GOING the DISTANCE Franchir Le Fil D'arrivee

Canadian Transportation Research Forum

i.e Groupe de Recherches sur les ransports u Canada

GOING THE DISTANCE Franchir le fil d'arrivee

PROCEEDINGS of the 29th vo- Annual Meeting

rp, ‘Cq.

.110 ACTES de la 29ieme Conference annuelle 683

Royal Commissions and Canada's Transport Policy Community: The Changing Dynamics of Political Innovation

Dr. Anthony Penl Department of Political Science University of Calgary Calgary, AB T2N 1N4

Introduction: Placing Royal Commissions in Context

11°oneYal Commissions have been a mainstay of Canadian transportation policy making. bod e In each generation since the First World War, government has charged such a eff,Y to develop a new transportation strategy. This paper takes stock of the latest such the "Royal Commission on National Passenger Transportation" chaired by Louis e‘,/a7ullian• The potential influence of the Hyndman commission's report will be mated in a comparative context that spans both time and space. By connecting the inYtolitian Commission's efforts with the work of its predecessors, one gains insight Lue domestic political forces that will serve to either constrain or facilitate its 'ence on reinventing government's role in Canadian transportation. Earli anal er. roYal commissions have influenced policy reform through a combination of of thYttcal insight and political resonance with the interests and ideas held by members and transportpolicy community, those government, industry, and civic organizations (109nulviduals who perceive a stake in the transport sector. Coleman and Skogstad have characterized the policy community as a locus of politics, the societal space Where th ti_ Problems are contested and solutions are crafted.1 Hayward (1991:401) notes the re policy community approach to comparing policies cross-nationally "usually fits acts better than do rival approaches." inprodeanada's transport sector, the changing political and economic organization of of e licters, consumers, and government itself has led to a very different interpretation thatacil royal commission's analysis, due in some measure to the ideas and interests implegreeted such findings. No commission's blueprint for policy reform has been d as proposed. In each era, certain recommendations were incorporated into com,P?licy while others were left to gather dust on library shelves. The policy implp unnY framework suggests that the connection between recommendations and apriv 111entation is not random. Rather, by focusing on the way in which public and it_is.„130,..sdsecibliesion makers interact in the period following release of commission findings, menu of innovations nu to predict which policy items will be ordered off the which ones will be left untested. If the resPonse pattern predicted by the policy community model holds true, then the arilani`y1T. an commission will not impact transport policy based upon the strength of its leag°1s. Per se. The attributes that will motivate policy actors (e.g., administrative 'I's in the federal and provincial bureaucracy, political parties, government, and

1 Perl 684 organized transport consumers and producers) to take up a particular recommendation for reform turn out to lie mainly in these recipients of policy advice, rather than in the donor's intentions.

Focusing on prior episodes of transport policy development that followed the release of royal commission reports will help sharpen the image of a policy community and its function in the selection and implementation of reforms. But given the increasing openness of Canada's economy, the transport policy community may have taken on a new orientation for this latest round of reform. Instead of assuming that the ideas and interests of various public and private policymakers are formed within a domestic frame of reference, one must now take the perspective of world markets and global competition into account. Contrasting the Hyndman commission's recommendations with the work of a contemporary French effort, the Debat national sur les infrastructures du transport, will offer an international counterpoint to the issues raised here in Canada. Not only can looking across the Atlantic sharpen our understanding of how new transport options relate to their respective policy community, but looking abroad will also highlight the new economic influences on the Canadian transport policy community. As a result of heightened international competition, both Canada and France will wind up choosing new transport policy options based upon an unprecedented inflow of signals from abroad. Thus, exotic foreign options Will increasingly influence innovations on the domestic policy menu.

The analytical horizon set out by the Hyndman commission makes periodic reference to the global economic forces that will influence Canada's transportation sector in years to, come, but it does not identify how the policy community will interpret those signals and value the stakes associated with the outcomes. The economic analysis that forms the Hyndman commission's principal research tool tends to focus on the degree of insulation from market signals that regulatory barriers and subsidies can create. NOW that those markets are becoming global, the quality as well as the quantity of insulation between Canadian transport practices and those elsewhere becomes increasinglY important. The Hyndman commission's recommendations can be thought of as opening a new policy making episode. But as previous episodes have demonstrated, the timing and direction of actual change depend on an interaction of political and economic forces that emanate from well beyond the commission's analysis.

How Earlier Policy Communities Greeted Recommendations for Change The Hyndman Commission is the fourth royal commission to investigate Canada's transportation policy in the twentieth century. The varied fates of its predecessors suggest that the balance of power between governments and societal interests, transport investors, consumers, and producers, can serve as useful indicators of MILT policy options will be developed and implemented and which ones will languish In, obscurity. As Canada's transport policy community has evolved, each royal commission confronted a different set of opportunities and constraints for poi< innovation.

