36th Parliament, 2nd Session
EDITED HANSARD • NUMBER 13
CONTENTS
Thursday, October 28, 1999
| ROUTINE PROCEEDINGS
|
1000
| GOVERNMENT RESPONSE TO PETITIONS
|
| Mr. Derek Lee |
| COMMITTEES OF THE HOUSE
|
| Procedure and House Affairs
|
| Mr. Derek Lee |
| CANADA LABOUR CODE
|
| Bill C-12. Introduction and first reading
|
| Hon. Claudette Bradshaw |
1005
| COMPETITION ACT
|
| Bill C-276. Introduction and first reading
|
| Mr. Roger Gallaway |
| CITIZEN-INITIATED REFERENDUM ACT
|
| Bill C-277. Introduction and first reading
|
| Mr. Ted White |
| CANADA ELECTIONS ACT
|
| Bill C-278. Introduction and first reading
|
| Mr. Ted White |
| CANADA ELECTIONS ACT
|
| Bill C-279. Introduction and first reading
|
| Mr. Ted White |
| COPYRIGHT ACT
|
| Bill C-280. Introduction and first reading
|
| Mr. Steve Mahoney |
1010
| DIVORCE ACT
|
| Bill C-281. Introduction and first reading
|
| Mr. Roger Gallaway |
| COMMITTEES OF THE HOUSE
|
| Procedure and House Affairs
|
| Motion for concurrence
|
| Mr. Derek Lee |
| PETITIONS
|
| Immigration
|
| Mr. Ted White |
| The Constitution
|
| Mr. Cliff Breitkreuz |
| QUESTIONS ON THE ORDER PAPER
|
| Mr. Derek Lee |
| GOVERNMENT ORDERS
|
| SUPPLY
|
| Allotted Day—Air Canada
|
| Mr. Gilles Duceppe |
| Motion
|
1015
| Mr. Bob Kilger |
| Motion
|
| Mr. Derek Lee |
| Motion
|
1020
1025
1030
1035
| Amendment
|
| Hon. David M. Collenette |
1040
1045
| Mr. Gilles Duceppe |
1050
| Ms. Val Meredith |
| Mr. Nelson Riis |
| Ms. Val Meredith |
1055
1100
| Mr. Yvan Loubier |
1105
| Ms. Bev Desjarlais |
| Ms. Bev Desjarlais |
1110
1115
| Hon. David M. Collenette |
| Mr. John Finlay |
1120
| Mr. Bill Casey |
1125
1130
| Hon. David M. Collenette |
| Ms. Bev Desjarlais |
1135
| Ms. Jocelyne Girard-Bujold |
1140
| Ms. Val Meredith |
1145
| Mr. Gilles-A. Perron |
1150
1155
| Mr. Ted McWhinney |
1200
| Mr. Gilles-A. Perron |
1205
| Mr. John McKay |
1210
1215
| Mr. Antoine Dubé |
1220
1225
| Ms. Val Meredith |
1230
| Mr. Jean-Guy Chrétien |
| Mr. Gérard Asselin |
1235
1240
| Mr. Jean-Guy Chrétien |
1245
| Mr. Antoine Dubé |
| Mr. Lynn Myers |
1250
1255
| Mr. Benoît Sauvageau |
1300
| Mr. Bill Casey |
| Mr. Lou Sekora |
1305
1310
| Mr. Gerald Keddy |
| Mr. Jean-Guy Chrétien |
1315
| Mr. Roy Bailey |
1320
| Mr. Benoît Sauvageau |
1325
| Mr. Bill Casey |
1330
| Mr. Keith Martin |
1335
| Hon. David M. Collenette |
| Mr. Jean-Guy Chrétien |
1340
| Mr. Ovid L. Jackson |
1345
1350
| Ms. Bev Desjarlais |
| Mr. Jean-Guy Chrétien |
1355
| Mr. Sarkis Assadourian |
| STATEMENTS BY MEMBERS
|
| LISAARD HOUSE FOUNDATION
|
| Mr. Janko Peric |
| JIMMY “ICEMAN” MACNEIL
|
| Mr. Cliff Breitkreuz |
| ARMENIAN PARLIAMENT
|
| Mr. Sarkis Assadourian |
1400
| CANADA HEALTH ACT
|
| Ms. Judy Wasylycia-Leis |
| AGRICULTURE
|
| Mr. Rey D. Pagtakhan |
| ROYAL CANADIAN MOUNTED POLICE
|
| Mr. Jacques Saada |
| MERCHANT NAVY VETERANS
|
| Mr. Peter Goldring |
| FUTURALLIA 2000
|
| Mr. Serge Cardin |
1405
| KIMMIRUT STUDENTS
|
| Mrs. Nancy Karetak-Lindell |
| GRAIN FARMERS
|
| Mr. Jack Ramsay |
| GENEVIÈVE JEANSON
|
| Mrs. Marlene Jennings |
| FRENCH LANGUAGE TELEVISION IN ONTARIO
|
| Mr. Eugène Bellemare |
1410
| JON SIM
|
| Mr. Peter MacKay |
| POVERTY
|
| Mr. René Canuel |
| WEEK WITHOUT VIOLENCE
|
| Mrs. Karen Redman |
| AGRICULTURE
|
| Mr. David Iftody |
| CANADIAN COAST GUARD
|
| Mr. Mark Muise |
1415
| TUITION FEES
|
| Hon. Charles Caccia |
| HOMELESSNESS
|
| Ms. Libby Davies |
| ORAL QUESTION PERIOD
|
| AGRICULTURE
|
| Mr. Howard Hilstrom |
| Right Hon. Jean Chrétien |
| Mr. Howard Hilstrom |
| Right Hon. Jean Chrétien |
| Mr. Howard Hilstrom |
1420
| Right Hon. Jean Chrétien |
| Mr. Gerry Ritz |
| Hon. Lyle Vanclief |
| Mr. Gerry Ritz |
| Hon. Lyle Vanclief |
| AIR TRANSPORTATION
|
| Mr. Gilles Duceppe |
| Hon. David M. Collenette |
| Mr. Gilles Duceppe |
| Hon. David M. Collenette |
1425
| Hon. David M. Collenette |
| Hon. David M. Collenette |
| AGRICULTURE
|
| Ms. Alexa McDonough |
| Right Hon. Jean Chrétien |
| Ms. Alexa McDonough |
| Right Hon. Jean Chrétien |
| Mr. Rick Borotsik |
1430
| Hon. Lyle Vanclief |
| Mr. Rick Borotsik |
| Hon. Lyle Vanclief |
| EMPLOYMENT INSURANCE
|
| Mr. Richard M. Harris |
| Hon. Paul Martin |
| Mr. Richard M. Harris |
| Hon. Paul Martin |
| AIR TRANSPORTATION
|
| Mr. Michel Gauthier |
1435
| Hon. David M. Collenette |
| Mr. Michel Gauthier |
| Hon. David M. Collenette |
| FISHERIES
|
| Mr. Mike Scott |
| Mr. Lawrence D. O'Brien |
| Mr. Mike Scott |
| Mr. Lawrence D. O'Brien |
| POVERTY
|
| Mrs. Christiane Gagnon |
1440
| Hon. Claudette Bradshaw |
| Mrs. Christiane Gagnon |
| Hon. Claudette Bradshaw |
| FISHERIES
|
| Mr. John Duncan |
| Right Hon. Jean Chrétien |
| Mr. John Duncan |
| Right Hon. Jean Chrétien |
1445
| EMPLOYMENT INSURANCE
|
| Mr. René Laurin |
| Hon. Jane Stewart |
| IMMIGRATION
|
| Mr. John McKay |
| Ms. Elinor Caplan |
| ABORIGINAL AFFAIRS
|
| Mr. Philip Mayfield |
| Hon. Paul Martin |
| Mr. Philip Mayfield |
| Hon. Paul Martin |
| AGRICULTURE
|
| Mr. Dick Proctor |
1450
| Hon. Lyle Vanclief |
| Mr. Dick Proctor |
| Hon. Lyle Vanclief |
| Mr. Rick Borotsik |
| Hon. Lyle Vanclief |
| HOMELESSNESS
|
| Mr. Gilles Bernier |
| Hon. Arthur C. Eggleton |
| YEAR 2000 CHALLENGE
|
| Ms. Susan Whelan |
| Hon. John Manley |
1455
| JUSTICE
|
| Mr. Leon E. Benoit |
| Ms. Elinor Caplan |
| AUDIOVISUAL PRODUCTIONS
|
| Mr. Stéphane Bergeron |
| Hon. Sheila Copps |
| AGRICULTURE
|
| Mr. Bill Blaikie |
| Right Hon. Jean Chrétien |
| VETERANS AFFAIRS
|
| Mr. Peter MacKay |
| Hon. George S. Baker |
1500
| PRESENCE IN GALLERY
|
| The Speaker |
| ARMENIAN PARLIAMENT
|
| The Speaker |
| Right Hon. Jean Chrétien |
1505
| Mr. Keith Martin |
| Mr. Gilles Duceppe |
| Mr. Bill Blaikie |
1510
| Mr. Peter MacKay |
| POINTS OF ORDER
|
| Comments in Chamber
|
| Mr. Gordon Earle |
1515
| Mr. Randy White |
| Mr. Bill Blaikie |
| Mr. Ken Epp |
| Mr. Keith Martin |
| Mr. Dick Proctor |
1520
| Mr. Jay Hill |
| BUSINESS OF THE HOUSE
|
| Mr. Grant McNally |
| Hon. Don Boudria |
| GOVERNMENT ORDERS
|
| SUPPLY
|
| ALLOTTED DAY—AIR CANADA
|
| Motion
|
| Mr. Guy St-Julien |
1525
1530
| Mr. Gérard Asselin |
1535
| Mr. Pierre Brien |
| Mr. Ghislain Fournier |
1540
1545
| Mr. Gérard Asselin |
1550
1555
| Mr. Pierre Brien |
1600
1605
| Mr. Gérard Asselin |
1610
| Mr. Steve Mahoney |
1615
1620
| Mr. René Canuel |
1625
| Ms. Carolyn Parrish |
1630
1635
| Mr. Deepak Obhrai |
| Mr. Gérard Asselin |
1640
| Ms. Wendy Lill |
1645
| Mr. Gérard Asselin |
1650
| Mr. Peter Mancini |
| Hon. Lorne Nystrom |
1655
1700
| Mr. Wayne Easter |
| Mr. Gérard Asselin |
1705
| Mr. Roy Cullen |
1710
1715
1720
1725
| Mr. Deepak Obhrai |
| Mr. Maurice Dumas |
1730
| Mr. Gerald Keddy |
1735
| Mr. Peter MacKay |
1740
1745
| Hon. David M. Collenette |
1750
| Mr. Scott Brison |
1755
1800
| Mr. Maurice Dumas |
1805
| Hon. David M. Collenette |
| Mr. Stan Dromisky |
1810
| Divisions deemed demanded and deferred
|
(Official Version)
EDITED HANSARD • NUMBER 13
HOUSE OF COMMONS
Thursday, October 28, 1999
The House met at 10 a.m.
Prayers
ROUTINE PROCEEDINGS
1000
[English]
GOVERNMENT RESPONSE TO PETITIONS
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker,
pursuant to Standing Order 36(8), I have the honour to table, in
both official languages, the government's response to five
petitions.
* * *
COMMITTEES OF THE HOUSE
PROCEDURE AND HOUSE AFFAIRS
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I
have the honour to present the fourth report of the Standing
Committee on Procedure and House Affairs regarding the associate
membership of the Standing Committee on Human Resources
Development and the Status of Persons with Disabilities. If the
House gives its consent, I intend to move concurrence in this
fourth report later this day.
* * *
CANADA LABOUR CODE
Hon. Claudette Bradshaw (Minister of Labour, Lib.) moved
for leave to introduce Bill C-12, an act to amend the Canada
Labour Code (Part II) in respect of occupational health and
safety, to make technical amendments to the Canada Labour Code
(Part I) and to make consequential amendments to other acts.
(Motions deemed adopted, bill read the first time and
printed)
* * *
1005
COMPETITION ACT
Mr. Roger Gallaway (Sarnia—Lambton, Lib.) moved for leave
to introduce Bill C-276, an act to amend the Competition Act,
1998 (negative option marketing).
He said: Mr. Speaker, I am pleased to give first reading this
morning to this bill, which would amend the Competition Act to
deal with negative option marketing.
I would point out that this bill dovetails with a report
released by Industry Canada under the office of consumer affairs
which identifies this type of marketing as being the area in
which a number of industries have targeted growth. This is
simply intended as a measure of consumer protection.
I would also point out that this bill is in the same form as
Bill C-393, which existed on the order paper at the time of
prorogation. I would ask, pursuant to Standing Order 86(1) and
92(1), that it be reinstated at the same stage at which it
existed at the time of prorogation.
(Motions deemed adopted, bill read the first time and
printed)
The Deputy Speaker: The Chair is satisfied that this bill
is in the same form as Bill C-393 was at the time of prorogation
of the first session of the 36th Parliament. Accordingly,
pursuant to Standing Order 86(1), the bill is deemed read a
second time and referred to the Standing Committee on Industry.
(Bill read the second time and referred to a committee)
* * *
CITIZEN-INITIATED REFERENDUM ACT
Mr. Ted White (North Vancouver, Ref.) moved for leave to
introduce Bill C-277, an act to provide for the holding of
citizen-initiated referenda on specific questions.
He said: Mr. Speaker, this bill, which would provide for the
holding of citizen-initiated referenda on specific topics, took
about two and a half years to prepare during the last parliament.
I introduced it during the first session of this parliament. It
was drawn but made non-votable and, therefore, I refused to have
it debated. I have put it back into the system again to wait for
my name to be drawn and, hopefully, next time it will be made
votable.
The bill is constructed from the best experiences of California,
other United States, and New Zealand, which has a similar
democracy as our own and allows citizen-initiated referenda.
I hope this time around the committee will see fit to make it
votable.
(Motions deemed adopted, bill read the first time and
printed)
* * *
CANADA ELECTIONS ACT
Mr. Ted White (North Vancouver, Ref.) moved for leave to
introduce Bill C-278, an act to amend the Canada Elections Act
(appointment of election officers).
He said: Mr. Speaker, one of the most distressing aspects of
the present elections act, and frankly the new Bill C-2 which is
presently before the House, is that most of the field officers
for Elections Canada are political appointees of the parties. In
other words, it is patronage ridden.
Elections Canada does not even advise emerging democracies or
third world countries to work under such a system.
This bill, when adopted, would get rid of the patronage in
Elections Canada and allow the chief electoral officer to select
his own staff.
(Motions deemed adopted, bill read the first time and
printed)
* * *
CANADA ELECTIONS ACT
Mr. Ted White (North Vancouver, Ref.) moved for leave to
introduce Bill C-279, an act to amend the Canada Elections Act
(election expenses).
He said: Mr. Speaker, this bill, when adopted, would remove the
ability of political parties and candidates to get the taxpayers
to subsidize their election activities. Consistent with Reform
policy, it would remove the reimbursement provisions of the
elections act which returns taxpayers' money to political
candidates and parties.
(Motions deemed adopted, bill read the first time and
printed)
* * *
COPYRIGHT ACT
Mr. Steve Mahoney (Mississauga West, Lib.) moved for leave
to introduce Bill C-280, an act to amend the Copyright Act.
He said: Mr. Speaker, I am pleased to introduce this bill.
Currently in our education system when a teacher wants to use a
document to teach his or her students and they need to photocopy
it they are in violation of the Copyright Act.
1010
This would not infringe upon an author's ability to have his
material in the classroom. In fact, I believe it would enhance
it. It would indeed support our education system at a time when
it needs all the help it can get with its limited resources.
(Motions deemed adopted, bill read the first time and
printed)
* * *
DIVORCE ACT
Mr. Roger Gallaway (Sarnia—Lambton, Lib.) moved for leave
to introduce Bill C-281, an act to amend the Divorce Act (child
of the marriage).
He said: Mr. Speaker, the objective of this bill is to declare
that a child who has reached the age of majority is not a child
of the marriage within the meaning of the Divorce Act by reason
of only being enrolled in a program of studies at the
post-secondary school level. Accordingly, a court would not be
able, except for some other reason, to make a child support order
in order to cover all or part of the child's post-secondary
expenses if the child has reached the age of majority.
(Motions deemed adopted, bill read the first time and
printed)
* * *
COMMITTEES OF THE HOUSE
PROCEDURE AND HOUSE AFFAIRS
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I
move that the fourth report of the Standing Committee on
Procedure and House Affairs, presented to the House earlier this
day, be concurred in. The report has been signed by each of the
party whips in accordance with the standing orders.
(Motion agreed to)
* * *
PETITIONS
IMMIGRATION
Mr. Ted White (North Vancouver, Ref.): Mr. Speaker, as I
have been doing for the last few days, I am presenting yet
another petition from people in North Vancouver and West
Vancouver who point out to parliament that the recent arrival of
ships bearing illegal Chinese migrants to Vancouver Island has
underscored how illegal immigration is one of the most serious
issues facing Canada today and that bogus refugee claimants cause
undue hardship for honest bona fide refugees fleeing genuine
political persecution.
The petitioners call upon parliament to enact immediate changes
to Canada's immigration laws governing refugees to allow for the
deportation of obvious and blatant abusers of the system.
This petition contains 520 signatures.
THE CONSTITUTION
Mr. Cliff Breitkreuz (Yellowhead, Ref.): Mr. Speaker, I
am pleased to rise to present a petition signed by people from
the town of Grande Cache in the riding of Yellowhead.
The petitioners pray and petition that all references to the
name of God and to the supremacy of God should remain in the
constitution and in the charter of rights.
* * *
[Translation]
QUESTIONS ON THE ORDER PAPER
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I ask
that all questions be allowed to stand.
The Deputy Speaker: Is that agreed?
Some hon. members: Agreed.
GOVERNMENT ORDERS
[Translation]
SUPPLY
ALLOTTED DAY—AIR CANADA
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ) moved:
That athis House reaffirms its desire to maintain the provisions
of section 6.1(a) of the Air Canada Public Participation Act
limiting ownership of the capital stock of Air Canada by any
person or group to 10% of the voting shares.
1015
Mr. Bob Kilger (Stormont—Dundas—Charlottenburgh, Lib.): Mr.
Speaker, after discussions with the representatives of all of
the parties, I believe that you will find unanimous consent for
the following motion:
That, at the
conclusion of the debate on today's Opposition motion, all
questions necessary to dispose of this motion be deemed put and a
recorded division be deemed requested and deferred until Tuesday,
November 2, 1999, at the expiry of the time provided for
Government Orders.
The Deputy Speaker: Does the chief government whip have
unanimous consent to introduce this motion?
Some hon. members: Agreed.
The Deputy Speaker: Is it the pleasure of the House to adopt the
motion?
Some hon. members: Agreed.
(Motion agreed to)
[English]
Mr. Derek Lee (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, I
rise on a point of order. There have been other discussions
among the House leaders and I think you would find unanimous
consent for the adoption of the following motion. I point out
that the wording of this motion is identical to the wording of a
motion passed by the House earlier this week governing speaking
times. I move:
That, during today's sitting the member proposing a motion on an
allotted day shall not speak for more than 20 minutes, following
which, a period not exceeding 10 minutes shall be made available,
if required, to allow members to ask questions and comment
briefly on matters relevant to the speech and to allow responses
thereto, and immediately thereafter a representative of each of
the recognized parties, other than that of the member proposing
the motion, may be recognized to speak for not more than 10
minutes, following which, in each case, a period not exceeding
five minutes shall be made available, if required, to allow
members to ask questions and comment briefly on matters relevant
to the speech and to allow responses thereto.
The Deputy Speaker: Does the hon. Parliamentary Secretary
to the Government House Leader have the unanimous consent of the
House to propose the motion?
Some hon. members: Agreed.
The Deputy Speaker: The House has heard the terms of the
motion. Is it the pleasure of the House to adopt the motion?
Some hon. members: Agreed.
(Motion agreed to)
[Translation]
Mr. Stéphane Bergeron: Mr. Speaker, on a point of order. I would
like to draw it to your attention that the hon. leader of the
Bloc Quebecois will share the time allowed him with his
colleague from Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans.
Mr. Gilles Duceppe: Mr. Speaker, the question we are debating at
this time is a very important one: the future of air
transportation in Canada. On November 8, Air Canada
shareholders will be asked to vote on a purchase bid from Onex
Corporation.
In order to properly understand the present situation fully, we
need to go back a number of years, to seven or eight years ago.
The government of the day, and the one that followed it—the
current government—told us over and over again how important it
was to have two national air carriers.
The Bloc Quebecois indicated on numerous occasions that the
policy being pursued by the government was doomed to failure,
leading possibly, potentially, to bankruptcy for one, if not
both, of the companies.
Yet the government continued its market intervention policy,
sinking millions of dollars into it, but was still unable to get
one of the two carriers, Canadian, out of the mess it was in.
It was a waste of money.
The minister we have today, he who had already done enough
damage at National Defence, committed the same errors of
intervention. He committed the same error of not making a stand
and he did not propose a solid, logical and rational framework.
So money was wasted.
He promised us a business plan. We have seen what happened.
Only this past August did he finally say “We need only one
carrier if we are to be competitive”.
1020
Yet all those years he intervened, blocking Air Canada's access
to routes to Air Canada when the demand was there, always in the
name of healthy competition, which was being maintained
artificially by the investment of millions of dollars in
Canadian International Airlines.
At that time we said the real danger was most definitely that
American carriers would seize control of all air travel in
Canada, for one company as much as for the other. The outcome
has proven us right. American Airlines intervened in Canadian
International, and even has a veto on major company decisions,
thus proving that the true control of Canadian is indeed in the
hands of American Airlines.
We had said that such a policy would be disastrous for regional
transportation in small communities throughout Canada and
Quebec. Once again, we have turned out to be right. Service is
not, is no longer, what it was. Prices have gone up, despite
this supposed competition, at an alarming rate. It costs more
to fly from Montreal to the Magdalen Islands than it does to fly
from Montreal to Paris. It is downright ridiculous and it is
hurting regional economies.
Yet the need for just one national carrier was apparent if we
looked at what other countries were doing. There are only two
countries without such a policy: the United States—and everyone
will agree that the economic, geographic and demographic
situation, especially in the United States, is very different
from ours—and Japan, which also has a very different situation.
In all other countries, there is a single national carrier for
international flights because there is already competition
internationally.
Regional competition must be maintained, of course, perhaps by
changing the charters of certain companies. I am thinking of
companies such as Royal and Air Transat, which could handle
regional transportation and would encourage the involvement of
small companies providing entirely satisfactory regional
service. I am thinking of Air Montréal, which is now offering
fares from the Magdalen Islands to Montreal at half the cost of
the major carriers.
But now the minister is changing his tune. He is telling us
that we must follow market rules. He now worships market rules,
and we have seen some divine interventions. The hand of God has
taken on a Liberal form, and we have a Liberal puppet being
operated by a corporation, which just happens to be contributing
heavily to the Liberal Party.
Here, we see the Liberal hand at work, and instead of talking about
market rules, they should talk about speculators' rules, because
this is what it is about.
These people do not care about the quality of transportation,
about American control, about the importance and the development
of regional economies. They are only interested in their stocks,
they want what will bring them the highest return after the
minister's divine intervention. This minister now wants to
change the rules in mid-game. We were told yesterday that there
are rules. A minister is responsible for rules. But this
minister, through meetings with Onex attended by himself or his
subordinates, is suggesting that the rules might be changed.
It is as if a referee in a hockey game were to change the size
of the nets to accommodate the team he favours. We see it this
morning—the editorial cartoons in the newspapers are very
eloquent—this is not a minister, it is a corporation's puppet. He
makes astounding leaps of logic when he tells us about what will
come after the shareholders' decision—and let us not forget that
the current offer made by Onex involves two corporations with
more than the 10% limit, namely American Airlines with 14.99%
and Onex with 31%. People will vote on that proposal even if the
rules provide a 10% limit.
Then the minister asks us to think about the need to change the
rules.
Logic—I would say honesty—dictates that we debate the rules,
we establish the rules before the game beings, so that
subsequently all of the players may be on the same footing,
instead of telling them “Begin the game, my friends, and if
things do not go well for you, I will change the rules along the
way”.
1025
That is exactly what the minister is doing at the moment. The
scenario was written ahead of time. The government had
discussions with Onex; it intimated that they could go ahead and
make their bid, since it would change the rules to please them.
The minister can then play hero here, saying that 31% is far too
much and perhaps it should be 15% or 20%.
Onex will then say that the minister has the public interest at
heart, an interest that, more often than not, is confirmed at
benefit suppers. The rules are being bent, so the company will
accept the minister's decision.
That is hypocrisy at its finest, especially since, in 1981, if
memory serves, on the rule of 10%, those opposite were opposed
to the Caisse de dépôt et placement du Québec owning more than
10% of Canadian Pacific shares.
The argument raised by Pierre Elliott Trudeau was that it was
unconstitutional for a provincial corporation to have more than
10% of the shares of a national corporation. The same thing is
happening today, and what would have been unconstitutional for a
province is apparently no longer so for a private individual.
And yet, other companies like Petro Canada and Via Rail have
such rules.
Last year, during the debate on the banks, this same government
said “Do not touch the 10% clause, it is in the public
interest”. And what about the public interest today? What is
parliament's role? Is this a “cronies' republic” or are we
under the control of the people's elected representatives? There
is democratic icing over a layer of nepotism in this matter.
That is what the minister is doing now.
This is why we are proposing the rule of 10% be maintained. We
can debate it later on. And, if the rules have changed, there
may be other offers, but changing the rules in mid-game is
unacceptable. This is giving preference to one offer over the
other, whereas one is legal and the other is not.
Mr. Michel Guimond
(Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Speaker,
I am very pleased to speak on this very important motion brought
forward by the Bloc Quebecois, to the effect that this House
reaffirms its desire to maintain the provisions of section
6.1(a) of the Air Canada Public Participation Act limiting
ownership of the capital stock of Air Canada by any person or
group to 10% of the voting shares.
As members know and as, in my opinion, the leader of my party
explained in great detail earlier, it is up to us, the
parliamentarians directly elected by the people, to those who
received a mandate from the citizens of Quebec and of Canada, to
shed light on this issue.
Therefore, it is up to us to shed light on this issue, as the
transport minister himself has deliberately kept us in the dark,
especially since August 13, when he announced, with his
colleague, the Minister of Industry, by his side, that he was
suspending section 47 of the Transportation Act, hence keeping
the Competition Bureau out of the picture.
Talk about democracy. I think it has to be pointed out that,
with this decision, the federal government put the review and
consumer protection roles of the Competition Bureau on hold for
90 days.
Instead of that, the situation has become extremely confusing
for the ordinary person because of this suspension.
1030
Yesterday, we heard about certain memos in a question addressed
to the minister in the House. We heard particularly about a memo
from Onex management to the company's directors dated August 11,
two days before application of section 47 was suspended. I will
not read that memo, but it said basically that the company had
to get a clear commitment from the government before going any
further with its plans, particularly with regard to various
administrative constraints.
A close look at the minister's presentation before the Standing
Committee on Transportation, on Tuesday, and a close look at
this memo helps us understand. I will say a few words about the
minister's presentation, where he talked about encouraging
competition. Basically, nobody is against good principles such
as encouraging competition, nobody is against sainthood.
However, people do not always behave on this earth in a way that
will lead them to sainthood.
The government, through the Minister of Transport, tells us it
wants to encourage competition as much as possible. “As much as
possible” is pretty vague. In the end, the government may say it
was not possible to do more than it did and we will just have to
be satisfied with that. It also said it will take legislative
and regulatory measures to this end.
Then it goes on to say “The Competition Bureau will undertake a
thorough examination of any proposal in terms of competition”.
Which means what? This suggests—and we will see the relevant
legislation and regulations—that the government may be tempted to
reduce the Competition Bureau to a mere advisory role, a simple
role of offering an opinion, rather like some others, for
example the ethics adviser. Everyone is familiar with the
ethics adviser. When we did things up, the answer we get is “Oh
yes, we have checked it out with the ethics adviser”.
By seeking extraordinary powers, the minister wants to downplay
the role of the Competition Bureau, which has already proven
itself in connection with certain decisions the government
wanted to take.
Let us not forget that the Bureau blocked Ultramar's planned
acquisition of Petro Canada. It was blocked because we had a
competition watchdog that said “The interests of Canadian
consumers might be affected”.
This week, a most interesting letter by former minister Marc
Lalonde was printed in Le Devoir. I need not tell you, Mr.
Speaker, given your years of experience in this House, that Mr.
Lalonde does not have the reputation of being a sovereignist, or
a supporter of the Bloc Quebecois or the Parti Quebecois. Marc
Lalonde is a former Liberal minister. The title he gave to his
article in Le Devoir, which has a reputation as a most serious
newspaper, was the following “The 10% rule: in the public
interest”.
Certainly the Minister of Transport, yesterday, tried to
downplay Mr. Lalonde's intervention in the debate by commenting
“Yes, but he is the counsel for Air Canada”. Nonetheless, Mr.
Lalonde has considerable parliamentary experience and can see
very clearly that there are two bids before the Air Canada
shareholders, one from Onex and the other from Air Canada.
It is extremely important to clarify at this point that the Air
Canada offer complies fully with current legislation and
regulations. The Air Canada offer calls for no changes to the
level of foreign investment, the 25% rule, or to the 10% limit
on individual ownership of Air Canada.
On the other hand, there is the Onex bid, which would require
both the 25% and the 10% rules to be raised.
1035
Under Onex's offer, which is now on the table, American
Airlines' share of Air Canada would increase from 10% to 14.9%.
I would like the members of this House and those listening at
home to remember this figure of 14.9%. This is no coincidence,
and perhaps the Liberal majority on the Standing Committee on
Transport would be seriously tempted to come and call for 15%,
since this has been allowed elsewhere, such as in the case of
CN.
Another feature of the Onex—American Airlines proposal is that
the president of Onex came right out and said that American
Airlines would be putting up $750 million to buy Air Canada.
The president of Onex would like us to believe that, even though
it is offering $750 million, it will not be trying to exercise
control and will not have a right of veto.
My question is this: Is American Airlines a philanthropic
institution? Is it a charitable institution? Do those
listening to us today think that a capitalist, American company
is putting $750 million into saving Canadian Airlines for the
sheer pleasure of it? Is that likely? I think the answer is
obvious.
No one believes the minister. He is the only one who believes
what he is saying. The leader of my party quite rightly
mentioned Bill S-31. We will be coming back to this bill again
during this opposition day.
Since time is moving along quickly, I would like to point out
that we see Liberal members from Montreal's West Island,
particularly the hon. member for Lac-Saint-Louis and the hon.
member for Vaudreuil—Soulanges, who opposed the Onex proposal and
supported Air Canada.
I would like to know why they do not come to the Standing
Committee on Transport and say so. This committee is sitting
right now. Today was our eleventh meeting since early last
week. Why do these members not come before the committee? The
simple answer is that they have been gagged.
In closing, I would like to move an amendment. I move:
The Deputy Speaker: The debate is now on the amendment.
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, I am pleased to take part in this debate on a motion
moved by the hon. member for Laurier—Sainte-Marie.
This motion deals with one of the components of the policy
framework on the restructuring of the airline industry in
Canada, which I have tabled before the Standing Committee on
Transport and the Senate Standing Committee on Transport and
Communications two days ago.
[English]
The tabling of the policy framework that I made available the
other day marks the beginning of the second phase of the
government's effort to ensure that any eventual restructuring of
the Canadian airline industry takes place in an orderly matter
and with adequate means for ensuring that the public interest is
met.
Since August 13, when the governor in council put in place the
section 47 order, both Air Canada and Canadian Airlines, and any
interested third parties, have had the freedom to develop and
discuss any proposal which might lead to a conditional agreement.
1040
Under this special process, three proposals have been advanced
and two of them are currently on the table. Both these proposals
present a private sector solution to the problems facing the
airline industry.
[Translation]
The document I have tabled earlier this week lists a number of
issues on which I seek the advice of my colleagues. The first
issue is the one we are discussing today.
The government is asking the members of these committees to
examine whether increasing the present 10% limit on Air Canada
shares would contribute to a more vibrant Canadian
controlled airline industry.
The motion before us today is to the effect that this 10% limit
should not be changed.
The government has not decided yet whether it should be changed
or not. We believe the question should be a matter for debate in
Parliament.
[English]
The policy framework which I made available this week situates
the debate in a larger context. I think the hon. member for
Laurier—Sainte-Marie has forgotten that. There is little doubt
that we face a consolidation of the airline industry and the
emergence of a dominant carrier, whether by means of a merger
through common ownership or by other means. This has given rise
to widespread concerns regarding the lessening of competition.
It is for that reason I solicited the advice of the commissioner
of competition on August 30. He gave that advice this week. I
would publicly like to thank him again for the consideration he
has given to our proposals and to tell him, through you, Mr.
