes — and fibre or a driverless car or truck highway all in one right-of-way.
It was CIRANO and the School of Public Policy, University of Calgary, that updated this 1960s idea and presented what we thought was an intriguing proposal. We had lots of witnesses in and different opinions, but that is what led to our recommendation.
I didn’t hear anything in your comments about that. I appreciate that this is an opportunity to talk about what you are doing today and a bit about the 2030 plan, but that is not what this report was about.
I am curious to know what your thoughts are about the report and the idea of a big vision, national initiative, for the next 100 years. Did it strike you as crazy? Did your people talk about it? Was there any kind of reaction such as, “This is interesting; we should put this on our radar screen and test it?” Or was it just another idea that came across your desk and you had to deal with it because it’s from those pesky senators?
Mr. Garneau: Senator, thank you for your question. I did hear about this project from the University of Calgary. It’s an appealing concept; there is no question about it. We are blessed to live in the second-largest country on Earth, and we have challenges with respect to a number of areas, not just transportation. The idea in itself is appealing — a corridor that would permit transportation as well as communication links and other infrastructure.
The corridor idea is definitely looking beyond 2030. I’m glad you pointed out that you are looking ahead 15 years ahead.
It is a concept that requires us to see what kind of buy-in comes from Canadians. That also includes the private sector, utilities, transportation companies and all those who might make use of it, whether it is a pipeline corridor or whatever. Those are things that have not been completed.
There is also the fact that this is a megaproject requiring a significant financial investment. I know there is an interest in studying the concept further, and this could be done through the National Trade Corridors Fund. As you heard me say, there is room for projects themselves and also for studies. That is something that is a possibility to explore through the National Trade Corridors Fund, but I will add one proviso: All of our projects are typically based on a co-funding arrangement.
Senator Tannas: That is a very important point that I think the committee will have to think about, and maybe there are ways we can help. Would there be anything wrong if the co-funders were Saskatchewan and Alberta, the provincial governments?
Mr. Garneau: There would be absolutely nothing wrong with that. Many of the co-funders of the projects that we did approve come from other levels of government as well as the private sector. It is perfectly allowed. They can come from universities, too. All of those are possible.
Then if something comes to us, let’s say, in the next round, we can look at it. It is in competition with everything else, of course. For example, in our first expression of interest we received over 400 projects. This is a program that has a high level of appeal. I am delighted with that, but we also have to work within the $2 billion.
Senator Tannas: Thank you.
Mr. Garneau: You’re welcome.
Senator Wallin: I would love to ask you about bus and train service and grain transportation in Saskatchewan, but I will take the direction from Senator Tannas and keep focused on our study. Thank you very much.
Many of our witnesses talked about the northern corridor project as being pan-Canadian. As such, it would fall under federal jurisdiction over trade and commerce. On several occasions it was suggested that it is unlikely a northern corridor would be implemented without significant federal involvement. Other witnesses pointed out that the federal government has a constitutional responsibility for a transportation policy. Do you agree with all of that?
Mr. Garneau: Although it hasn’t been costed in detail, this is a truly enormous project. I can understand people saying that it is unlikely to be realized unless there was some federal involvement. Very careful thought, from a government policy point of view, must be given to whether or not a federal contribution is justified. That requires us to do much more studying.
Senator Wallin: Obviously you agree it is your constitutional responsibility, this issue?
Mr. Garneau: I’m not enough of an expert to say whether it is our constitutional responsibility, but once it crosses provinces, there generally is federal involvement as opposed to interprovincial.
Senator Wallin: To follow up on what Senator Tannas was saying, we understand you want other people at the table, be they Indigenous groups, provinces or any number of entities. The sense was that because of the enormity of the project and its pan-Canadian nature, you would have to take the initiative, which is why we sent the report to the federal government.
I realize you have to study it, but the implication is that you would have to be the spur and a major contributor. Is that on the table in any way, or not?
Mr. Garneau: At this point we would advocate the route of further study outside of the federal government and then to present a more fully developed study to the government for consideration.