In 1917, the (Drayton-Acworth) "Royal Commission to Inquire into Railways and Transportation" released its findings into a transport policy community where the, national government dominated all other interests and organizations. World War I created an unprecedented centralization of political authority in Ottawa, turning.the federal cabinet into a temporary "constitutional dictatorship" with near absolute polical powers (Smiley, 1980: 50). At the same time that Ottawa's power wasover-extendeerrcli at a mod apogee, the economic demands of wartime had pushed an already

2 685

e rrailroad industry to the brink of financial collapse. This royal commission's ric°111rnendations to nationalize the privately owned Canadian Northern Railway, fand Trunk Railway, and Grand Trunk Pacific Railway thus came at a time when 6uvernrnent was exceptionally powerful in relation to transportation producers. Tc_hi.s.. configuration government and a weak private sector td of a powerful central enitates a "state directed" policy network in which government was in a position to overcome,. ..r any challenge to its policy preferences. And those preferences were in near iect harmony with the royal commission's findings. Ottawa sought to assert a new ,,,,u,.1r 11 of economic sovereignty through railway nationalizion. The goal of the new 1:41cY was to use nationalization as a policy instrument that could impose the costs of waY reorganization on the British investors who owned the Grand Trunk and Grand u `LII1c Pacific railways (Per!, 1994). This redistribution was needed to bail out oinestic financiers of the Canadian Northern Railway. Persuasive circumstantial evidencee suggests that government's activity in this state directed policy network )(tended to shaping the findings of the royal commission itself.2 Prom 1 , 917 through 1923, Ottawa continued to direct policy development in ,`"Piernenting- only those findings of the Drayton-Acworth commission that ,scorresponded example, Drayton and Acworth' a with government's preferences. For the power of appointments to the national railway's board of directors in existing directors was studiously ignored. Board members were appointed by the Cabinet°met, Withoutwithout advice from the Canadian National's sitting directors. A stat e directed policy network thus facilitates government autonomy in policy making, co_ when government's preferences either overlap with, or extend to, guiding a royal nZmission's analysis, the likelihood of translating favoured recommendations into 'funw_policies is quite high. Indeed the Drayton-Acworth commission's primary 'Ion was legitimating new policy that had been developed within the federal 8°veha,ernme n t . But as the balance of power between government and societial, a new policy network emerged to greet the next royal commission s findings.interinterests"tea, The 1,, • auth '.3us demonstrated that an economic crisis could not legitimate Ottawa's political des onty in the way that a wartime emergency had. For in peacetime, no matter how otrrate the economic circumstances were, Canadian federalism short circuited wa's public policy initiatives like unemployment insurance and interventionist pr eg,1 711 ation of the national economy. In the transport sector, this division of powers ented government from addressing the emerging competition between railways and re_ or-carriers. Constitutional practice treated inter-provincial rail transport as a ,,,,Vciusibility of national government, while the rapidly expanding road transport sector p—rii:re under provincial jurisdiction. In addition to this diffusion of public authority, the c,an Providers of transport had now consolidated into two national carriers, autan Pacific Railway (CP), and Canadian National Railways(CN).

:21 e. result of this shifting balance of power could be termed a disjointed duopoly, in )'Ileh the division of public responsibilities, where Ottawa and the provinces each tnntrolledra separate modal policy levers, was paralleled by the division of Canada's prjPortati on market between CP and CN. But whereas Canada's two transport th',u.cerse could have adjusted their output by redistributing modal and regional shares, sucuistribution of government's regulatory powers was not organized to accommodate poi!' a change. The resulting mismatch in political and economic capacity left this icy community poorly positioned to undertake any real innovation.

3 Perl 686

Neither Ottawa, the provinces, nor CP and CN,could forge an alliance to translate anY of the Duff commission's recommendations into workable policies. Reforms that applied consistent regulatory and fiscal rules to both road and rail transport would have required a new division of powers over transport, more political effort than anY government was prepared to undertake. Absent that level of political commitment, attempts at reorganization would necessarily be balkanized.

The 1932 Duff commission approached its task with sensitivity to the constitutional division of powers in transportation. Although intermodal competition was becoming. a serious policy issue, the Commission recommended against federal intervention in either automotive finance or regulation because "Under the constitution of Canada regulation of road transport falls within the exclusive jurisdiction of provincial authorities (Government of Canada, 1932; 56). The analysis went on to provide an elaborate disclaimer of federal responsibility in road transport to avoid challenging the provinces' responsibility.