Speaker, that we are guided by his report.
The vision that we have for the airline industry as we enter the
21st century is one that is safe and healthy, one that is owned
and controlled by Canadians and one that serves all parts of
Canada at fair prices and that is capable of competing with the
biggest and best airlines in the world.
[Translation]
Our vision for the next century is that of a Canadian airline
industry that will be safe and vibrant, owned and controlled by
Canadians, serving all parts of Canada at fair prices and able
to compete with the biggest and the best airlines in the world.
[English]
In articulating this vision and delivering this vision to
Canadians, I want to make one point absolutely concrete here
today, and that is the safety standards of the Canadians airline
industry, which are admired throughout the world, will not be
compromised one inch by the proposal that we have before us.
[Translation]
There is another very important factor in this debate.
Fundamental to the identity of Canada is its linguistic duality.
It is a reflection of Canada's unique culture and values that
Canadians be able to rely on the national air carrier for
service in either official language.
The government will ensure that the Official Languages Act
continues to apply in the case of Air Canada or any future
dominant carrier, and that the Act is effectively implemented.
Let me now turn to some specific elements in the policy
framework.
[English]
The policy framework that I outlined clearly affirms that the
government will ensure that the Canadian airline industry remains
owned and controlled by Canadians. There will be no change to
the legislative framework in this area. The 25% limit on foreign
voting shares in any Canadian carrier will not be changed. The
requirement to be controlled in fact by Canadians will not be
changed.
The Canadian Transportation Agency has the statutory obligation
to carry out an examination as to whether or not any proposal
that comes forward does in fact meet effective Canadian control
requirements.
[Translation]
The policy framework recognizes that Air Canada is subjected to
another limit that only applies to that corporation, namely the
10% limit on Air Canada's voting shares that a single
shareholder, Canadian or non-Canadian, can own.
Although this provision has ensured that this former crown
corporation has been widely held, some have argued that this
reduces shareholder influence.
1045
As I said on Tuesday, the government is prepared to consider
increasing the limit—and only to consider increasing it—to a new
level to be decided following input from parliamentarians—after
debate here, in this House and in the Senate, for example—if such
a measure contributes to achieving a healthy, Canadian
controlled airline industry.
We are pleased to take part in today's debate. However, we hope
that the issue will be thoroughly reviewed by the committees of
the House and the Senate in the weeks to come.
[English]
I would want the debate to include the question of whether
preserving the 10% limit is part of the consideration of the
public interest. One could argue that the best means of ensuring
that the public is protected is through legislation and
regulation, and not through the 10% rule.
The policy framework puts emphasis on addressing the issues
which are of paramount concern to Canadians. In addition to
Canadian ownership and control there are competition concerns, in
particular predatory pricing, airport access, ticket pricing,
continuation of service to small communities, and the rights and
concerns of employees. All these matters must be taken into
consideration.
[Translation]
Finally, I remind you that the government intends to introduce
legislation very soon which will give it permanent authority
over the review of any merger or acquisition affecting Air
Canada or Canadian Airlines which is concluded from now on.
This formal review process, which is being put in place because
of the importance of the airline industry to Canadians and to
our economy, will involve the three elements of government
oversight which are needed to fully capture the public interest.
The Competition Bureau will review specific proposals with
regard to competition issues; the Canadian Transportation Agency
will review proposals to ensure air carriers remain controlled
in fact and in law by Canadians; and the government itself will
ensure that transportation public policy concerns are addressed.
This process puts the final decision to approve a merger or
acquisition with the governor in council on the recommendation
of the Minister of Transport.
If a merger or acquisition is found to comply with the
requirements to be owned and controlled by Canadians, as
determined by the agency, the Minister of Transport will
formulate the recommendation for approval, taking into account
the extent to which the carrier has made undertakings to address
the remedies negotiated with the Competition Bureau, and the
conditions necessary to meet public policy objectives.
[English]
These are the cornerstones of the framework, but some work
remains to be done before this framework can put into effect.
That is why we have the debate in the committees. It is going on
right now. It is going on in the Senate. We want to know the
views of parliamentarians and we want them to reflect upon the
conditions that we will extract from any new entity to protect
the public interest.
Yesterday the leader of the New Democratic Party took issue with
the 10% rule. We have this today with the leader of the Bloc
Quebecois. I want to know why they are taking sides in a
corporate debate. This government is not taking sides in a
corporate debate.
We want the shareholders of public traded companies in the
private sector to determine what is in their best economic
interest, and then the government and parliament will determine
if that agreement is in the public interest.
We will look at service to small communities. We will look at
pricing. We will look at competition. We will look at Canadian
control. We will look at how it affects the rights of workers,
but I can assure the House that the government will protect the
public interest so that all Canadians have an enviable travel
system with strong air competition as we go into the 21st
century.
[Translation]
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker,
nevertheless, it is stretching credibility to be told that the
minister did not interfere in this, and that the opposition
parties are interfering. Let him just read this morning's
papers and look at their political cartoons, he will see how
things really are.
I would like to ask him whether it is not a bit illogical to
allow this offer, this debate among shareholders, to take place
under a certain number of rules, while telling them that they
could be changed.
1050
Is this not raising share prices at this time? What if the MPs
decided the 31% in the Onex bid was way too high, and that the
limit would be 15%, and what if Onex could not comply with that,
does the minister not realize share prices will drop drastically
as a result, and people will make a quick profit? Does he not
realize that speculators will be able to gamble not once but
twice, provided they get rid of their shares before such a
decision is reached?
At that point, there will be a dramatic drop in share prices and
some people will pay dearly as a result.
Does the minister not realize that it is more logical to debate
the 10% rule—as I am prepared to do—before the offers are made,
not at the same time as they are being made.
I would have liked to ask the minister to give me an example of
a case where such a thing has happened.
[English]
Hon. David M. Collenette: Mr. Speaker, the hon. member
kindly referred to cartoons. We in public life are used to being
the butt of criticism. I know that the hon. leader of the Bloc
Quebecois has had the same experience with cartoons.
I have said for the last year that we would consider any
regulatory or statutory change if it improves the health,
viability and stability of the Canadian airline system. We
repeated that on August 13 when my colleague, the Minister of
Industry, and I brought forward the section 47 order.
It is incumbent upon us to give every flexibility for the
private sector to come forward with a solution. That is what we
are doing, but we are not pronouncing on that particular issue.
We are saying that we will consider raising that particular
limit.
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, I want to ask the minister about the
changes he is anticipating to transfer the powers from some
agencies to himself in making these decisions.
Why is he not using parliament's authority for that rather than
the minister's? I take exception that he is leaving parliament
and parliamentary committees out of the decision making process.
Hon. David M. Collenette: Mr. Speaker, with great
respect, my friend has it all wrong. The fact is that the
Competition Bureau will be very much involved in examining any
merger and in negotiating with any successful applicant in the
normal way. The Canadian Transportation Agency will be doing its
statutory duty in seeing whether or not any proposition meets
Canadian control regulations.
There are other issues that the agency and the bureau cannot
deal with. They do not have the legislative competence to deal
with these issues. Only parliament can deal with them. That is
why we are proposing, in the sanctioning of any new agreement
with respect to a dominant carrier, to have that enshrined in
legislation so that the protections the Canadian public want will
be in legislation which will be debated in the House. Parliament,
on this entire issue, will have the last word.
Mr. Nelson Riis (Kamloops, Thompson and Highland Valleys,
NDP): Mr. Speaker, I have two very serious questions to put
the minister. I appreciate his speech this morning.
One thing I have not heard in the discussions of the proposed
merger is the people of Canada, through the Government of Canada,
taking an equity position in a new airline to ensure decision
making at the board. Is this something the minister would be
open to? If not, why not?
Second, if there is a concern across the country it has to do
with the jobs that will be lost. What safeguards would the
minister provide us today that those jobs will be protected to
the extent which is humanly possible?
Hon. David M. Collenette: Mr. Speaker, we have no
intention of taking an equity stake in any of the airlines. The
government got out of the airline business in terms of ownership
some years ago, and we do not intend to go back. We intend to
create the framework so that it can be a private sector solution
which we will sanction through parliamentary measures and statute
to ensure the public interest is maintained.
One of the key elements of that is to extract conditions in any
deal that comes forward so that workers are indeed dealt with
fairly and their rights are respected.
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, it is a pleasure to shed what I would
suggest is the light of day on the motion of the Bloc to reaffirm
the maintenance of the 10% limit on ownership of the Air Canada
Public Participation Act.
1055
It would appear to be a straightforward motion, but there seems
to be a lot of emotion and intrigue behind why the Bloc would
choose today to put the motion before the House. I would like to
look at some of the reasons the Bloc might have done so.
I would like to know whether the Bloc is putting the motion
forward because of its strict adherence to the laws of the land.
I would assume from comments given by the Parti Quebecois justice
minister recently that Quebec would simply ignore the supreme
court's decision on separation if it chooses. We know that
separatists do not really have a lot of attachment to the laws of
the land, so that cannot be it.
I wonder if it is because they truly believe it is in the best
interest of the Canadian travelling public. I sincerely doubt
that, because if the current situation were identical, with the
exception that Air Canada was headquartered in Winnipeg, members
can rest assured that the Bloc Quebecois would either be in
favour of changing it or indifferent to the 10% limit.
The real reason, I would suggest, that Bloc members are so
concerned with this 10% ruling is that they see its removal as a
threat to Air Canada. If the elimination of the 10% rule would
be acceptable, what would be next? Would it be the clause that
requires the headquarters of Air Canada to remain in Montreal?
Even though the Onex proposal has ensured that the new Air Canada
headquarters would be in Montreal, the BQ knows that it cannot
trust what a boss who is based in Toronto has to say. The BQ
wants to ensure that the status quo remains with Air Canada.
It is only with Air Canada that the BQ wants the status quo to
remain. The BQ makes no secret of the fact that it wants Quebec
to separate from Canada, that it wants Canada's national airline
to remain untouched in Montreal, but it does not want Montreal to
remain in Canada.
Let us think about this. Canada may have one national airline
situated in a city that does not want to remain in our country.
Let us think of the chaos that would be created if the Bloc got
what it wanted and Quebec no longer was part of our country. We
have two national airlines today and all of a sudden we would end
up with no national airline. That is the ludicrousness of this
kind of argument and this kind of emotional attachment that the
Bloc seems to have to the 10% rule.
I would suggest to Canadians and to the Bloc that the 10% rule
should never have been there in the first place. It is not the
government's role to dictate to corporate Canada and to a
private-public shareholding company in Canada, a domestic
company, what limit shareholders should have. It is not the
government's role to put those kinds of attachments to any kind
of arrangement. Nor should any other control be placed there
other than foreign ownership.
The crisis today is a drop in the bucket of what the crisis
tomorrow will be if the Canadian government and the Parliament of
Canada do not deal with the situation of trying to maintain the
status quo. The status quo will not work. We have to look at
options and we have to be open to look at all options. That
means the government has to remove those things that should not
have been there in the first place which restrict the ability of
the private sector to look at the options and to give different
ways of solving the situation we find in the Canadian airline
industry.
I question, as members can tell from some of my previous
comments, the sincerity of the Bloc Quebecois in putting the
motion on the table today and the reasons why it feels it is
important to restrict the choices of the House of Commons,
parliament and the government in looking at a solution to the
crisis in the airline industry and to moving into the 21st
century with a positive vision of what Canada and what Canadian
airlines can offer the international community.
1100
It is that kind of narrow-minded vision that the Bloc Quebecois
has of Canada and its role internationally and its position with
one another and how we can work together. That narrow-minded
vision creates the situations we face day in and day out in the
international community.
I have great concern that the Bloc has brought forward a motion
of this nature now to complicate what is already a complicated
situation. I hope the House will determine not to support it and
to move on with the discussions over this industry's situation. I
hope we will look at all options and not limit it to one simply
because of a mistake that governments in the past have made in
trying to control private enterprise in the country.
Certainly as a free entrepreneur, as somebody who believes in
the open market, I find that any control that a government places
is not good enough. I hope in future deliberations on how we we
will help the industry through regulations and legislative
change, that we will not move backward to a regulatory industry.
[Translation]
Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Speaker,
really, we have heard our fair share of contradictions from the
Reform Party.
My colleague said that the free market had to be considered and
that business decisions had to be made on the basis of cost
effectiveness. I would remind her that, again this morning, it
is being said that, with its financial difficulties, Canadian
would have a hard time making it to next spring if the situation
did not change. For years now, the government has been trying,
through various ploys, to help Canadian hold on, while it kept
sinking every year. This is the first point I want to make on
what my Reform colleague said.
The second point is as follows. Could she explain—because
Reform members are not short of contradictions in their
speeches—how it is that last
year, in the debate on the reform of
financial institutions and the banks in Canada, no Reform member
on the Standing Committee on Finance opposed the retention of
the rule on 10% of the stocks of a financial institution being
held by one shareholder?
How is it that, in the case of the banks and financial
institutions, the Reform members fought with the Bloc Quebecois
to retain the rule of 10% in order to prevent Canadian financial
institutions from falling into the hands of Americans, among
others, and that today it does not apply to air transportation?
Is she picking up the failings of the Minister of Transport and
supporting Canadian at all cost?
[English]
Ms. Val Meredith: Mr. Speaker, I am not trying to promote
any airline. The member confuses foreign investment and 10%
rules in domestic markets.
I do not agree with the 25% foreign limit. That should be open
as well. There are other Canadian controls in place that would
allow it. They have been used in other areas.
We cannot confuse a 10% limit in a domestic investment with a
25% limit in a foreign investment market. The member is
confused.
The member says that the Canadian government has tried to
support Canadian, and I will not argue that. But if he is trying
to suggest that there has been a level playing field, then he is
way out to lunch.
Air Canada was a government owned airline. Air Canada had the
taxpayers build it tarmacs, hangars and provide it with
equipment. Until 1979 Air Canada controlled 75% of the
continental traffic. It was controlled by legislation for Air
Canada. It had a preferred airline status until 1979 and beyond.
Canadian taxpayers made it possible for it to operate in a
somewhat efficient manner and it not need government help to the
same degree that Canadian did.
1105
I would argue that both of our Canadian airlines are under heavy
competition with the U.S. because of high fuel taxes, high
airport fees and other high costs imposed upon them by the
Canadian government and the Canadian economy which the Americans
do not have.
I would suggest that the member's comments which imply that
Canadian is getting favoured status do not acknowledge that Air
Canada has been a favoured airline for generations in this
country. There never has been a level playing field.
Ms. Bev Desjarlais (Churchill, NDP): Mr. Speaker, my hon.
colleague comments on the Bloc preference for Air Canada. I do
not think there is any question in this issue that once again we
have drawn east-west lines within Canada. One thing I can
honestly say with regard to the Bloc members is that at least
they are up front about separation and about standing up for
Quebec. I have a really hard time listening to Reform members who
are willing to sell out Canada at every single turn.
The 10% rule was put in place to ensure broad participation in
Air Canada after it was taken from being a public company and
privatized. Even the U.S. would not go about doing the things
which Reform suggests. The Americans would not allow total
takeover of their systems. They do not allow cabotage within the
U.S., but the Reform Party thinks it is totally okay in Canada
and would allow the U.S. to come in.
I want Quebec to remain a part of Canada, but at least the Bloc
members are up front.
Ms. Val Meredith: Mr. Speaker, the Reform Party has never
excluded Quebec.
I would like to suggest that the member is out of line in saying
that we think the United States should come in and take over our
airline industry. That has never been our comment.
Our comment is that there have been instances internationally
which show that a foreign company can offer competition. The
commissioner of the Competition Bureau has offered that as a
suggestion he felt should be considered for competition. It was
not the Reform Party. Other people have looked at this and have
put those options on the table for consideration. We should be
looking at all options, not looking at it from a narrow-minded
singular position.
Ms. Bev Desjarlais (Churchill, NDP): Mr. Speaker, I am
pleased to rise on behalf of the New Democratic Party in support
of this motion. I hope in this debate today that we can convince
the Liberal government to support this motion as well.
This debate is not about which airline merger, if any, is the
right thing for Canada. It is about something much more basic
than that. It is about ethics in government. It is about
getting the government to uphold the laws of this country. In
effect this motion is asking the Liberal government to uphold the
law.
We have a law in Canada called the Air Canada Public
Participation Act. The law prevents any Air Canada shareholder
from owning more than 10% of the company's stock. It is
perfectly reasonable to expect the government to uphold the law.
That is what governments are supposed to do; that is their job.
Normally we would not think we would need a motion in the House
of Commons just to get the government to do its job, but in this
case we do.
Since this airline crisis in Canada began, the Liberal
government has not done its job. The airline industry is vital to
our country. In a country as large as Canada with a population
spread from coast to coast to coast, a strong, healthy,
affordable airline industry is a necessity. It is the
government's job to make sure the airline industry serves the
public interest, not the shareholders alone.
It is the government's job to stand up for Canadians, Canadian
communities and Canadian jobs. The government is not doing that.
Instead, the Liberals have been flying by the seat of their pants
making things up as they go along. The Liberal government's slow
reactions have created uncertainty and made a bad situation
worse.
If Canadians should be able to count on the government for one
thing, they should be able to at least count on it to uphold the
law. It should be a given that everybody in Canada has to follow
the same set of laws, the same set of rules, but the Liberal
government has not been doing that and has not ensured that that
is done.
The Liberals are talking openly about changing the laws to
accommodate their friends. I wonder if it has something to do
with the $74,000 which Onex gave the Liberal Party and Liberal
candidates, including the Prime Minister, in the 1997 election. I
wonder.
1110
What I do know is that so far Onex has not played by the same
set of rules as everyone else. The whole situation is
incredible. First Onex tabled it complex takeover bid just days
after the Liberal government conveniently suspended the
Competition Act, removing the Competition Bureau's power to
review a merger. We heard the Competition Bureau yesterday
indicate that the reason this was done was that more than likely
it would not have met the test of the Competition Bureau.
I do not know how Onex knew that the Liberal government was
going to suspend the Competition Act. Maybe Onex consulted a
psychic. More than likely Ronald Reagan's is no longer busy now,
so it is taking up some Reform and getting into that type of
business.
It is incredible that this company is making a takeover bid, all
the while assuming that the Liberal government will change the
law for it. Think about it. The Onex takeover bid is
technically illegal under the Air Canada Public Participation Act
but Onex has just said, “That's okay. The Liberal government
will just change the law for us”. That is like saying we are
going to steal something because we expect the law to change to
make that legal.
I have known for a long time that the Liberal government is
under the thumb of some big businesses but this is a new low even
for it. I said earlier that this debate is about ethics.
Obviously the Liberal government has none.
The government is supposed to be a neutral arbitrator. It is
supposed to be the one to stand up for Canadians. Instead it
suspended the Competition Act to pave the way for its friends and
campaign contributors. Now the government says it is going to
change the law to make an illegal takeover bid legal. It is
completely unethical.
I do not want to sound like I am being critical of Onex. I am
critical of the process the Liberal government has followed.
Instead of being a neutral arbiter and putting the interests of
Canadians first, the Liberal government has bent over backward to
change the rules for one bid. First it suspends the Competition
Act and now it is threatening the 10% ownership limit.
People are probably asking why we need the 10% ownership limit.
Think for a minute about the name of the act we are talking
about, the Air Canada Public Participation Act. The two key
words are public participation. The whole point of the 10%
ownership is to keep any one shareholder from getting a
stranglehold on the company. Air Canada is supposed to be a
public company.
Remember that for years Air Canada was an extremely successful
crown corporation. The taxpayers of Canada paid for Air Canada.
It is clear now that privatizing it was a terrible mistake, a
mistake driven by the Mulroney government ideology instead of the
public interest. Air Canada belonged to the people of Canada and
it was thrown away.
The Liberal government is throwing away the principle of public
participation. Public participation is basic democratic value.
No wonder the Liberal government is trying to get rid of it. It
is in the business of eroding our basic democratic values.
Raising the ownership limit above 10% will open the door for one
investor to get a stranglehold on the airline. We cannot allow
this to happen. We cannot allow something as important as our
national airline to fall under that kind of control. We must
keep the ownership of our national airline as broadly based as
possible.
What is more, we must bring in a modern regulatory regime to
protect the interests of Canadian communities, Canadian jobs and
the travelling public. Deregulation got us into this mess and
only reregulation will get us out of it.
After 10 years of deregulation we have been left with higher
ticket prices, lower wages and less service to remote
communities. It is unthinkable that we could allow deregulation
to continue in a monopoly situation.
Yesterday I was shocked to hear the Competition Bureau indicate
that one of its success stories was that of Canadian Airlines
prices and the American Airlines investment. That was its
success story. Here we are today, because of the situation
Canadian Airlines is in, and that is because competition was all
that was looked at. There are things more important than just
competition.
One group the Liberal government has completely ignored in the
whole mess is the airline employees. The transport minister's
policy framework was vague on the issue of protecting workers.
All it really says is that workers should be treated fairly.
We have seen how the government treats workers fairly in Canada.
In spite of pay equity legislation we have had to spend 15 years
fighting the Liberal government fighting the law on pay equity.
That means nothing coming from the Liberal government which, as
we have seen over the last six years, does not know the meaning
of the word fair.
1115
Workers in the airline industry do not trust the Liberal
government. They deserve concrete commitments that there will be
no involuntary layoffs. No worker should have to lose his or her
job because the Liberal government has run our airline industry
to the ground.
Time and time again the Liberal government has put the interests
of friends ahead of the interests of Canadians.
I have touched on many issues in my limited time here today, but
the debate comes down to one crucial question: is the Liberal
government going to uphold the law or not? Is it going to do its
job as the government? This is the moment of truth for the
Liberal government. It is a chance for it to stand up and say
“Yes, we will uphold the law. We will stand up for Canadians.
We are going to stop the special treatment”. The Liberals can
do that if they support the motion and commit not to raise the
10% ownership limit.
This is one of those moments when each and every Liberal MP is
going to have to look in the mirror and ask themselves who they
were elected to serve. For the sake of the Canadian airline
industry, I hope they make the right decision and join my fellow
New Democratic Party MPs in supporting the motion to keep the
public in the Air Canada Public Participation Act.
Hon. David M. Collenette (Minister of Transport, Lib.):
Mr. Speaker, I listened to the member for Churchill very
carefully.
The issue here is not of upholding the law. It is whether
parliament, in its wisdom, should change the law. What we said
the other day was that we were asking parliamentarians whether we
should even consider changing the law. We should put the entire
debate in the proper context.
Is my hon. friend saying that all laws are immutable and should
never be changed to reflect changing circumstances in society? Is
she saying that we should not even consider changing the law?
I will point out that Air Canada itself was the first to put in
a proposal on August 22 under the auspices of section 47 of the
Canada Transportation Act. We then had another offer which is
currently on the table. This shows that the process the
government has followed has worked.
Ms. Bev Desjarlais: Mr. Speaker, I am not suggesting for
a second that at any point there may not be a need to change laws.
However, I think it is totally correct to say that we abide by
the laws that are there. If the laws change then those laws go
into place. In this case there is no credibility in the whole
process that is taking place because the law that is in place is
not being recognized by one of those offers. It is the process
that is the problem. It is going outside the realm of the law.
If the law should change and there is a bid that comes in to
that effect, so be it, but that is not the case here. There are
too many things that are inconsistent here and leave some
question as to whether there has been some influence that is not
in the best public interest.
Mr. John Finlay (Oxford, Lib.): Mr. Speaker, my question
is similar to the minister's in that my understanding is that we
have not decided to change anything yet.
I am sure the hon. member does not want us sitting in this place
simply reading old laws and saying that they will do. We will be
changing the law in the Nass Valley for the Nisga'a people who
have made an agreement after 20 years. If we stay with the
Indian Act we will not be making that change. We will have to do
that. We will have to do the same thing with the airline
industry.
Is my hon. friend saying that there is not a problem with one of
our national carriers?
Ms. Bev Desjarlais: Mr. Speaker, there is no question
that there would appear to be a problem with one of the national
carriers. For that reason the transport committee was studying
it prior to the June recess.
As I indicated to the minister, let us be very clear, I
recognize fully that at times laws will have to change. It is
not acceptable to anybody that somebody will play outside the
rules of the law before the law is changed. Imagine if we have
not signed the Nisga'a treaty and we allow everything to happen
that is in the treaty before it is passed through legislation.
How on earth is there any credibility to the laws of Canada if we
allow those things to take place?
1120
Mr. Bill Casey (Cumberland—Colchester, PC): Mr. Speaker,
I am pleased to stand in support of the motion to prevent the
government from changing the 10% Air Canada Public Participation
Act to increase the available participation by any single entity.
This is all being done in the middle of one of the most
controversial issues we have going on in Canada and we should not
be discussing this. This should not be thrown into the middle of
the debate.
We have a great debate now about the future of our aviation
industry and the process we are using is nothing short of crazy.
This industry involves thousands of employees, dozens of
airlines, hundreds of airports and communities. They will all be
involved.
Even though this industry has evolved over 60 years, the
minister established the criteria on August 13 that we have 90
days to restructure an entire industry that affects thousands of
people and many communities in the country. It is absolutely
ludicrous that we could even get a handle on the situation. In
the middle of that, he throws in a proposal to maybe change the
10% public participation act on Air Canada.
It does not make sense. The process has been mismanaged from
the beginning. It must be ratcheted down so we can get a handle
on this very serious issue that affects so many people, so many
communities, so many airports and so many employees.
Throughout the 90-day process, the minister has been changing
the rules. First, he brought in section 47 which changed the
rules completely for the first time and removed the Competition
Bureau from the entire debate. He then changed the rules again
and invited the bureau to come back in, only he gave it a very
narrow focus, not the focus it was supposed to have and not the
ability to do the job it was legislated to do which was to
analyze competition in the interest of consumers and businesses.
He wanted it to just analyze the one dominant airline theory. He
did not give it the opportunity to look at all areas or to come
up with other suggestions, he just focused on his one proposal.
We missed a tremendous number of proposals and we missed all
kinds of opportunities to hear other proposals that might be more
effective and more practical than the two on the table now. The
whole thing has been mismanaged from the beginning.
We missed great opportunities when the minister confined the
Competition Bureau to just look at his vision of the future for
the aviation industry in Canada. He did not tell the Competition
Bureau that he wanted it to look at all the possible permutations
and combinations for restructuring the aviation industry in the
interest of consumers and business. He took that legislated
right away from it and instead instructed it to confine its study
to only one dominant airline theory, and that is his theory. We
again missed a number of opportunities there.
The Competition Bureau did an incredible report but it was
confined and restricted only to the parameters allowed by the
minister. If he would have opened up the parameters and allowed
the Competition Bureau to consider all options, we would be
looking at more options today. If at the beginning of the 90-day
process the minister had announced that he was going to change
the 10% public participation act, I believe we would also be
looking at more proposals and other options would be on the
table.
Let us go back to August 13. When the minister announced he was
invoking section 47, we had 90 days to come up with an answer.
On day one, if the minister had announced he was going to change
the 10% public participation act, I believe there may have been
other investors, other aviation companies and other proposals put
on the table. However, when they looked at this they said that
because of the Government of Canada law they would not put a
proposal on the table.
On day 74 of 90 days, incredibly, he announced that he was going
to change the 10% rule, or at least consider it. That left 16
days for a company, an investor, a group of investors or
consortiums to come up with a package involving $6 billion. That
was not possible in 16 days. They could not get the approval of
the boards of directors. They could not even meet their legal
requirements. By not announcing the 10% proposal in the
beginning, he precluded a whole lot of options. By announcing it
on the 16th, he left it too late for anybody to respond to it or
take advantage of it except for one of the applications or
proposals that was already in place.
I feel very strongly that the minister has failed to manage this
process right from the very beginning.
1125
Competition is the number one issue we hear about from consumers
and people who have appeared before the committee that is
reviewing the situation. The two proposals on the table now do
not provide the discipline supplied by competition, the
discipline for competitive air fares, air flights and schedules.
Neither one of these proposals provides that competition.
We may have missed opportunities that could have supplied that
competition. The Competition Bureau was restricted from
analyzing that aspect of it and looking at other options that
might be available. The Competition Bureau was restricted to
only looking at the dominant carrier approach, which is the
minister's approach.
Another serious issue is regional service. In the minister's
five principles that he brought out on day 45 of the 90-day
process, one of the principles he stated very clearly was that
regional service must be guaranteed. The problem is that even if
the airlines agree to provide regional service, some of the
airports that have recently divested under the divestiture
program are not viable.
We had testimony at our committee that 10 to 15 airports in
Canada now are not making ends meet. They are no longer viable.
We also had testimony from the Onex-American Airlines-Canadian
Airlines proposal to say that revenues to those very airports
that are not viable now will be reduced. How can we assure
regional service if the airports cannot survive?
The problem is that there is no policy on this. There is no
policy on anything. We asked the minister the other day in
committee if he had a dual airline policy. There is no dual
airline policy nor is there a single airline policy.
We asked about the 10% increase, although on August 13 it was
not discussed or mentioned. There was no policy then. On day 74
of the 90-day process, he came up with a proposal that maybe
there would be a policy on the 10% increase, but again, no
policy.
At the standing committee and ad hoc committee we have had
academics, flight attendants, airline representatives, travel
agents and consumer groups. Every one of them complained that
the cart is before the horse.
The academics say that any organized government would have an
aviation policy, especially a country like Canada where aviation
is so important. The government should establish policy and the
private sector should make its proposals to meet those
parameters.
In this case the government wants the proposals first and then
it will establish policy. It is exactly backwards. In my
opinion it is complete mismanagement of a transportation system
that is absolutely critical to our country.
Yesterday at committee we an executive from one of the airlines.
He commented that he could not believe that a G-7 country like
Canada was debating a proposal that was, in effect, illegal. He
made an excellent point. We are debating and considering a
proposal that breaks the Air Canada Public Participation Act. We
are debating this even though it is illegal. He was perplexed by
that, and I can only share that confusion.
My position is that the whole process of determining the
restructuring of the aviation industry in Canada is grossly
mismanaged. We are in a pressure cooker. We have a 90-day
window of opportunity. We are supposed to deal with thousands of
employees, hundreds of airports, dozens of airlines, communities
right across the country and economic development, and we have 90
days to do it. A person cannot even buy a house in 90 days.
It is not sensible to address this, but we have this incredible
pressure cooker atmosphere created by a false 90-day window of
opportunity which we think was inappropriately instituted.
We are voting in favour of the motion, not because we are
against the 10% increase but because of the way it is being
handled. It should not be injected into the debate when it is
surrounded by controversy and all these peripheral effects. The
issue should be addressed in the clear light of day. It should
not be addressed when it is attached to so much controversy, this
bid and that bid, and all the accusations that are being made.
We are supporting the motion. I compliment the Bloc for
bringing it to the table. We would look at it again some time in
the future without the pressure and without the undue influence.
1130
Hon. David M. Collenette (Minister of Transport, Lib.):
Mr. Speaker, I would like to ask the hon. member for
Cumberland—Colchester a question.
Is there not an inherent contradiction in what he just said? He
has lamented the fact that under section 47 allegedly the
Competition Bureau has been sidelined, yet in the next breath he
praises the very report that we asked them to produce under the
auspices of section 47. That is a contradiction. The fact is
that the Competition Bureau is very much alive in this process,
as I have outlined.
After the 90 days the bureau will be able to examine any
proposal that comes forward with its full powers. Therefore,
there is no question of the Competition Bureau not being involved
in this debate. It will be doing its work and it will be doing
that work very well.
Mr. Bill Casey: Mr. Speaker, on the contrary, the
Competition Bureau was sidelined from its legislative
responsibilities by section 47. That is what it is all about.
Then the minister asked the Competition Bureau, in a strange
way, to address a very narrow parameter of proposals. The
minister did not say “Competition Bureau, go find the best
proposal for restructuring the industry that addresses
competition for consumers and the industry”. He did not do
that. He said “Just look at this one little narrow idea that I
have. I have a great idea, just look at it”. It is effectively
sidelined.
In fact, we just had testimony from another airline this
morning. When I asked the president of the airline why section
47 was invoked, he said “It was to circumvent the airline merger
review process”, contrary to what the minister just said.
Ms. Bev Desjarlais (Churchill, NDP): Mr. Speaker, I
would like to verify something with my hon. colleague for
Cumberland—Colchester. Is it not true that right now the only
real assurance that the government may not be able to increase
foreign ownership to 49% of Air Canada is as long as this 10%
rule is in place?
If this 10% rule should be thrown out the window, so to speak,
then the government would have the opportunity under regulatory
powers to increase foreign ownership and in essence turn over an
additional percentage of Air Canada—our national airline, or at
least it once was, which had a huge amount of taxpayers' dollars
in it—to another company outside Canada.