Senator Wallin: The study that needs to come to you, does that have to somehow formally represent these other groups, provinces, Indigenous groups, et cetera?
Mr. Garneau: No, I think it needs to represent the promise of what it would deliver in terms of benefits to Canadians.
Senator Wallin: So more private sector?
Mr. Garneau: And some idea of the cost, yes. If the project is there but there is no take-up by all the potential users, that sends a signal. Is there enthusiasm and involvement from, ultimately, the users? That kind of assessment would need to be done, and we would prefer that it be done by those who are likely to be the users of it.
Senator Wallin: You have set such an interesting precedent so that if the private sector went ahead and then it couldn’t somehow happen because of any number of things — consultation — maybe you would buy it?
Mr. Garneau: The 37 projects that we co-funded along with the private sector made the case for “debottlenecking” or making our corridors more efficient. The same tasks would fall to this group as well.
Senator Wallin: Great. Thank you.
Senator Tkachuk: Thank you, minister, for your presentation and informing us about the money that you are spending on transportation matters.
At the Banking Committee, we are more interested in a national corridor . We presented a report. We didn’t recommend that the government spend a lot of money but that it further review the initial study done by the Universities of Calgary and McGill. In doing this, it partners with Indigenous groups as well, and that was very important to us. I haven’t heard anything in your response that gives us an indication that you have any interest in this, so I would like you to comment directly on the report.
Mr. Garneau: What I would say to you, senator, is that we definitely took serious note of your committee’s report with respect to the northern corridor as you describe it. Our response to that would be that if this is a program or project that could help achieve our aims with respect to our trade and transportation corridors — to make them more fluid and efficient — we would be interested in following that up.
At this point, we feel that a great deal more work needs to be done to flesh it out, to find out if there is a strong take-up by the private sector, which would be the users, or the provinces, if they are also the users, before going any further. At this point it is eligible for NTCF funding if it can present a compelling, co-funded submission the next time we go out for a call.
Senator Tkachuk: Since then we have had the Energy East corridor closing down. We have got a problem with Trans Mountain, which translated into how many billions of dollars? Nobody quite knows how many billions of dollars that will cost us. Wouldn’t that hit you in the face to say, “I think we have a problem and maybe we should look at some way to prevent this from happening in the future”? I don’t know why you, or someone in the department, wouldn’t have phoned Saskatchewan, Alberta or B.C. and said, “Let’s kick in a couple million dollars and have a further look at this to see if it has got any possibility of success.”
The request was very little. I think the government spills that as we speak here. I’m just saying it seems odd that we wouldn’t look at it and why “take note” is not a good answer.
Mr. Garneau: We have a lot of projects that we are going forward with. You mentioned the TMX. At the moment, I believe that you’ve probably taken note of the government’s response with respect to the Federal Court of Appeal.
Senator Tkachuk: That’s an understatement.
Mr. Garneau: We are continuing to move forward on that, to be compliant with the recommendations from the Federal Court of Appeal, and we will see where that will take us. We are certainly recognizing that it’s important for us to seek — since you brought up the subject of our hydrocarbons — other markets than the United States. Because 99 per cent at the moment goes to the United States, we’re looking for access to foreign markets.
Senator Tkachuk: You talked about Trans Mountain. Were you involved in the decision to purchase Trans Mountain?
Mr. Garneau: Our government was involved.
Senator Tkachuk: No. Were you involved in that decision?
Mr. Garneau: That’s cabinet confidential, senator. It is a government decision. I don’t think it matters whether I was personally involved or not.
Senator Tkachuk: Were there any outside advisers involved?
Mr. Garneau: Cabinet confidential, senator.
Senator Tkachuk: I’m not asking who they were. I’m asking if there were outside advisers.
Mr. Garneau: Cabinet confidential, senator.
Senator Tkachuk: I have one more question. In your presentation you mentioned the Canada Infrastructure Bank, which we have been waiting for for quite some time, and you mentioned they will be involved in $5 billion towards transport and green energy projects.
Mr. Garneau: Five for each.
Senator Tkachuk: So the government has given them some direction as to what they should invest in, I would take it. What kind of green energy projects would that be?
