Hon. Darren Praznik (Deputy Government House Leader): Madam Speaker, I would ask if you could please call for second reading, Bills 16, 21 and 22?
SECOND READINGS
Bill 16--The Highway Traffic Amendment Act
Hon. Glen Findlay (Minister of Highways and Transportation): Madam Speaker, I move, seconded by the Minister of Rural Development (Mr. Derkach), that Bill 16, The Highway Traffic Amendment Act (Loi modifiant la Loi sur le Code de la route), be now read a second time and referred to a committee of this House.
Motion presented.
Mr. Findlay: Madam Speaker, today I am very pleased to be able to introduce Bill 16 which is amending The Highway Traffic Act. This bill proposes to phase out the province's economic regulation of intraprovincial trucking.
Let me first explain why this system of economic regulation was put in place in the past, and then explain to you why we are now proposing to have it removed.
The province has engaged in the economic regulation of various modes of highway transportation for several decades, including trucking, intercity buses and intermunicipal taxis. This was to ensure that rural communities had access to passenger and freight services at reasonable rates.
It was believed that the highway transportation industry is inherently subject to what is termed destructive or excessive competition, whereby an unregulated market would allow too many carriers to enter or remain in an industry with available freight or passenger traffic services.
In the case of intraprovincial trucking, excessive or destructive competition would undermine the financial viability of carriers and the ability to cross-subsidize the higher-cost service provided to smaller rural communities.
To promote and preserve transportation service to rural points, the province developed a system of economic regulation which restricts or limits competition. This system of regulation is administered by the Manitoba Motor Transport Board on the basis of a provision provided in Part VIII of The Highway Traffic Act.
Before discussing in detail how these economic regulation's provisions will be amended, I would like to discuss in general terms the reasons for introducing this bill.
The impetus for these amendments is twofold: One reason is that changes in federal transport policy will make it impossible for Manitoba to effectively regulate intraprovincial trucking. The provinces and territories have exclusive jurisdiction over purely intraprovincial truck carriers. From the late 1950s, the federal government delegated to the provinces this jurisdiction over in extraprovincial truck carriers.
Effective January 1, 1993, after a five-year transition period, the federal government deregulated entry to extraprovincial trucking with the support of the provinces. For those provinces which wish to maintain their regulation for intraprovincial trucking, the federal government delegated its authority over intraprovincial operations of extraprovincial truck carriers. This exists only in Manitoba, Saskatchewan and British Columbia.
However, in negotiations leading to the agreement on internal trade, the federal government took the position that they would only allow provinces to continue regulating the intraprovincial operations of extraprovincial truck carriers for a limited period of time.
With the repeal of the delegated federal authority in this area, Manitoba could no longer effectively maintain regulation of intraprovincial trucking under The Highway Traffic Act. Also, most provinces have deregulated their intraprovincial truck industries and they view continued economic regulation by Manitoba as a barrier to Canadian internal trade.
On May 1, 1995, the federal government tabled in the House of Commons Bill C-88, the Draft Agreement on Internal Trade Implementation Act. Section 19 of the draft act repeals Part 3 of the Motor Vehicle Transport Act, 1987. This provision comes into force on a day to be fixed by order of the federal cabinet. Part 3 of the Motor Vehicle Transport Act allows a province to regulate the intraprovincial operations of extraprovincial truck carriers in the same manner that regulate purely intraprovincial truck carriers.
In Manitoba a dominant share of the intraprovincial general freight is transported by trucking firms that are classified as extraprovincial truck carriers. With the repeal of Part 3 of the federal Motor Vehicle Transport Act, Manitoba will not be able to continue the economic regulation of the segment of the intraprovincial truck industry and will no longer be able to effectively maintain a system of regulated truck services in rural Manitoba.
In the internal trade negotiations the federal government took the position that would only allow provinces to continue regulating the intraprovincial operations of extraprovincial truck undertakings for a limited time. Under the agreement on internal trade it was agreed that Manitoba will deregulate their intraprovincial trucking by January 1, 1998. The federal government and other provinces have pressed for an earlier date, but Manitoba was able to negotiate a date which was generally acceptable to our industry.