Instead of seeking to integrate, or even harmonize, the fiscal and regulatory policies on both sides of the jurisdictional divide between railways and roadways, the Duff commission focused its attention on restructuring the railroad industry alone. The target of such "rationalization" was duplicative freight and passenger services Perhaps because both CP and CN feared that such consolidation would lead to amalgamation, they opposed most of the commission's policy recommendations. The most that Ottawa and the railways could agree upon implementing was a relatively modest consolidation of passenger services in Ontario and Quebec. Disjointed duopoly turned out not to fit with the objective of reforming railway operations on a national scale.

As a result, Canada's transport policy community chose to leave most of the Dug commission's suggestions untested. But even though this royal commission changed little in the short run, its analytic principles served to legitimate provincial responsibility for road development and worked to entrench the separation of government's powers in the transport sector. In its deference to Canadian federalism, the Duff commission became a midwife to modal segregation in Canadian transportation policy. By 1961, when the Macpherson royal commission was established, Canada's transport, policy community was more dynamic than ever. Provinces had used their fiscal and regulatory jursdiction over road transport to implement policies that stimulated truck, bus, and automobile transport. The success of these efforts had come largely at the expense of the rail mode, and by 1960 the relationship between government, consuthers, and producers in the transport sector was at a turning point.

Roads falling under provincial jurisdiction were poised to surpass federally sponsored railways as Canada's most important means of surface transport. Along with the dispersion of fiscal and regulatory authority among Canada's ten provinces that accompanied the rise of road transport in relation to railways, the private sector had als°, been transformed by a new diversity of interests. Trucking firms, bus companies, allu the wide range of automotive related producers joined the railroads as major transport producers. This diversification of interests in both the state and society set the scene for what Pal (1992: 112) has termed a "clientele pluralist" policy network where "state agencies are both weak and dispersed ... [relying on private sector] associations for, information and support ... in policy-making." The diverse preferences and dilute levels of authority found in a clientele pluralist network increase the likelihood of grotlY alliances because no single firm, government, or consumer organization can achieve as objectives alone. The Macpherson commission's analysis took little account of these

4 Peri 687 allian ces, and hence neglected the political fault lines underlying the transport sector's ---'nomic development. he Macpherson copied the Duff commission's double standard of Tnvest commission tgation into federal and provincial transport policies. It examined both the P°Th„Alitical and economic dimensions of Ottawa's transport responsibilities (i.e., the rail ).while recognizing only the economic consequences of the provinces' finance and r,:iluntstration of With provincial sponsorship for roads neglected, ,1Way road transport. subsidies appeared unjustifiable, leading commissioners to conclude "The 4 waysthe role as an instrument of national policy promoting settlement and ... traffic by Incentive of cross-subsidization ... is obsolete" (Government of Canada, 1966: 18). Exten • sive automotive transport and its competitive treerssu evidence concerning the growth of reon the railroad industry was presented to justify findings that CP and CN must liberated and from their existing public service obligations (i.e., subsidized freight rates c,o ununprofitableProfitable passenger service) and given a narrower commercial mandate. The golilillssion worked from a syllogism that associated a transport monopoly with a ,t e pment initiative. Railroads had been created as a monopolistic industry to advance Rorlilic agenda of national development, industrial growth, and territorial cohesion. Tha_u transport had effectively put an end to the railroads' transport monopoly. „."tre.fore,ecc the policy objectives of national development could no longer be achieved tively through government direction of the railroad industry. The ongoing were , and indeed expanding, provincial policy objectives in road investment Ass never elaborated with the care and precision of earlier federal initiatives. :fin ssing the competing calculations that guided federal and provincial infrastructure evidnAce, the Commission stated "... our investigations have revealed surprisingly little as ,,nce of a consistent and considered economic approach to this allocation of public left cie among the various modes"(Government of Canada, 1966: 13). What was fede`,,4"Pli cit was the potential redistribution of fiscal and regulatory input between refo—l. and provincial governments. For if the commission's market oriented policy eonsrit ns were adopted by Ottawa in the rail sector but provincial policy remained transtvant,, then the provinces would become the principal sponsors of Canada's transt—rt infrastructure and further stimulate the fastest growing component of its cons port industry. From the policy community's point of view, those producer and at theuTer interests that were well represented at the provincial level would gain leverage 'xPense of interests that linked into the federal government. Wherea coin .s economic logic would have followed up on the source of growing modal bourtion, the political taboo of crossing the federal-provincial jurisdictional refor arY prevented any prescription to the provinces. As a result, recommended exn„Ills, sought to accommodate rail policy to the exogenous economic logic of iobs—jive provincial highway programs that bore a striking resemblence to the chan,-nte" development efforts at the federal level. The federal government was allo‘r,;vith implementing fiscal, administrative, and regulatory reforms that would road ti""ways to shed loss making functions in order to compete more effectively with were rns, Port But at the same time, the provinces' policies stimulating road transport inte,r elt virtually untouched. The fit between this bifurcated logic and the divided reco;sts of the transport policy community turned out to be the key to predicting which Plural-!i5llendations would be adopted. In the policy community's dynamic of clientele allied T, only those findings which produced an initial consensus among interests or With one level of government, and then encountered either indifference, disunity, 6reement among the clientele associated with another level of government, made it

5 Perl 688 off the policy drawing board. Thus, the federal government, CN, and CP managed to reach a consensus about shedding railroad cross subsidies to preserve passenger service. Since the clientele of provincial transport policy initiatives (i.e., road users) were either indifferent to, or supportive of, such a reform, policy was implemented.