Mr. Garneau: First of all, the premise of the Canada Infrastructure Bank is that it will be involved in assisting in projects that attract the private sector, where the private sector sees a return, as opposed to government-funded projects, which we are doing for the public good. In this case, there is the opportunity to interest the private sector in large projects. As you know, they have already announced through the Caisse de dépôt et placement du Québec their involvement with the REM project, which is the light-rail system that will be built in Montreal. That’s the first example, in fact, of the Infrastructure Bank.
But in terms of green infrastructure, these would be projects of interest to the private sector where they feel there would be a return for them. There are all sorts of possibilities. I’m not going to give specific examples, but if the private sector wants to get involved in a project where they get a return, they may be interested in investing. We’re confident that large investor sources will be interested in some of the projects in the category of green infrastructure or transportation infrastructure, whether it’s public transit or trade corridors, initiatives where they would like to be involved and can put in significant amounts of funding if there is a proper return.
Senator Tkachuk: They would be a partner to the project. This would not be a subsidy to the project.
Mr. Garneau: They could ultimately own the project.
Senator Tkachuk: The government would own the project?
Mr. Garneau: No, the partner, the private sector.
Senator Tannas: For a minute there, I thought we were going backwards, so I want to make sure we were not.
This recommendation that we have, the parties that we’ve identified, would be eligible for consideration by the fund, no guarantees, but they need the matching 50 per cent funding. That is your point, not that they need to do another study before they are eligible for consideration.
Mr. Garneau: That is exactly my point. When you have over 400 projects and many of them are co-funded, you’re naturally drawn towards those that will already leverage the government contribution.
Senator Tannas: Completely understandable.
Senator Marwah: Thank you, minister, for being here today. Your comments have been insightful.
You clearly outlined many initiatives that the government is undertaking in the public sector investment space. I was pleased to hear you mention that some 37 projects are co-invested with the private sector. Are you satisfied with the take-up from the private sector in the NTCF or the Arctic Energy Fund, or are you disappointed? And if you are disappointed, are there more things we should be doing to encourage private sector participation, such as incentives? We need their skills and expertise to manage many of these projects. How do we encourage greater private sector involvement?
Mr. Garneau: That is a very good point, senator. This first call for expressions of interest ended with us receiving over 400 projects. So there was enormous interest in participating in this plan.
We narrowed that down to the 37 that we felt were the most important, based on how much effect they would have on our trade corridors and were within the parameters of the program involving co-funding. Those 37 projects involve a commitment of $774 million from the federal government. But, if you look at the co-funding provided by the private sector and others, they also provided an additional $1.08 billion.
Senator Marwah: Almost 60-40.
Mr. Garneau: About 60-40.
This goes back a long way. You may remember the old Gateway project. In fact, it was originally initiated by the Liberal government, by Minister of Transport Jean Lapierre, the whole idea of making our trade corridors more efficient to our gateways, the Pacific Gateway, for example, which is an important gateway. Right away the enthusiasm of the private sector to solve problems with respect to our trade corridors was evident, and the leveraging of private sector money was quite impressive.
This is our first call. We think now that everyone is aware of this program and that when we do a second call, we will receive a large amount of take-up from across the country. We believe that we’ll continue to leverage a lot of private sector investment because they see a great deal of advantage for themselves. For example, when I was in the Lower Mainland of British Columbia announcing some of the projects there, CN and CP, who are both heavy users of the port authority, were putting their money into it because it was going to make an important difference in the efficiency with which they move goods. These goods typically come from the Western provinces into the Port of Vancouver, which is by far the largest port in the country.
Senator Marwah: On the 37 projects co-funded with the private sector, who manages them? Is it the government or the private sector?
Mr. Garneau: We certainly are responsible for deciding who gets it, and then after that, the actual projects themselves are not typically managed by the federal government. I don’t know if one of my colleagues wishes to add to that.
Emilia Warriner, Director, Transportation Infrastructure Programs, Transport Canada: The recipients themselves are fully responsible for the implementation and the reporting, the whole cycle of work required to implement the project.