Further impetus for deregulation comes from growing recognition that economic regulation does not serve the interests of either shippers or carriers. Shippers have been requesting deregulation of intraprovincial trucking since 1987 when the federal government began the deregulation of extraprovincial trucking.
In May '92 in response to representations by the Canadian Industrial Transportation League that the province should deregulate, the Department of Highways and Transportation retained Prairie Research Associates to conduct an analysis of the intraprovincial trucking industry and its future under several regulatory options.
In December '93, following release of the Prairie Research Associates' study, I requested the chairman of the Motor Transport Board to consult with interested parties of what action could be taken to resolve the issues surrounding intraprovincial trucking regulations and to build a consensus on an action plan. The Motor Transport Board chairman began this consultation in January '94 by inviting written and telephone submissions from interested parties including shippers, carriers and communities.
In March 1994, a round table conference of key stakeholders was held which included representatives, carriers, shippers, chambers of commerce, regional development corporations and municipalities.
In May '94, after the Manitoba Trucking Association developed a proposal for deregulation, which actually is the fundamental basis of the bill that we are introducing today, the chairman then requested the round table conference participants to comment on the MTA proposal and requested comments from over 50 intraprovincial truck carriers.
It is clear from these extensive consultations that shippers consistently hold the view that economic regulation of intraprovincial trucking is an impediment to an efficient and competitive provincial truck transport system and to the economic well-being of the province.
Many truck carriers also subscribe to this view. Even a number of small rural carriers, some of whom feel a need for continued protection from competition at least during a transition period, perceived that economic regulation has limited their opportunities to fairly compete with larger carriers due to the cost of the regulatory process.
Following this consultation with stakeholders the Motor Transport Board chairman made several recommendations which would lead to full economic deregulation by way of a two-stage transition period. The economic regulatory provisions in Part VIII of The Highway Traffic Act are of two kinds: (a) provisions which provide the board with various powers to restrict or limit competition and (b) provisions which allow the board to protect shippers and passengers from the effects of restricting or limiting competition. These latter provisions will allow the board to regulate rates and the level of quality of service provided by carriers.
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I will briefly describe these provisions and how they will be amended.
The entry test: The board restricts competition in the for-hire trucking industry through the legislative requirement Part VIII of The Highway Traffic Act, that an operator of vehicles used to transport persons or property for compensation requires a certificate from the board authorizing its operation. A certificate is issued to an applicant if (a) applicant satisfies an economic entry test whereby the board finds that the proposed service will promote the public interest, and (b) the applicant satisfies the board's criteria relating to fitness.
It is proposed that effective January 1, 1998, the economic entry test for intraprovincial truck operations be eliminated. Accordingly, The Highway Traffic Act will be amended so that only the fitness criteria will apply to an applicant for a PSV certificate authorizing the transportation of property. The economic entry test and the fitness test will remain in place for other types of public service vehicles such as intercity buses and intermunicipal taxis.
On the issue of geographic restrictions of certificates, the board also limits competition in the for-hire trucking industry by attaching geographic conditions or restrictions to certificates so that a for-hire trucker can be restricted to providing service to a defined territory or group of communities. The act will be amended so that effective January 1, 1996, all existing geographic restrictions or conditions attached to the certificates shall cease to have an effect and (b) the board may not thereafter attach a geographic condition or restriction to a certificate issued to a motor carrier for the transport of property.
On the issue of rate regulations, in order to protect shippers from the limitation of competition created by the economic entry test and by geographic restrictions on PSV certificates, the board has specified powers to regulate freight rates.
Freight-rate deregulation will take place in two stages so that two amendments are required to The Highway Traffic Act. The first amendment provides at the end of 1995, the board's existing truck rates cease to have effect and over the following two years, '96 and '97, it may set a rate for the transportation of property only if it is satisfied that no effective adequate and competitive alternative is available for the movement of property in question.