Conversely, when the commission proposed federal regulatory reforms that divided interests allied with Ottawa while also uniting the provincial policy community in opposition, these recommendations were not implemented. The Macpherson commission had recommended a new transportation act which would centralize regulatory authority for interprovincial transportation within a single federal agency. Ottawa responded by creating the Canadian Transportation Commission (CTC). This agency was charged with formulating a national transport policy based upon the competitive advantages of each mode. But clientele pluralism worked to prevent anY reconciliation of federal railway policy with provincial highway policy, leaving it impossible for the CTC to articulate a national transportation policy.

Richard Schultz attributes the failure to implement Section 3 of the National Transportation Act, which would have incorporated regulatory responsibility over interprovincial road transport under Ottawa's jurisdiction, to a combination of intergovernmental rivalry and internal division within the federal government, the hallmarks of clientele pluralism. Schultz confirms, "Naturally, the provinces would oppose the loss of the only mode of transportation which they could regulate, especially in light of the role they envisaged for trucking in regional economic development." (Schultz, 1980: 24)

Policy Reform in Today's Transport Policy Community

By the time of the Hyndman commission's report in 1992, Canada's transport polieY community was more diverse than any to have yet encountered such a blueprint for reform. Canadian National and Canadian Pacific were no longer all-encompassing transport conglomerates that provided a full range of services. In response to the, Macpherson commission's recommendation to do away with cross subsidy, Ottawa hau cooperated in excising their unprofitable "cost centres" and establishing them a,s independent public enterprises. Passenger train service became the responsibility 0; VIA Rail Canada, Maritime ferry services were turned over to Marine Atlantic, an° Newfoundland's freight and passenger services were placed in the care of Terra Transport. These uneconomic entities made easy targets for budget cutters in the Mulroney government. Indeed, the Hyndman commission was launched at the same time that Ottawa cut VIA Rail Canada's route structure in half and its train miles bY eighty percent.

In aviation, deregulation and privatization have also diluted the national focus of Canada's two major carriers. Air Canada and Canadian Airlines International now represent distinctive regional coalitions of capital and labour, pitting central Canada,. against the West as each firm struggles to survive the air industry's crisis 01 overcapacity. Further, although both remain Canadian owned corporations, the globalization of the aviation industry has motivated each company to build internation. alliances that bring foreign political and economic interests to the table of Canadian transport policy making. While Canadian Airlines may appear to be the mo.re dependent on such a foreign linkage, with its future currently riding on an alliance with American Airlines, Air Canada's stake in Continental makes it increasinglY interdependent with a U.S. carrier over the long run.

6 Perl 689

In the automotive sector, the North American Free Trade Agreement will trigger a relative decline in Canadian vehicle assembly while also boosting the manufacture of specialized component parts (Molot, 1993). Within a decade, automotive amlfacturing will no longer be central Canada's engine of economic growth.3 And ill eking deregulation has opened Canada's borders to U.S. operators whose lower cost Structure have enabled them to capture a significant share of the domestic road transport Market(M adu, 1989).

In short, the Hyndman commission's recommendations have been placed before the most heterogeneous transport policy community in Canadian history. Such diversity tendswh to be associated with policy networks characterized by pressure group pluralism. c;ere structured by the dominant characteristic of fr Clientele pluralism had been nada's domestic politics, namely federalism, pressure group pluralism breaks away ar°111 any consistent organizing principle. Instead of communities of interest clustered d,,,,c)und government's involvement in transportation, be it federal or provincial, the n*Zairlic of pressure group pluralism is based on ad hoc political alliances that form and 'a:e4 4vel under the momentum of sudden events. As a result, neither public nor private thtors are C likely to posess an incentive for proactive public policy development because uncertain until a moment of 1Si!mPlications of a given proposal are likely to remain (e.g. major firm, an obvious environmental disaster, or the iation bankruptcy of a of a particular region or societal segment from national transport services). Tran,„ 0„,"Yurt Policy reforms are clearly less predictable within a pressure group pluralist ceiText than under any other policy community environment. Under these Liiiitc.ivatrnivsetsances, accomplishing change requires coordinating public and private under conditions of minimal certainty. Thus, the Hyndman commission's .:iti a.11cY Prescriptions will not become reality as a result of the stable set of preferences inrs;once attracted firms, consumers, and governments to previous reform initiatives. b:;eaci, the likely to be influenced .Y translation of recommendations into reality is most transitory preferences, ideas and interests.