The federal government is providing funding to support those activities, and there’s oversight of the work they do. But the actual recipients are the responsible for implementation and management.
Senator Marwah: I appreciate the fact and I’m glad you have the oversight. Let’s say there is an overrun. Who is accountable?
Ms. Warriner: The recipient. The federal government’s contribution is capped at a maximum amount.
Mr. Garneau: Senator, to give you one example — I could give you many — the Port of Nanaimo was a recipient. It’s a port authority. It is responsible for the project that it proposed to us. We allocated a specific amount of money, and that’s it. They are responsible for the project.
[Translation]
Senator Mockler: Minister Garneau, I listened carefully to your comments on the National Trade Corridors Fund.
[English]
Being from Atlantic Canada, could you itemize for us, as we whittle away from the National Trade Corridors Fund, what you have in store for Atlantic Canada? Could be precise as to what you have for our ports in Saint John, New Brunswick; Halifax; St. John’s, Newfoundland; and Charlottetown? You have not touched on that. Could you provide us with the list, through the clerk? But since you’re here, I would like to know for the record, exactly what you have for Atlantic Canada.
Mr. Garneau: Thank you, senator. We have not gone out and said, “Here is the 37” yet because we have been announcing them. Until we announce them, it is not appropriate to put that list out there.
In answer to your specific question, in New Brunswick we have allocated funds to the New Brunswick Department of Transportation and Infrastructure. It’s Route 10 in New Brunswick, and that’s a federal contribution of $22 million. I’m giving you ones that have been announced. The Saint John Airport Authority — I made this announcement myself — is over $10 million. In Nova Scotia, the Prime Minister made the announcement of a $90 million federal investment for twinning of the TransCanada Highway with Highway 104. In Newfoundland, there is $5 million for Gander International Airport. In Prince Edward Island, there is $8 million for the Charlottetown airport, which Minister MacAulay announced. In Newfoundland, for the St. John’s Port Authority, there is a $175,000 for a study on cargo handling. There is funding that has been provided across the country.
We are also looking at the Chignecto Isthmus. As you know, this is where the Bay of Fundy comes in the basin all the way just about to the TransCanada Highway. If severe flooding were to occur in the isthmus, it would cut off Nova Scotia from the rest of the country. We’re looking at whether we need to reinforce Chignecto Isthmus protection.
[Translation]
Senator Mockler: In the next phase of the fund, will the cities of Saint John and Belledune, New Brunswick, be taken into consideration?
Mr. Garneau: All projects will be reviewed in the future, when the second call for proposals is launched. The people who wish to access the funding can do so, as long as they meet the parameters and eligibility criteria. The project must improve our transportation corridors in order to make them more efficient. There must also be co-funding involved. If these criteria are met, we’ll be very interested.
The Port of Belledune can submit an application if it has a project idea. It’s essential to obtain co-funding and to explain how the project will help us.
Senator Mockler: I have one last question.
[English]
I am known to always ask questions about the Energy East pipeline every time I see ministers.
Had we had a pipeline corridor across Canada — in Atlantic Canada especially — coming from Quebec to the biggest refinery in Canada in Saint John, New Brunswick, do you believe that we would have achieved Energy East?
Mr. Garneau: The process through the NEB, and then the decision by Trans Mountain Pipeline to drop the project for financial reasons, to no longer pursue it, are the factors that played into the outcome in this case. Those are factually related, of course, for those who followed this very closely, including myself.
We have to live with those outcomes. I can understand those who were lobbying for Energy East. I understand the reasons why they were in favour of this. But there is also a due process that the NEB went through, and there’s also the decision of the company that would have provided the pipeline.
[Translation]
Senator Dagenais: Thank you for your presentation, Minister Garneau. We mustn’t forget the cost of transportation within the country in comparison with travel outside the country. I won’t mention the cost of plane tickets from Montreal to the Magdalen Islands in comparison with the cost of tickets from Montreal to Paris. The tickets are really very expensive.