Mr. Bill Casey: Mr. Speaker, I thank the hon. member for
her question. The problem is, if we change the 10% rule, under
the NAFTA agreement there is a very specific exemption to the
regulations and it lists specifically the 10% rule for the Air
Canada Public Participation Act. If we change that rule it
changes the whole agreement. We cannot just say that we will
take this out of the agreement and this out of the agreement; we
would have to renegotiate the whole deal. That could also change
the percentage of foreign content which the hon. member has
brought up.
If we break the agreement open, which this will do, then we
break the whole agreement open and it is subject to complete
negotiation again, and it is impossible to predict what effect
that will have.
Hon. David M. Collenette: Mr. Speaker, the hon. member
heard Mr. von Finckenstein yesterday at committee. I would like
to ask my hon. friend if he thought the Commissioner of
Competition gave an impression of a man who had been sidelined,
of heading an agency that had no effect and no real power. The
fact is that no proposal has come forward in the 90 day process
which therefore would have bypassed the bureau.
What I announced the other day was the fact that the bureau will
indeed examine any proposal that comes forward and have its full
rights under merger review.
Mr. Bill Casey: Mr. Speaker, absolutely, Mr. von
Finckenstein made a very impressive presentation and his report
was excellent. However, on the first page of his presentation
there was a letter from him to the minister. I do not have the
letter here with me, but it said something like “Further to your
instructions, I am making all my studies or my presentations on
the assumption that there will be one dominant carrier”. If
that is not a restriction, there never was one.
The minister, in his instructions, said “Do your report based
on my criteria, to address my proposal that I like the best”.
At best, the Competition Bureau was handcuffed and prevented from
doing an open study.
1135
[Translation]
Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Mr. Speaker, I am
pleased today to take part in the Bloc Quebecois opposition day
devoted to the airline industry.
The reason my party has had to devote one of these opposition
days to this topic is that the government has refused to hold
its own debate. In the case before us, the government seems to
want to keep its actions hidden, withholding information from
parliamentarians and not allowing all stakeholders in the
airline industry to be heard.
On August 13, the federal government announced its decision to
suspend section 47 of the Canada Transportation Act, a section
having to do with the Competition Act, supposedly to make it
easier to restructure the airline industry. At the time, the
Minister of Transport said he wanted to allow the two Canadian
companies to reach a mutually advantageous agreement. But a few
days later, on August 24, 1999, Onex, in partnership with
American Airlines, made a public offer to buy Air Canada and
Canadian International and merge them. This is the real reason
that the Liberal government decided to suspend the competition
rules.
In addition, the government turned down a request from the Bloc
Quebecois and other opposition parties to hold an emergency
meeting of the Standing Committee on Transport in order to study
the matter.
The Liberal government also prorogued the session, delaying the
resumption of parliament and thus sparing the government from
having to answer questions on this subject that it would find
very embarrassing.
That is why the Bloc Quebecois is today taking—
Mr. Michel Guimond: Mr. Speaker, I rise on a point of order.
I wish to point out that something might not have been made
perfectly clear this morning during our party leader's first
speech. Throughout the day, Bloc Quebecois speakers will be
dividing their time into ten minute periods. I am sorry for
interrupting the member for Jonquière.
The Deputy Speaker: I know that members are always sorry to have
to interrupt a colleague. I thank the hon. member for pointing
this out to me.
Ms. Jocelyne Girard-Bujold: Mr. Speaker, I was saying that, today,
the Bloc Quebecois is using one of its opposition days to speak
of this. Why? Because the Bloc Quebecois is concerned first
and foremost about public interest and the interests of Quebec
in this matter, unlike the federal government, which appears
concerned only about the electoral interests of its friends.
Any restructuring, including a possible merger, should comply
with current legislation. Recourse to section 47 and to various
other considerations poses a great threat to the continuation of
healthy competition in this industry.
The Bloc Quebecois considers that competition is vital, because
air transportation is an essential public service, especially in
remote areas. There is no guarantee that control of air
transportation in Canada will not fall into foreign hands.
Finally, the Bloc Quebecois feels that American Airlines has a
real veto on any proposal to restructure the airline industry in
Canada, which runs contrary to the spirit of the Transport Act.
We also oppose it because there are thousands of strategic jobs,
including many in Quebec, that are at risk in this matter. The
Bloc Quebecois refuses to consider the loss of thousands of jobs
a matter of fate and proposes that other scenarios be
considered. The role of a responsible government is to take all
these elements into account in order to serve the general
interest.
1140
The offer to purchase contravenes the Air Canada Act, which
prohibits a single shareholder or a group of shareholders from
owning more than 10% of the voting shares of the company. If
the Onex/American Airlines group is making such an offer it
means that either they are ignoring Canadian legislation or
their friends in the government have allowed them to change the
law to their satisfaction.
My interest in the air transportation issue arises from my
awareness as the member for Jonquière of the importance of these
changes for remote communities.
While the merger of international routes could give us a sound
national carrier, the merger of regional subsidiaries might
eliminate competition in local markets, with the consequences
this can have on prices and the quality of service.
The airline industry has a responsibility to serve communities
across Canada. This merger would include regional subsidiaries,
and the new entity would control 84% of the domestic market.
Would this be good for remote areas and how would competition be
affected? Even the strongest advocates of capitalism will say
that a monopoly will almost certainly lead to higher prices,
deficient services and a slow degeneration of the industry.
I would not want my region of Saguenay—Lac-Saint-Jean to lose out
on this merger.
Yet it is these same company owners who want to change the rules
who are asking the government to suspend the application of the
Competition Act and who want to change the rules regarding
ownership.
In closing, I support my colleague, the member for Charlesbourg,
and I remind the House that the Bloc Quebecois has asked the
federal government on several occasions to pass legislation on
political party financing similar to that which exists in
Quebec. Until such a law is enacted, the federal government will
continue to protect the interests of those who contribute to the
election fund to the detriment of the general public, as seems
to be the case in the area of air transport.
[English]
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, I find it interesting that the member for
Jonquière would make a comment like competition is essential.
The very nature of the motion that the Bloc has put before the
House today would restrict competition and would remove
competition from the proposals of a merger. The member suggests
that competition is essential, when her party has brought forward
a motion which would prevent competition. I ask her, why the
discrepancy?
[Translation]
Ms. Jocelyne Girard-Bujold: Mr. Speaker, I do not
know whether the hon. member has understood that I was defending
the position of the isolated regions. As hon. members may be
aware, in distant regions such as mine we would be penalized if
there were only one carrier. Healthy competition is important
to my region. At present, even with two companies competing, we
have to pay very dearly for our air travel.
Just getting to Montreal costs an extraordinary amount. A
person can get from Bagotville to Florida cheaper than to
Montreal. I believe that we would be penalized if there were
only one company. I was referring to this very specific aspect.
This does not mean I am not behind the Bloc Quebecois motion,
but I am simply giving the point of view of a distant region.
That is why it is important to have a debate, but there has not
been one because the government was opposed to any true debate
on this issue.
1145
There is no debate at this time, and there are even government
members who oppose this proposal by their own government who are
not here to speak on this issue; they are not speaking out. On
the other hand, we, in the Bloc Quebecois, are allowed to say
what we think and to speak on behalf of our respective
constituents.
Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): Mr. Speaker, it
is a pleasure to speak this morning on an issue that seems to be
dragging on, since we have been hearing about Air Canada and
Onex for months now.
Of course, during the summer, we were able to follow the
reactions of both Air Canada and Onex in the papers and in the
news, if we followed current events. Through it all, the
government said nothing, did not take part in the debate, except
briefly during the month of August, when the transport and
industry ministers, with almost unhealthy complicity, quietly
let it be known that the competition rules were being suspended.
The suspension of the competition rules had the desired effect,
helping the government's friends from Onex to submit a proposal
with the complicity of American Air Lines, in order to get their
hands on Canadian International Airlines.
What did the Bloc do during the summer? My friend, our critic
for transport, the hon. member for
Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, asked on a daily
basis that the Standing Committee on Transport be convened to
listen, comment and collect information that would be useful to
the Minister of Transport. In my view, that is what a committee
is supposed to do: give legal advice to the appropriate
minister.
However, the government refused to discuss the
issue; it even boycotted meetings.
Finally, the Bloc Quebecois and all opposition parties on this
side of the House demanded that an ad hoc committee hold
meetings. This committee was boycotted by the members opposite
and dismissed as illegal.
But we went ahead and sat—during the summer, during our supposed
holidays—here in Ottawa so that we could hear what groups such as
the Airline Pilots Association and Air Canada's machinists
association and many others thought of Onex's bid to buy Air
Canada.
Finally, a few days ago, the Minister of Transport simply told
us that that was that, that everyone would have to decide, that
it might well be necessary to change the 10% rule.
But this is unacceptable.
This morning, the leader of my party, the member for
Laurier—Sainte-Marie, gave a good summary of the history of the
10% rule, and we in the Bloc Quebecois think that this rule
should not be changed. In fact, that is the reason for our
motion this morning.
Why does this 10% rule apply to Petro Canada? Last year, in all
the discussions about the bank mergers, why was the existing 10%
ownership rule enforced? Why, this morning, does the government
want to scrap it in the case of the airline industry? That is
what we are wondering. This proposal strikes us as a bit
strange.
1150
Would its purpose be to help a friend, the president of Onex,
who is part of the inner Liberal circle? It is a question one
is entitled to ask.
There is something else I find really strange. In my view, this
issue of Air Canada and Onex is a major one, with particular
consequences for those living around airports. This morning, I
have some serious questions. What about the members for Laval
West, Notre-Dame-de-Grâce, Verdun—Saint-Henri, Pierrefonds—Dollard?
What about the Secretary of State for Amateur Sport and the
member for Anjou—Rivière-des-Prairies? Are they unable to speak?
We have not heard from them.
I admire the courage displayed by the hon. member for
Lac-Saint-Louis, who sits on the other side. At the risk of being
reprimanded by his caucus, he dared to tell Le Devoir, on
October 14, that the 10% limit is appropriate and must
absolutely be maintained. I admire him for his courage.
And then there is the hon. member for Vaudreuil who was perhaps
a little less courageous when he said “Maybe yes, maybe no”. At
least he expressed a preference, even though he was trying hard
not to make waves. Again, I admire the hon. member for
Lac-Saint-Louis. He is not here just now, but that does not
matter, I admire him nevertheless.
I also ask myself other questions. Why would someone like Marc
Lalonde, a former Liberal minister who must surely be respected
by the Liberals, want the 10% limit maintained? Mr. Speaker, I
wonder if you and Mr. Lalonde sat in the House at the same time.
I believe so, and I am sure you respected him at the time. On
October 26, 1999, Marc Lalonde stated many reasons why the 10%
limit should be maintained.
I agree with those who say that there are problems with Canada's
air transportation system. We definitely have to ask ourselves
certain questions. Is there room in Canada for two international
carriers, namely Canadian Airlines and Air Canada? We definitely
have to ask ourselves certain questions. But the issue cannot be
solved in 90 days or in 90 minutes. A thorough review is in order.
I certainly agree with most members here, including my friends
across the way, that we must not let Canadian international air
transport fall under the control of foreign companies.
Control over Canadian international air transport must remain
with Canadians. Regional air transport also must be
restructured, as the hon. member for Jonquière said. Coming from
Abitibi, it makes no sense to me that people in Rouyn-Noranda
should pay more to fly from Rouyn-Noranda to Montreal than to fly
from Montreal to Paris. It is crazy and ridiculous that a
55-minute flight from Rouyn-Noranda to Montreal should cost more
than a 6-hour Montreal-Paris flight. It makes no sense, and we
must review all that.
Competition must be reconsidered.
When the Reform member talks about competition, I agree with her
that we must bring in sound competition in regional transports.
It is indeed desirable and urgently needed. The lack of
competition hinders regional development. It is much more
expensive for business people from Rouyn-Noranda, Jonquière or
any other region to travel on business to Montreal and back than
to Paris. What nonsense!
1155
That adds to production costs and results in products made in
Rouyn-Noranda or in Jonquière costing more and being less
competitive than those in the Montreal or Toronto area. The 10%
rule must not be abolished.
Of course, I will support the Bloc motion. A major restructuring
of regional air transportation in Canada is absolutely needed.
[English]
Mr. Ted McWhinney (Vancouver Quadra, Lib.): Mr. Speaker,
I will be sharing my time with my colleague the hon. member for
Scarborough East.
Allow me in opening my remarks to refer to some prior experience
in this area. I was the director of the Air Law Institute at
McGill University for a number of years, and incidentally,
adviser to the premier of Quebec on air law matters at that
stage. One of the recommendations was against the construction
of the Mirabel airport, the second airport. I think it was
correct on constitutional grounds and also on air law grounds,
although the advice was not taken.
We can move on to other matters where expertise also comes into
account. This is not the first time the airlines have been
before this parliament. In the previous mandate of this
government the issue arose, as may be remembered, of aggressive
litigation between the two airlines, the result of which might
have been to drive one of them out of existence. This matter was
settled by the intervention of the then minister of transport and
in consideration of the use, if need be, of his powers which are
limited but within those limits have a considerable range.
What was essentially done was to use the federal power under
international law through our membership in the International
Civil Aviation Organization and our participation in the Chicago
convention to grant or withhold approval of international air
routes. A very felicitous solution was reached in this earlier
problem in 1994 between the two airlines by opening international
air routes to one as a condition of dropping the litigation. I
think it was an excellent example of executive power being used
imaginatively and producing a consensual solution.
However at that time I did make some points clear, as policy
imperatives, certainly for me as a British Columbian but also I
think for all Canadians, that we have an interest in maintaining
the extraordinary investment we have in highly skilled jobs in
the airline industry. In British Columbia and Alberta there are
17,000 highly skilled technical jobs with one airline alone. We
want those jobs maintained throughout Canada. Therefore any
approach to solutions here must bear that in mind.
We also want maintenance of reasonable air access to distant
areas of our large country that might not otherwise be
commercially viable in a strict market economy.
We also want reasonable prices. If competition will produce
that, well and good. If it will not, obviously there has to be a
degree of government regulation of prices. But the opportunity
and the facility is there. And we do want safe air travel.
These were imperatives that the transport minister understood,
that he conveyed to both airlines and in the solution in 1994
they were realized.
I have looked with sympathy and interest to the motion by the
opposition Bloc Quebecois, as I say, granted the predisposition
to examine every motion from the other side. But I do believe it
does not really face the realities of the new world community of
our times, the world revolution of our times which affects
international commerce, international trade and international air
transportation.
1200
Most of the rules of the game that we have now are posited on an
economic trade situation that no longer exists today. We do
accept the maxim that small is beautiful, but in the world of
international air transportation even large national airlines in
middle powers no longer have the weight or the size to compete
effectively in the international market without considerable
assistance from the government.
This is why I welcome the intervention by the Minister of
Transport. There is here no legislation. There is an opening of
a debate. It is clear that we are on the edge of the necessity
of examining a fundamental restructuring of the airline industry
to meet the new realities of international air transportation and
the cutthroat competition that exists for much larger companies
outside with much heavier government investment and support.
It is on this basis that we have joined this debate. I would
suggest, though, that our national rules of competition are
devoted to, directed and inspired by national problems. They do
not, without some further examination, meet the new realities of
international air transportation.
The minister's powers are limited in the range of matters he can
touch but he does have discretion, so that the issue of relaxing
the national Competition Act, which was designed to meet national
conditions, to meet new international conditions is one worthy of
respect and consideration by the House. We need suggestions on
how we would use that discretion. I invite that from the
opposition.
We must recognize that the international rules, even the tidy
rules of the Chicago convention, those implemented by the
International Civil Aviation Organization, also need
re-examination.
We have entered into an national debate. I have had visits from
delegations, from Air Canada pilots, Canadian Airlines pilots,
representative employees of the companies and others. I am
gathering my own opinion on what needs to be done in the
restructuring of the air industry. I believe, and I say this
with all respect to my colleagues in the Bloc Quebecois, the
motion reflects the past. It fetters and confines a necessary
element of national policy making which needs to be directed
toward the entirely new and revolutionary conditions in
international air transportation.
It is on that basis that I would not recommend to the Bloc
pursuing the particular motion, an unnecessary restriction which
hinders the debate that we now need on restructuring the airline.
I return again to those imperatives. Any solution that the
House may reach must maintain the investment we have in the
highly skilled jobs in both airlines. It must maintain air
access even to uneconomic areas of the country in strict national
airline terms. It must maintain reasonable prices with
competition if that is the case: two international airlines and
one national or one international airline and two national ones.
The modalities of development are considerable, but the goals and
the imperatives remain, and I believe it is within our ability to
work them out.
[Translation]
Mr. Gilles-A. Perron (Rivière-des-Mille-Îles, BQ): Mr. Speaker, I
would like to ask a question of my colleague from Vancouver
Quadra. He says that the Bloc Quebecois motion is out of date.
Does his vision of the future include no possibility for
Canadians to control their own international air carrier?
1205
In other words, could some company like American Airlines be the
one giving the orders on international aviation in Canada? Is
that his vision of the future?
[English]
Mr. Ted McWhinney: Mr. Speaker, my problem is simply that
we are on the eve of a great national debate and we need
contributions from all sides but not to limit the modalities of
our choice by focusing on a section that relates to company law
which needs frankly readjustment review, in the context of the
new rules of international competition.
The reality is that it is very difficult even for one Canadian
airline to compete and survive in the international market acting
by itself. It will need considerable government help. It will
need positive intervention using international law and national
law rules accordingly.
Mr. John McKay (Scarborough East, Lib.): Mr. Speaker, I
rise to speak to the motion before the House which calls on the
existing 10% individual share ownership rule to be restored and
retained. The motion reads as follows:
That this House reaffirms its desire to maintain the provisions
of section 6.1(a) of the Air Canada Public Participation Act
limiting ownership of the capital stock by any person or group to
10% of the voting shares.
I might mention at the outset that my constituents are greatly
interested in this matter. I represent a riding in the GTA which
contributes directly or indirectly greatly to the health of our
airline industry. We find ourselves inundated with various
viewpoints on this issue and the restructuring of the industry
that is going ahead. This is of local importance to my riding
and my constituents, but it is also of national importance.
On Tuesday the Minister of Transport issued a document entitled
A Policy Framework for Airline Restructuring in Canada. In
that document the minister announced that the government was
willing to consider changing the existing 10% limit in the Air
Canada Public Participation Act, if such a measure contributes to
achieving a healthy Canadian controlled airline industry. That
is a rather important caveat.
To determine what role reviewing the ownership restrictions on
Air Canada might imply in achieving a healthy Canadian controlled
airline industry, I wish to speak to the cost of this rule,
particularly the cost of this rule in the marketplace.
What market distortions result from the existence of this rule?
I would submit there are market distortions and the market has
reacted in a variety of ways. The running of any airline is a
very expensive exercise. The question always has to be in a
public policy context: Are the costs of imposing certain
desirable public policy goals worth the actual cost in the
marketplace? The questions to my mind are: Are these
restrictive provisions in place? How do they distort the cost of
money? Do they achieve a proper public policy goal?
If Air Canada cannot go to the TSE on a free and open basis like
other industries because of this rule then there is a cost and in
some measure or another the market reacts to that cost. The
question to my mind is an open question. I am glad the minister
raised the issue of whether this cost is worth while.
What is the effect? The market is already mutated to some
extent. Consumers directly or indirectly pay for that mutation.
I draw attention to the Air Canada proposal that is on the table.
That proposal raises $930 million. Interestingly enough, at the
end of the day those who are actually putting in $930 million
only end up with 7% of the shares. That in purely market terms
is a bit of a bizarre anomaly because the market has in some
respects mutated.
1210
We must recognize that the value of an airline is not in and of
itself the infrastructure of the airline. Rather it is in other
things. For instance, UAL and Lufthansa have agreed to acquire a
new series of perpetual convertible preferred shares in the
amount of $230 million. The shares will only pay dividends if
and when they are declared on the common shares. It then goes on
in greater detail. I would submit that is a distortion of the
market. In addition, UAL and Lufthansa will provide a 10 year
credit guarantee facility to Air Canada of approximately $310
million. How much that costs I do not know.
CIBC will provide a $200 million upfront payment to Air Canada
to deepen and extend its agreement. Air Canada will provide to
CIBC approximately 4.4 million warrants exercisable for class A
non-voting commons shares at $24 to $28 per share over five
years.
None of us in this room are securities lawyers. It would
probably take a great deal of effort to explain to us exactly
what that means. Although the simple issue is that this is a
reflection of the distortion in the marketplace, this is in
itself a reflection that money has to be raised in the airline
industry other than in a straightforward fashion. When money is
raised in a marketplace in other than a straightforward fashion
some kind of premium is paid.
The question to my mind still is whether the 10% rule the Bloc
is so desirous of retaining actually distorts the marketplace and
ratchets up the cost of money.
The first market distortion we see in this proposal is that the
value is everywhere but in the infrastructure of the airline. The
value is in the Visa card. The value is in some shares that UAL
and Lufthansa want to hold, which are not voting shares.
The second distortion plays out each and every day, every time a
Canadian gets on an airplane. Consumers in one way or another
pay the cost because Air Canada or Canadian Airlines or any other
entity does not get the cheapest possible money because the
market has been distorted.
The third perverse consequence of that an airline, whatever
airline, that is hobbled by unreasonable share restrictions and
contradictory public policy decisions will inevitably fail or
will inevitably be a weak partner. If we have learned anything
in this debate, it is that whatever the future is for whatever
dominant airline that comes into play it is extremely important
that partner be a strong partner in the alliance. If it is not a
strong partner in the alliance, it will be inevitably controlled
by entities that will frustrate our public policy goals.
I congratulate the minister for putting the 10% rule on the
table. It did not descend from Mount Sinai. It is not sacred.
It is not the Ten Commandments. It shows a great deal of
political courage on his part to put what has been an effective
mechanism to achieve certain public policy goals on the table in
order that they can be discussed.
If the minister asks me what is the value of this rule, my
response would be that he should tell me what is the cost of the
10% rule to the airlines and therefore to their consumers. If
there are other ways to achieve the same goal, either de facto
control or de jure control or effective control, and we have a
variety of tests for those things, then let us achieve it that
way. Let us not ruin the marketplace by putting in artificial
unsustainable rules.
Another reality is that whatever dominant airline emerges it
will be part of an alliance. If this “new company” is hobbled
by some useless public policy initiative, it will inevitably lead
to difficulties with that airline. Then we will be back to this
debate again and we will be back to trying to figure out how to
bail out the new airline one way or another.
1215
If this rule does not stand that litmus test, then my view is,
let the rule go.
The 10% rule in essence is a share restriction, and a share
restriction distorts the market. When market distortion occurs
it costs money. The cost goes not only to the shareholders of
the airline, it also goes to the consuming public. If that cannot
be justified, then the rule should not stand.
On the basis of that I suggest that the motion should fail and
that hon. members should not support the motion. In fact, the
minister's positioning on this is correct, it is an area which
needs to be discussed. If we can achieve public policy goals by
other means, then I would be open to that idea.
[Translation]
Mr. Antoine Dubé (Lévis-et-Chutes-de-la-Chaudière, BQ): Mr. Speaker,
I am most enthusiastic about taking part in this debate, which
is an extremely important one, in my opinion.
All debates are important, in my opinion, but this one is of
vital importance for those who work in the airline industry, and
for the consumers, those who fly. It is vital as well for
economic and regional development, for all these aspects are
interrelated.
Since the first speech by the leader of the Bloc Quebecois, I
have listened carefully to everything the representatives of the
other parties have had to say.
I am delighted that the Progressive Conservative Party and the
NDP have declared their intention of backing the motion by the
member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans. This
pleases me a great deal.
However, representatives of the other parties—the Liberals of
course, and the Reformers—have said they were opposed. As far as
Reform is concerned, one could doubt their consistency, as it
seems to vary depending on the subject, but in this case their
point of view is clear.
The Reform member who has just spoken referred to the interests
of the west. She did not seem to be upset by the fact that the
Americans want to get their hands on more shares in the airlines.
The Bloc Quebecois' position is consistent with earlier
government decisions in certain areas. In the case of the
banks, or other sectors of the economy, the 10% rule was
enforced. The exception was CN, where the government allowed up
to 15%. The Bloc Quebecois was not in agreement.
We have therefore always been consistent. If the rule is 10%,
we are not going to change it to suit the circumstances. We
therefore have to wonder why the Minister of Transport said,
before Air Canada shareholders have cast their votes at the
November 8 meeting, “Things are changing, and we must too”.
1220
Why change at this particular time, when we know that not a
session goes by—at least, not since I have been in parliament—
that the situation in the airline industry is not discussed in
one way or another?
There have been questions from all the opposition parties. The
government had things to say as well. Everyone was concerned
about the future of Air Canada and of Canadian International
Airlines. So why, at this particular time, is the government,
while claiming not to want to intervene, suggesting that, before
shareholders make their fateful decision on November 8, it would
now be prepared to change the 10% rule?
And the suggestion was not made by just anybody. Not by an
official, a backbencher or a parliamentary secretary, but by the
Minister of Transport himself. So, he is speaking on behalf of
Cabinet. So, they have discussed the matter.
When we look at the series of events that have occurred since
August 13, we can see that, in the end, we are in a context in
which the government has decided to make a choice. It has waited
for just the right moment. Why? Because Onex is involved. It
knew that Onex was prepared to act. The government, according to
us—at least that is what I think—the government is changing
its tune, and now it would like to help Onex with its project.
Since it does not want to do so overtly, it is doing so
covertly.
Doing covertly what one cannot do overtly is not being
transparent. It is acting. It is a scenario that would do for
a great film.
It is a strategy that does not fool the members of the Bloc
Quebecois or the media, and commentators who are following the
story closely.
It is part of a well formulated plan. The way things are going,
since the parties on both sides are following this debate even
more closely than the average citizen, it is clear that they
know how to decode the messages sent them by the government.
This ability will significantly influence the results of the
general meeting of Air Canada shareholders. At least, it can
change it a lot.
So, while the government did not intervene in any way, the Air
Canada shareholders will have only one option on November 8:
accept or reject Air Canada's offer, since it is the only one
that goes by the rules.
There is however one principle at stake, the one according to
which we must act in the best interests of all Canadians and of
all Quebecers. It is therefore a matter of interest. We must ask
ourselves in whose best interests the Minister of Transport was
acting when he made his position known on Tuesday.
I am talking about the position he indirectly took when he
suggested that he was ready to consider changing the rules. What
purpose would that serve? To enhance services? To protect as
many jobs as possible? To promote the interests of some
shareholders? To promote the interests of a handful of
government buddies perhaps?
We do not know. We are asking the question. Today's debate gives
us the opportunity to ask this question. The Bloc Quebecois is
wondering in whose best interests the government is acting.
This is a rather simple question, at least to us in the Bloc.
We have always stated, and we keep reminding people, that we are
here—because we only ran candidates in Quebec—to protect the
interests of Quebec. We are here first and foremost to protect
the interests of our province. Air Canada and Canadian Airlines
International are Canadian companies, and competition should be
given free reign.
1225
I am surprised to see that our colleagues from the Reform Party,
who always saw the competition rule as a protection for
consumers, now seem to be supporting the new way of thinking of
the transport minister, who is announcing in advance what he
intends to do to encourage certain people who have interests or
shares in these companies.
The Bloc Quebecois' position is clear: we want the competition
rule to be maintained. Obviously, we do not want to see any
company disappear.
In this era of economic liberalism, performance and the quality
of goods and services are the main factors that will make or
break a company, and that has to remain.
Even if we had only one major air carrier, there would still be
competition because other international carriers fly to Canada,
and there are regional carriers that are not affiliated with Air
Canada or Canadian International Airlines. For example, starting
November 1, Air Montreal will serve Quebec and Ottawa.
Therefore, there are opportunities for the regions also, and one
sound company that provides good services is better than two
that are struggling to survive.
[English]
Ms. Val Meredith (South Surrey—White Rock—Langley,
Ref.): Mr. Speaker, I find it very interesting to hear the
member say that he is in favour of free market competition
prevailing when the very nature of this motion would prevent any
competition in the merger process.
Those members are trying to say that only one deal can be
considered by the government, by anybody, by the shareholders. I
do not find it competitive when we are saying there is only one
person or one deal which can comply with the conditions.
I would suggest that if the member truly believes in the
competitive nature of the free market he would be willing to open
up the guidelines, open up the regulations to allow more than
one. Perhaps there are two, three or more people who would be
interested.
I would also challenge this member on his comments as to whether
a company should be allowed to go into bankruptcy. In the
interests of all Canadians, the restructuring of the airline
industry should be handled in an organized fashion rather than in
a chaotic fashion.
I find it very difficult to believe that the hon. member is
speaking to and concerned about all Canadians and not just those
who happen to live in the province of Quebec.
[Translation]
Mr. Antoine Dubé: Mr. Speaker, I refer to the last part of the
member's speech, where she says that it would have to be
organized and that things should be done in the best possible
way. I completely agree with her on that. The Bloc quebecois has
attempted to set an example in this regard.
When the government refused to let the Standing Committee on
Transport hear stakeholders, the Bloc Quebecois created a shadow
committee to give everybody an opportunity to voice their
opinions. Of course, the liberals would not have anything to do
with it. However, when we talk about organization, the
government decided to suspend application of the relevant
section of the Act, saying that the situation should not be
referred to the Canadian Competition Bureau for 90 days. We
would be very happy if this issue were referred to the
Competition Bureau.
1230
At meetings of the Standing Committee on Industry, of which I am
a member, the subject of the Competition Bureau often comes up,
and that makes sense. So far, however, the opposite has
happened. The process is not transparent, not democratic at all.
It is on the Bloc Quebecois' initiative that the subject is
being discussed today, that there is a public debate being held,
in the public interest. We hope that the Reform Party will do
the same.
When the matter was raised in caucus—
The Acting Speaker (Mr. McClelland): I am sorry to interrupt,
but your colleague has a question.
Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): Mr. Speaker,
yesterday, during oral question period, the leader of Bloc
Quebecois and the hon. member for Beauport—Montmorency—
Côte-de-Beaupré—Île-d'Orléans both asked questions about an article
recently printed in Le Devoir and signed by Marc Lalonde.
Marc Lalonde is a former minister who, I believe, was respected
by all parties in this House. He wrote that “A promise or
commitment to authorize a merger of the two carriers without
knowing how the act will be amended is pernicious and
dangerous”.
The Minister of Transport replied:
I respect the qualities of my former colleague, Mr. Lalonde.
Yesterday, he gave his opinion in an article in the daily Le
Devoir, but I must point out that Mr. Lalonde is a lawyer and
that his company works for Air Canada.
Fine. But we read in the same newspaper that the hon. member for
Lac-Saint-Louis is also opposed to fiddling with the 10% limit.
Could the minister tell us which company the hon. member for
Lac-Saint-Louis works for? I would like to hear what my colleague,
the hon. member for Lévis, has to say on this score.
Mr. Antoine Dubé: Mr. Speaker, I do not have the same respect as
my colleague does for the former minister, but for other
reasons.
This former minister, who was a heavyweight in the government of
Pierre Elliott Trudeau, expressed his opinion. But the fact that
the hon. member for Lac-Saint-Louis has made his position known
leads me to making the following comment.
I see an hon. member from the Montreal area who is usually very
vocal, but she has had nothing to say on this issue. Yet, she
represents a Montreal riding very close to the airport. I invite
her to come forward, just as the hon. member for Lac-Saint-Louis
did.
Mr. Gérard Asselin (Charlevoix, BQ): Mr. Speaker, as the hon.
member for Charlevoix and a member of the Standing Committee on
Transport, I believe we have a lot of work to do and a huge
mandate to fulfil as a result of airline mergers and the
restructuring of air transportation services in Canada.
We have been going through turbulence for some time now. The
Minister of Transport has tried to maintain Canadian Airlines
and Air Canada. Unfortunately, in January, Canadian Airlines
told the Minister of Transport it was in great financial
difficulty, on the brink of bankruptcy. Of course, it will not
go bankrupt as long as Canadian Airlines' suppliers do not take
action.
Reporters will probably write, as they have done before, that
members of the Bloc Quebecois attend their committee meetings
regularly and are well prepared. They are in Ottawa to defend
Quebec's interests and to improve Canada.
As long as Quebec sends tax money to Ottawa, as a member of the
Bloc Quebecois, as the hon. member for Charlevoix and as deputy
critic for transport, I will fulfil my responsibilities.
1235
The Bloc Quebecois has decided today, given the urgency of this
debate, to inform the public by making use of an opposition day.
The Bloc Quebecois had been asking that the Standing Committee
on Transport be convened since July. For various reasons,
including members' holidays, the adjournment of the House, the
throne speech, we were told the committee could not sit.
Oddly enough, the committee did meet, with members of the New
Democratic Party, of the Reform Party, of the Bloc Quebecois and
of the Conservative Party. The only people who did not show up
were the Liberals. Yet, for two days, the ad hoc committee heard
from witnesses who came from all over Canada to raise members'
awareness about the importance of restructuring air
transportation services in Canada.