becauselob of the growing openness of Canada's economy in general, and. the tem oulzation of transport competition in particular, some of the inputs that trigger the trarY coalitions in the policy community will originate from abroad. Assessing tran,YndInan commission's key recommendations along with those of a parallel French recie-signn't Policy review can suggest whether the principles guiding domestic policy are compatible with those being applied to policy reforms abroad. Because of Puressure group Canada's policy community could follow foreign "if pluralist dynamic, ences just as easily as the cues set out by domestic policy reformers.

Contrasting Canadian and French Modes of Transport Policy Analysis 130th Canadian and French governments sought advice on modifying their transport g„ .Y regimes during the same time period, because by the end of the 1980s, firms and ent agencies in both nations exhibited little confidence in being able to adapt to intePlulY changing economic climate. Forces ranging from more open and acute degrrnadational competition to growing concerns over the costs of environmental signal aLion had led policy actors to question their ability to interpret the conflicting sign,,s ueing generated by a "new world order." In the transport sector, getting these ca„,,_,s wrong could lead to costly mistakes given the large amounts of long-lived pa''lssekt..1 that are required to build and operate new networks. Interestingly, railway tran "ger service became a bellwether for both Canadian and French insecurity over sP°rt Policy making more generally.

7 Penl 00

In Canada, the passenger train's fortunes had been on the wane for about two decades, fueled by a prolonged period of disinvestment. Despite evidence that new policY initiatives could reverse such decline in the U.S., the Mulroney government opted .to downsize VIA Rail Canada dramatically (Perl, 1993). Government's loss of faith in public enterprise, and in the rail mode as a passenger carrier, was presented as an act of fiscal responsibility, one that would become apparent in the context of a more comprehensive review of future national passenger transport needs. Hence the rationale for the Hyndman commission's entire review exercise could be seen to originate from the need to legitimate the Mulroney government's abrupt "solutionr to Canada's long term passenger train problem.

But in France, it was the passenger train's success that triggered a similar policy review. Here, the development of a high speed rail network had provoked dissent about the government's responsibility to other segments of the transportation system While government provided the national railway, SNCF, with abundant resources to expand upon the initial triumph of the TGV,critics charged that regional train services operated by conventional technology, commuter rail services, and urban transit were being allowed to deteriorate. This divergence of public support led critics to attack government's "two speed" transport policy in which a favored class of travelers cou!cl speed across the country by bullet trains while the numerical majority of pubV transport users was left to suffer deteriorating ordinary trains, buses, and urban tran.sii. Thus, Louis Hyndman and Gilbert Carrere were each appointed to oversee policy reviews that could establish new national transport priorities. These goals would, presumably, make it easier for both government and industry to deal with increasinglY contested and contentious trade-offs.

The different ways in which these commissions undertook a broadly similar task offer important evidence about the divergent premises that guided their analysis. Both commissions were charged with undertaking public consultation, but the scope of such investigation, and the relationship between public and expert opinion in these investigations, suggests that the Hyndman commission viewed Canadian public inpu.! as being less compatible with the substance of transport policy development than di° the Carrere commission in France.

The Hyndman commission began its work by holding public hearings at 30 locations across Canada during which .382 deputations were made. These hearings were, publicized by modest advertisements in the public media, and received very limiteu news coverage in advance of the proceedings. After such hearings, when me.clela coverage was likely to spark further public interest, the option to submit written brieis or call a toll free line and offer opinions over the phone was taken up by 546 written responders and 134 callers.4 The commission confined its public outreach to a seriesr of 14 focus group sessions which became the basis for a nationwide telephone poll °I 2,400 individuals' attitudes on transport issues.