In your presentation, you briefly mentioned the loss of Greyhound service for certain communities. It must be understood that business isn’t conducted only over the Internet. People sometimes need to travel for business. To what extent is access to affordable travel, either by air or road, part of your plans? In concrete terms, I want to know what people should expect when it comes to a reasonable time frame. Business travel must also be affordable.
Mr. Garneau: Thank you for your question. In general, at Transport Canada, we’re trying to create the right conditions to increase competitiveness, which often leads to lower prices. For example, in Bill C-49, we decided to allow foreign investment in Canadian airlines at a rate of up to 49 per cent. The previous rate was 25 per cent. Companies that wanted to enter the highly competitive field had difficulty attracting the funding needed to launch a competitive airline and provide other options to Canadians. By increasing the participation rate from 25 per cent to 49 per cent, we’re stimulating competition.
You talked about providing subsidies to ensure affordable prices. These are the major decisions when governments decide to move forward. For example, as you know, VIA Rail is subsidized. It’s a big decision when we choose to get involved rather than leave everything to the markets.
You also mentioned Greyhound. The company has announced that it will eliminate all routes in Western Canada as of October 31. The Prime Minister has given me the mandate to examine this issue, because it leaves many people without transportation. In some cases, these people have other solutions, but in other cases, they have no other options. We’re looking very closely at this issue. I’m looking at the file with other departments and with representatives of the four Western provinces concerned, since they’ve been responsible for bus service in their region since 1954. We’re looking for a solution to this new and unforeseen situation. The types of concerns that you just mentioned often raise the issue of whether the provincial or federal governments should subsidize transportation services. In my view, these major issues will lead to a blueprint for society.
At this time, we’re not seeing any major changes in this area. We want to make VIA Rail more competitive, since the company provides rail service. We can’t cover the whole country, but this matter is important when it comes to people who have no other options. I hope that I’ve answered your question.
Senator Dagenais: Thank you, Minister Garneau.
[English]
The Chair: Minister, I have a question, if I may.
Obviously, I’m very pleased with the work you outlined for us today that you and your department are doing in our 2030 plan. This is key for Canada, enhancing access to ports, airports roads. It is absolutely key work, so thank you for doing that.
With respect to your response to the work that the Senate has done on the northern corridor, I’m very disappointed with your response. The Senate of Canada doesn’t undertake projects for the fun of it. We don’t take people’s time, our time, or people’s money to look at projects that we think are frivolous. If we do, we either don’t look at them or they don’t come to the point where we’re making definite recommendations to government.
You have come back to us and have acknowledged the potential intellectual importance of a northern corridor, with which we agree. We know, given the problems we have had with Trans Mountain, Energy East, Gateway, and railways in this country, that there may be something here.
Our request to government was very simple. We said, “Government, we need to look at this more,” exactly as you said, minister. And this would require, we thought, $5 million to do so — a paltry request for an important nation-building project, so we thought. Then we were met with the fact that people who are interested can apply and they need to find partners to apply with. While not unreasonable, it does not show to me, frankly, any nation-building leadership on behalf of the government or your department. I wish I could be softer with my message, but I just find it unacceptable.
I can also tell you that McGill and the University of Calgary did apply for funding to advance the work that we urged them to do, but I understand were turned down. Maybe I’m wrong on that. You can correct me if I am. That would be my understanding.
Minister, I want you to tell this committee, if you can, that you will find $5 million somewhere, in some fund, so that this important work can be done. We want we understand whether or not there are opportunities for Aboriginals and business in Canada and to avoid the conundrum we are in now, which is that we do not seem to be able to build projects in this country. My request to you is have a car wash or a bake sale, but find the $5 million needed to advance this project.
Minister, tell us how we can get that done, please.
Mr. Garneau: Thank you very much. You were very clear, senator.
As I said to Senator Tannas, the approach that we have taken — I should mention on the side that we receive a huge number of unsolicited requests for government money. I’m not telling you anything you don’t know. We have to make tough decisions about how we go forward in a responsible manner with the taxpayers’ money. I’m not at liberty, by the way, to discuss, for unsuccessful projects, which ones applied and why and what have you. I did mention to you that the co-funding was an essential element when you’re receiving hundreds of projects.