Considering the seriousness of all those people, the Bloc
Quebecois introduced a motion today. That motion reads as
follows:
That this House reaffirms its desire to maintain the provisions
of section 6.1(a) of the Air Canada Public Participation Act
limiting ownership of the capital stock of Air Canada by any
person or group to 10% of the voting shares.
Of course, the Bloc Quebecois explained its position which is
that the role of a responsible government is to act like a
referee whose primary concern is protection of the public
interest. Changing the act would favour one party over the other
and that is called cheating.
If the government changes the act to suit Onex or AMR, that
would send the signal that private companies do not have to
comply with the law but that the government has to adapt the law
to suit its friends.
The 10% rule applies to Petro Canada, banks and several other
public interest corporations. Changing that rule would be
contrary to public interest. The 10% rule was put in place to
prevent a single group from gaining control of Air Canada, one
of the two national air carriers. The government wants to change
the rule to allow a group to gain control of the only remaining
carrier. That would be putting the future of the air carrier in
the hands of only one group. By refusing to state its position,
the government is feeding the uncertainty that currently exists
in the airline industry.
Of course the committee has a clear mandate, witnesses to hear,
hearings to hold. I hope this time the Minister of Transport is
going to listen to the committee's recommendations. We know what
happened when it was time to restructure the shipping industry.
Every political party had an input and made recommendations to
the minister. I am convinced unfortunately that he had already
made up his mind on how the shipping industry was going to be
restructured, even before the committee sat down to write its
report.
As I said earlier in my speech, we are going through very
turbulent times and Canadians are very concerned. When a plane
is going through turbulence or a storm, people on board are
worried and feel powerless.
Our constituents, who are watching us, who sent us here to
represent them, are concerned about the future of air
transportation, especially in the regions.
Under the bid of Onex or AMR, the merger of Air Canada and
Canadian could result in the loss of 5,000 to 10,000 jobs.
According to the president of Air Canada, Air Canada's offer to
merge with Canadian could mean the loss of around 2,500 jobs. If
the government does nothing, Canadian will likely go under and
all its workers will lose their jobs.
1240
What we in the Bloc Quebecois want is to maintain as many jobs
as possible while ensuring the highest quality of service in the
airline industry.
Later this week in committee I will ask the Minister of
Transport the following question “Should there be a merger, what
do you think the future of air transportation in the regions
will be?” As you know, air transportation is of paramount
importance in the regions. And yet, over the last few years, air
service in the regions has been diminishing. Quality of service
is in jeopardy, and flight frequency is left up to individual
carriers.
For those who have no choice, plane tickets are very expensive.
In a riding like Charlevoix, on the north shore, air
transportation is the fastest way to get around, because we have
no rail transportation and we have only one access road.
Therefore, the only way to travel fast is by plane, and carriers
know it only too well.
Travellers who have no choice use a particular type of service,
for professional reasons. They are, for example, business people
who need to travel within a very short timeframe or people from
the regions who need to go to Quebec City or to Montreal to have
access to certain health care services.
The merger of Air Canada and Canadian International Airlines is
of great concern to us, especially the Onex proposal, because I
think there is some kind of complicity between the Department of
Transport, Canadian International Airlines and the future
company.
With regard to the future of regional air service, we all know
that airports are already losing money.
If the number of flights to regional airports is reduced, we
will no longer have what we have now, that is a red and white
Air Alliance plane arriving at 8.55 a.m. and a blue and white
Canadian Airlines plane arriving at 9.10 a.m. Some will say that
the blue and white plane was half full and the other one was
half empty, depending on which company they want to support.
We know that the number of flights is what makes an airport
profitable. This means that a merger would reduce the
profitability of airports by at least 50%. And when I think
about what happened when the Department of Transport made Nav
Canada responsible for airport management in order to reduce
airport deficits, if the past is any indication of what we can
expect in the future, then I am extremely worried.
We all know that Nav Canada cut services at airports by reducing
the number of air traffic controllers, by closing control
towers, by cutting airport firefighting services, all at the
expense of passenger safety.
I see that my time is up. I could have gone on for at least
another 40 minutes, but I will have the opportunity to come back
to this later on.
Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): Mr. Speaker, when
the Onex project was made public this summer, a number of
members from ridings close to the Dorval Airport, mainly from
the West Island, wanted to meet with the transport minister to
get some explanations.
This is surprising and I would like my colleague from the north
shore to comment on what I could call the ominous silence kept
be some members, like the hon. member for Vaudreuil—Soulanges,
for instance, the hon. member for Pierrefonds—Dollard, and a
veteran, the hon. member for Lac Saint-Louis, who was quoted
recently in Le Devoir as saying that the 10% rule is fair and
reasonable and should not be changed.
I am also thinking of the hon. member for Verdun—Saint-Henri, the
hon. member for Beauce and the hon. member for Laval West. And
what about the hon. member for Notre-Dame-de-Grâce—Lachine from whom
we have not heard a peep?
Are the best interests of the province of Quebec being protected
by the handful of Liberal members from the West Island?
1245
I would like my colleague from the north shore to explain to us
why these members have clammed up today.
Mr. Gérard Asselin: Mr. Speaker, this morning we learned from
Canadian International Airlines that there have been discussions
and an exchange of letters since January with the Minister of
Transport.
Yet this week the Minister of Transport told us that he found
out about it in June, that he had to intervene in June. We
mentioned some ridings, but there are other Liberal MPs in
Quebec.
They were, of course, present when the minister appeared before
the Standing Committee on Transport, because there were some 25
to 30 cameras in the room and all the journalists were there.
As soon as the cameras left the room, the number of Liberal MPs
dropped by half, and a lot of chairs were left vacant.
The speeches by the members for Beauce and for
Abitibi—Baie-James—Nunavik show that they are out of touch with the
situation.
They are just trying to please the minister, without even
knowing what the consequences of the famous 10% rule will be.
Why did the minister allow section 47 of the Competition Act to
be amended?
If either of the two members were asked what section 47 was, he
would probably not be able to say.
Mr. Antoine Dubé (Lévis-et-Chutes-de-la-Chaudière, BQ): Mr. Speaker,
very quickly, I would like to give the member for Charlevoix a
chance to finish what he was saying about regional
transportation in the future.
The 10% rule issue is about whether we should allow
concentration of powers or keep things fair. As for regional
transportation, I know that the Bloc Quebecois would like
another, broader debate.> Small regional carriers do exist but,
right now, there is at least one Canadian company having trouble
providing good regional service because of major financial
difficulties.
I would like to hear whether my colleague agrees that the issue
of regional air transportation rules should be debated again.
In my view, this is a truly important issue.
Mr. Gérard Asselin: Mr. Speaker, any discussion about regional
transportation is a discussion about an essential service. It
is not a luxury to travel by air when one lives in the regions.
Consideration must also be given to travel agencies and
passenger safety. As the Minister said in his speech “Safety
remains Transport Canada's top priority”.
How can the minister explain that, just under a year ago, on
December 7 in Baie-Comeau, a plane registered to Mira Aviation in
Gaspé crashed, unbeknownst to any air traffic controller?
How does the minister explain that a Nordair plane flying out of
Sept-Îles crashed, forcing passengers to walk several kilometres
through a wooded area to reach a road and obtain help?
How does the minister explain that, last December 7, an Air
Satellite plane operating out of Baie-Comeau crashed, and that it
was a six-year old girl who discovered the plane?
This is air service? This is the sort of good service Nav Canada
is providing? I would not want to alarm the public, but I worry
when I take a plane these days. If it was important to have air
traffic controllers and firefighters in 1975, it is even more
important to have them in 1999.
[English]
Mr. Lynn Myers (Waterloo—Wellington, Lib.): Mr. Speaker,
I am pleased to speak to the motion to affirm the 10% limit on
individual holdings of voting shares in Air Canada.
Mr. Speaker, I will be splitting my time with the hon. member
for Port Moody—Coquitlam—Port Coquitlam.
I want to remind the House that on October 26 the transport
minister issued a policy framework for the restructuring of the
airline industry in Canada in which the percentage limit on
individual holdings of Air Canada was addressed. In his remarks
to the Standing Committee on Transport the minister reiterated
the government's willingness to consider increasing the limit to
a new level, to be decided following input from parliamentarians,
if such a measure were to contribute to achieving a healthy
Canadian controlled airline industry.
1250
That is important. A healthy and viable industry is one in
which airlines are financially fit and competing both
domestically and internationally. However, in view of the
circumstances in the air travel marketplace, a restructuring of
Canada's airline industry resulting in one dominant airline
appears likely.
Confronted with the probability of major changes to the airline
industry, Canadians have been very active and vocal in expressing
their views and concerns, and rightfully so. The transport
minister and his officials have met with numerous direct
stakeholders, have consulted with interest groups and members of
the public and have received views through correspondence and
other ways of getting in contact. A wide of variety of important
concerns have been expressed by Canadians confirming the need for
a clear government role in any restructuring of the airline
industry.
I am proud to say that the government has listened carefully to
Canadians and has developed a framework outlining our approach to
protecting the public interest.
One aspect of the public interest that has received substantial
attention is the predicted lessening of competition as a result
of a major consolidation of airlines. Most Canadians want
Canada's airline industry to be competitive. We have heard that
and we have listened. They believe that competition is an
effective way to ensure reasonable airfares and good quality air
service. The government continues to agree with Canadians in
this regard.
Early in the process the transport minister solicited the
assistance of the Competition Bureau. The commissioner of the
bureau submitted his report on October 22 to the Minister of
Transport. The commissioner's analysis and recommendations were
thoroughly considered by the minister, as a study of the policy
framework will show.
The government is committed to fostering as much competition as
possible in the airline industry in Canada. That is precisely
what we are doing. We are convinced that reducing the barriers
to market entry for new carriers and encouraging existing
carriers to expand into new markets will mitigate the expected
lessening of competition that may result from a consolidation in
the industry. That is why the Minister of Transport announced
the government's intention to take policy and regulatory steps to
address competition issues.
Frequent flyer programs, for example, that have a significant
influence on the air services that consumers choose, are a
concern for competition. Other carriers would be greatly
disadvantaged if they could not offer or redeem points in a
dominant carrier's plan. The potential negative effects could be
mitigated by allowing any domestic carrier to purchase points in
the dominant carrier's frequent flyer plan at a reasonable cost,
or by the dominant carrier's participation in independent loyalty
programs.
The great majority of flight bookings still go through travel
agents. If agents are constrained from booking on other airlines
for fear of not achieving the target set for their override
commission by the dominant carrier, competition would be
undermined. The government will examine ways to address the
anti-competitive effects of this issue while recognizing the
potential impact on travel agent revenues.
Any restructuring of the airline industry is expected to include
some rationalization of services, particularly in the domestic
market, such that the dominant carrier may no longer need all the
aircraft in its fleet. These aircraft, already certified for
safe operation in Canada, might be very attractive to other
Canadian carriers. There is a risk, however, that the dominant
carrier would prefer to divest any surplus aircraft offshore. If
rights of first refusal for surplus aircraft on reasonable
commercial terms were offered to an interested party in the
domestic market during the restructuring process, this could
assist in fostering more consumer choice.
Independent airlines may have little choice but to work with the
dominant carrier when their passengers need a connecting flight
to get to their final destination. A smooth exchange of
passengers and their baggage, however, requires the co-operation
of the dominant airline. If access to feed traffic and
interlining were offered to unaffiliated regional and chartered
carriers on commercially reasonable terms, this could help
regional carriers to continue to function effectively. This is
certainly a goal of the government.
Both major airlines have developed close commercial relations
with regional affiliates or partner airlines to ensure that
smaller communities are well integrated into their network.
After all, that is what Canada is all about.
1255
In these arrangements it is common for the larger carrier to
provide such essential services as airport slots and facilities,
aircraft leases, reservation systems, ticket processing, revenue
collection and accounting. However, it is not clear whether all
of the smaller regional carriers will remain connected to the
dominant carrier in any restructuring. If any do not, they will
need a period of adjustment so that they may replace essential
services previously provided by larger partners.
For regional carriers formerly dependent on one of the two major
carriers for essential services, if the dominant carrier were to
continue to provide these services for a reasonable period of
time at prices no less favourable than currently in place, this
would help ensure continued service. Where feasible, the dominant
carrier might also continue to provide items acquired through
volume purchasing such as fuel, spare parts, aircraft leasing and
insurance for a reasonable transition period.
Preventing excessively aggressive competition activity by a
dominant airline will be a priority for our government, as will
be ensuring smaller airlines reasonable access to airport
facilities and services and to computer reservations systems.
The government has made it clear that in the new process the
Competition Bureau will review any specific proposed merger or
acquisition with regard to competition issues. The results will
be taken into account by the Minister of Transport who will make
a comprehensive recommendation to the governor in council.
These government initiatives regarding airline competition, in
my view, are measured and reasonable to accomplish the policy
objectives. Certainly they are in the best interests of Canadians
wherever they live.
In closing, as stated in the government's October 26 policy
framework statement, regardless of how things evolve in terms of
airline industry restructuring in Canada, the government is
intent on ensuring that the public interest remains paramount and
is protected. The government is confident that the
entrepreneurial spirit of Canada will remain strong and that
competitive air services will develop and provide real options
for travellers.
The government is also confident that the House and Senate
standing committees will provide useful advice on the
implementation of remedies for competitive issues. As well,
these committees have been requested to provide their views on
this issue.
I believe that parliamentarians in this House should be given a
chance to provide views on this important issue. I oppose the
hon. member's motion to make a decision on the issue today. We
need to let the process take its course. I think that is what
Canadians want and it is what all of us need.
[Translation]
Mr. Benoît Sauvageau (Repentigny, BQ): First of all,
Mr. Speaker, I would like to congratulate the hon. member for his
great performance in reading his speech. It was written either
by Department of Transport officials or by Onex bureaucrats, we
do not know exactly. In any case, we have to admit that he read
it very well.
With all due respect, I also want the hon. member to know that I
would have liked to direct my question to the hon. member for
Notre-Dame-de-Grâce—Lachine, the hon. member for Vaudreuil—Soulanges
or the hon. member for Verdun—Saint-Henri, but as my colleague,
the member for Frontenac—Mégantic, said today, we will not hear a
peep from them.
It would be nice if their constituents had the opportunity to
hear them, here in the House of Commons, or outside, in the
foyer, or in their riding. One member, the hon. member for
Lac-Saint-Louis, actually did speak out, but oddly enough, we have
not seen much of him lately.
I have two very simple questions to ask the hon. member. Could
he give us an example, in Canadian history, of the 10% rule
being violated? For example, for the banks, did the rule stand,
yes or no? I am sure that the hon. member looked into this issue
at length before delivering his speech, and I would like him to
give us any example in Canada, since 1867, of the 10% rule being
violated. My second question is this one: as things stand now,
is the proposal from Onex legal or not?
[English]
Mr. Lynn Myers: Mr. Speaker, I thank the hon. member for
his question.
1300
It is important that we on the government side, however we do
it, elucidate clearly what we are saying and how we are going
about this very important process, unlike the sovereignists
opposite who seem to flail around and do not quite focus on this
all important issue. I can tell the House that we have nothing
to learn from those people over there.
I think back to the 1980s when Quebec Air was nationalized by
the then Parti Quebecois. What did it do then? Did it consult
with the people? Did it take a look at what should happen? No,
it barrelled ahead and did all kinds of outrageous things.
Now those members on the other side are trying to tell us what
we should do now. It is outrageous that they would sit in their
seats and try to make that kind of pretension because they do not
practise what they preach. All they do is flip-flop around and
make all kinds of nonsensical issues in the best interest not of
Canada, not of Quebec, but of their own small minded way.
Canadians will have no part of that because they saw through
them in what they did with Quebec Air in the 1980s, and what they
are preaching today is nothing but phony, phony, phony.
Mr. Bill Casey (Cumberland—Colchester, PC): Mr.
Speaker, I have two questions for the hon. member. He mentioned
in his speech that the entrepreneurial spirit was alive and well,
that they were fostering it and all that sort of thing.
When the minister asked the Competition Bureau to investigate
the restructuring of the aviation industry, could the member
explain why the minister did not restrict it to one narrow
vision, the minister's narrow vision of a dominant carrier? Why
did he not ask the Competition Bureau to bring back all the
options and all the potential possibilities that may include the
competition which this one does not? Instead, he just focused on
one area and limited the bureau's review to that.
I would like him to comment on another matter. When the
government called for proposals on August 13, it said that it
would consider proposals for 90 days. Why did the government not
then consider or make public its intention to consider changing
the 10% rule? Why did it wait until there were only 16 days left
in the process when nobody else had a chance to put a proposal on
the table?
Mr. Lynn Myers: Mr. Speaker, I thank the hon. member
opposite for the question. I reject outright his premise that we
did not have a broad consensus in terms of where we are going. It
is not a narrow vision. It is, rather, in the best interest of
our great country and of all Canadians.
I have been amazed by the Tories since 1997. I was doing some
research on this very important area. Two years ago the Tories
called for cutbacks of $35 million from Transport Canada, and
here they are today wanting to argue the other side. Can we
imagine calling for those kinds of cutbacks and now arguing the
other side?
I was reading not so long ago in the Montreal Gazette that
the member for Cumberland—Colchester accused the minister of
changing the ground rules to favour the Onex takeover bid. It is
truly amazing that those Tories who wreaked havoc when Mulroney
was in power are trying to do things today which are totally at
odds with what we as a government are doing in a very effective
and promising way for Canadians. Such nonsense will not be
tolerated by the Canadian people.
Mr. Lou Sekora (Port Moody—Coquitlam—Port Coquitlam,
Lib.): Mr. Speaker, I am pleased to speak to the hon.
member's motion concerning the government's policy framework for
the airline restructuring in Canada announced on October 26 by
the Minister of Transport.
The motion before us concerns whether the current prohibition on
any person or persons holding more than 10% of Air Canada voting
shares should be maintained. The government has clearly stated
in its policy framework that it is prepared to consider
increasing the limit to a new level after input from
parliamentarians, if such a measure contributes to achieving a
healthy Canadian controlled airline industry. In this context it
articulated a number of key elements in its policy framework,
including the desire to foster as much competition as possible in
the airline industry in Canada.
This framework also clarifies the government's intention to
review Canadian international air policy in a new Canadian
airline environment.
1305
A revised international air policy is a critical element of the
new policy framework for airline restructuring. International
air services account for more than 50% of the revenues of
Canada's two major airlines, Air Canada and Canadian Airlines
International.
These services are even more important to Canadian's largest
charter carriers: Air Transat, Canada 3000, Royal Aviation and
Sky Service. These carriers operate extensive passenger charter
services both domestically and throughout the world. In his
policy framework announcement the minister clearly stated that
the government would revise its policies for international
scheduled and charter air services with a view to removing
unnecessary restrictions on air services.
I am sure members would all agree that such a commitment is
clearly warranted now that the industry structure appears to be
changing. Canada's international charter policies, for example,
were developed in 1978. One of its primary objectives was to
allow charter carriers to compete effectively with scheduled
carriers like Air Canada and Canadian Airlines for international
leisure passengers.
The objective has been implemented through regulations
administered by the Canadian Transportation Agency and effected
through a series of charter fences such as pre-booking and
minimum stay requirements. Therefore a policy approach that
protects parts of the market for scheduled services from charter
competition was deemed to be in the public interest.
In an environment where Canada might be faced with one dominant
Canadian scheduled carrier operating both domestic and
international air services, the minister has clearly signalled
that the current degree of protection for scheduled air carriers
from charter service competition on international routes will be
reviewed.
The minister has also indicated that the government intends to
review its international scheduled air policy. This is the
policy framework by which the Minister of Transport exercises his
authority to assign to specific Canadian carriers the right to
operate scheduled international routes to specific countries.
Other than the Canada-U.S. market where any number of Canadian
carriers may be designated, today's policy framework designation
of international routes states that two Canadian carriers may be
designated in markets exceeding 300,000 scheduled passenger trips
per year.
In markets below that threshold only one Canadian carrier will
be designated. This policy framework has developed over time.
Historically international scheduled routes were granted to Air
Canada and CP Air, later known as Canadian Airlines
International. This approach was known as the division of the
world approach whereby each carrier was assigned exclusive access
to specific markets in order to support the broad viability of
each carrier's operations.
Changes have evolved to make the approach more transparent and
more competitive. The current policy framework includes a use it
or lose it approach whereby airlines that are granted
designations must operate them at a minimum level of service or
potentially lose them to another air carrier.
Given the potential changes to the airline structure in Canada,
the minister has indicated a need to revise these policies with a
view to removing all unnecessary restrictions on air services.
This clearly is in keeping with the objective of fostering
competition as articulated in the new policy framework which has
formed part of the recently released recommendations of the
commissioner of competition in his letter to the minister.
The government has stated its intention to reconsider its
approach to the 60 plus bilateral air agreements the government
has negotiated with other countries. We will determine the
extent to which Canadian and foreign carriers should have more
international route opportunities. These agreements or treaties
guarantee the airlines assigned by each country the right to
operate specific international scheduled routes, the frequency of
services permitted, the type of aircraft that may be operated,
and even the number of airlines that may be authorized to
operate.
1310
Canada's bilateral air agreements are varied in their degree of
openness. Sometimes Canada is not able to secure at the
negotiating table all the rights it may seek. In the end this
can have an impact on the kinds of services that may be operated.
Canada does have considerable experience with open or liberal
bilateral agreements.
The Canada-U.S. open skies agreement is a case in point. Before
the agreement was concluded some 82 city pairs received non-stop
scheduled services. After the agreement the number of such city
pairs increased to 135. Passenger traffic has increased by 8.5%
a year. The Canadian charter industry has remained active and
has converted many of its services from charter to regular
scheduled flights. Furthermore the Canadian airline industry has
increased it share of the Canadian-U.S. market from 43% in 1994
to 49% in 1997.
In the context of a restructured industry where we want to
foster and enhance competition and provide opportunities for
Canadian carriers to operate international scheduled services,
the government's decision to review its approach to negotiating
bilateral air agreements, combined with a review of its
international air policies, will be timely and warranted. The
government has proposed an approach that will promote a healthy
and viable air transport system in Canada.
Mr. Gerald Keddy (South Shore, PC): Mr. Speaker, I
picked two words from the member's speech. Those two words were
transparent and competitive, that the process is transparent and
competitive. What is transparent is the strategy used by the
government to make sure one company and one company only takes
over the airlines. It is very transparent.
The member stated that on October 26 the minister started a new
strategy and in a new direction to see how the airline would
eventually be taken over. He would make the process more
competitive by perhaps abandoning the 10% rule to allow an
airline or a company to own more than 10% of a Canadian airline.
We must realize that by October 26 there were only 16 days left
in the process. There are only 14 days left in the process now.
Suddenly we are opening it up.
By some type of a miracle or coincidence Onex puts a bid in for
14.5% Canadian ownership. It is a coincidence. I understand
that, but the bottom line is that if he wanted to make the
process competitive, should he not have changed the 10% rule at
the very beginning of the process? Probably a number of other
bidders would have bid on the process at that time. However, 74
days into the process they have been cut out. They will not come
in now with a new plan so what we really have to do is extend the
timeframe.
Mr. Lou Sekora: Mr. Speaker, the fact is the rules have
not changed. We always hear from the other side some kind of
breeze, that some miracle has happened or that something has not
happened. It is frightening that the member sits on the
transport committee with me.
I have listened to all sides. We are reviewing. We have many
witnesses to listen to. I do not know what the intention of
those on the other side is, but my intention is to get the best
airline service across Canada and we must save all the jobs we
can.
[Translation]
Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): Mr. Speaker, we
all know that Wednesday morning, in the federal capital, all
parties hold a caucus meeting.
Yesterday, many Liberal members, after their caucus, expressed
their disappointment, their dissatisfaction on the Onex issue.
Certain facts must be remembered.
1315
Onex is an major sponsor of the Liberal Party, giving $5,000 for
this, $5,000 for that.
The transport minister said yesterday that Marc Lalonde works
for Air Canada. In today's Journal de Montréal, Michel C. Auger
said that the transport minister works for Onex.
I would like to ask my friend across the way, who sits on the
transport committee and who heard this week that the transport
minister works full time for Onex, if the merger is legal, yes
or no.
[English]
Mr. Lou Sekora: Mr. Speaker, I sit on the transportation
committee as the member does. I do not know what will be before
us. I do not know what our final agreement will be as far as the
transportation committee is concerned.
On Wednesday afternoons when we sing O Canada we do not see any
members from the Bloc in here joining us. I do not think they
believe in Canada. They believe in their own ways. They will
not come and pray with us on a prayer day. They will not come
and sing O Canada with us because they do not believe in Canada.
I do not know where they are coming from.
[Translation]
The Acting Speaker (Mr. McClelland): Unfortunately, there is no
more time for questions and comments.
[English]
Mr. Roy Bailey (Souris—Moose Mountain, Ref.): Mr.
Speaker, I do not know if I can follow the same act. I suggest
that this debate did not come to the floor of the House like the
great historic transportation debates that took place in the
past.
If we went back to Confederation and the years thereafter, the
House and the committee spent months on the great transportation
debate: The building of a railway across Canada, the national
dream. The only thing in the last 100 years even comparable to
that was a little bill called the national highway strategy
program which was a piece of paper.
This is the big issue for this century. In the closing days of
this century this will be the biggest transport issue since 1900
until the new millennium comes in. The most unfortunate thing is
that the House first learned of everything that was going on
through the papers. Most of what Canadians know about this great
debate and the merger they learned through the papers.
I sit on the transport committee. I have enjoyed very much
talking to some very key witnesses. Canadians phone me and ask
if the same rules apply to everybody. They want to know if there
is a level playing field. I cannot answer those questions but I
have my suppositions. However, whatever happens in this great
debate that will always remain in the minds of the people.
I want to congratulate my colleagues in the Bloc Party for
bringing this to the floor of the House. Whether I agree with
the 10% increase or not is not the issue. In the past, when we
had these great transportation debates, we always brought in
capital from all over the world to help us. This happened with
the railway and originally with the airline industry.
What we have here is an emergency. I did not create that
emergency. None of the parties on this side of the House created
the emergency. It was going on. Unfortunately, the story broke
when the House was not in session.
It was not only awkward for me and other members of the
committee to hear statements being made when we were in our home
constituencies, but two days before we arrived here I read in the
paper who the new chairman of the transport committee was going
to be.
1320
I do not know if that was a charade, but we usually go through
the actions of a committee meeting before making a decision as to
who the chair will be. The second order of business would be to
choose what topic we were going to discuss. That was
pre-announced. I am not arguing about that because I think that
would have happened anyway. What I am arguing about is that,
unfortunately, and I am not blaming anyone, the House will never
have the time, because of the urgency of this matter, to properly
debate the issue.
I see the minister is here. I believe he has given us a
timetable of something like November 26. Our last witness in the
transport committee will appear on November 24.
Mr. Speaker, I failed to announce that I will be sharing my time
with the hon. member for Esquimalt—Juan de Fuca.
What was the immediate Canadian reaction? What are some of the
questions? My phone lines have been busy with people asking if
this is a fair procedure. The government will have to answer
that. Is it a fair procedure?
The next question they ask is: Will it keep the regional
airlines intact? Coming from the west, they have fallen in love
with WestJet. We have received some assurances in committee that
would take place but I would like to see that on paper.
The fundamental question is: If there is only one dominant
domestic air carrier within Canada in the future, could it really
be said that a monopoly exists given that there is a relative
freedom of entry into the industry? I think that is a big
question.
Provided a carrier can obtain a licence and meet the initial
financial fitness test, should financial fitness be assessed on
an ongoing basis? We have used the word “dominant” to replace
the word “monopoly”, with the exception of some regional
carriers. I submit that we will, even if it is not a necessity,
go to a dominant, monopoly carrier.
I have to ask if that is really necessary at this time. I am
not so concerned about where we get the money. I would suggest
to my friends in the Bloc that I do not care where the money
comes from for these ventures, whether it comes from Germany,
France or the United States. In the history of the United
States, when it developed much of its money came from Germany.
At any one time we have always had about 10% of the population
of the United States. We have heard from witnesses that our
major role and major profit in this industry goes south. That
part does not worry me. I do not think we should have
limitations. That is where I disagree with the Bloc.
I wish I was in a position today to make some guarantees about
the future of the airline industry in Canada. Unfortunately, we
have only had but a few weeks with just a few hours left before
the decision is made. Let us hope for the travelling public,
those who must use the airline, that it is a good decision and
that the House will in the future be notified in plenty of time
to have a debate on this great issue, as it did with the railways
and other great transportation issues, on the floor of the House
and in no other place.
[Translation]
Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Speaker, I will be
brief to give other members an opportunity to ask questions.
My hon. colleague from the Reform Party talked about
consultations and the short time available for consultations. I
would simply like to compare that to the prebudget
consultations.
1325
I would point out to him that the auditor general has found a
$25 billion surplus in the employment insurance fund and that it
is up to the minister to decide what to do with that money.
In all the prebudget consultations we have had since 1993, I do
not recall the government asking people if they agreed with the
way the finance minister intended to use the surplus. That is a
good indication of the government's philosophy with regard to
consultations.
This morning, the Minister of Transport said—and his colleagues
read speeches prepared by his officials—that we were initiating
an important debate. I want to point out that the Standing
Committee on Transport will be studying this issue until
November 26. It was said that, within the committee, the
majority is Liberal and does as the minister says. In the House,
the majority is Liberal and does as the minister says. In the
Senate, the majority is Liberal and does mostly as the minister
says. What does the member think about consultations in that
context?
[English]
Mr. Roy Bailey: Mr. Speaker, I would have liked to have
had a pre-consultation. I think we had plenty of time before the
House opened in late September. I could not see any reason for
not calling together the Standing Committee on Transport. We
could have had the same witnesses as we are having now. At least
those people assigned from each of the political parties in the
House would have had a chance to update this. We would have been
able to spend more time discussing the matter with our colleagues
who do not happen to be on the transport committee.
I believe the major flaw in the whole process was that the
government did not see fit to ask the Standing Committee on
Transport to meet as early as possible after the gates were
opened.
Mr. Bill Casey (Cumberland—Colchester, PC): Mr.
Speaker, the member said that the number one issue on people's
minds was whether the process was fair. On August 13 the
minister announced a 90-day window of negotiation during which he
would receive proposals to restructure the industry.
On day one the law of the land was and still is that the maximum
that anybody could own of Air Canada was 10%. Two days ago, with
only 16 days left in the process, he has announced that he may
change that regulation to allow any bid to maybe considerably
more of the company.
Considering it is a standard operating procedure for government
to call for proposals and give a window of opportunity to receive
them, does the member feel it is fair for the minister to change
the rules with only 16 days left when obviously nobody else has
an opportunity to put together such a comprehensive plan that is
required for the issue?
I like the member's referral to the dominant monopoly carrier.
It is very appropriate. When the minister asked the Competition
Bureau to review the industry, he did not ask it to look at all
possible options, he said “Just look at my favourite option,”
the dominant monopoly carrier theory”. Does the member feel
that was fair?
Mr. Roy Bailey: Mr. Speaker, on the basis of what I have
learned in the papers prior to coming back to the House and on
the basis of what I have learned from asking questions, there is
an element there that says it was an unfair situation. I do not
think there is any question about it. I think the general public
agrees with it.
The big question that should be asked and one that only the
minister can answer is whether this was necessary. If we ever
get an answer to the question of whether it was necessary to
change the 10% at this time, I suspect we will find that maybe
the 10% was put there for an obvious reason. However, it appears
that it is being changed at this time because there is an unfair
situation for one of the people who are presently bidding. I do
not think there is any question about that.
There is another thing I want to mention about the dominant
carrier. I have great fear that without some discussion and
debate in the House, we will need to have some regulatory
legislation in this industry in the years ahead. If that will be
the case, and I fully suspect it will be, I hope it will come to
the House. I hope it does not take place as this issue has in
the past.
1330
Mr. Keith Martin (Esquimalt—Juan de Fuca, Ref.): Mr.
Speaker, it is a pleasure to speak to the motion put forward by
the Bloc Quebecois. It is a very interesting motion, which
affects most of us because of the employees of both Air Canada
and Canadian Airlines who live in our ridings. This issue is
exceedingly important to them.
Part of their concern is that they want to know the truth about
what is going on. Unfortunately what we have seen is a
polarization amongst the employees of both companies, so much so
that it is causing an extraordinary amount of acrimony.
I would say, and I am sure many members would agree, that
Canadian carriers, both Air Canada and Canadian Airlines, have
the finest staff, as well as some of the best planes in the
world. Oftentimes Canadians wonder what we can do, as opposed to
the rest of the world, and we need not look any further than
those two carriers to see Canada excelling in the airline
transport industry.
Having said that, there are things we need to do to ensure we
are not left with an airline industry in disarray, which would
affect the employees and especially consumers who want the
assurance that whatever comes of these discussions they will be
protected and not left with a monopoly and the possibility of
price gouging. They want a fair and equitable decision for the
employees of both airlines.