The second amendment provides that any rate set by the board in '96 and '97 ceases to have effect by the end of '97 and eliminates the board's remaining power to regulate rates as of January 1, 1998. On the issue of regulation of level and quality of service, within the removal of economic entry and rate regulation is the province's intent to allow the market to determine the adequacy and level of quality of services provided by freight motor carriers.
Part VIII of the act contains a number of provisions to allow the board to regulate various aspects of the level and quality of service offered by motor carriers. These provisions are proposed to be amended so that effective January 1, 1998, they will not apply to public-service vehicles operated for the transportation of property except insofar as they relate to the safe conditions of the vehicle and its equipment or its safe operation.
Madam Speaker, in closing, this overview I am sure will give the members some idea as to the amendments to economic regulation that we are providing for The Highway Traffic Act, and I look forward to people bringing their input forward during the committee stage of this bill.
I have commented extensively on the wide level of consultation that occurred, what has happened in other provinces and the actions taken by the federal government that require these amendments be made. Certainly, what the end result of all of this is, it creates a level playing field for all people in the trucking industry across Canada.
I have spreadsheets here for the opposition members, and I will hand them out. Thank you.
Mr. Daryl Reid (Transcona): Madam Speaker, I move, seconded by the member for the Interlake (Mr. Clif Evans), that debate be adjourned.
Motion agreed to.
Bill 21--The Rural Development Bonds Amendment Act
Hon. Leonard Derkach (Minister of Rural Development): Madam Speaker, I move, seconded by the Minister of Culture, Heritage and Citizenship (Mr. Gilleshammer), that Bill 21, The Rural Development Bonds Amendment Act; Loi modifiant la Loi sur les obligations de développement rural, be now read a second time and referred to a committee of this House.
Motion presented.
Mr. Derkach: Madam Speaker, I am pleased to be able to introduce to the members of this House today a bill to amend The Rural Development Bonds Amendment Act. This bill is intended to make some minor modifications to the Grow Bonds Program to improve efficiency.
The Grow Bonds Program was established in 1991 as a vehicle for rural residents to invest in prudent business opportunities and thereby strengthen the local economy, diversify the rural economy and create employment and other benefits. The program provides a guarantee to investors, while placing responsibility for the investment selection, management and control directly in the hands of the community through the creation of local bond corporations. This way the communities themselves can define and pursue their own economic goals and objectives.
The Grow Bonds Program is now deeply rooted in rural Manitoba, which it is intended to serve. In fact, the Grow Bonds head office is located in Altona, with business and economic development staff also working elsewhere throughout the province.
Madam Speaker, even based on the most conservative estimates, the Grow Bonds Program can be deemed an unprecedented success. In the few short years it has existed, it has performed exactly as it was intended to. It generated innovative enterprises. It created new employment opportunities and it is levering economic activity at a ratio of three to one. In other words, for every $1 of Grow Bonds money that it raises, an additional $2 of new capital investment is generated and put to work in rural Manitoba communities.
As of today, a total of 19 Grow Bonds projects have been approved. These projects have raised $7.1 million in the community Grow Bonds investments and generated over $21 million more in private-sector funding.
In addition, in excess of 450 more jobs will have been generated in rural Manitoba prior to the start of the Grow Bonds Program once projects have been carefully implemented. That represents hundreds of more families with incomes that they in turn use to buy clothing, food, shelter and other commodities, creating tremendous spin-off benefits for the Manitoba businesses that supply these goods and services. Regarded in this way, it paints a picture of tremendous impact of the Grow Bonds Program and its spin-off benefits for the communities in which the projects are located.
Madam Speaker, in presenting this bill in the Legislature today, the intent is to introduce ways in which the Grow Bonds Program can be made more efficient, more user friendly and be delivered in a more expedient way. Increased activity in the Grow Bonds Program over the past two years served to identify desirable minor modifications to the act that would better accommodate activities and development under the program.