Although the Hyndman commission actually received the bulk of its public inP1.1l, through an active outreach effort, the telephone poll instrument led to a highu structured form of interaction with the public. Evidence that even this feedback was mediated by an evaluation mechanism that was far from neutral suggests that the Hyndman commission placed a low value on direct public input (Dunbar, 1993). All explanation for this scepticism regarding public input into transport policy reform call be found in the commission's subsequent diagnosis of Canada's transport ills being caused by a widespread addiction to government subsidies. Although not stated in as

8 Perl 691 illthanY words, the commission recommendations regarding each mode make it clear that 'wue caPital and operating subsidies furnished by governments have distorted the ways in rdlich both producers and consumers evaluate transport's costs and benefits !lig°vernment of Canada, 1992). This interpretation of subsidies' effect would leave e room for public input into policy evaluation because consumers and producers Ould be unfit to express preferences that had not been clouded by subsidy. The ,usPinions of producers and consumers hooked on subsidized mobility were judged to be 4n unreliable guide for analysis. The can Carrere commision took a different approach to public consultation. Like its achan hearings around France, receiving more than 3,000 de counterpart, it held public s_Putations at seven such events. It took a more active role in publicizing these events, a that 400 articles about its activity were published in major French newspapers. "en differences in population size are taken into account, these efforts generated PuTkblic input that is roughly comparable to that received by the Hyndman commission. reue French placed less emphasis on polling, mounting a telephone survey with 1,000 d sPoudents. But where the Carrere commission's consultation efforts diverge ranlatically from Canadian practice is in their interactive mode of outreach.

The bulk of the Carrere commission's consultation efforts were devoted to convening und table discussions in which over 50,000 elected officials, bureaucrats, sumers, and producers discussed their views on transport policy with one another, with attention dire commission staff(Government of France, 1992: vi). By focusing its dir,ctlY on the French transport policy community, the Carrere commission revealed a fo lerent premise about the role that consumers and producers should play in the initial sori!nulation of new policies. Indeed, the devotion of such extensive resources to pe, iciting input from the policy community suggests that the commission staff valued thLeePtions based on contemporary experience at least as much, and perhaps more, economic models built upon idealized principles.

In other words it appeared that policy community perceptions, ranging from cabinet irrlininisters situated at apex of decision making to Metro drivers working on the front cohcs of urban transit, meant more to French policy innovators than to their Canadian themnterParts. Rather than discounting contemporary reports as having been dulled by abollarcotic of subsidies, the staff of the Carrere commission appear more concerned thee'I t compensating for excessive abstraction in prior policy formulation, where pri retical rigidity had either discounted or entirely screened out important inputs from °rPolicymaking. l'arees,eh initial indications of a divergent conception of contemporary transport problems the rne out by the ways in which the Hyndman and Carrere commissions connected data gained from their public consultations to subsequent policy analysis and ii71111nendations. The Hyndman commission physically distanced public input from pubit.3l1cy recommendations by dividing the two into separate reports that were su ished more than a year apart. The title of the interim report, Getting There, gests that public input would constitute a means to an end. But when the end itself 4co arrived at in the final report entitled Directions, there was virtually no attempt to reidulect these earlier means with policy recommendations. While this might have been 1111,d.ant if the public consultations summarized in Getting There had pointed uiguously to the conclusions reached in Directions,just the opposite occurred. A birve °f analytical premises occurred during the transition from Getting There to ctions that required a more explicitjustification.

9 Perl 692

The Carrere commission issued a single report, one which explicitly integrated its consultation exercises with analysis. This combination of listening and learning was justified as a valuable means to breaking down organizational barriers that had inhibited effective policy analysis in the past. In his introduction, Gilbert Carrere wrote "••• transportation is no longer a purely technical and financial enterprise. Its social and economic dimensions are too important to be left exclusively to transport producers an. d [policy] specialists" (Government of France, 1992: i). Instead of encouraging specialists to interpret evidence along traditional lines of specialization, in which the interaction between transport modes was artificially segregated and the relationshiPs between the transport sector and the broader economy and society were also compartmentalized, the Carrere commission adopted a new analytical framework.

Problem Redefinition : Subsidy Addiction Versus Organizational Sclerosis

In their analyses and conclusions, the Hyndman and Carrere commissions identify the central problem facing transport policy makers in different ways. For Hyndman, the malady is an addiction to government subsidies and the cure is a steady withdrawal from this economic sedative. The report's introduction states, "...one of the main thrusts of our principles is to achieve the benefits from transportation like any other business where people buy and sell services, instead of as a government function"(Government of Canada, 1992: 65). In the commissioners' view, the direct and indirect government subsidies used to replace earlier cross-subsidy arrangements had dulled Canadians' awareness of economic reality in transportation. This subsidy habit fostered a debilitating delusion in which firms, consumers, and government each perceived only benefits from getting "something for nothing" out of existing transport policies. In an increasingly competitive and integrated world economy, the cost of further self- indulgence was judged to have become prohibitive.

For the Carrere commission, France's transport maladies could also be traced to government characteristics that impeded effective policy, but instead of economic sedation, transport producers and consumers were suffering from the effects of organizational sclerosis. The ossification of the public institutions responsible for transport policy making had led to insulated regulatory and fiscal decisions in which a single objective (e.g., the creation of a TGV network) was pursued without considering its effects on the transport system as a whole. The results, where "... the pricing of each transport mode's infrastructure use takes account of, different [and unrelated] factors prevents the market from operating efficiently' paralleled Canada's inefficiencies, but were seen to arise directly from flaws in government's organization (Government of France, 1992: 14).