Let us look at the issue put forth by the Bloc Quebecois, which
concerns the 10% limitation on ownership of Air Canada. We
already have a 25% foreign restriction on the ownership of a
Canadian carrier. That is a good thing.
If one professes to believe in allowing the market to decide,
and allowing strong competition, why should we prohibit any
individual or group in this country from having greater ownership
of Air Canada? What is so wrong with having a person or group
own a larger share of Air Canada or Canadian Airlines, or any
company for that matter?
It is not right for the government to impose those kinds of
restrictions upon a private carrier. It limits and creates a
barrier to that company becoming as effective as it could be.
On the issue of competition, as I am sure most people here would
agree, we would like to see two carriers, competitive, healthy
and profitable, being able to take on not only other groups
within Canada but also around the world, and win, which they can
do.
The sad state of affairs today, with both of these companies
having trouble, is that we are looking toward a merger. As my
colleague, our critic, has mentioned before very eloquently,
rather than having a merger take place in an environment of
chaos, let us do it in a relatively controlled fashion so that
market forces can take place, but we can be left at the end of
the day with a merger that will strengthen the airline industry
in our country. I think that is what we all agree ought to
happen.
We need a level playing field, so that both groups can compete
or both groups can merge.
The truth must come out about what is really going on. The
issue of debt levels is very important in terms of how investors
look at both companies and there has been a lot of misinformation
about what the debt levels are in both companies.
According to the most recent information we have, Canadian's
debt is around $1 billion and Air Canada's is around $9 billion.
Many of the employees of both companies do not know that. They
have been fed different lines as the political battles take place
over the merger of the two companies.
As our eloquent transport critic has mentioned, we want to
ensure that if we are left with a single carrier there will not
be price gouging and there will be legislation in place to
protect the public from it.
1335
On the issue of service to small communities, given the nature
of our country, its broad scope and sparse populations, we need
access to adequate transportation facilities, in particular by
air. We want to make sure that people in remote areas will be
serviced properly and we will press the Minister of Transport to
make sure that whatever comes of this there will be consideration
in the legislation to ensure that those people living in remote
areas will be protected.
The employees of Air Canada have a legitimate concern about
their rights. Because they have a younger staff, if or when they
merge with Canadian Airlines, they fear they will be taken over
and put at the bottom of the barrel. That would not be fair and
it would not be equitable.
On the other hand, Canadian Airlines' workers fear that if they
are to be merged with Air Canada, which has a larger number of
employees, their numbers will diminish and they will lose
employees, which would be equally unfortunate.
We ask the Minister of Transport to ensure that there will be
fair and equitable treatment of the employees of both Air Canada
and Canadian Airlines.
On the issue of the proposed legislation to review the airline
merger, there are a couple of points that we would like to put
before the Minister of Transport. First, we take offence to and
oppose the Competition Bureau being reduced from its legislative
role to an advisory role. We would also like to see the
transport committee take a larger role in this and advise the
minister as to how this should take place. Members of that
committee should be involved. The Competition Bureau, with its
rules and regulations governing competition within the country,
should not be suspended for this particular merger. That is not
correct. It also adds an element of partiality which I know the
minister would not like to see in this particular merger, given
the well known connections that he and the government have with
Onex Corporation. However, that should not preclude Onex from
having a fair go at being able to merge these groups.
In closing I would like to say that members on all sides of the
House are very much in favour of ensuring that whatever comes out
of the Air Canada-Canadian Airlines trade war, which is what it
is, we will be left at the end of the day with a strong airline
industry which will be profitable and able to continue to take on
competition and win in the aggressive airline transportation
industry.
Hon. David M. Collenette (Minister of Transport, Lib.):
Mr. Speaker, I realize that my friend was not particularly
enamoured with the fact that under section 47 the bureau was
given an advisory role, but I think he will agree that the report
which has come from the bureau in the last few days is a
comprehensive one and certainly has helped us, helped me, in
developing the guidelines which I brought before the committee on
Wednesday of this week.
Does the hon. member not now fully appreciate the fact that
under the framework that I announced the bureau will very much be
back in the picture, approving the merger, every aspect of the
merger, negotiating with any proposer who comes forward and that
this is a very crucial safeguard on the very essential issue of
competition?
Mr. Keith Martin: Mr. Speaker, I thank the hon. Minister
of Transport for his question. Yes, we would like to ensure that
the Competition Bureau will have significant input. What the
minister said is obviously true, and we would definitely support
that. We also want to make sure that members of parliament who
are on the transport committee have a strong voice in what takes
place. As members of the House are representatives of the
people, the people should have a role to play, an understanding
and a vote on what takes place in this competitive merger. The
people, by virtue of the members who are in the House, should not
and cannot be excluded from this process. They must be involved
in it as well as the Competition Bureau.
[Translation]
Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): Mr. Speaker, I am
very pleased to see the Minister of Transport taking part so
actively in this debate on an opposition motion brought forward
by the Bloc Quebecois. Our party is very concerned about the
merger of two major carriers that are about to be swallowed up
by Onex.
1340
Yesterday, during question period, in response to a question put
by the hon. member for
Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, the transport
minister said that Marc Lalonde works for Air Canada. Today,
Michel C. Auger maintains that the transport minister is working
full time for his friends from Onex, who are being very generous
toward his political party.
I want to ask my Reform colleague if he also believes that the
transport minister has put his cards on the table and is not on
the payroll of Onex.
[English]
Mr. Keith Martin: Mr. Speaker, I would suggest that the
member ask the Minister of Transport that question himself.
I would refer the member to the following: Why did the Bloc
Quebecois say today that Canadian Airlines is being
discriminatory against francophones? That is an insult to the
60,000 employees, both francophone and anglophone, who work hard
for Canadian Airlines. It is an insult to every francophone who
works for Canadian Airlines that members of the Bloc Quebecois
would say that Canadian Airlines is somehow anti-French. That is
nonsense.
The second point I would like to make is, why is there an
obligation for Air Canada to have its headquarters—
[Translation]
Mr. Jean-Guy Chrétien: Mr. Speaker, I simply asked the hon.
member from the Reform Party for his opinion. Neither I nor a
member of my political party have ever insulted Canadian
Airlines International. I regularly fly with this airline and my
language rights have always been respected.
I ask the hon. member to withdraw his remarks. They were
insulting.
[English]
The Acting Speaker (Mr. McClelland): That is obviously a
point of debate, but the hon. member for Frontenac—Mégantic has
had the opportunity to put his words eloquently on the record.
Mr. Keith Martin: Mr. Speaker, I am very happy to speak
to my hon. friend from the Bloc Quebecois. I was not accusing
him, but there are members of his party who said that today and I
will prove it to him privately after this. I will show him the
facts.
The second point I wanted to make is, why is there an obligation
in the law of this land to ensure that Air Canada is forced to
have its headquarters in Montreal? Air Canada should have the
same flexibility as any company to have its headquarters where it
likes. I think it would be fair to allow Air Canada to do that.
On the point of whether the minister is or is not involved in
any of this, that is an issue for the member to ask the minister,
not me.
The Acting Speaker (Mr. McClelland): Unfortunately, the
time for questions and comments has expired.
An hon. member: Mr. Speaker, a point of order should not
be taken from debate time.
The Acting Speaker (Mr. McClelland): The point has been
made that the point of order should not be taken from debate
time. It is a call that the Speaker gets to make. The Speaker
has made the call. We are going to debate and the hon. member
for Bruce—Grey has the floor.
Mr. Ovid L. Jackson (Bruce—Grey, Lib.): Mr. Speaker, it
is my pleasure today to speak to the opposition motion. I will
share my time with the member for Mississauga West.
Today's motion reminded me of what happened in the early days of
aircraft flying. I am reminded of a story told by Bishop Wright
one Sunday in church when he was lecturing to the congregation.
At that time there were two significant things happening. One
was that there were to be blood transfusions coming out of
Stanford and he thought that was not a good thing. There was no
mention of it in the Bible. As well, he said “I hear that some
people have developed some of these metal things that can fly”.
He said “Ladies and gentlemen of the congregation, I want to
tell you that flying is only reserved for angels”.
1345
The government is here to make legislative changes, but those
changes have to be what is best for Canadians. The country is
large and has a northern climate. There are airports in many
remote areas. Canadians would like to be able to get across this
country as often as they can and as cheaply as they can. Every
once in a while when it gets a little cold they want to go south.
As a member of the transport committee, the question I have is
what is in the best interests of the public and how can we get
there? The minister has outlined five points.
The problem with the debate today is that it is being clouded by
extemporaneous things. We have our own little nuances and little
enclaves because we are a federation. We have to look beyond the
federation to see how the system can be better while being
reminded that this is a Canadian institution. None of us in the
House, including members on this side, will ever give that up.
We want to have full control of the Canadian airline industry.
So far we have done well. We started with Air Canada which had a
lot of help from the government. The government helped Air
Canada get on its feet. As always happens in this place, when
Air Canada started making money the opposition did not like it
and we had to privatize it. We said it was okay, that it could
fly on its own.
Later on we did the same thing for Canadian Airlines in a
balanced approach. We gave it some international routes and
allowed it some slots in British airports. It is working quite
well.
The transport committee heard from the Canadian Transportation
Agency. It heard from the Competition Bureau. They have a lot
of resources, skills and experience. They told us that we have
benefited from deregulation over the last number of years.
I do not think the Minister of Transport got up one morning and
decided that the industry had a problem. We ended up with this
problem because of the changes in the international market, in
international allegiances and alliances and because things do
change in the marketplace.
An hon. member: Too much bureaucracy.
Mr. Ovid L. Jackson: A member of the opposition says
there is too much bureaucracy. We want to get rid of that too
and that is what we will try to do.
There are repair facilities in one part of the country and head
offices in other parts. Pilots on both sides are lobbying.
Members of parliament are getting antsy. They are being pushed
in one direction or the other.
The main point is what is in the best interests of the public.
Can they get access to their communities? Will the fares be as
cheap as possible because there is enough competition in the
marketplace? Can they have better flights and faster routing
using other systems? That is what we are examining. As far as I
know, every time the government has changed regulations it has
been for the better. That is what I hear when I am in the
transport committee.
The Bloc is trying to tell us that we should stick to the 10%
rule. It may be what we end up doing. However, it must not be
in the legislative framework as the Bloc is trying to do here
today, to force us to make a decision based on something that we
do not know anything about.
These two airlines are competing to see who is going to take the
position when the dust has settled and the shareholders have
decided. These are corporate moves. We will be faced with
having to make a decision. The minister has listened to public
forums and gathered all the needed information. He asked the
Competition Bureau to look at it. He asked the regulators to
look at it. When this offer comes before us we want all our
options open. We will make a decision and the decision will be
that Canadians will still effectively have control.
The question is will there be effective control? Will small
communities be serviced? Will the rights of the workers be
respected and looked after? Will their contracts be looked at so
they do not lose benefits they are currently getting? Will that
be handled in a proper fashion?
1350
There are all the other balanced approaches we have to use to
make sure there is competition in the marketplace, to make sure
that Canadians have more options and cheaper fares. These are
the things that need to be looked at and they cannot be looked at
with our hands tied behind our backs by saying it is going to be
1%, 2%, 3% or whatever.
Times do change. I said earlier that Bishop Wright got up in
church and said that people would not fly. People do fly and as
a matter fact, we can now go to the moon.
Ms. Bev Desjarlais (Churchill, NDP): Mr. Speaker, the
hon. member commented on Bishop Wright's analogy that only angels
fly. I am sure all of us recognize that flying goes beyond that.
I am wondering if in any of his comments Bishop Wright talked
about ethics. Did he talk about living by the rules and laws
while they are in place? If that is not going to be the case,
maybe the government side should take a flight to the moon and
let the public interest be handled by Canadians and people who
care about the public interest.
I have to question a government that does not ensure that the
laws are being adhered to. If a government is not doing that,
how is it representing the best interests of Canadians?
Mr. Ovid L. Jackson: Mr. Speaker, I will try to answer
the hon. member's question in this fashion.
The government has not had any offers before it. The government
has not moved beyond the 10% rule. The government cannot be
accused of being unethical because it is all hypothetical.
[Translation]
Mr. Jean-Guy Chrétien (Frontenac—Mégantic, BQ): Mr. Speaker, my
friend and colleague from Bruce—Grey, who is usually very
intelligent and a good mathematician, having taught mathematics
and physical education for many years, says that we must fly
more and more regularly and at the best rate possible. However,
I have difficulty with his reasoning.
I cannot see how this will be possible with only one airline
left after the merger, when we no longer have any choice and
there is no competition for prices. Right now, we can choose
between two or three airlines the one whose schedules and prices
suit us best.
I do not understand how the hon. member for Bruce—Grey can say
that plane tickets will be cheaper and service will be better
when there is only one airline left. That does not make sense. I
cannot understand his reasoning. If there were only one
restaurant in his hometown, it would cost him a mint of money to
eat there, he would not get any service and he would have to
wait for hours before being served.
I am wondering if the sole purpose of his speech is not to
please his minister, who joined in the debate a moment ago, to
get a promotion or to dissociate himself from the dissidents who
expressed dissatisfaction in yesterday's caucus meeting.
[English]
Mr. Ovid L. Jackson: Mr. Speaker, my hon. colleagues and
I have fun and we do work together. We are still in the realm of
the hypothetical.
When we make changes and those changes call for legislative
changes, we have exchanges and debates in the House. It is those
legislative changes and those debates that make our systems
better.
My hon. friend has some concerns that I can understand. However,
I think he has been to some of the transport committee meetings.
He will know we have had some advice that notwithstanding there
will be a dominant carrier, there are ways and means to make sure
we keep that competition, that the small areas are looked after
and that the pilots are looked after.
We are looking into all of that. We cannot reach the
conclusion that the technique we are going to use is good or bad
until such time as we have tabled the legislation.
1355
Mr. Sarkis Assadourian (Brampton Centre, Lib.): Mr.
Speaker, what is the member doing specifically to make sure that
whatever happens to the airline industry it will continue to
provide services to small towns in Ontario and other
provinces?
Mr. Ovid L. Jackson: Mr. Speaker, the system we have now
allows for small operators to start up their businesses.
Obviously the Competition Bureau will look at the operators to
make sure they have enough facilities, that their facilities are
safe and that they have enough resources to operate.
There are many facilities. For instance, my friends from out
west will tell us that CanWest is doing a great job. First Air
owned by our native people is doing a fantastic job up north.
There is room in the marketplace to make sure that smaller
communities are looked after.
Under the legislation and under the legislative framework we
will make sure we have enough slots for aircraft. We will make
sure that travel agents are controlled and are also operating for
our small communities, that they are able to access these flights
and co-ordinate them. We will make sure there will be enough
space at the airports. From time to time there will be
subsidies.
When we make a regulation we have to make sure all of
our communities are serviced. Those small communities will be
looked after under the legislation.
The Speaker: We will pick up on debate at the end of
question period. It is almost two o'clock so we will go to
Statements By Members.
STATEMENTS BY MEMBERS
[English]
LISAARD HOUSE FOUNDATION
Mr. Janko Peric (Cambridge, Lib.): Mr. Speaker, Cambridge
residents Val and Sheila O'Donovan recently donated $1 million to
the Lisaard House Foundation, a new charitable organization
establishing a hospice for terminally ill cancer patients.
Cancer patients who are too ill to be at home and who do not
want to be in hospital will now have the option of staying
at Lisaard House. The 6,000 square foot hospice located on 3.8 acres
will provide large accommodations plus other living and meeting
quarters making it easier for families and friends of cancer
patients to visit and stay over.
The O'Donovans describe the donation as a gift back to the
community. It is the generosity and kindness of people like Val
and Sheila that has made Cambridge the caring community that it
is. I call on all members to join me in thanking the O'Donovans
for their incredible generosity.
* * *
JIMMY “ICEMAN” MACNEIL
Mr. Cliff Breitkreuz (Yellowhead, Ref.): Mr. Speaker,
The outlook isn't bright for Canadians today,
For Yankees are stealing the game that Canuckers love to play.
On every front they rob us, south the talent flows,
Thanks in part to Liberals, who tax us through the nose.
Great multitudes of fans are deep in despair,
Tired of the Yashin types spewing thick pompous air.
Yet on a different front, a battle has started to brew,
Where a true Canadian stands alone to fight for me and you.
There is a man from Brantford, waging an ice age war,
To return what might be lost, and perhaps even more.
It's Jimmy “Iceman” MacNeil, who guides the Brantford Zamboni,
Taking on a Detroit Yank, who couldn't ice bologna.
One Zamboni driver, will triumph from this fight,
The winner will ice the surface, on NHL All-Star night.
Jimmy needs your votes; he needs them now today,
Canadians vote at Zamboni.com where you can have your say.
Choose the brave Canadian, not the American fat cat,
For Canadian pride will swell again if we let Jimmy ice the mat.
* * *
ARMENIAN PARLIAMENT
Mr. Sarkis Assadourian (Brampton Centre, Lib.): Mr.
Speaker, I am terribly saddened by the deaths of Prime Minister
Sarkisian, the Speaker of the Armenian parliament, Speaker
Demirchian, and other members of the Armenian government at the
hands of terrorist gunmen on October 27, 1999. We must all
condemn this cowardly attack on fellow parliamentarians who were
gunned down while they conducted their nation's democratic
business in the Armenian parliament.
1400
I invite all members of parliament and the public to join me and
the former Canadian Ambassador to Armenia, Anne Leahy, when we
meet with the Armenian community tomorrow night, October 29, at
7.30 p.m. at the AGBU Centre, 930 Progress Avenue, Scarborough,
Ontario, at the corner of Markham Road and the 401.
I urge all Canadians to support Armenia during this time of
crisis. A friend in need is a friend indeed.
* * *
CANADA HEALTH ACT
Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Mr.
Speaker, since when did access to universal health care in the
country depend on where we live and how much we make?
A Canadian study in today's New England Journal of
Medicine shows that our chances of living through a heart
attack depends on how rich we are. If we are wealthy we are 20%
more likely to get high quality treatment.
Another study leaked two weeks ago shows that Windsor residents
have higher death rates and suffer more from 22 serious
illnesses, including birth defects and heart disease, than other
Canadians.
Where are the Liberals? The silence is deafening. Even worse,
the government is contributing to two-tier health care through
wilful neglect and a refusal to enforce the Canada Health Act.
Today, let us make a real commitment to end this agenda of
silence and complicity and to ensure that every Canadian has
equal access to a healthy life no matter where they live and how
much is in their pocketbook.
* * *
AGRICULTURE
Mr. Rey D. Pagtakhan (Winnipeg North—St. Paul, Lib.): Mr.
Speaker, “Farming is the single most important factor in
Canadian experience,” wrote author Allan Anderson in
Remembering the Farm.
It is, therefore, welcome when the Prime Minister and the
premiers of Manitoba and Saskatchewan come together and when
delegations of farmers, ministers and officials meet with key
federal ministers and government caucuses to find urgent
solutions to the farm income crisis and to address the root
causes on a long term basis.
Dialogues like these, not sheer political partisanship, are more
effective in further advancing the interests of farmers to the
well-being of all Canadians. Thus, we can be confident that the
Government of Canada, working together with all stakeholders,
will find the solution and soon.
Farming is vital to Canada's food production system, is vital to
the Canadian economy and will continue to be vital to Canadian
life.
* * *
[Translation]
ROYAL CANADIAN MOUNTED POLICE
Mr. Jacques Saada (Brossard—La Prairie, Lib.): Mr. Speaker, this
year we are celebrating an important stage in the life of the
Royal Canadian Mounted Police, namely 25 years of women in the
force.
On September 16, 1974, at exactly the same moment across the
country, 32 women aged between 19 and 29, from all provinces
except Prince Edward Island, were hired as regular members of
the RCMP. Today, some 14% of the force are women. That amounts
to some 2,000 women.
The appointment of women police officers not only radically
changed the RCMP and other police forces, it also helped
radically change the role of women in the workplace and to
change public perception of this role and of the police.
Many activities have been organized in celebration of this
event, but much remains to be done. The change is essential if
we want Canada to continue to set an example with community
police and police close—
The Speaker: The member for Edmonton East.
* * *
[English]
MERCHANT NAVY VETERANS
Mr. Peter Goldring (Edmonton East, Ref.): Mr. Speaker, 50
years of stonewalling, 50 years of neglect, 50 years of denial of
equality for Canada's merchant navy veterans. This is our
governments' performance for 50 years and more.
The issue is very clear. The bitterness is so very high. The
veterans are not seeking great wealth, simply the respect and
benefits given to their armed forces brethren with fair and just
recompense.
The minister must agree that this issue cries out for resolve.
It would be unconscionable for their concerns to continue to the
next millennium, for the bitterness to be carried to their
graves. The minister must end this injustice, end this sordid
tale now. Lest we all forget.
* * *
[Translation]
FUTURALLIA 2000
Mr. Serge Cardin (Sherbrooke, BQ): Mr. Speaker, next June,
Sherbrooke will be hosting a major event. Futurallia 2000, the
international forum on business alliances, will meet for the
sixth time and, for the first time in its history, outside
France.
1405
For three days, nearly 500 business people from some 30
countries will meet in the capital of the eastern townships to
discuss strategic alliances, subcontracting bids and
distribution network development.
Permit me to congratulate the organizers of Futurallia 2000 on
their initiative. Réal Patry and his team have been working
hard for months to make this event a success. They are working
to ensure that each of the business meetings may be as
successful as possible for the businesses involved. In
addition, the success of this event will boost our region's
economy.
I invite my colleagues to tell businesses in their riding about
this forum so they too may reap the benefits of Futurallia 2000.
* * *
[English]
KIMMIRUT STUDENTS
Mrs. Nancy Karetak-Lindell (Nunavut, Lib.): Mr. Speaker,
I would like to welcome to Ottawa a group of dedicated students
from Kimmirut, a small community on Baffin Island in Nunavut.
After extensive fundraising and a sponsorship by Heritage
Canada, these students spent last week in Montreal. Next April
their hosts, grade 9 and 10 students from St. George's High
School in Montreal, will travel to Kimmirut to experience Nunavut
hospitality.
Exchange trips are one of the positive ways for Canadians to
learn more about our great country and we welcome those who chose
to come to the north.
Kimmirutmiut, welcome to the nation's capital and enjoy the rest
of your exchange.
* * *
GRAIN FARMERS
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, Doug
Steinwand farms in my constituency. This fall he took a load of
grain to the elevator. His gross income for that load of grain
was just under $5,000. His take home pay was just under $3,000.
Over $2,000 was deducted for transportation, handling and the
GST. Those deductions amount to 42% of the gross value of the
grain marketed by this hardworking husband and father who is
trying to make a living for his family.
How can farmers survive under these conditions? Their input
costs are enormous. The price they get for their grain is
depressed because of international subsidies. They battle the
weather to plant and harvest their crops and when they get their
grain to market, 42% of its depressed value is ripped off the top
for handling and transportation.
If something is not done about these conditions, Canada is going
to lose its farmers and our food producing capacity.
I say to Mr. Steinwand, to his family and thousands of farmers
like him, the government has failed you, it has failed your
families and it has failed the country.
* * *
GENEVIÈVE JEANSON
Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine,
Lib.): Mr. Speaker, I rise today to recognize one of my
constituents, a young lady who has brought honour, fame and pride
to her home town of Lachine and in doing so has become an
instant role model for all young Canadians.
[Translation]
I am, of course, referring to Geneviève Jeanson. She is quite a
champion in the cycling world, in fact a two-time champion.
Geneviève's exploit is a Canadian first in the history of road
cycling: two junior cycling championships within the same week.
Without a doubt, this is the sporting event of the year.
Geneviève's excellence, maturity, tenacity and great
self-discipline are clear proof that one can go far without
having lived long. We thank Geneviève for her presence in the
gallery today to share her great success with us.
I invite all of my colleagues to give her a very warm welcome.
Some hon. members: Hear, hear.
* * *
FRENCH LANGUAGE TELEVISION IN ONTARIO
Mr. Eugène Bellemare (Carleton—Gloucester, Lib.): Mr. Speaker, I
would like to read an excerpt from a telegram sent to TV Ontario
in 1994.
It reads “Thank you so much for the essential role you play in
the preservation and promotion of the French language. My
sincere congratulations to you, on behalf of the Government of
Quebec”. The telegram is signed Jacques Parizeau.
Today, the Bloc Quebecois is opposed to Ontario French language
programming being broadcast in Quebec. What a contradiction.
* * *
1410
[English]
JON SIM
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, I rise today in the House with extreme pride to
congratulate Jon Sim, of New Glasgow, Nova Scotia.
As a rookie member of the Dallas Stars of the National Hockey
League, Jon accomplished something only few Canadians could dream
of: He played for a Stanley Cup winning team.
The people of Pictou—Antigonish—Guysborough were honoured by
his presence this summer, along with the Stanley Cup. It was an
extremely exciting and extraordinary day of celebration that
brought the entire community together. The citizens of New
Glasgow lined the streets in his honour for his homecoming
parade.
His family, friends and all Nova Scotians are proud of Jon and
his historic feat.
In a fitting tribute, the Glasgow Stadium raised Jon's jersey in
recognition of his great accomplishment.
A product of the Pictou county minor hockey system, Jon has gone
on to make a name for himself as a tenacious and talented
athlete.
On behalf of the Progressive Conservative Party of Canada and
the people of Pictou—Antigonish—Guysborough, I wish to extend
best wises and congratulations to Jon Sim, a Stanley Cup
champion.
* * *
[Translation]
POVERTY
Mr. René Canuel (Matapédia—Matane, BQ): Mr. Speaker, it is a
source of dishonour for our society that, while our economy is
in an excellent condition, poverty is increasing.
This contrast has a direct impact not only on people's physical
and psychological health, but also on the chances for success in
adult life of the child victims of this poverty.
Instead of putting an end to the considerable waste engendered
by duplicating provincial programs, this government has taken
advantage of the opportunity of the throne speech to infantilize
the provinces and to make children the first victims of the
increased federal visibility thus achieved.
Visibility is this government's middle name; it would rather
make use of its spending power to gain visibility than to
address the problems relating to poverty.
I beg this government to repair the damage it has done to social
programs by giving funding back to the provinces and respecting
their areas of jurisdiction.
* * *
[English]
WEEK WITHOUT VIOLENCE
Mrs. Karen Redman (Kitchener Centre, Lib.): Mr. Speaker,
this past week was the YWCA's fourth annual week without
violence.
In Canada this international event is exclusively sponsored by
Clarica. In my riding of Kitchener Centre, the Community Safety
and Crime Prevention Council joined with the YWCA of
Kitchener—Waterloo to host a community leaders breakfast.
I commend these groups for their commitment to raising awareness
about this important issue. Under the banner of “Share the
Image of a Violence Free Society”, they have released a series
of postcards in the Waterloo region with thought-provoking
quotations and pictures.
Violent acts take place against all members of our society, in
our homes, on our streets, in our schoolyards and even in the
workplace.
Organizations such as the YWCA provide programs teaching men and
women to express their feelings in a productive manner.
I encourage all members of the House to work with their
communities to find local solutions to addressing violence, for,
to quote Carl Bruehner, children “...may forget what you have
said but they will never forget how you made them feel”.
* * *
AGRICULTURE
Mr. David Iftody (Provencher, Lib.): Mr. Speaker,
Canadian farmers are not being left alone to face the current
income crisis.
The government has moved to the aid of Canadian farmers by
providing $1.5 billion over two years through the agricultural
income disaster assistance program, or AIDA.
So far 16,000 farmers across the country have received over $200
million in aid. This amounts to an average of $15,000 per
farmer. However, we need to do a lot more.
Today Liberal MPs from Manitoba met an all-party delegation
where we discussed changes to the AIDA program with the intention
of getting urgently needed resources to the family farms. Over
the next few weeks, we will be working closely with that same
delegation to ensure that urgent resources move quickly to those
farms in Manitoba and Saskatchewan.
* * *
CANADIAN COAST GUARD
Mr. Mark Muise (West Nova, PC): Mr. Speaker, while the
Canadian Coast Guard continues to review its program for the
purpose of reducing its budget deficit, West Nova fishers are
left pondering whether Yarmouth's emergency helicopter service
will still be operational in the future.
With the fishery being the cornerstone of West Nova's economy,
it is imperative that the emergency service be available in a
time of crisis.
A defence department review concluded that Canada's search and
rescue operations were seriously impacted by the government's
cutbacks. In particular, the report made reference to the
erosion of support services provided by other departments,
including Fisheries and Oceans.
Further exasperating this situation is the government's
cancellation of the EH-101 which forced Canadians to absorb $500
million in penalties, a huge sum of money that could better have
been spent on search and rescue programs.
It is time that the Minister of Fisheries and Oceans immediately
commit to maintaining this essential service.
* * *
1415
[Translation]
TUITION FEES
Hon. Charles Caccia (Davenport, Lib.): Mr. Speaker, in the
recent throne speech, the Canadian government committed itself
to working together with its partners to remove all
unjustifiable barriers to mobility within Canada.
However, the Quebec government is discriminating against
university students from outside the province who want to pursue
their education in Quebec by imposing higher tuition fees on
them. That barrier must absolutely be eliminated in order to
promote Canadian unity through exchanges involving young
Canadians.
I therefore urge the Government of Canada to begin a dialogue
with the provinces, and particularly Quebec, to remove this
barrier that impedes young Canadians' mobility from coast to
coast.
* * *
[English]
HOMELESSNESS
Ms. Libby Davies (Vancouver East, NDP): Mr. Speaker, the
homelessness minister's claim in question period yesterday that
everything was fine with emergency shelters is dead wrong.
Advocates across the country have confirmed to me that we face a
desperate shortage of emergency shelters and another winter of
death on the streets. I cannot believe that after spending this
summer on a cross-country tour the minister is in denial about
the extent of Canada's homelessness emergency.
The minister says her staff has been in touch with every
community she visited, but the fact is shelters in Toronto and
elsewhere in the country are already turning people away, even
before winter moves in.
The Liberals have to face reality and take decisive action
immediately. We need both a short term emergency solution to
prevent death in the streets, and a national housing strategy for
long term solutions.
It is a disgrace that despite having more than 100,000 homeless
people Canada remains the only industrialized country without a
national housing strategy.
ORAL QUESTION PERIOD
[English]
AGRICULTURE
Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr.
Speaker, the government is in denial about the severity of the
farm crisis. As usual, the Prime Minister's response is don't
worry, be happy. Imagine, Mr. Speaker, if all your expenses went
up but your income went down 107%. That is what happened to
Saskatchewan farmers and it is happening to Manitoba farmers.
We are not just talking about the average business that is in
trouble. We are talking about Canada's national food supply. Why
will the Prime Minister not help our farmers through this winter?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the federal government, along with the provincial
government, put $900 million on top of the program we had this
year.
I met with the Premier of Saskatchewan and the Premier of
Manitoba this morning. We looked at all elements of it and we
looked at if we could adjust some of the programs, but it is a
complex program and difficult to manage.
At least we are not like the Reform Party. We do not have in
our program that there will be absolutely no subsidy for the
farmer. At least we really care about the farmer.
Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr.
Speaker, if the government would listen to Reform today, farmers
would have the support they need.
Thousands of farmers have lost their farms and thousands more
are hanging by a thread. These farmers are suffering through no
fault of their own, but the Prime Minister still does not care or
help would be there today.
If floods wiped out half the businesses in Shawinigan and if
foreign subsidies were killing the other half, would there be
help for Shawinigan today?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, I am saying that $900 million on top of what we are
spending is quite a lot of money for us, especially as we have
some programs that are still there, and the Reform Party wants to
cut them.
The difference between our position and their position is
billions of dollars of help for farmers. They have the nerve to
get up and tell us that we are doing nothing when they would do
nothing at all for them.
Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr.
Speaker, feeble attempts are not enough. Farmers are judging the
government by its actions. They are judging by results. AIDA
has been a complete waste of time.
Farmers want to see the Prime Minister fighting American and
European subsidies. They want to see input taxes slashed. They
want to see emergency compensation coming to help. Farmers need
help now.
If the government does not step in, thousands of more farmers
will be made homeless just before Christmas. Why is the Prime
Minister refusing to help these farmers make it through the
winter?
1420
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, I have already said, and I repeat it today, that each
time I had occasion to talk with the Americans I told them they
were wrong to have this policy of subsidy.
Not only that. We are pushing to have it on the WTO agenda in
Seattle next month. So we have been there all along, but the
problem at this moment is that we have a very serious program
with new money. I have Reformers in front of me who said to the
people who voted for them in the last election that there would
not be any subsidy for them if they formed the government.
Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): Mr.
Speaker, western farm families have their backs against the wall
this fall because of weather and foreign subsidies. These are
hardly programs or conditions which they have any control over.
The government is in a position to help. The Prime Minister
could put his foot down for once and fight those foreign
subsidies. The finance minister could announce some tax cuts on
inputs. The agriculture minister could start by announcing
assistance for farmers that actually gets to them.