By the way, I don’t agree with you that nothing is happening in terms of major projects. Earlier this week, as you know, the Prime Minister himself was present with a large number of companies that are making a $40 billion investment in the LNG plant to be built at Kitimat. I think that is a huge vote of confidence for our country and very good for our economy. So things do happen, and we have to play within certain parameters and make tough decisions.
I thank the committee for all the work it did on the northern corridor, and I think there is a way to go forward. We are funding some studies, but these are all good studies that that have co-funding.
The Chair: Thank you for that. I appreciate that this frank conversation is a good one. So you’re saying there is not any other pool these people can look to. They need to look to the pool that you have identified here with partners. That’s the bottom line.
Mr. Garneau: Yes, senator.
The Chair: That’s helpful, thank you very much.
Senator Tannas: Just so you know, I suspect what will happen — and this goes to what Senator Tkachuk was saying — is that we’ll pick up the phone. Maybe our job as senators is to do initiatives that no one feels like doing, and we will take the initiative to round up the other half of the money and encourage the universities to reapply.
Senator Wallin: The LNG project, which everyone is saying is such a wonderful idea, there is one tiny issue that the Premier of Saskatchewan raised today. In order for these projects to go ahead, there has to be a carbon tax exemption. It speaks to why these things tend to discourage investment.
I will come back to the issue at hand, and this is an issue we talk about in this committee a lot when we talk about big projects. We saw it again yesterday with the announcements on next steps for the Trans Mountain project. Could you give us some idea, without breaking any cabinet confidences, what your government believes the duty to consult entails?
Mr. Garneau: The duty to consult — we’ve taken the Federal Court of Appeal’s comments and direction very seriously — involves speaking to the First Nations that are affected by or potentially affected by it. As you know, there are some who support it and there are those who do not for different reasons. And it is consulting with them individually and finding out the specific reasons why they do not support it, whether there are potential solutions to that in the case of all of the First Nations and Indigenous peoples along that route, then demonstrating that we have made that consultation, in some cases perhaps made some adjustments, and that the consultation process has been a serious exercise.
The onus is on us, as the government, to do this. That’s what the Federal Court of Appeal directed us to do, and it is particularly important that we get it right because it will probably serve as a bit of a template for future major projects.
Senator Wallin: I think we all agree that this is crucial, basic and necessary. What we’re struggling with is looking for when the end point ever comes. If there are people opposed to a project and people in favour of it, short of changing everybody’s mind, how do you get to the end point?
Mr. Garneau: You’ve summarized it extremely well. We’re in new territory in this country. We are now doing something that we did not do very well in the first 150 years of our existence, and we are now committing to doing it seriously. It’s not without complications and challenges. We recognize that it will not always be possible to get 100 per cent consensus, but we need to do demonstrate that we tried our best. That is a chapter in our history that has yet to be written and will be written in the next year or two.
Senator Tkachuk: My understanding is that the process now will be that you start all over again. You’re not just going to be dealing with the ones that took the case to court but dealing with all the ones who have already agreed that this was a good project and were partners in the project. Are we starting this whole process all over again?
Mr. Garneau: I would say to you, senator, that in some cases the process will be simple because for those who have supported the program, they will probably continue to support it. They will feel that they have been consulted and that they are not objecting to it for a particular reason.
It’s more important for us, obviously, to consult more with those who have an objection, hear their specific reasons and explore whether we can find an alternative. Then, of course, we have to make the decision about what we’re going to do finally.
Senator Tkachuk: There was no appetite to appeal the decision.
Mr. Garneau: We believe it is important for us to get this right, so we have taken the Federal Court of Appeal’s rejoinder seriously and we are going to follow its recommendations.
Senator Tkachuk: Okay. Thanks.
The Chair: Minister and officials, thank you very much for being here. As always, senators sometimes have questions that are a little edgy and direct, but that is what Canadians expect of us. Thank you very much for being here and I look forward to welcoming you again.
Mr. Garneau: Thank you very much, Mr. Chair.
(The committee adjourned.)