Under the influences of such overly narrow policy evaluations, the Carrere commission found an 'excess of transport demand stimulated by the systematic underpricing of transport services. "Too often," the report found,"either nobody decides [what the true cost of transport should be] or those who should not be deciding [are in a position to control pricing, i.e., those who have a vested interest in a particular model]"(Government of France, 1992: 20). Given that organizational sclerosis had distorted transport pricing primarily through financing transport infrastructure in an uneconomic manner, the Carrere commission saw, these facilities as creating long run distortions that would inhibit a "free market from correcting past inefficiencies. Simply minimizing government s

10 Fed 693

,itnvcdvement in the transportation sector would accomplish nothing because tirsPort consumption and production would remain connected to each other _ ough distorting factors, the "blindness of the market,...pressures and volatility °I Public opinion,.., and the uneven power of [existing] public authority" ‘'overnment of France, 1992: 1). The t() proposed cures for subsidy addiction and organizational sclerosis turned out e have little in common. The Hyndman commission prescribed a course of hc°110\ Inic shock therapy designed to break Canada's subsidy habit once and government the Public finance, regulation, and ownership were identified as the Principal routes by which subsidy reached the transport sector. Each of these smree Policy instruments was targeted for radical redesign to stop this flow of ,I latives to Canada's transport market The Hyndman commission recommended Ftlasing out all Period. transportation finance from general revenues over a ten year

Thurant sitional assistance was recommended to ease the pain of subsidy withdrawal, if economic restructuring was intended to achieve "zero tolerance" for subsidies. e0`)°,Ine carriers, modes, or even an entire infrastructure (e.g., rail branch lines) thed not pay their own way out of unsubsidized revenues in the long run, then re was no place for such firms, technology, or facilities in Canada. 'erIerestingly, the Hyndman commission found that the most heavily regulated and inc)dss-subsidized component of Canada's intercity public transport sector, the bus 221,ustrY. to be the most economically efficient (Government of Canada, 1992: ti„4). Deregulation and privatization across the board were assumed to enhance th-esenvironmental and economic cost advantages of the bus mode, even though ande had developed under a restrictive system of provincial government controls nr,Partial public enterprise (e.g., Terra Transport in Newfoundland, Gray Coach 't Ontario Northland in Ontario, S.T.C. in Saskatchewan, and Pacific Coach nes in British Columbia). For the 'e Carrere commission, organizational rehabilitation within government was eff surest route to curing inefficiencies in the transport market. Its goal was more acr,ective public arbitration, i.e., the ability to set rules of the game that would take eo`olint of intermodal cost effectiveness and assess externalities in a effnIPrehensive economic and social context The commission defined such invec,tive arbitration as government's capacity to evaluate the claims of all parties situTi:v ed in a policy issue, to take account of all objective elements of the (0,;4`1°n, and to compare and contrast alternative options in an equitable manner tra,feltment of France, 1992:27). By making such an assessment process more -'Parent, government decisions would gain greater legitimacy.

C°11e1usion: Is Organizational Sclerosis a Canadian Policy Problem? Whe„ led s",seen in historical perspective, the Hyndman commission's preference for market cont°altions appears to be a logical counterpart to the diverse pluralism of Canada's the ,bemPorary transport policy network. Coordination, integration, and cooperation, difr"411marks of the Carrere commission's alternative approach, are indeed more fra lcult to achieve in Canada's environment of heightened economic competition and or:ured political jurisdictions. But if the Carrere commission's insight into cenizational sclerosis has any applicability in Canada, and the Hyndman sh:Rnmission's reconstruction of public input would indicate that it does, then market als will continue to be distorted by false administrative and regulatory output

11 Perl 694

These signals may be generated by prior fiscal mistakes, such as the ongoing economic distortions of overdeveloped road infrastructure (Government of Canada, 1992: 106). Or they may come in the inability to implement needed changes for lack of public legitimacy.