Why will the Prime Minister not take any concrete action to
assist farmers?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, I guess the hon. member must have been
away for a while.
We announced $900 million of new money last spring. That is on
top of the $600 million that we have there each year. That is on
top of the contributions of the provincial governments as well,
for a total in the years 1998 and 1999 of $3.5 billion.
Mr. Gerry Ritz (Battlefords—Lloydminster, Ref.): Mr.
Speaker, just a few minutes ago the Prime Minister categorized
the AIDA program as complex and difficult to manage. That is
their best shot at this program.
The agriculture minister used to be a farmer, yet he shows very
little compassion for farmers. His best advice is for them to
quit and retrain, a TAGS program for farmers. We know how well
that worked.
Only 15% of the money is getting out there to farmers. If AIDA
had worked, the premiers of Manitoba and Saskatchewan would not
need to be here today. Why is the AIDA money sitting on the
cabinet table instead of on the farmer's kitchen table?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, I might remind the hon. member that the
money would have been out there sooner, but over 50% of the
applications did not come in until after August 1.
If the applications do not come in they cannot be dealt with. We
are dealing with them at the rate of 1,500 applications a week.
Over $220 million has been put out to farmers already.
I assure the hon. member and the House that the $900 million in
the AIDA fund will go to farmers. The applications are
indicating that it will. They say $900 million is not
meaningful. I think $900 million is meaningful. It is even more
meaningful when the $600 million of provincial money goes with
it, to make $1.5 billion.
* * *
[Translation]
AIR TRANSPORTATION
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, since
the Air Canada affair first came up, the Minister of Transport
has described himself as a neutral observer. He has stated that
there was never any meeting between himself and Onex officials.
But we now know that, on the eve of Onex's bid, one of his
deputy ministers, Louis Ranger, met with Onex officials.
Did this deputy minister not act as an emissary for the
minister, and deliver the following message “Make your offer
and, if the regulatory framework is not suitable, we will see
that it is changed”?
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, on June 23, the president of Air Canada informed me of
the bid to acquire Canadian International Airlines' foreign
routes. He did so out of courtesy.
The same thing happened the day before Onex officially announced
its bid. Mr. Milton observed the same courtesy two weeks ago,
when Air Canada made its offer. There is nothing unusual in
that.
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, the
minister is a very courteous man, who also has some good
friends.
Speaking of good friends, we know that one of his friends, Mr.
Schwartz, is no amateur when it comes to finance. There is no
way he would have spent all that money, time and energy
promoting his offer over a two month period if he had not had
the promise, or guarantees, which boils down to the same thing,
that the legislation would be amended in his favour.
Will the minister finally admit that he and his officials opened
the door to Onex, failing which Mr. Schwartz would never have
gone ahead with his offer?
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, there was no promise from the Canadian government. I
said the same thing yesterday.
With all due respect, I suggest that the hon. member put his
questions to Mr. Schwartz at the committee meeting next week.
1425
Mr. Michel Guimond
(Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Speaker,
the Minister of Transport keeps telling us that he did not have
talks with Onex regarding the Air Canada/Canadian Airlines
issue.
How can he explain that Air Canada's chief executive officer,
Mr. Milton, told the transport committee yesterday that, in
June, the Minister of Transport alluded a couple of times to a
takeover of Air Canada and Canadian Airlines by an independent
investor?
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, there were meetings with Air Canada and Canadian
International Airlines. It was public knowledge that Mr. Benson,
Canadian International Airlines' CEO, had begun looking for
investors. That was common knowledge. I imagine that, during the
discussions, I alluded to something which was in the public
domain.
Mr. Michel Guimond
(Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, BQ): Mr. Speaker,
could the minister tell us where he got the idea, back in June,
of a takeover and a merger of the two carriers by an independent
investor, if not through his discussions with Onex chairman
Gerry Schwartz?
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, I already told the House that Mr. Benson himself
informed me on June 25 that he had found an investor who
intended to merge the two air carriers, and that this investor
was Onex.
* * *
[English]
AGRICULTURE
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, my
question is for the Prime Minister.
Prairie farmers have pleaded with the Prime Minister to go west,
to go to Saskatchewan and Manitoba, and to meet with farm
families to see for himself the depth of the crisis. However the
Prime Minister refused. He would not go to them and so they have
come to him.
What does the Prime Minister do? Instead of listening, instead
of acting, he sandbags them with numbers. My question is to the
Prime Minister. Will there be new money for desperate prairie
farmers? Yes or no.
The Speaker: Hon. members will address all their
questions to the Speaker.
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, this year it was $900 million of new money which was put
on the table by the federal government on top of the programs
that existed before.
For me, $900 million is a lot of money. It is not my money. It
is taxpayers' money. We are working with the provincial
governments to see how we can make sure that the money is
distributed as equitably as possible and as quickly as possible.
We are working with the provincial governments to see what can
be improved in the proposition. The future of farming in the
west has been discussed over a long period of time between the
provincial and federal governments.
Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, the
Prime Minister refuses to understand the gravity of the farm
crisis. Thousands of family farms are going under. So are farm
dependent businesses. Farm communities are suffering their worst
farm crisis since the Great Depression. The whole prairie
economy is deeply affected.
The only thing that the Prime Minister is willing to do is
launch a numbers war. When will the Prime Minister stop acting
like a bean counter without a heart?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, there are a lot of beans for $900 million, I guess, and
it would take a long time to count them one by one.
I just say that we are taking the problem very seriously. We
are talking very seriously with serious people, as I have done
this morning with the Premier of Saskatchewan and the Premier of
Manitoba, but we can see that the kid daughter in Ottawa is just
playing politics.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, the
agriculture minister just said that there was $3.9 billion in
agriculture support from the provinces and the federal
government.
In 1993, in the last budget of the Progressive Conservative
Party, between provincial and federal contributions there was
$7.1 billion in farm support.
Will the minister please stand and say when he will put the rest
of the money back into farmers' pockets.
1430
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, I am surprised the hon. member brought
that up. In 1993 this country had a $42 billion deficit. If the
hon. member's party had not built up the deficit we would not
have had to make the changes. All Canadians contributed so that
we could once again have sustainability in the industry and be
able to help with $900 million, as we have.
The hon. member should listen a little closer. I will give him
the benefit of the doubt, but I said $3.5 billion, not $3.9
billion. He should not give out the wrong numbers.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, it
is $3.9 billion if the minister would look at his numbers.
The $42 billion debt comes up constantly. That was done on the
backs of agriculture. That was done on the backs of farmers.
Farmers do not want to hear about that. What they want to hear
about are solutions.
When will the minister put back the $3 billion that he took out
of agriculture and help save Canadian farmers?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, this government has helped farmers in a
lot of ways, with the safety net as well as in many other ways,
including the fact that interest rates are considerably lower.
That means millions of dollars for farmers every year. Thank
goodness interest rates are not where they were when the hon.
member's party was in power. Our farmers would be in even worse
shape than they are at the present time and we would not be able
to help them as a government.
What we have done as a government has allowed us to be as
helpful as we are being. We wish we had more resources. We
would like to have more resources. But unlike that party when it
was in power, we know there is a limit.
* * *
EMPLOYMENT INSURANCE
Mr. Richard M. Harris (Prince George—Bulkley Valley,
Ref.): Mr. Speaker, the chief actuary said that EI premiums
could be cut to $2.05 and still provide for a rainy day fund.
But, no, the Minister of Finance will stop at $2.40. He is still
determined to rip off Canadian workers and businesses by about $6
billion a year.
Why will the finance minister not listen to the government's
chief actuary, reduce EI premiums to $2.05 and give every
Canadian family about an $800 a year tax break to put back into
the economy?
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, first of all, to put the record straight, we have cut EI
premiums by over $4 billion in the last four years and the vast
majority of that went to Canadians.
Let us take a look at what the hon. member's party has actually
said. In “Fresh Start” the Reform Party recommended decreases
in EI or UI premiums, but only for corporations. Its
recommendation meant not one cent for Canadians. Families would
not have received a penny from the Reform Party.
Mr. Richard M. Harris (Prince George—Bulkley Valley,
Ref.): Mr. Speaker, if the finance minister would take off
his blinders when he reads Reform material he would get it right.
He did not get it right there.
The EI surplus is not his, but he just does not get that. What
he wants to do is give Canadians a drop of blood in one arm and
still rip off a pint of blood from the other arm.
Why will the finance minister not listen to his chief actuary?
He will not listen to us, why does he not listen to the chief
actuary, drop EI premiums to $2.05 and give every Canadian worker
a $350 a year tax break? Why will he not do that? What is the
problem?
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, it is very clear why we will not listen to the Reform
Party. The fact is that while the hon. member talks about blood,
the Reform Party would bleed Canadian families dry; not one penny
of EI cuts for Canadian families. The only people who would
benefit from the Reform Party tax plan would be corporations and
rich Canadians. We will simply not adopt that agenda.
* * *
[Translation]
AIR TRANSPORTATION
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, my question is
for the Minister of Transport.
Yesterday, in the Air Canada-Canadian matter, former Liberal
minister Marc Lalonde said that the government was mocking the
House with its attitude and behaving as if everything were in
the bag. The Minister of Transport defended himself saying that
Marc Lalonde and his firm of lawyers were working for Air
Canada.
If Marc Lalonde is considered to be working for Air Canada, is
it not a far more serious matter that the person in a position
to make the decisions is considered to be working for Onex? How
can he, who is up to his neck already, point his finger at Marc
Lalonde?
1435
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, the implication in the question by the hon. member is
an insult.
Some hon. members: Oh, oh.
The Speaker: Order, please. I ask each and every member to be
very careful in their choice of words—on both sides of the
House.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, the terms were
particularly well chosen.
In June, the minister tried to run the Onex proposal past the
president of Air Canada. He said so himself in committee. On
the eve of the presentation of the Onex project, the deputy
minister met with this firm, and on Tuesday, the minister
announced, by chance, that he would probably be changing the 10%
rule to make Onex's proposal acceptable.
Is he not the one who, since June, has been pushing us
inexorably in one direction—acceptance of the Onex project?
Hon. David M. Collenette (Minister of Transport, Lib.): Mr.
Speaker, I repeat, I was informed on June 26 by the president of
Canadian International Airlines that he had found an investor
for the company and that it was the intention of this investor
to merge the two airlines. He identified the investor as Onex.
I said a few minutes ago that, on the day before the Onex
proposals were presented, my officials were informed, out of
courtesy. This is common practice.
* * *
[English]
FISHERIES
Mr. Mike Scott (Skeena, Ref.): Mr. Speaker, some Mi'kmaq
leaders insist that the supreme court's Marshall decision applies
to Newfoundland. A small group of Mi'kmaq have already gone to
Newfoundland to fish crab and that has sparked confrontation and
violence.
Yesterday, Premier Tobin said that unequivocally the Marshall
decision does not apply to Newfoundland. Could the Minister of
Fisheries and Oceans tell us if he agrees with Premier Tobin, or
does he agree with the Mi'kmaq leaders?
Mr. Lawrence D. O'Brien (Parliamentary Secretary to Minister
of Fisheries and Oceans, Lib.): Mr. Speaker, we support the
Marshall decision.
Yesterday the chief of the band in Conne River, Chief Misel Joe,
pointed out that he was very concerned about what happened in
Newfoundland and that he supported the position which we took and
the position taken by the province.
I want to say to the member that this issue will unfold. The
chief federal representative, Mr. Mackenzie, will deal with all
issues. In the course of time members will see the resolution.
In the meantime, we will enforce the law.
Mr. Mike Scott (Skeena, Ref.): Mr. Speaker,
Newfoundlanders deserve clarity on this issue. They need to know
where the government stands on the issue of the Marshall decision
as it applies to Newfoundland.
I will ask the minister again, on behalf of the people in
Newfoundland who depend on the fishery for their living, does he
agree that the Marshall decision applies to Newfoundland, or does
he agree with Premier Tobin that it does not apply? Which is it?
Could he please give us that clarity?
Mr. Lawrence D. O'Brien (Parliamentary Secretary to Minister
of Fisheries and Oceans, Lib.): Mr. Speaker, as I pointed out
to the hon. member, the law will be respected.
The treaty rights as they relate to the Marshall decision—
Some hon. members: Oh, oh.
The Speaker: Excuse me. The hon. member has the floor.
Mr. Lawrence D. O'Brien: Mr. Speaker, the rights of
Canadians will be respected. Treaty rights will be respected.
Conservation is the first order of business. We have a regulated
fishery and we will enforce the law.
* * *
[Translation]
POVERTY
Mrs. Christiane Gagnon (Québec, BQ): Mr. Speaker, yesterday the
Minister of Labour made some troubling statements directly
linking the reality of former psychiatric patients and of the
homeless. Her statement is unfounded and smacks of prejudice.
1440
Does the minister dare deny that the cuts to the Canada social
transfer, the mess in the employment insurance program, and the
Liberal government's withdrawal from social housing are what has
increased poverty?
Hon. Claudette Bradshaw (Minister of Labour, Lib.): Mr. Speaker,
during my travels across Canada, I met people in every community
who had been in psychiatric hospitals.
More important still, the representatives of municipalities and
communities told me how they had suffered these past 15 years
from budget cuts. They asked us to get involved. What did we
do? In the last two budgets we made transfer payments to the
provinces. We added $11.5 billion more for health, $2 billion
for child benefits, $1.9 billion for social housing. As
Liberals, we shall continue along these same lines.
Mrs. Christiane Gagnon (Québec, BQ): Mr. Speaker, the cuts to
the social transfer will, nevertheless, continue until 2003,
reaching $33 billion.
When the minister toured the food banks and self-help groups, did
she not find that the problems of the great majority of people
using them were not necessarily related to psychiatric illness
but to poverty?
Hon. Claudette Bradshaw (Minister of Labour, Lib.): Mr.
Speaker, I saw people with psychiatric illness, I saw poor
people, I saw young people who had been in numerous foster
homes.
What was I told by all the community agencies? That they want
to work along with the Government of Canada, with the provinces
and municipalities. That is what we are going to do.
* * *
[English]
FISHERIES
Mr. John Duncan (Vancouver Island North, Ref.): Mr.
Speaker, last February DFO rejected a request from the Mi'kmaq to
develop a contingency plan prior to the Marshall decision. That
was over eight months ago. Last month in another meeting, one
day before the Marshall decision, DFO again rejected a request to
develop a plan. Now we see the results of this inaction: chaos,
violence, confrontation, uncertainty. The minister is simply not
getting the job done.
I ask the Prime Minister, where is his plan to resolve this
growing crisis?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the minister of fisheries and the minister of Indian
affairs have been working very hard. At this moment they have an
open dialogue with all of the parties and they have managed the
situation very well.
It is difficult because this judgment came down and has given
these people their treaty rights. These rights were given to
them a long time ago, before Canada existed, and we have to
respect the commitment that was made by the King of England at
the time, that those who came to Canada had to sign treaties with
those who were here first. We are respecting that commitment.
Mr. John Duncan (Vancouver Island North, Ref.): Mr.
Speaker, as a result of the Marshall decision the Mi'kmaq have
announced that they are preparing to fish offshore within the 200
mile limit, and bands on both coasts are claiming they can fish
where they want and when they want.
On every fishing front the government is being asked more and
more questions and it has no answers.
Livelihoods are at stake. This is serious business. Where is
the Prime Minister's plan to address this growing crisis?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the hon. member makes an affirmation that the Mi'kmaq
want to do this and that. In fact, 33 of 35 chiefs have made a
commitment to a moratorium and a commitment to respect the
situation. They do not want to abuse this situation, which is
new for them, and they have collaborated very well with the
government so far.
Of course there are some people who do not follow the advice of
the Mi'kmaq leadership, but the great majority is following it.
We are thankful to the natives for their leadership and those
who want to work with the government to find an adequate
solution.
* * *
1445
[Translation]
EMPLOYMENT INSURANCE
Mr. René Laurin (Joliette, BQ): Mr. Speaker, obviously unaware
of the inhumane consequences of the Employment Insurance Act,
which denies benefits to honest citizens without resources, the
minister responded to my question yesterday by saying “the
accusations made by the hon. member are false”.
Now that this issue has been put to rest this morning, will the
minister first admit her mistake, and then admit that the quotas
imposed on her officials cause them to behave in an inhumane
manner and continually harass honest citizens without resources?
[English]
Hon. Jane Stewart (Minister of Human Resources Development,
Lib.): Mr. Speaker, my point yesterday and my point today is
that there is no issue of quotas here. The issue may be one of
the integrity of government programs, in this case the Employment
Insurance Act.
If the hon. member has a particular case that he feels has been
adjudicated outside the act, I would be glad to look at it.
* * *
IMMIGRATION
Mr. John McKay (Scarborough East, Lib.): Mr. Speaker, the
Mike Harris government claims that the majority of immigration
sponsors, and I emphasize the majority of immigration sponsors,
default on their sponsorship applications.
Could the minister of immigration tell this House whether this
allegation on the part of the Harris government is true?
Ms. Elinor Caplan (Minister of Citizenship and Immigration,
Lib.): Mr. Speaker, the government takes very seriously the
obligations of those who sponsor immigrants.
The Harris government and others would prefer to look at failure
rates and default rates. The government prefers to look at
success rates. The facts are that in Toronto, 86% of sponsorship
applications are met. Across this country the rate of successful
sponsorship is 90%. When I was in school if we got a mark of 86%
or 90% we got an A and that was pretty good.
* * *
ABORIGINAL AFFAIRS
Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Mr.
Speaker, in the public accounts of Canada tabled here, we find
the total monetary value of specific aboriginal claims. That
amount is $200 billion. That amount of money would make 200,000
millionaires. There is not enough money in all of Canada to pay
out these claims. This amount is in excess of the entire annual
income of the federal government.
When was the Minister of Finance going to tell Canadians that
they owed this $200 billion?
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, the hon. member ought to know that is not an amount that
is owed. It is simply an amalgam of all of the claims that have
been made. It is not a liability owed. It is simply an estimate
of all of the claims that have been submitted.
Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Mr.
Speaker, the Minister of Finance cannot diminish this liability
in such a casual way. This $200 billion in specific aboriginal
claims is only the beginning. The public accounts of Canada
reveal that there are 2,000 additional claims still being
researched by aboriginal groups and the number is growing.
Does the finance minister plan to establish any limits, or does
he intend to sign a blank cheque on behalf of Canadian taxpayers?
Hon. Paul Martin (Minister of Finance, Lib.): Mr.
Speaker, the member's question is nonsensical. As he ought to
know, that is simply a listing of all of the claims that have
been made. If one is going to be open and transparent, one owes
it to the Canadian people to let them know what other claims have
been made. No liability has been established.
* * *
AGRICULTURE
Mr. Dick Proctor (Palliser, NDP): Mr. Speaker, the
prairie farm lobby has been telling any MPs who would listen
today what we have been telling the government for months.
Namely, net farm income for both Manitoba and Saskatchewan is in
a deficit position and AIDA and other safety net programs simply
are not working because they were never designed to deal with a
crisis of this magnitude.
Everyone agrees that the long term solution is for Americans and
Europeans to reduce subsidies. We know that. What is the
government's short term solution that will allow 16,000 prairie
farm families to stay on the land this year?
1450
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, this government understands very well the
unfortunate situation of too many farmers in Canada today. That
is why we put $900 million in place and it is going to assist as
many as much as we possibly can.
We continue to look for more resources. We continue to have
very good dialogue with the provinces, the farm organizations and
the national safety nets advisory committee that is meeting in
Ottawa again this week to assist us in this challenge and this
opportunity. We will continue to do so.
Mr. Dick Proctor (Palliser, NDP): Mr. Speaker, even the
Liberal member for Provencher in statements before question
period today agreed that Liberal MPs from Manitoba said that they
recognized that farmers need resources urgently and that they
need them now.
The numbers coming out today show that a specific bridging
arrangement or transitional payment is required. Will the
minister of agriculture inform the House whether or not he is
prepared to level that playing field now by providing some help,
or will he just stand idly by as prairie farm families are forced
off the land? Which will it be?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, unfortunately our pockets are not as deep
as those of the United States. We will probably not be able to
level the playing field to the extent that the hon. member would
like us to. However we will do as much as we possibly can and
find as many resources as we possibly can to assist.
Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, it
is obvious and very depressing that there is no leadership and
there is certainly no long term vision when it comes to Canadian
agriculture.
Last Friday the Americans announced another farm aid plan. We in
Saskatchewan and Manitoba cannot compete with that. Is the
minister of agriculture prepared to buy American wheat when
Canadian farmers no longer exist?
Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food,
Lib.): Mr. Speaker, it is just the opposite. The Americans
are buying Canadian wheat and the hon. member knows that very
well. They are buying it in very large quantities because of the
quality of the wheat. They are saying that they are prepared to
pay more for Canadian wheat than they are for American wheat.
I remind the hon. member again that this government put $900
million on the table when a year ago his party said only $276
million was needed. That is over three times what he and his
party said they would do.
* * *
HOMELESSNESS
Mr. Gilles Bernier (Tobique—Mactaquac, PC): Mr. Speaker,
the Liberal government sent the city of Toronto a bill for
$250,000 to supply emergency shelter for Toronto's homeless.
The minister responsible for homelessness says that she is in
charge of co-ordinating the efforts of her government with the
municipalities and the provinces. Is it the minister's policy
for the Liberal government to make money off the backs of
homeless people?
Hon. Arthur C. Eggleton (Minister of National Defence,
Lib.): Mr. Speaker, absolutely not. We make our armouries
available, as in the case the hon. member refers to, in emergency
cases.
What the city of Toronto asked for was something over and above
the normal policy that we provide across the country. There has
been an agreement reached with the city of Toronto which it is
quite happy with and we are quite happy with. We have provided
for extra use of our armoury to help the homeless in Toronto
which is what we want to do.
* * *
YEAR 2000 CHALLENGE
Ms. Susan Whelan (Essex, Lib.): Mr. Speaker, small
business is one of Canada's most important areas of economic
activity consisting of more than 2.5 million businesses and
accounting for more than 80% of all new jobs created in the past
10 years.
With only 64 days until December 31, can the Minister of
Industry inform the House what plans have been made to ensure
that small business has the tools required to meet the year 2000
challenge?
Hon. John Manley (Minister of Industry, Lib.): Mr.
Speaker, I am pleased to report to the House that Canada is among
the world leaders in year 2000 readiness. That is thanks in no
small measure to the tireless work of members from all parties on
the industry committee. They have worked hard not only to
understand this problem and raise awareness of it, but also to
recommend solutions.
A number of programs and initiatives have been taken to help
small business. Can2K is helping small business as well as
volunteer organizations and municipalities in rural and remote
areas. Special tax relief has been offered by the Minister of
Finance to enable small business to be Y2K ready. There is also
support from the student connections program.
* * *
1455
JUSTICE
Mr. Leon E. Benoit (Lakeland, Ref.): Mr. Speaker,
yesterday a British judge ordered seven jail terms ranging
between seven and fourteen years for the crime of people
smuggling which has been likened to the new day slave trade.
Since 1995 out of 12 convictions for the crime of people
smuggling in Canada, not one jail term was handed out. I repeat
that of the 12 convicted of people smuggling, not one of them was
sentenced to a single day in jail.
England got tough. The United States got tough. Australia got
tough. This government by its lack of action has made Canada a
primary target for people smugglers. Why?
Ms. Elinor Caplan (Minister of Citizenship and Immigration,
Lib.): Mr. Speaker, I would like to put out to the member and
to all Canadians that Canada has among the world's toughest
legislation to deal with people smuggling, with up to half a
million dollars in fines and up to 10 years in jail. It is up to
the judges to determine what sentences are appropriate.
Having said that we have among the toughest legislation, we are
also proposing to increase those fines and jail terms to send a
message to our courts that we will not tolerate people smuggling.
We want those individuals who are found guilty to be prosecuted
to the full extent of the law and for the courts to do their part
as well.
* * *
[Translation]
AUDIOVISUAL PRODUCTIONS
Mr. Stéphane Bergeron (Verchères—Les-Patriotes, BQ): Mr. Speaker,
Jeannine Basile, of Telefilm Canada, admitted in a letter she
wrote me yesterday that existing control systems had enabled
Telefilm Canada to uncover “a few cases of overbilling”, and
that companies that were “largely bogus (firms) could have
existed at the time when programs to deduct depreciation costs
were still around”.
My question is for the Minister of Canadian Heritage.
Will the minister not admit that it is unacceptable from a
public administration standpoint that Telefilm Canada did not
react more quickly and more vigorously to cases of overbilling
and to the existence of bogus companies?
Hon. Sheila Copps (Minister of Canadian Heritage, Lib.): Mr.
Speaker, the member is again making allegations. I urge him
once again to pass on all his allegations to the RCMP, as his
boss in the Quebec City head office has asked him to do.
* * *
[English]
AGRICULTURE
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker,
my question is for the right hon. Prime Minister.
The Prime Minister has said that he takes every opportunity to
tell the Europeans and the Americans that they are wrong, and we
welcome that. The problem is that in the meantime, Canadians
cannot afford to be dead right about this. Canadian farmers
cannot be expected to pay the price for Canada being dead right
about this.
Is the Prime Minister prepared to consider going beyond the $900
million? That may be what it takes in order to save the family
farm and make sure farmers do not have to sacrifice themselves
until such time as we get the EU and the Americans in line on
this.
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the minister of agriculture has been working with the
ministers of agriculture from Manitoba and Saskatchewan. The
programs are very often shared by the federal and provincial
governments on a 60:40 basis. We are working on ways to improve
what we can do with the money available at the federal and
provincial levels.
* * *
VETERANS AFFAIRS
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, decades of financial mismanagement of pension
benefits of thousands of foreign disabled veterans by veterans
affairs has finally been exposed.
Witness the case of Joseph Authorson, a World War II vet unable
to manage his pension who trusted the government to properly
administer his finances. He and potentially thousands of
veterans have been denied millions of dollars in interest owed to
them.
The Department of Justice is notorious for lengthy and
protracted lawsuits. Is the minister prepared to settle this
issue quickly, or will she follow the usual path of denial and
delay?
Hon. George S. Baker (Minister of Veterans Affairs and
Secretary of State (Atlantic Canada Opportunities Agency),
Lib.): Mr. Speaker, this matter is presently before the
courts, but I can inform the hon. gentleman of this. In the bill
by the Tories that went through this Chamber in 1990, which
allowed interest payments to be paid from 1990 on, there was a
clause that made it illegal for the government to pay
retroactively.
* * *
1500
PRESENCE IN GALLERY
The Speaker: I draw the attention of hon. members to
the presence in the gallery of a number of visitors. It is not
very often that we get two premiers and other members of their
cabinets and houses with us. However, I would like to introduce
the Honourable Roy Romanow, Premier of the Province of
Saskatchewan, and the Honourable Gary Doer, Premier of the
Province of Manitoba.
With them in our gallery are our fellow Canadians from the
province of Saskatchewan: the Honourable Jim Melenchuk, Minister
of Education; the Honourable Dwain Lingenfelter, Deputy Premier
and Minister of Agriculture; the Honourable Maynard Sonntag,
Minister of Highways; the Honourable Clay Serby, Minister of
Municipal Affairs; the Honourable Jack Hillson, Minister of
Intergovernmental and Aboriginal Affairs; and we have with us
from the province of Manitoba the Honourable Rosann Wowchuk,
Minister of Agriculture. We also have with us a former colleague
of ours, Elwin Hermanson, who is Leader of the Opposition.
Some hon. members: Hear, hear.
* * *
ARMENIAN PARLIAMENT
The Speaker: Yesterday in Armenia there was a great
tragedy where we now know that the Prime Minister of Armenia, the
Speaker, two Deputy Speakers and some members of parliament were
assassinated.
The House will now hear statements in tribute from the different
parties with regard to this tragedy that has overtaken all of us
in the world.
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, all parliamentarians in the world could not believe what
happened in Armenia yesterday. The Prime Minister, the Speaker
of the House, the Deputy Speakers, ministers and members were
brutally assassinated while they were exercising their duty on
behalf of the people of that troubled land.
We are all very shocked. We want to say very strongly that
violence is absolutely unacceptable and is the last way that
problems can be solved.
1505
For us to see what happened to the Prime Minister and the others
in that country is completely unacceptable. We are very sad and
we are praying for their families and for the people of Armenia
that the situation will come back to normal.
[Translation]
I also want to pay tribute to the president of that country,
which is currently undergoing an incredible crisis, for the calm
that he displayed, for negotiating to put an end to the
murderers' attack, and for promising them a fair trial.
On behalf of the Parliament of Canada and all Canadians, I wish
to offer to Armenia, to its leaders and to the grieving families
our most sincere condolences.
The Minister of Foreign Affairs will be there on Saturday to
represent Canada.
He will be accompanied by a member of this House who is of
Armenian origin, the hon. member for Brampton-Centre. They will
fly there in a few hours to represent us at the funerals. Let us
hope that a tragedy of such magnitude will never happen again in
any democracy in the world.
[English]
Mr. Keith Martin (Esquimalt—Juan de Fuca, Ref.): Mr.
Speaker, on behalf of my colleagues in the Reform Party I would
like to extend our deepest condolences to the families of
Armenian Prime Minister Vazgen Sarkisian, Speaker Karen
Demirchian, and the five other politicians who were assassinated
yesterday in their parliament.
To the families there is nothing we can say or do to bring back
their loved ones, but our prayers and deepest sympathies are with
them.
To the people who committed these cowardly acts, each one of us
here and all Canadians deplore with every bone in their bodies
what they have done.
To the people whose concerns these murderers were supposed to be
representing, we can only urge them to pursue their needs through
peaceful means for murder will not produce peace, killing will
not build reconciliation and violence will not secure a common
future.
The Caucasus is an area of great concern. It is an area of
great instability. Members of the Reform Party would hope that
the people there who have deep concerns today would pursue them
with peace in their hearts, peace in their actions, and avoid the
bullet and violence.
[Translation]
Mr. Gilles Duceppe (Laurier—Sainte-Marie, BQ): Mr. Speaker, the
Armenian people were oppressed during centuries. They were the
victim of genocide early in this century and it was only
recently that they gained freedom and built a country.
Just a few years ago Armenia was hit by a terrible earthquake.
Yesterday it was struck by another calamity. The Prime
Minister of Armenia and several parliamentarians were killed
while carrying out their parliamentary duties.
The Bloc Quebecois offers its most sincere condolences to the
families of the Armenian prime minister and his colleagues, and
hopes that they will find the courage to overcome this terrible
ordeal. We also share the sadness of the Armenian people
following this tragedy, which will mark their history.
The Bloc Quebecois also wants to express its dismay at such
brutal acts, which have no place in a democracy. We all remember
that a similar event occurred in Quebec's national assembly
about 15 years ago.
Now that the hostages have been released, we hope that the
murderers will be brought to justice and that democracy will
prevail as quickly as possible in that country, for the benefit
of all Armenians.
[English]
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker,
on behalf of the federal NDP caucus and our leader I join with
the Prime Minister in deploring the events that took place in the
Armenian parliament yesterday, in expressing our condolences to
the families of those who were assassinated and to the people of
Armenia, and in saying that I think it particularly reprehensible
that this kind of thing should have happened in a parliament.
For me, and I am sure for parliamentarians around the world,
parliament is the antithesis of violence. It may be a place
where we exchange views in a spirited way, but it is a place
where we commit ourselves to working our differences out in a
non-violent way by talking to each other and by observing the
rule of law.
For this kind of thing to happen inside a parliament is
particularly deplorable.
1510
I hope it rallies people all around the world to reflect on the
value of democracy, on the value of parliament, and just how
wrong was what happened in Armenia the other day.
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, all Canadians were shocked and saddened yesterday
when we heard of the terrorism and murder that had taken the
lives of the Prime Minister, the Speaker and members of the
Armenian assembly. I know that everyone in the House abhors and
condemns what has taken place.
On behalf of the Right Hon. Joe Clark and the Conservative Party
of Canada, we also offer our sympathy to the families of those
whose lives were taken and to the people of Armenia whose history
has been scarred with far too much violence and strife over the
years.
In circumstances such as these we can only reflect on the
fragility and sanctity of human life and pray that the people of
Armenia will soon know better days and experience calm in
the aftermath of this horror.
We offer our condolences and our solidarity to all Armenians in
this difficult time and pray for peace and justice in that
country and around the world.
The Speaker: As a sign of respect for our fellow
parliamentarians who fell before the bullets in Armenia, I ask
members to join me in standing for one minute of silence.
[Editor's Note: The House stood in silence]
* * *
POINTS OF ORDER
COMMENTS IN CHAMBER
Mr. Gordon Earle (Halifax West, NDP): Mr. Speaker, I
raise a point of order about a very grave matter, indeed. Racism
has no place in the House, as I am sure you will agree, Mr.
Speaker.
During debate last night I made the comment, and I quote “we
see that one has been in chains for years and years”. One MP
from the Reform Party benches immediately said “Like him”,
referring to me. The official record of the House,
Hansard, has recorded those words forever.