The Rural Development Bonds Act amending bill proposes that the following changes be made: That upon founding of a bond corporation one director be a young entrepreneur who shall be no more than 30 years of age. This would allow longer-term continuity within the bond corporation by ensuring that the young director serve the bond corporation past the age of 30.
The other amendment is that the manner in which the forms used in the processing of Grow Bonds be changed to enable the Minister of Rural Development to authorize them--this would streamline the authorization process--that applications to issue bonds be allowed before the bond corporation is incorporated. In practice, the bond corporation is not incorporated until approvals are acquired, and, also, that the Minister of Rural Development be allowed to approve applications to invest bond proceeds rather than the provincial review committee. Normally, all conditions of approval have been met at this point in the process so that a second approval by the review committee is unnecessary and only lengthens the approval process. In addition, that clarification be made to the requirements for and the process applicable to the issuing and investment of investment pool development bonds. These alterations would enable and indeed encourage the use of this presently dormant vehicle under the act.
The above-noted amendments which I have summarized will improve the efficiency of the overall Grow Bonds approval process without compromising the integrity of the due diligence process. This is of utmost importance, especially in the administration and application of public funds.
Madam Speaker, there are countless examples of Manitobans gainfully employed and adding to the renewal and revival of the rural economy, all of which has occurred in part because of the Grow Bonds Program. Some of these examples include Operation Fire Fly, Crocus Foods, Elias Woodwork and the Tire Recycling Corporation of Winkler. These are a few examples of Grow Bonds in action doing all that they were intended to do and a whole lot more. We need only to ask those Manitobans who have jobs because of the Grow Bonds Program if they think this program is important to the province's economic development.
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So in closing, Madam Speaker, I recommend this bill to the House and to the Legislature for its thoughtful consideration. Thank you very much.
Ms. Jean Friesen (Wolseley): Madam Speaker, I move, seconded by the member for Transcona (Mr. Reid), that debate be adjourned.
Motion agreed to.
Bill 22--The Municipal Amendment and Brandon Charter Amendment Act
Hon. Leonard Derkach (Minister of Rural Development): Madam Speaker, I move, seconded by the Minister of Highways and Transportation (Mr. Findlay), that Bill 22, The Municipal Amendment and Brandon Charter Amendment Act (Loi modifiant la Loi sur les municipalités et la Charte de Brandon), now be read a second time and be referred to a committee of this House.
Motion presented.
Mr. Derkach: Madam Speaker, it is my pleasure to introduce today a bill to amend The Brandon Charter Act specifically as it relates to public transit fares. Changes to the act are being recommended to make it compatible with The Municipal Act as it relates to public transit fares.
In 1993, The Municipal Act was amended to remove the requirement that public transit fares be approved by the Public Utilities Board. The City of Brandon has a similar clause in The Brandon Charter Act that still remains in place. This amendment will correct this discrepancy making both acts compatible with one another. Furthermore, an additional amendment will clarify that notwithstanding the clause in The Public Utilities Board Act no longer apply to transit fares in Brandon or other municipalities.
Madam Speaker, these amendments will allow Brandon to continue to reasonably adjust fares without the threat of a court challenge.
I therefore recommend this bill to members of this House for their consideration. Thank you very much.
Mr. Daryl Reid (Transcona): Madam Speaker, I move, seconded by the member for Wolseley (Ms. Friesen), that debate be adjourned.
Motion agreed to.
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House Business
Hon. Darren Praznik (Deputy Government House Leader): Madam Speaker, I move, seconded by the honourable Minister of Highways and Transportation (Mr. Findlay), that Madam Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.
Motion agreed to, and the House resolved itself into a committee to consider of the Supply to be granted to Her Majesty, with the honourable member for La Verendrye (Mr. Sveinson) in the Chair for Urban Economic Development Initiatives; the honourable member for Sturgeon Creek (Mr. McAlpine) in the Chair for the Department of Housing; and the honourable member for St. Norbert (Mr. Laurendeau) in the Chair for the departments of Justice and Urban Affairs.