The Hyndman commission's wide gulf between suggested input from the public and recommended policy output offers government little support in getting from "here" to "there." While the anarchy of Canada's policy networks may currently appear to constrain more purposive attempts at government led policy reform, the strengthening connection with international economic forces is likely to facilitate just such change. For if France and other European nations renovate their transport policy making institutions to achieve the European Community's commitment to sustainable mobility, and if the U.S. also follows through on ambitious regulatory and fiscal reforms (e.g? the Intermodal Surface Transportation Efficiency Act's goal of integrating road and rail transit planning with land use and environmental policy objectives), then pressure Will mount for Canada to match these efficient outcomes. Given the current distance between Canada's transport policy community and the rarified, indeed condescending, economic logic of the Hyndman commission, it is safe to predict that this latest royal commission to inquire in transportation will raise more questions than provide solutions. Instead of dismantling subsidies and other forms of public finance base upon abstract notions of what an efficient market should look like, Canada's policy is far more likely to adapt to the competitive signals sent by foreign policy innovations. Some of these innovations will call for government's leadership in facilitating change, but all of them will require a policy making process that is free of the organization. al sclerosis highlighted by the Carrere commission. The Canadian transport policy community's free flowing style of political and economic relationships needs to be matched by a less rigid, more inclusive public sector approach to problem solving.

12 perl 695

Notes

1 A concise overview of the policy community model is presented in Leslie A. Pal, Public Policy Analysis: An Introduction, Second Edition, (Scarborough: Nelson Canada, 1992), pp. 111-114. 2 On February 22, 1917, less than two months before the royal commission tabled its ,Port,r the Prime Minister sent a cable marked "secret" from London reading: "ask ur rayton [one of the 3 commissioners] consult with [Finance Minister] White and Oustice Minister] Meighen respecting railway report." Although the details of this e_onsultation remain unknown, government appeared ready to seek some form of input Or influence, and was willing to intrude upon the commission's independence to get its Inessage across. This cable from Borden in England to Blount in Ottawa, dated Fbeniary1,u 22, 1917, can be found in the National Archives of Canada, Papers of Rt. '1011. Sir Robert Borden (MG 26, H la), Volume 31, p. 12919. 3 Simon Reich predicts that what will remain of Canadian auto manufacturing in another ten years will certainly be more productive and better integrated into the global eco. nomy, but will also contribute so much less to the economy that "... the situation „11110t become one where Canadians look back with fond memories to the time where 'nen- industrial base was described as an American subsidiary"(Molot, 1993: 92). 4 , These findings were summarized in a preliminary report entitled Getting There: interim Report of the Royal Commission on National Passenger Transportation (Government of Canada, 1991).

Ileferences

C°Ieman, William D. and Grace Skogstad. 1990. Policy Communities and Public Policy in Canada: A Structural Approach,Toronto: Copp Clark Pitman.

buribar, John N. 1993. What You Don't Know Hopefully Won't Hurt: Developing Public Supportfor Passenger Trains in Canada. New Orleans: paper presented at the Biennial Meeting of The Association for Canadian Studies in the United States, November 17.

Government of Canada. 1932. Report of the Royal Commission to Inquire Into Railways and Transportation in Canada. Ottawa: King's Printer.

Government of Canada. 1966. Royal Commission on Transportation, Volume 1, March 1%1. Ottawa, Queen's Printer.

Government of Canada. 1991. Getting There: Interim Report of the Royal Commission on National Passenger Transportation. Ottawa: Minister of Supply and Services Canada.

Government of Canada. 1992. Directions: The Final Report ofthe Royal Commission on National Passenger Transportation. Volume 1, Ottawa: Minister of Supply and Services Canada.

13 Perl 696

Government of France, Mission Transports 2002. 1992. Transports Destination 2002-: Debat National Sur Les Infrastructures de Transport. Paris: Mission Pour l'Animation du Debat National sur les Infrastructures de Transport. Hayward, J.E.S. 1991. "The Policy Community Approach to Industrial Policy," in Comparative Political Dynamics: Global Research Perspectives, by D. A. Rustow and K. P. Erickson. New York: Harper Collins.

Madar, Daniel. 1989. "Heavy Traffic: Trucking Deregulation, Federalism, and Canada - U.S. Trade," in Publius, vol. 19, n. 1.

Molot, Maureen Appel,(ed). 1993. Driving Continentally: National Policies and the North American Auto Industry. Ottawa: Carleton University Press.

Pal, Leslie A. 1992. Public Policy Analysis: An Introduction, Second Edition. Scarborough: Nelson Canada.

Perl, Anthony. 1993. "Getting What You Pay For. The Politics of Public Investment in Amtrak and VIA Rail Canada," in Proceedings of the Sixth World Conference on Transport Research. Lyon: Universite Lumiere Lyon 2, Laboratoire d'Economie des Transports.

Perl, Anthony. 1994. "Public Enterprise as an Expression of Sovereignty: Reconsidering the Origin of Canadian National Railways," in Canadian Journal ofPolitical Science, Volume 27, Number 1.

Schultz, Richard. 1980. Federalism, Bureaucracy, and Public Policy: The Politics of Highway Transport Regulation. Montreal: McGill-Queen's University Press.

Smiley, Donald. 1980. Canada in Question: Federalism in the Eighties, Third Edition. Toronto: McGraw-Hill Ryerson.