Racism is no laughing matter. Certainly the suffering of black
slaves in chains is a terrible thing. I raise this point of
order not only as a black MP but on behalf of the dignity of the
House and all Canadians fighting racism.
Disreputable and unparliamentary language has no place in the
House. As we set an example for children and families throughout
the country, racism can neither be overlooked or condoned,
especially within the House of Commons.
I call on the MP who said those words to set a positive example
for our youth and for all of us. I call on the MP to have the
conscience and fortitude to admit his words, withdraw his
comments and set an example by apologizing to people of colour,
to his colleagues in the House, and to all Canadians.
Finally, through this we can move forward and use this as a
example of how to fight racism in our workplace. I hope through
this point of order to have some good come out of something very
bad.
1515
The Speaker: The hon. member for Halifax West has not
named another member of parliament so I find I am a bit at a loss
to have someone withdraw unless I know who the hon. member is
referring to. Does the hon. member have a name that I can
address so this person can tell us what happened?
Mr. Gordon Earle: Unfortunately, Mr. Speaker, I was in
the midst of a very important speech and did not look at the
member who said it. I know it was a Reform member. The fact
that it is recorded means that the individual doing the recording
must know who this person is. More importantly, I believe the
member himself knows who he is and what he said and I would hope
that he, in good conscience, would come forward, admit and
apologize.
Mr. Randy White (Langley—Abbotsford, Ref.): Mr. Speaker,
the member made a very serious accusation. Equally serious is
the fact that he does not know who said it or particularly where
it came from. How is it possible to stand up in the House and
make an accusation not only against one of our colleagues in the
House but against a party when in fact he does not even know if
it is in fact from the Reform Party.
I ask the member, in all fairness, that if he does not know then
he should actually retract his comments.
Mr. Bill Blaikie (Winnipeg—Transcona, NDP): Mr. Speaker,
I find the suggestion that somehow the hon. member for Halifax
West should withdraw his remarks ridiculous on the face of it
when Hansard actually records the fact that this was said.
The member has said that he knows full well that it came from the
Reform Party. He has made that claim and will stand by it. The
fact is that somebody in the House said this. Whoever that
person was ought to own up to it and withdraw it for all the good
reasons that the member for Halifax West elucidated in his
speech.
The Reform Party, instead of trying to defend this and trying to
avoid the reality of this, should show a little more shame and
say they will find out who among their members did this.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I would
somehow appeal to not only you, but also to the member making the
accusation, that perhaps he has jumped ahead in an interpretation
of what was said. It seems to me that when he says that we are
in chains, he in fact is very free. Could the meaning not have
been that the members are not now also physically in chains as
this member is not? That would be the charitable interpretation
of this statement.
Mr. Keith Martin (Esquimalt—Juan de Fuca, Ref.): Mr.
Speaker, as a member of the Reform Party and somebody of mixed
background, I find it personally offensive that the member from
the NDP would make such a claim on this party.
I have read Hansard and Hansard clearly states that
an hon. member made a claim “Just like him”. I would put to
the member, who is also of mixed background, that he cannot claim
at all that the comment was made by this party. As a member of
this party, I can tell the House right now that there is not a
single racist bone in this party.
The Speaker: I will recognize the hon. member for
Palliser, but I ask him, is he prepared to identify the hon.
member?
Mr. Dick Proctor (Palliser, NDP): Mr. Speaker, I was in
the House when the member for Halifax West made his comments. I
did not see the lips move but I heard and recognized the voice of
the member for Prince George—Peace River as saying that comment.
1520
The Speaker: We have a point of order raised by the hon.
member. We have a member named. The hon. member is here in the
House with us. The hon. member for Prince George—Peace River.
Mr. Jay Hill (Prince George—Peace River, Ref.): Mr.
Speaker, I was present last night during the debate. The hon.
member is quite correct. I do not recall what was said. There
were a lot of heated things said from all parties during the
debate last night.
I want to assure the House and everyone watching today that if I
did say something, and I am not saying I did, it certainly was
not meant as a racist slur as the hon. member has accused. If
whatever I said caused him any discomfort, I apologize.
The Speaker: Colleagues, the point was raised. We
have heard a statement by hon. members. I consider the matter
closed.
* * *
BUSINESS OF THE HOUSE
Mr. Grant McNally (Dewdney—Alouette, Ref.): Madam
Speaker, this being Thursday, it is a pleasure to be able to
finally ask the Thursday question.
In light of some serious issues, such as the airline industry
restructuring, the Marshall decision on the east coast and its
impact on other areas across the country, the serious concerns of
agriculture and of course our broken immigration system, I am
wondering if the House leader from the government side might be
able to tell us the business of the government for the remainder
of this week and the week following.
Hon. Don Boudria (Leader of the Government in the House of
Commons, Lib.): Madam Speaker, I want to thank the hon.
member for Dewdney—Alouette for asking me this very important
question.
Let me take a moment to describe the business of the House
between now and the break during Remembrance Day week.
Today of course is the Bloc opposition day. On Friday, the
government orders that will be called will be Bill C-4, the space
station bill, and Bill C-5, the tourism bill.
On Monday, the present intention is to call Bill C-9, the
Nisga'a legislation.
Tuesday shall be an allotted day.
Next Wednesday, it is our intention to call the report stage of
Bill C-8, the marine parks bill. For those members who are
familiar with the last session, I believe it bore the number Bill
C-48.
Next Thursday, it is our intention to resume consideration of
the proposed Address in Reply to the Speech from the Throne.
Next Friday, we will deal with any aforementioned business not
yet completed should that be the case. If that is not the case
then we will take other bills still on our list, perhaps the
municipal grants bill if that bill is available for us to
consider.
GOVERNMENT ORDERS
[Translation]
SUPPLY
ALLOTTED DAY—AIR CANADA
The House resumed consideration of the motion, and of the amendment.
Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.): Madam
Speaker, I will be dividing my time with the Liberal member for
Mississauga West.
I am speaking today in the context of the policy framework made
public earlier this week by the Minister of Transport.
I must thank the minister for appearing before the Standing
Committee on Transport and all of its members.
His vision of a Canadian airline industry that is not only safe
and prosperous, but also meets the needs of Canadians in the XXI
century is clear and lucid.
That vision identifies the issues requiring government action
and the areas in which such action will make it possible to
strengthen this industry on the eve of the new millennium.
1525
One of the questions being debated is the possibility of
amending the Air Canada Public Participation Act. Under this
legislation, no individual or group of individuals may hold or
control more than 10% of voting shares in Air Canada.
When Air Canada was privatized in 1988 and the Air Canada Public
Participation Act came into effect, the view at the time was
that Air Canada shares should be spread over a large shareholder
base. Whether that point of view is still valid in 1999 is
debatable.
In his statement on his policy last Tuesday, the minister
indicated that he was prepared to increase this limit, if, and
only if, doing so would help achieve the objective of a
prosperous airline industry under Canadian control.
To this end, the minister asked the two Standing Committees on
Transport to examine the question of the 10% limit and, after
consulting the main stakeholders and considering the future of
the industry, to make recommendations on a possible change to
this limit.
All the members of this House know that the airline industry
must undergo major changes; they are inevitable.
The broad policy for the restructuring of the airline industry
in Canada the minister presented to us establishes guidelines
for the transformation of an industry, currently comprising two
main carriers, into an industry in which a dominant carrier will
emerge.
In this regard, the public at large, consumer associations,
independent carriers, travel agents and other stakeholders have
raised serious concerns about the impact of consolidation on
competition in the airline industry.
In fact, in my big region of Abitibi—Baie James—Nunavik, with over
36 airports, and airlines such as Air Inuit, Air Creebec, First
Air, Air Boréal and Air Wemindji, First Air is the third largest
regularly scheduled airline in Canada and its Inuit owned parent
company, Makivik, is paying close attention to statements and
actions by the various groups in the reorganization of the
airline industry in Canada.
The fear is that a dominant carrier could, by design or
inadvertently, act unfairly. Such action would eliminate or
limit competition with the intent of controlling air traffic.
In August of this year, Canada's Minister of Transport wrote to
Konrad Von Finckenstein in his capacity as Commissioner of the
Competition Bureau. In particular, the minister called on the
commissioner and the bureau to help the government develop a
position that would take the interests of Canadians into
account, while giving the private sector the necessary leeway to
develop proposals for the structure of a viable industry. The
bureau's response, dated October 22, was made public last
Tuesday.
I would like to take a few minutes to examine certain issues
having to do with domestic competition that were identified by
the Competition Bureau.
I am referring here to the issue of predatory pricing and to the
issue of airport access.
The Competition Bureau notes that a dominant carrier will have
both the incentive and ability to engage in various types of
anti-competitive behaviour, including predation. Within the
airline industry, predatory behaviour can take various forms,
including predatory pricing.
Predatory pricing occurs when an airline temporarily sets low
fares to inflict losses on one or more rival airlines, or
matches fares while adding additional capacity. Once it has
eliminated the competitor, the carrier restores higher prices.
The policy framework announced by the federal Minister of
Transport deals with this very issue. The document states that
“Small and new entrant carriers are potentially vulnerable to
excessively aggressive competitive attacks from a larger,
established airline.
Small carriers run the risk that a dominant carrier may try to
drive them out of a market or out of business by substantially
lowering fares and increasing capacity in the short run with the
intention of recovering the short term losses with price
increases in the long run”.
Initially, consumers might seem to benefit from lower prices,
but the long term result will be a narrower range of choices and
higher prices.
1530
The federal Minister of Transport stated that predatory prices
will not be tolerated. According to the overall policy, the
Government of Canada must ensure that effective measures are
taken to deal with abuse in the air transportation industry.
The commissioner recommended that some sections of the
Competition Act and its regulations be amended to grant him the
authority to act in this area. Under the overall policy of the
federal Minister of Transport, the government recognizes that
this is a key issue which must be dealt with decisively.
The minister has asked the House and Senate committees to make
recommendations on the best way to reach this goal.
Also, small or new air carriers have trouble gaining access to
airports. This is a complex problem that was also examined in
detail by the Competition Bureau.
In order to be competitive, new Canadian carriers must get
reasonable access to departure and arrival slots as well as
various airport facilities, such as boarding gates, loading
bridges and ticket counters.
The federal government intends to come up with innovative ways
to facilitate access to airports. I would like to elaborate on
this point.
A “slot” is an expected time of departure or arrival that is
available or allocated to a specific airline, for a specific
date, at a specific airport. Take, for example, Toronto's
Pearson airport. It is the only Canadian airport that is
currently operating at full capacity. It is also the airport
where most new entrant carriers will want to land.
A carrier created by merging Air Canada and Canadian Airlines
would use up a large portion of the slots at Toronto's airport,
particularly during peak hours.
Since the slots are reserved for carriers as long as they need
them, it would be difficult, if not impossible, for other
carriers to get enough slots to establish new services.
The policy framework announced by the federal Minister of
Transport deals with this specific issue.
It notes that independent carriers and airport authorities have
identified access to airport facilities at the large congested
airports as a potential barrier to competition.
Without being able to offer services at Lester B. Pearson
International Airport in Toronto and other major airports, new
entrant carriers and other small carriers will not be able to
compete effectively against a dominant carrier.
The policy framework states that the dominant carrier may need
to give up some of its access to congested runways so that other
airlines can add to their domestic services.
Guidelines or regulations to ensure fair and competitive
allocation of slots may be needed at Toronto and at any other
airports where slot control proves necessary.
The guidelines would ensure that a reasonable portion of the
surrendered slots comes from the most congested times, days and
seasons, as these slots are the hardest to obtain.
In conclusion, in a restructured industry with a dominant
carrier, it will be necessary to promote competition. The
government intends to put in place the necessary mechanisms to
encourage the arrival of new entrant carriers and the growth of
existing ones, such as First Air, Air Inuit, Air Québec, Air
Canada, Air Wemindji, Canadian Airlines and others in Canada.
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, my
colleague from Abitibi—Baie James—Nunavik comes from a region
similar to the north shore. It is served frequently by two
airlines, but services are very limited.
The member will have to convince me that the level of air
transportation services depends on the merger. Will a merger
ensure efficient air transportation services in the regions, be
it through Onex, Air Canada or Canadian?
The quality of services at airports is already in jeopardy.
Services in the regions have been diminishing. The frequency of
flights is left up to the carriers. The price of a ticket is
very high for travellers who have to fly.
I would like the member for Abitibi—Baie James—Nunavik to reassure
me that the transport minister's involvement and his being in
connivance with Onex on this issue will in no way hinder any
possible agreement between Canadian and Air Canada.
1535
If Onex were to acquire Air Canada and Canadian, I have my
doubts, I fear, and I am almost convinced that this company
would serve American interests first and foremost. I would
rather we maintain our autonomy with regard to air
transportation, with Canadians keeping control of the airline
industry.
Mr. Guy St-Julien: Madam Speaker, I have taken careful note of
the hon. member's question.
I am indeed from a large region encompassing Abitibi,
Témiscamingue and Nunavik. It is the largest region in all ten
Canadian provinces, with an area of 802,000 square kilometres,
36 airports, a population of 100,000, and 68 mayors, counting
the aboriginal chiefs and mayors in Nunavik.
In committee, the Minister of Transport spoke several times of
northern communities and small communities. On October 12, I
introduced Motion M-129 to the House, to protect northern Quebec.
On October 19, I asked some questions in a transport committee
meeting. I also did so on October 26.
Yesterday, I made a statement in the House, precisely to send a
message about the north to the Minister of Transport.
Mr. Davis, the President of First Air, is asking the minister to
oppose any agreement that does not specifically guarantee the
interests of northern consumers, the people of the Arctic and of
Northern Quebec, and those of the aviation industry and its
employees, airports and investments.
The President of Makivik, Peta Aatami, said the same thing I
have said several times here in this House: AThe federal
government is legally and morally responsible for protecting the
interests of the Inuit covered by the James Bay and Northern
Quebec Agreement who could be affected by any reorganization of
the Canadian air industry.
In response to the member's question, the Government of Canada
stated, as outlined in the minister's speech, that it was going
to respect small communities, both those in the south and those
in major centres such as Val d'Or and Amos, as well as the
airports at Lebel-sur-Quévillon, Matagami and Radisson. I could go
on, there being 68 in all within my riding. Particularly in the
Sept-Îles sector and other parts of Northern Quebec, the
Government of Canada must respect the progress that has been
made in air transportation to date.
Mr. Pierre Brien (Témiscamingue, BQ): Madam Speaker, as a
member of the previous Progressive Conservative government,
which brought us deregulation and astronomical increases in
fares, including for our region, while promising us that this
deregulation would promote competition and thus lower fares, the
member for Abitibi—Baie-James—Nunavik is not worried.
He must know that the basic fare for a flight from Rouyn to
Montreal and back is over $600. In addition, does the fact that
an American company, namely American Airlines, will indirectly
become the owner, and that this will be a quasi-monopoly, or just
about, not worry him even more?
He should rise in his place and denounce the Onex proposal,
which will have a disastrous impact on a region such as ours.
Mr. Guy St-Julien: Madam Speaker, the hon. member has asked me
whether I should not be speaking out.
We have nothing to learn from the separatists and the péquistes.
We need only mention Québec Air. What did they do? The PQ
government never held any hearings before the transport
committee. It signed orders. It did not protect northern
regions.
Today, I am here to protect northern Canadians, and that is what
I am going to do. My message is that I am here to defend my
constituents.
Mr. Ghislain Fournier (Manicouagan, BQ): Madam Speaker, I am
pleased to speak today to my party's motion to maintain the
provisions of section 6.1(a) of the Air Canada Public
Participation Act limiting ownership of the capital stock of Air
Canada by any person or group to 10% of the voting shares.
I want to say that this government's conduct is disturbing.
1540
Everywhere I have been—last night, I attended two meetings and
200 people came to the first one—I can tell you there was
unanimity within the community and among groups, and the Bloc
Quebecois is leading a fierce battle and will continue to do so.
Looking at what the government is doing today, I would never
have believed a democratically elected government could stoop so
low in its loyalty.
I think transparency is being dealt a terrible blow and this
government does not have notion of what justice is. This is
purely and simply a dictatorship. I indicated earlier that there
was unanimity within the community and the business community in
particular, but the media are unanimous as well.
Anyone who paid attention to the media, both print and
broadcast, this morning, noted that they were hard on the
government. I would like to quote two articles, because if I had
to quote all those I read this morning, I could go on all
afternoon, and if we had to record everything that was said on
television last night and this morning, we would not get out of
here tonight.
The article I will quote is from the Journal de Montréal and is
written by Michel C. Auger. It is entitled “Alas, he is a
minister.” It reads: “If David Collenette were a judge, we could
easily—”
The Acting Speaker (Ms. Thibeault): I must interrupt the hon.
member. The member knows full well that a minister or a member
of this House cannot be named and that quoting something cannot
be used as an excuse to do so.
Mr. Ghislain Fournier: Madam Speaker, that is how the article
reads, and I asked permission to read the article, but I will
refer to the Minister of Transport.
I was saying:
We could easily have him disqualified for being biased in the
matter of the airline merger. Unfortunately, he is a minister.
For quite some time we suspected the Minister of Transport—
This is not the Bloc Quebecois speaking. That is what was
written in the paper this morning.
—of being biased in favour of the Onex proposal, if only because
of the remarkably close ties that exist between that company,
Canadian Airlines International, and the Liberal Party of
Canada. Tuesday, before the transport committee of the House of
Commons, the Minister of Transport provided the last piece of
evidence proving that he is indeed biased with regard to this
issue.
He announced that the federal government was prepared to
suspend—without asking for anything in return—the application of
the act that prevents an individual or a company to hold more
than 10% of Air Canada shares. The 10% rule is important because
it is the only legal obstacle to the Onex proposal, which is the
only proposal that requires such a change. Such a rule limiting
concentration of ownership was included, mind you, in
practically all transactions to privatize Crown corporations
over the last few years. While in the public interest, this
limitation will be waived by the government in support of a
proposal made by a private company.
Most importantly, it was the only lever available to the federal
government to have a direct influence on this transaction, which
will determine to a large extent the future of air
transportation in Canada. It is a rather unique situation. Onex
made a proposal that could not even be considered without an
amendment to an act of parliament. Practically at the first
opportunity, the government announced that it would agree to
this request and not ask anything in return.
1545
The article goes on:
This is what the transport minister means by “parliamentary
consultation”. It is a kind of consultation that is completely
meaningless because it comes after the fact, after the vote on
Onex's offer by Air Canada's shareholders.
We might as well say that the transport minister works for Onex.
I did not say it, it is in today's paper. The article goes on:
Of course, if we do not allow the government to modify the 10%
rule, Onex's offer will die.
It is quite clear.
We could always believe that the government does not want Air
Canada to win by default. However, there must be an amendment to
an act of parliament to make Onex's offer legal. That must be
justified by saying that the Canadian public will gain something
from it. Better guarantees for air service in remote areas could
have been required.
For example, in my riding, on the north shore, the distance
between Ottawa and Sept-Îles is 1,200 kilometres. And the price
of tickets is very high. A trip from Ottawa to Sept-Îles costs
more than $1,000.
The article goes on:
Do you know of many corporations that have got, with nothing in
return, such favours from a government, when their bids were
contrary to the law and could not have been made to the
interested shareholders? But the Minister of Transport had
nothing to ask for in return. We might as well say right away
the minister works for Onex.
Meanwhile, it has to be noted that this same government and this
same minister did not lift a finger to help Air Canada, the more
profitable of the two corporations, but the one that is
unfortunate enough not to have friends in high places among the
friends and the bagmen of the Liberal Party of Canada.
What is even more ironic is when the minister states that once
the airlines merger is completed, the government intends to be
very watchful of the new monopoly, that it intends to protect
the rights of consumers and the rights of official language
minorities and that it will deal severely with any attempt to
inflate prices.
In short, the government intends to watch closely the new
monopoly, but it claims that it has no role to play in the
creation of the new monopoly and that it is letting market
forces determine everything. As long, of course, as the market
sees to it that the friends of the government end up the
winners.
I really wanted to quote this article. I think I will only skim
over the other one. I will not read from it, but comment on it.
I will defend the position of the Bloc Quebecois.
In this morning's issue of Le Droit, we see that on air
transportation “The Liberals do not agree with each other”.
But where are the Liberals? During the last campaign, a Liberal
delegation came in my riding and told us not to stay behind the
boards, but jump on to the ice instead. Where are the Liberal
members for Quebec now, when they should be jumping in and
exposing the unfairness of this government? We know for a fact
that, in this government, only one vote counts, the Prime
Minister's vote. If he votes yea, all Liberal members vote the
same way. If the votes nay, they all say nay.
They do have a spokesperson. But the parrots all keep repeating
what their boss says. They have marching orders. That is how the
government views democracy.
Did members ever see the hon. member for Vaudreuil—Soulanges
stand up for Quebecers in the House and disagree with the
government? Where is he? He keeps repeating the same old story
and he tries to come up with a defence for the transport
minister.
The Acting Speaker (Ms. Thibeault): I am sorry, but the hon.
member's time has expired.
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, I thank my
colleague for Manicouagan for all this information. I did not
have the time to read the press clippings this morning.
1550
Yesterday, the minister told the transport committee “Safety
remains Transport Canada's top priority”.
It takes some nerve on the part of an MP or a minister to say
such things.
How can the minister explain that, in Quebec's north shore and
Gaspé region, we have had three plane crashes in eight months.
A Mira Aviation plane crashed on landing in Gaspé.A Nordair plane
crashed in Sept-Îles, in the riding of Manicouagan. People were
injured and the passengers had to call for help, because no one
had seen the crash. Finally, an Air Satellite plane crashed in
Baie-Comeau on December 7. That accident was witnessed by a
six-year old girl, from her parents' residence.
When the federal government delegated to Nav Canada
responsibility for transport safety, Nav Canada made cuts at the
expense of passenger safety. It reduced the number of air
traffic controllers, shut down control towers, and eliminated
firefighting services at airports. Now, the federal government
wants to privatize those airports, which already are not viable.
My questions to the hon. member for Manicouagan are as follows.
Does he think that, in the region of Manicouagan and
particularly in Sept-Îles—which is currently served by two
airlines, namely Air Alliance and Canadian Airlines—the airport
will be more viable? Will there be better customer service? Will
travel agencies in his riding gain anything? They create jobs in
his riding and provide ticket, reservation and checking
services. The number of passengers will increase. Since 1996,
travel agencies have been losing money. Yet, they create jobs.
Could the hon. member tell me about his concern regarding
current versus future airline services in Sept-Îles, which is the
largest city of his riding of Manicouagan?
Mr. Ghislain Fournier: Madam Speaker, I would like to thank my
hon. colleague from Charlevoix. I congratulate him on the
excellent work he is doing on the transport committee. His
question gives me the opportunity to tell the House about a
scandal that occurred at the Sept-Îles airport.
Money is not spent on enhancing security in the transportation
industry, as the hon. member for Charlevoix pointed out. When I
was city councillor, we were told that the airport was being
transferred to us.
I was against the project, because the airport, which was
located in my ward, came with an annual deficit of $2 million,
$2.2 million to be exact. However, the city council met and I was
there when we were told “Give us five minutes and we will
explain how you can get rid of the $2 million deficit”. I said
“You have been running a $2 million deficit every year for 30
years now. That is $60 million. Why were these measures not
taken before today?”
They started by saying “We have a firefighting service with
trucks and 9 firefighters that we pay for year round and have
never been put to task. Besides, if there were a fire, there
would not be enough pressure, as there is not enough water. We
have a pumper, but it is not powerful enough. We have to get
help from the Sept-Îles firefighters. There were two fires and
both times the firefighters from the city of Sept-Îles were
called to do the work. So we will get rid of the firefighting
service and save almost a million dollars”.
We were told that there were three airstrips and only one was in
use. It is 1,000 feet longer that the average strip and 50 feet
wider. It can handle a departure and a landing every ten
minutes. We could save $800,000.
There was a restaurant that took up a whole floor and cost
$300,000 in heating bills. We were told it could be moved
downstairs, that service would be better and the savings would
be $200,000.
So, they reduced the deficit and there will even be a small
surplus this year.
This goes to show how the money was utterly wasted at Sept-Îles
airport. However, security services are being cut, even though
we have had fatal accidents.
1555
Mr. Pierre Brien (Témiscamingue, BQ): Madam Speaker, we are
debating today a motion tabled by the Bloc Quebecois asking the
House of Commons to reaffirm its desire to maintain a provision
of the act limiting the ownership by any company or person to 10
per cent of the voting shares of a corporation, especially in
the case at hand of the eventual purchase of Air Canada by Onex.
Very seldom do we see a government intervene in a battle for
control between private sector corporations by loading the dices
as it has done in the present case.
Nobody will succeed in convincing us today that the government
was not in league with Onex from the beginning.
Let us look at each stage of the process leading to the present
situation—Onex' last offer was made only an hour and a half
ago—and see how the actions of Onex and the government add up to
what the member for Roberval described during today's Oral
Question Period as “the crater we are inexorably headed for,
which is the acceptance of the Onex project”.
Incidentally, Onex is the company which will take control, and
which has a particular interest in this acquisition. One wonders
about its long term intentions for the companies that it is
trying to buy, Canadian Airlines and Air Canada.
It is very strange to note that, on the subject of these two
firms, Canadian Airlines and Air Canada, the one in the greater
financial difficulty today is Canadian Airlines.
If no changes are made at this point, Canadian Airlines' ability
to carry on business in the coming quarters is very limited. It
will probably have major problems—and this will not be the
first time, because it has already had them—and, surprisingly,
on a number of occasions, this very government, the federal
government has come to its aid. Whether by providing foreign
routes, or by providing funding when American Airlines arrived
on the scene the first time, the federal government has always
helped to bail out Canadian Airlines.
This time, however, it is becoming a bit too indecent to
artificially support the company. Accordingly, a new player has
arrived—Onex—which intends to join Canadian, with American
Airlines behind the scenes, to take control of Air Canada.
Air Canada is the more profitable of the two companies, is the
only potentially profitable one of the two and is being taken
over by the other because of this intervention.
Even if last minute information gives the impression of a
certain number of parameters being changed, it is not in fact
the case when we look at the long term, the change to the rule
of 10% is not insignificant in what is going on. It serves to
give the advantage to the player or the hand holding the strings
behind Canadian and behind Onex—American Airlines.
The minister is making fine speeches about “allowing the
shareholders to speak, and when a definitive scenario has been
decided upon—”, that is what the government is saying, “when it
is all over, we are going to look after the interests of
consumers and everyone else.” The government is setting out
broad principles.
At one point, this government suspended part of the Competition
Act and decided or announced that the 10% limit would be
changed. All of a sudden and as if by chance, the very week of
the deadline—the companies wishing to make a take-over have until
midnight tonight—the minister announced his intention to review
the 10% rule and demonstrate a very open mind.
1600
It is hard to believe that the people from Onex, who seem to
have a great familiarity with the people in the Liberal Party,
the Prime Minister and the Minister of Transport, who are great
pals, were not kept informed of the government's intentions.
Of course that would be very hard to prove, but the actions, the
outcome and the progress of this matter demonstrate very clearly
that there is a very close collaboration between certain people
in government—those with influence and decision makers, anyway—and
the people from Onex.
Where will all this take us? It will lead to a situation where
the strongest of the two companies will find itself in a weaker
position. In this case, Quebec, where Air Canada is well
established, will suffer more job losses because of the federal
government's involvement.
This also makes us wonder about a number of other issues in
terms of the future, if the airline industry were to become
predominantly influenced and controlled by a foreign company
such as American Airlines, for example.
I am convinced that air transportation in the
Abitibi—Témiscamingue region is not a top priority for American
Airlines. What will happen to our regions?
We Bloc Quebecois members represent the regions of Quebec.
I want to clarify something. Here in Ottawa, people talk about
Quebec as if it were a single region. But the regions of Quebec
include the North Shore, Lower St. Lawrence,
Saguenay—Lac-Saint-Jean and Abitibi—Témiscamingue regions. When we
talk about regional air transportation, we are not referring to
Montreal-Toronto, but to air transportation to and from our
regional centres.
We are very concerned. Earlier, my colleagues mentioned that
airports had been taken over by the communities. If passenger
and freight volumes go down, it will change the
cost-effectiveness figures for the organizations that manage air
traffic.
There are many things to consider. I am not even talking about
airfares, which have already increased drastically since
deregulation, with the result that it is now very difficult for
people living in regions to travel at an affordable price.
A traveller who did not plan his or her trip between Rouyn and
Montreal well ahead of time to take advantage of a major rebate
is looking at a round trip fare of more than $600.
By contrast, those flying out of Montreal or Toronto can travel
quite far for the same $600. There is something indecent about
this, particularly when you think that, because of the
specializing that is taking place in the health sector, patients
travel by plane wherever they can get treatment, which generates
huge costs.
Regional development probably does not mean a lot to members
opposite. It makes me laugh when I hear the Liberal member for
Abitibi—Baie-James—Nunavik congratulate and thank the Minister of
Transport for his work. He made this statement in a meeting of
the Standing Committee on Transport.
I have no congratulations for the minister, far from it, and
particularly not with regard to this issue.
This same minister who closed the military college in
Saint-Jean—let us not forget that—is now working to ensure that
Quebec will come out a loser in this biased process in which the
federal government has a hand.
There is obviously some disagreement within the government on
this matter, and it is perhaps worth pointing out. There are
some interesting quotations. In the October 26 edition of Le
Devoir, Marc Lalonde, who is cut from the same cloth as the
members opposite, had this to say:
It is odd that a public bid for a hostile takeover of the
country's major air carrier should be launched on the assumption
that the existing legislation will be changed to allow that
takeover to occur.
In all my years in the public sector, I have never seen a more
disturbing challenge to the rights of parliamentarians.
God knows, Mr. Lalonde has been around for a long time. So this
is one of their friends speaking, not a nasty separatist from
Quebec. He says that the process has been biased from the
start, because one of the players has the advantage of
privileged information.
As for the fact that it will be possible to amend legislation,
if necessary, what message does this send for other private
transactions? The message it sends is this: “Stay on the good
side of the members opposite and, if you are having trouble with
a particular issue, worry not because we will take care of the
legislation in due course, depending on our interests, the party
coffers, and 56 other variables”.
1605
There are members from Quebec in this government and others
elsewhere who can also see through this transaction, and I am
certain that the lobby was limited to a few government insiders.
The policy must be changed, and the government must not agree
to change the rules of the game mid-stream to the advantage of
one player and one carrier.
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, as I said
this morning in my speech, the Bloc Quebecois has contributed
and will keep on contributing to the improvement of air
transport in Canada, especially in Quebec regions.
Journalists will report again that Bloc Quebecois members are
well prepared, that they attend every committee meeting, every
sitting of the House. Aware of the urgency of the situation,
today the Bloc Quebecois moved an opposition motion with a view
to informing Canadians of what an airline merger will mean for
them.
After putting questions to Air Canada officials, the minister,
officials from the competition bureau, and Canadian Airlines
yesterday, the committee will have the opportunity to hear from
Onex next week.
From what Air Canada and Canadian Airlines were able to tell us
in response to our questions, we have learned that Canadian
Airlines has been talking to the transport minister since
January 1999.
We are going through turbulent times. The air transport industry
is going through a storm. The minister took it upon himself to
amend section 47, essentially telling the competition bureau:
“This is none of your business, I am using section 47 to give
the airlines 90 days to prepare their bid and come to an
agreement.”
Why did the minister not ask Canadian Airlines and Air Canada to
sit at the table as early as January? Why did he not ask both
major Canadian carriers to sit down together? Instead, he waited
and opened up section 47 at the request of Onex. Then Onex
tabled its bid. Air Canada made another bid. Onex had no choice
but to make a higher offer.
The decision will be up to the shareholders, those who own
shares in Air Canada and Canadian Airlines. They will accept the
best proposal with no regard for which offers the better
service.
They will not look to see whether Rouyn-Noranda, Témiscamingue,
the north shore, Manicouagan, or Gaspé have improved service.
They will look to see which is the better deal. Shareholders
will decide, not parliamentarians, and they will do it according
to the proposals put before them.
The minister made promises to Onex. Onex said “I have a problem.
If I become the major manager, if I put in a lot of money, I am
taking a risk with the 10% rule”. So the minister replied “Well,
we will increase it, we will change the Competition Act”.
Could the hon. member for Témiscamingue tell me why the 10% rule
should be changed in this case, when it was not changed for
Petro Canada? The Caisse de dépôt et placement du Québec was
prevented from investing in CP Rail, and was told: “No, it is
10%”. The federal government said, about the bank mergers, “No,
it is 10%”.
In this case, the Minister of Transport is saying “Onex will
serve American interests, I will not have to subsidize anymore,
to prop up an air carrier. It makes no difference if 10,000 jobs
are lost. It does not bother me. You deal with the problem. Tell
us what you need to buy both airlines. As for section 47, it is
a done deed. We will amend the Competition Act. And as for the
10%, we will increase it to 25%”.
Why is the minister prepared to do so in this case, when it was
not allowed in other cases?
Mr. Pierre Brien: Madam Speaker, the answer to that is quite
simple: it is to favour its friends. There is no other reason.
The government is far more sensitive to political affinities
than to regional economic development, particularly in Quebec.
I am happy my colleague raised this issue. In the past, this
section was used to prevent Quebec portfolios from acquiring too
many shares. In Quebec, we have a number of development tools
such as the General Investment Corporation, the Caisse de dépôt
et placement, the Fonds de solidarité, major players that can
become significant shareholders in various projects. The federal
government did not like the 10% rule in some cases. Sometimes it
suited the government, sometimes it did not, but we will have to
see the consequences this will have in the future.
1610
How will it be possible now to justify this in the other sectors
still subject to this rule? If the government wanted a debate on
whether the 10% rule is important or not, we could have had that
debate outside the context of the Onex, Air Canada and Canadian
transaction.
But the government now wants to change the rules in mid-game, in
a specific case, to favour one player in particular. This is
totally unacceptable. That is why the House must support the
motion to reaffirm that the rules will not be changed.
[English]
Mr. Steve Mahoney (Mississauga West, Lib.): Madam
Speaker, I will be delighted to share my time with my hon.
colleague and good friend from Mississauga Centre.
I was interested to hear the debate, particularly from the Bloc
members when they talked about the various issues surrounding the
10%. What I have not heard them talk about, and I am a little
puzzled by this, is the real motivation behind them putting this
issue before the House.
Before I talk about that I want to thank them for bringing this
forward. Frankly, I think it is a good opportunity for many of
us. I have many, many employees of Air Canada and some of
Canadian Airlines living in my riding who have been calling me.
This gives me an opportunity to put my views on the record and
discuss the issue here in parliament.
Members opposite say that there is no debate. What are we doing
today? Everyone is being given an opportunity to express their
views. In fact, what the Bloc has done is exactly what the
Minister of Transport asked parliamentarians to do; to give their
views to him, to give our best advice to him, and obviously to
reflect the feelings and opinions of our constituents so that he
indeed can deal with a number of the issues involving this
potential merger.
The minister has not changed the rules. For members opposite to
say so is nothing more than misleading. Maybe it is intentional,
perhaps to get around the real underlying issue.
I suggest that the problem the Bloc has, which I think I
understand, is that the head office of Air Canada is in the great
city of Montreal. We all know that in recent history there have
been dozens of major corporations move out of the city of
Montreal, which I think is a tragedy. Why have they done so?
They have done so because of policies put in place by the current
provincial government, and other provincial governments before
it, led by separatists. They have done so because of the
separatist policies of the Bloc. They cannot do business with
the uncertainty that exists in the province of Quebec. I think
that is a shame.
In fact, one member opposite made a remark that Bloc members are
working hard at committee and that they participate in debate in
the House. Let me tell the House that he is right. I have been
quite impressed with the number of members of the Bloc who have
come to the citizenship and immigration committee and to the
public accounts committee to make good quality contributions to
the committee and to the democratic process. It is because they
do not discuss the issue of separation. The one flame that
continues to burn in the heart of that party is to separate the
province of Quebec from the rest of Canada. We know that.
If we could leave that issue aside and take it out of the body
politic of the Bloc, we would find some very decent, hard-working
men and women who can contribute to this place. However, as long
as that is there, I submit that it clouds virtually every issue
which they address. It also leads to hidden agendas, which is,
frankly, what we are seeing here today.
1615
Having said that, I believe the Bloc has done us a favour in at
least bringing it forward. The Bloc members know the government
is not going to support them but that does not matter. What
matters is that as parliamentarians we have the opportunity to
stand here and to tell our constituents exactly what is going on.
If we simply want to read the newspapers, as the hon. member
earlier did, we can get any kind of distorted view we wish to and
we can put it forward as having some sort of credibility.
If the minister had changed the rule unilaterally without
discussion in this place, I too would be upset. That is not what
he has done. I sat at the committee meeting. I am not a member
of the transport committee but I wanted to hear firsthand what
the minister's plan was. He said that he wanted our views, that
he wanted some consultation, that he wanted to hear from members
of all parties in the House of Commons. Imagine opposition
members complaining about that. It is really quite remarkable.
They must get up in the morning and ask “What has the government
done that we can twist and turn around so we can oppose it?”
I want to give some credit to a couple of members and they might
go into apoplectic shock. I heard speeches earlier today from
two members of the Reform Party, the member for Esquimalt—Juan
de Fuca and the member for Souris—Moose Mountain. Both gentlemen
gave thoughtful, reasoned, intelligent remarks, something I am
not used to hearing from the Reform Party. I was quite amazed. I
will give credit where credit is due.
However, the comments do not seem to match other comments made
by the leader of the Reform Party at a fundraiser in Calgary. Let
me share those with the House because they are somewhat confusing
and somewhat contradictory to the remarks made by the two members
I just referred to.
The leader of the Reform Party said: “We want to wait until
all the final offers are on the table. Our aim is to get the
best deal for the air travelling public”. I would have thought
the Minister of Transport had said that. I would not have
thought the Leader of the Opposition actually came up with
something that seems to be a rational policy. He said:
“Whichever deal is accepted we want a free enterprise market to
deal with this. That could involve the government encouraging
greater foreign and regional competition”. What does he mean?
I would suggest that he wants the skies of Canada to be opened
up to the extent that foreign airlines, be it American, be it
United, be it whatever, can come into Canada and transport
passengers between Winnipeg and Toronto, between Montreal and
Vancouver, while ignoring all of the very difficult routes. They
would simply cherry pick the best routes so those foreign
carriers can make a profit on the best, easiest, most economical
and efficient routes in Canada. They would be sucking the
lifeblood out of whatever airline becomes the dominant Canadian
airline. Let me stress clearly that is what is going to happen
in my view.
Whether the shareholders vote to accept either the Onex deal
that is on the table now or some other deal that is put forward,
and I guess it has to happen soon, or whether they decide to
accept the offer put on the table for Air Canada, there are pros
and cons to both sides of those issues. But in my view there
will only be one major airline by this time next year. It will be
running the major routes in this country.
Are we going to do what the Leader of the Opposition has
suggested and allow foreign airlines to come in and destroy that
company? That could happen.
1620
The minister has stood in his place and has said he will not
change the foreign content issue. Foreign ownership of Air
Canada will not increase beyond 25%. He has said that.
I could not believe it so I had to verify it in Hansard
but I heard the Reform Party critic ask the minister why he would
not even consider allowing foreign ownership content to increase
to 49%.
Just as there is a hidden agenda by the Bloc, members of the
Reform Party seem to be driven and motivated by a need to
Americanize this country. They do it all the time. They stand
and say “Do it the way they do it in the United States. They do
it better”. They confuse issues.
The minister is consulting. He wants to hear the views of all
parliamentarians and all Canadians. I have great confidence that
he will make the right decision.
[Translation]
Mr. René Canuel (Matapédia—Matane, BQ): Madam Speaker, I
listened to my colleague and associate. He said that we had
introduced this motion on an opposition day today because we
want sovereignty. I would have liked him to be a little more
logical. I would have liked the House to stick to the issue at
hand, because it smells to high heaven.
One of their own, Marc Lalonde, said “Look, I do not think we
should go that route”. And now my colleague says “The minister
is carrying out consultations, but calm down, that does not mean
he will change the regulations”.
Will he be able to assure me sometime in the future that the
minister will not make any changes? He will not be able to give
me any assurances. He will skate around the issue. He will say
anything.
I said that this is dangerous. Can we have the assurance that
security will be enhanced and that the air rates will not go up?
Of course not. They say almost anything. When we ask questions,
they do not even answer. Such behaviour in the House of Commons
goes against the spirit of democract. And flouting democracy in
the House of Commons, that is serious business. What was said
earlier about the Bloc was an insult to the constituents not
only of Matapédia—Matane but of each and every riding. There are
44 of us here. It was an insult to all the people of Quebec.
I ask my colleague opposite to apologize, because my
constituents will just not take it.
I ask him if he can assure us that the 10% rule will not be
changed. Can he confirm that security will be enhanced, that the
rates will at least remain the same and that in remote areas the
level of service will be maintained?
[English]
Mr. Steve Mahoney: Madam Speaker, constituents in my
riding find it insulting every time a Bloc member talks about
taking a major part of the country out of confederation. I do
not apologize for a single thing I said in this or any other
speech in regard to that.
Let me answer the question. The member talks about servicing
small communities. I can tell him that my province of Ontario
has many small communities as he would well know, as does the
province of Quebec. I can tell him that the government is
concerned that those communities continue to be serviced by air.
The airline industry is part of nation building. We cannot leave
the people of Nunavut without that kind of service. We cannot
leave northern Quebec and remote regions in Labrador or western
Canada without some kind of access to affordable quality service.
The minister has laid that out in his program which he presented
to the committee. Pricing is absolutely a concern.
Service to small communities is a concern. Jobs are a concern,
not only for Air Canada employees, but for Canadian employees.
1625
I believe that through debate in parliament, through discussion
in committee, through submissions that will be made by many
people who will be appearing before the transport committee, all
of those issues need to be addressed. I agree with the member
that they are extremely important. The government is committed
to that.
Above all, the government is committed to ensuring that we
continue to have one of the finest, safest airline industries in
the world, which we do. We have terrific people who work in them
and we have two quality airlines. We just have one that is in
serious financial trouble and that issue must be addressed.
Ms. Carolyn Parrish (Parliamentary Secretary to Minister of
Public Works and Government Services, Lib.): Madam Speaker,
it is my pleasure to share my time with my colleague the member
for Mississauga West.
I rise to speak against the motion raised by the Bloc today. In
his policy framework for airline restructuring in Canada, the
Minister of Transport indicated on October 26 that the government
was prepared to consider increasing the 10% limit to a new level
to be decided following input from parliamentarians, only if such
a measure contributes to a healthy Canadian airline industry.
The importance of a healthy airline industry in Canada cannot be
overstated. Canada's airlines provide employment to thousands of
skilled workers and are important contributors to our economy. In
a country as large as Canada, they help support the very fabric
of our society by connecting communities separated by hundreds,
sometimes thousands, of kilometres.
As international trade and travel increase, our airlines provide
Canada with critical links to the rest of the world. Canada
needs a healthy airline industry to continue to enjoy these
benefits and to create even greater benefits.
As my hon. colleagues are aware, the government has been very
closely monitoring developments in the industry. It has assessed
the implications of a major restructuring in order to form its
policy framework.
The Government of Canada is committed to protecting the public
interest in issues such as pricing, service to small communities
and the rights and concerns of airline employees. I and my
caucus colleagues have been made intimately, sometimes
forcefully, aware of the concerns of the employees of both
Canadian Airlines and Air Canada.
As the member of parliament for Mississauga Centre, I represent
a riding that is home to hundreds, sometimes it feels like
thousands, of airline employees. It is the employees of both
airlines as well as the Canadian traveller that I remain most
concerned about.
Travellers are justifiably concerned about airfares. Competition
encourages lower airfares and increases the affordability of air
travel. Currently almost 90% of air travel within Canada is on
discounted fares. Seat sales allow families in Vancouver to
visit relatives in Montreal. They allow small business people on
restricted budgets to travel more easily. They encourage tourism.
It is reasonable to be concerned that a major restructuring of
the Canadian airline industry could lead to higher airfares for
all consumers. The government is very much aware of these
concerns and the importance of affordable air travel to all
Canadians.
As stated in the policy framework for airline restructuring in
Canada, clearly the best way to promote affordable air travel is
to have an air industry that remains healthy as well as
competitive. It is competition rather than government
intervention that will be most effective in moderating airfares
in the long run. However, we must consider that competition may
not exert sufficient control on prices in all circumstances. It
is for this reason that competition concerns have been addressed
at such length by our government.
The government already has tools at its disposal to address
pricing concerns, including section 66 of the Canada
Transportation Act which allows the Canadian Transportation
Agency to act on complaints regarding basic fares on monopoly
routes. As the Minister of Transport has stated, the government
will go further and assess whether these provisions should be
broadened to address market dominance.
As well, the government will require commitments on pricing from
the dominant carrier during any restructuring process. The
government will consider adding relevant conditions to its
approval of any restructuring. The government will not tolerate
any price gouging of Canadian consumers.
The importance of air travel to small communities is also a very
serious concern. Our airlines help support the fabric of our
nation by providing crucial air service to hundreds of domestic
destinations, many of them accessible only by air.
1630
Small communities rely on air services often more than large
communities. Airlines provide links to larger markets, help
attract investments and provide an indispensable lifeline to the
rest of Canada.
As my hon. colleagues can appreciate, a major restructuring of
the airline industry could lead to a rationalization of some air
services. In this regard the public, consumer representatives
and northern residents have expressed their concern that air
services to smaller communities could decrease or even disappear.
As set out in the government's policy framework, the key to
addressing this issue is to ensure that barriers to entry and to
growth in the market of small regional airlines are reduced to
the greatest extent possible and that there are protections from
possible predatory behaviour on the part of a dominant carrier.
History has demonstrated that where there is a demand there will
be entrepreneurs willing to provide service, even in small
markets. There must be an environment that will allow
competition to exist. With this in mind our government has
indicated that it will work to ensure that the necessary
conditions for attracting competition are in place.
I would like my hon. colleagues to note that the Canada
Transportation Act already requires the last and second last
carrier serving any community to give notice of their intention
to stop service so that there will be adequate lead time for any
other carrier to prepare to offer replacement service. These
sections will be reviewed to determine if they remain adequate.
In addition, the government has stated that it will require
commitments on service to small communities from the dominant
carrier during the restructuring process and will consider adding
more conditions before restructuring is approved.
Lastly, I would like to address concerns regarding employment.
The Canadian airline industry employs thousands of skilled
workers directly and indirectly. These employees have worked
diligently. Many of them have made significant sacrifices to
ensure the success of their companies. They have endured
economic downturns and have witnessed corporate downsizing. They
have agreed to pay freezes and to pay cuts. They are important
contributors to the Canadian economy. I believe they merit the
consideration of our government in any airline restructuring.
The government has already consulted various groups on the
issue. Labour leaders have expressed the concern that employment
levels may be substantially affected by a restructuring of the
airline industry. They want to ensure that job impacts and
dislocations are minimized and that any employment adjustments
are handled exclusively through normal retirement, attrition and
voluntary separation packages.
Airline employees are very concerned that airline consolidation
will cost them their jobs. They fear forced relocation and
layoffs. It is for this reason that the government will insist
that employees be treated fairly and will require commitments
from a dominant carrier to this effect. The government will
encourage labour management discussions with a view to reaching
an agreement which is satisfactory to all.
The government believes that Canadian consumers want and deserve
the benefits of competition, that small communities require air
service and that airline employees deserve to be treated fairly.
At the same time the government believes that these objectives
are consistent with a healthy, Canadian controlled airline
industry.
If my hon. colleagues believe that these are laudable goals,
then they should agree that we must be prepared to take the
necessary steps to manage a major restructuring of the Canadian
airline industry. I call on my hon. colleagues to support the
government initiatives presented by the Minister of Transport on
October 26, including a provision for the government to consider
increasing the 10% limit on individual ownership of Air Canada's
voting shares.
The Minister of Transport has been very clear on his willingness
to consider a legislative change right from the beginning. One
has to look no further than the minister's news release of August
13, 1999, in which he said:
The Government of Canada will also consider what further action
might be required, including the possibility of introducing
legislation to facilitate the implementation of an acceptable
proposal and making any necessary changes to the policy and
regulatory framework governing airlines.
Clearly the government has stated its openness to legislative
change from the day the use of section 47 was announced, which
was August 13.
This issue will only be decided following input from
parliamentarians and then only if such a measure contributes to
achieving a healthy, Canadian controlled airline industry.
I will repeat this for the sake of all here. The government has
stated that a change to the 10% limit will only be considered if
it will contribute to achieving a healthy, Canadian controlled
airline industry.
To make a decision prior to proper consultation, as is
effectively proposed by the hon. member's motion, would not only
deprive the government of the benefits of the advice of the
parliamentary standing committees, it would also be unfair to the
proponents of the private sector proposals that are seen to be
addressed by shareholders.
1635
For this reason, I oppose the motion. I also appreciate, as my
colleague did, the opportunity to state my position in the House.
Perhaps it will relieve me of the millions of phone calls I have
been getting.
Mr. Deepak Obhrai (Calgary East, Ref.): Madam Speaker, I
listened with great interest to the debate today. I heard the
minister's speech and my colleague's speech.
She talked about having an open debate, which is right. She
talked about certain issues like regional communities being
serviced, employees and the excellent airlines that we have. I
agree with her. There is no question that we have great
airlines. She made a good point. We do not oppose that; we
agree with it.
However, we do have differences. We know there is a definite
need to restructure the airline industry in Canada and that we
are facing the prospect of one airline. If the ownership rule
was raised, as the Competition Bureau chief said, we do not see
any danger in that. We see that as meaning that jobs will be
protected, the excellent service will continue and the skills in
the aviation industry will remain in this country. We do not see
a danger. As a matter of fact, we see our two airlines growing,
providing Canadians with more opportunity for jobs.
Why are we becoming restrictive? The Minister of Transport
would like to raise it to 25%. What is the problem in
restricting this to 49% to improve competition? We would have a
healthy aviation industry in this country.
Ms. Carolyn Parrish: Madam Speaker, I am very pleased to
respond to my friend from Calgary East. I too read the
recommendations and found that what was lacking was practicality.
The Competition Bureau suggested that we could bring in all kinds
of new airlines. It did not really matter who owned them, we
could raise the ownership portions to astronomical heights.
What has to be understood, which the minister understands, is
that this country was originally connected by railroads. Now its
lifeblood is being pumped through the airlines. The heart of the
country and its regions are being fed through the airlines.
It would be a gross miscarriage of justice if we lost some
control over Canadian ownership and some control over the
direction this new mega airline will go in. It would be a very
sad situation if we, as parliamentarians, stood back and let the
market forces take over. We have to understand that some of us
really believe this will keep the country together. It is
important to control it to a certain extent and to monitor it so
that it is the best airline it can be and one which will continue
to make Canada proud.
[Translation]
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, recently I
met with representatives of Air Canada, its subsidiary Air
Alliance and Canadian International Airlines.
The problem facing the managers of these two companies is that
their service is expensive in the regions because they do not
have enough passengers. If so, it is also because prices are
high.
I would ask my colleague if she would support, in the
restructuring of airline services in Canada, having a carrier
for international flights and an interprovincial carrier and
having unrestricted competition to serve the regions. Local
carriers would serve them and feed into the hubs for
interprovincial and international flights.
I think we would then have more and better service regionally.
1640
[English]
Ms. Carolyn Parrish: Madam Speaker, I hope I am not
misinterpreting the member for Charlevoix. My impression is that
he is willing to relegate Canadian Airlines to be the little
local server, which would provide a lot of nasty competition to
very successful small airlines which are out there right now, and
that he is willing to allow Air Canada to continue to be the
international carrier.
My perception of what has been going on between Air Canada and
Canadian Airlines for a long time is that it is like the big
brother and the little brother fighting each other, but they are
not prepared to take on the bully from across the road. I think
our real competition lies offshore and that international
airlines from other countries are taking a lot of the lifeblood
out of this country.
No, I do not agree with the member's position.
Ms. Wendy Lill (Dartmouth, NDP): Madam Speaker, I am
happy to be splitting my time with the member for
Regina—Qu'Appelle.
I am pleased to speak to the question surrounding the airline
industry. It concerns many people in my riding of Dartmouth and
they are looking to Ottawa for leadership on this issue.
It is also a symbolic issue for Nova Scotia and Canada, a debate
which shows how the Liberal Party has moved from being a
proactive force in Canadian politics to being a caretaker
government which equates the corporate good with the public good.
It clearly shows how out of touch members opposite have become
with the reality of most Canadians.
My constituents have approached me on the issue of the travel
industry. It is an industry which employs many people in
Dartmouth. They fear for their jobs. We have heard about the
more than 25,000 direct jobs involved in Air Canada and Canadian
Airlines, but I have also heard from people who make a living
selling seat sales. They worry that they will have no jobs when
there are no regional carriers, no national competition and no
more seat sales.
A retired Air Canada worker was in my office yesterday. He is
concerned about the future of his pension. He is not a direct
employee, but he is scared because this process may threaten his
income. Many direct employees, be they pilots, mechanics or
flight attendants, have told me or my staff that they will be
forced to move to keep their jobs due to the restructuring.
These people are being brave, but they are worried. Consumers in
Dartmouth are also worried.
Atlantic Canada has a sad history of watching our young people
go down the road. I do not think I am exaggerating when I say
that most families in my riding have a close family member in
central or western Canada. I also know that many people have
moved to Dartmouth from Cape Breton, rural Newfoundland or from
the Acadie to find work. Most of these peoples' families are
still down home. A major force which helps to connect these
families are airplanes.
Due to the former Conservative policies there is no real train
service left for most people in the maritimes. The Trans-Canada
highway system has been abandoned by the government and motorists
now face tolls throughout my region, so that option is becoming
less and less a factor as well.
What I hear people talking about over their coffee in the shop
next door to my constituency office is the next seat sale to
Calgary, Sydney or Gander. I am also amazed by the anger people
express over the fact that it seems to cost more to fly from
Halifax to St. John's than it does to fly from Toronto to London,
England.
People do not talk about the relative merits of the Onex or Air
Canada offers. They are not concerned about the share price.
They want to be able to see their kids. They want to know they
can fly to see their parents and be by their side in an
emergency.
These anxieties should have been addressed by the government.
It had the opportunity. The government started the ball rolling
by invoking section 47 in the summertime, but there were no
assurances from the minister for Dartmouth consumers. A throne
speech was delivered, but again silence on this issue. There was
nothing for maritimers.
The minister did say at one point that this was a matter for the
private sector, a position I believe he still stands by. He has
mumbled vague words about price protection, but nothing specific.
This week the minister has given assurances that the company will
be accommodated and that the 10% ownership rule could be changed,
but no such specifics to protect consumers.
The minister will do nothing to protect consumers because he is
part of a party and a government which does not believe there is
a role for government in the marketplace to protect consumers. He
is protecting the choices of shareholders, not stakeholders and
not the public.
It is sad that we have come to this. Canada was not built this
way and Canadians have never wanted it to be this way.
Halifax harbour has had a proud and vital part in the
development of my country and our community.
1645
We should always remember that its piers, its rail links and
equipment did not arrive with this pretty setting. It was
largely built by public money. In large part, Canada was created
based on promises of a public investment in a cross-Canada rail
link.
Our airline industry was also built by public money. These
investments were visionary in their recognition that accessible
transportation links in Canada are not a frill but a necessity.
The policy allowed for the concept of the Canadian government
acting for the public good. This tradition was gutted by the
Conservative government in the last decade and it has been
continued by the current Liberal regime.
It is sad that the Liberal government has lost that vision of
the public good. It seems that at every turn on questions of
trade, culture, the environment, health protection and
transportation, the government feels that the corporate good
outweighs the public good. The government has said that after
shareholders have finished carving up the current air carriers it
will bring in a law to allow the carve up. For the rest of us,
the government has said “trust us”.
I still remember the Liberals saying “trust us” for a national
child care program, and the Liberals committing themselves to
scrap the GST. I cannot trust them in any good conscience but I
can call on them to remember the concept of public good in
transport policy and do the following before bringing in any new
law: Protect the maximum number of jobs and ensure that any job
loss be offset through attrition and incentive packages; put in
place a regulatory framework to guarantee fair prices and equal
service to the consumer; explore all policy instruments at its
disposal, which might include an equity partnership, to ensure
that the public good is protected in a restructured airline
industry; have all affected stakeholders participate in any
eventual decision about the future of our air transport industry
prior to it being taken; and, keep foreign investors in a small
minority interest and do not allow them to obtain a controlling
position in the affairs of Canada's national airlines.
This is our national tradition. That is what I believe
constituents want to see.
[Translation]
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, I >have a
little more time than before to put my question.
As I was saying, after meeting with Canadian and Intercanadian,
the numbers are not there because it is expensive and it is
expensive because the numbers are not there, in short, it is a
case of which came first, the chicken or the egg. Or it is the
case of Maple Leaf sausages, the more we eat, the more we like
it, and the more we like it, the more we eat. We live with
that.
I would like to put my question by citing an example. There are
two sorts of travelers. There are those obliged to travel and
those travelling on holiday.
The first type of traveller may be a business person who must
get from point A to point B, for example from Baie-Comeau to
Montreal. That person must be in both places on the same day,
then come back the next morning to be at work. Another example
is a person who leaves Baie-Comeau for treatment in Quebec City
or in Montreal, and who comes back the same day or the next day.
The return trip between Baie-Comeau and Montreal for such a
traveller not leaving the country costs $900.
If a person travels from Baie-Comeau to Montreal on his or her
way to Paris or Florida, or anywhere outside the country, for a
holiday, it will cost that person $285. Where is the problem?
The problem is that people in the regions pay for the air miles
that frequent flyers collect.
Some airlines give air miles and access to the V.I.P. lounge,
but the person who must travel on business, or for treatment,
helps pay these promotions from major airlines.
That should be abolished. I said earlier that we should help the
regional carriers that bring passengers to hubs and to
interprovincial or international carriers, so as to have lower
airfares.
After talking to people from the chamber of commerce—and all
chambers of commerce make representations at that level—one
realizes that they are penalized, in terms of the airfare,
because they leave from a region to go to a major centre. They
are told that this is because the aircraft is half empty, or
half full if one is an optimist. But the problem is that it is
not profitable.
Why? Because it is costly. Let us eliminate the gadgets and the
promotional items and let us provide competitive prices for the
regions. In order to do that, the Minister of Transport must
promote regional development in the context of the air
transportation industry. I would like to hear the hon. member's
comments on this.
1650
[English]
Ms. Wendy Lill: Madam Speaker, I agree with the hon.
member that there certainly is a need for an investigation of the
fee structure in terms of transportation across the country.
I know members of the House find themselves having to make
ridiculous detours through Toronto to reach another location,
perhaps in the maritimes. Sometimes when flying from Calgary,
one has to go through a place like Winnipeg to get to somewhere
in the north. There are a lot examples of erratic and irrational
detouring going on. I believe all of that has to be taken into
account in terms of it being a system that will meet the needs of
Canadians.
Mr. Peter Mancini (Sydney—Victoria, NDP): Madam
Speaker, I listened with interest to the last question from the
hon. member for Charlevoix. We, too, in Cape Breton understand
how difficult that is. The cost of flying from Cape Breton to
Halifax, a 40-minute plane ride, sometimes exceeds $700 or $800.
It is cheaper to go from Halifax to Europe and back again, or at
least one way, than it is to get from Cape Breton. With the
decline in hospital services and so many other services that
rural communities face, this is becoming an increasing burden on
people in rural communities.
Ms. Wendy Lill: Madam Speaker, I agree with the hon.
member from Sydney—Victoria.
Hon. Lorne Nystrom (Regina—Qu'Appelle, NDP): Madam
Speaker, the surprises never cease. I also want to say a few
words in the debate.
[Translation]
I support the motion proposed by the Bloc Quebecois this
afternoon on the future of Air Canada and Canadian Airlines in
our country, Canada.
[English]
As I said, I really am in support of the motion put forward by
the Bloc Quebecois today. I am surprised that some of my Liberal
friends are not supporting it as well.
I remember, for example, my hon. friend from Prince Edward
Island, when he used to be a progressive left-wing Liberal, would
get up and make all kinds of speeches about Canadian nationalism
and how we had to look after our own country and stand up for
Canada. I remember that before he became power hungry and ran as
a Liberal in Prince Edward Island. I wonder where those speeches
are now.
All the Bloc Quebecois is doing today is moving a motion that
respects existing Canadian law. I am sure you are surprised by
this, Madam Speaker, but the Liberal Party is going to vote
against it. What the Bloc is saying today is that we should
respect the current law that says that no single entity,
including someone as wealthy as the member from Prince Edward
Island, can buy more than 10% of Air Canada. That is the law and
that is what the Bloc is saying today.
What does the Liberal Party say? It says “No, we are not going
to support that”.
An hon. member: You haven't been listening.
Hon. Lorne Nystrom: If I have not been listening, I will
be very interested in watching the member stand in his place here
later on today and vote in favour of the motion put before the
House. We will then see who is going to be listening, myself or
the hon. member from P.E.I.
When Air Canada was privatized, parliament in its wisdom, and I
think it made the wrong decision to privatize in the first place,
decided that no entity could own more than 10% of Air Canada and
that a maximum of 25% of it could be owned by foreigners. We
were paralleling the Bank Act in many ways where nobody could own
more than 10% of a bank and no more than 25% of a bank could be
owned by non-Canadian entities, institutions, pension funds, et
cetera. That is what happened.
Now the Liberal Party is considering increasing the 10% rule. I
wonder why. It think it is doing that because the Minister of
Transport is favouring the proposition put forward by Mr. Gerald
Schwartz who is the president of Onex.
1655
It is interesting to talk about Mr. Schwartz. Mr. Schwartz is
one of the most effective fundraisers in the Liberal Party
anywhere in the country, contributing and raising hundreds of
thousands of dollars for the Liberal Party and for candidates in
that party, in particular in the province of Ontario. I think
this is part of what the debate is about. If it was not about
that why would the government want to change the 10% rule? Why
does the government not say to Mr. Schwartz or anyone else, “If
you want to make a proposal, do it in the context of existing
law”.
As my friend in the Reform Party says, it is like changing the
rules in the middle of a game. That is what the Liberal Party
wants to do. I am surprised at the hole that the Minister of
Transport and the Prime Minister have on the backbenches. Some
of these people will not rise in their place and say, “All this
motion is doing is supporting the existing law in the country”.
Why will they not get up and do that? It is because there is
another agenda.
The minister from Toronto is favouring his buddy, Gerald
Schwartz from Toronto, who is a big fundraiser for the Liberal
Party of Canada. That is the kind of politics that we have here
today. It says an awful lot about the need for more free votes
in the House of Commons where a member can get up and voice his
or her concern without fear of losing a job as a parliamentary
secretary or chairmanship of a committee.
I have spoken to many members of the Liberal Party in the House
who are dead set against what Gerald Schwartz is trying to do,
who are not at all happy with the minister from Toronto and who
are unhappy that the minister is talking about changing the rules
to favour one airline over the other. Where are those people
today? They are not going to get up and speak in support of the
motion that is before the House.
This is a very important issue. I come from Saskatchewan. I
come from a smaller market where we do not have many flights. We
have very few flights by Canadian Airlines. We have a few more
by Air Canada. We have very few flights in all. It is a captive
market. The prices are very expensive in a small market like
Regina or Saskatoon, Saskatchewan. People are very concerned
about the future of the airline industry.
If the 10% rule goes through, how high does it have to go before
in effect we lose control of an airline industry in the country
to big financial institutions or big American airlines in the
United States? I want members to think about that.
Even the Conservative Party of Brian Mulroney, when it
privatized Air Canada, brought in the 10% rule for a purpose. It
was to make sure the airline remained in Canadian hands. That
was the Conservative Party.
Here we have a Liberal Party that is now more conservative than
the Conservatives and more conservative than Brian Mulroney. It
is a shame.
I can see members across the way nodding their heads in
agreement that it is a real shame. If this rule goes through, we
are going to lose the airline industry and people know that. It
is only a matter of time before the big airlines buy out the
Canadian airline industry, buy out Air Canada and Canadian
Airlines. Big institutions in the United States will invest
money and buy out these Canadian airlines.
That is the issue today. If we had a true parliamentary
democracy in the country, the vote this afternoon on this motion
would, I think, be overwhelming in terms of support for the
motion put forward by the Bloc Quebecois. That is why we need
change in terms of how the House governs itself.
Before my time expires, I have a couple of other things to say.
One thing the government should consider is the federal
government itself taking an equity position in a new national
airline. I would suggest about 15%. I think 15% would give the
people of the country, through the federal government, enough
control to make sure that the industry stays in Canadian hands,
that we have jobs here for Canadians, that rural communities and
smaller communities will to be served, that the price which
passengers pay when they fly on an airline will be reasonable
regardless of the size of the Canadian market. I think that is
one thing that can be done.
I believe that sooner or later, probably sooner than later, we
are going to end up with one national airline.
We do not have the market to support two big national airlines. I
do not think any other country in the world, except the United
States and perhaps Australia, has more than one national airline.
Of course Australians have to fly almost always when they leave
their country. I do not think we have the market to have two big
national, successful, economic airlines in this country.
1700
If we are going to have one airline, the government should
seriously look at the possibility of an equity stake in that
airline. The public should have some input and some clout. The
public should have a couple of people on the board of directors
of the airline and have some say over the direction in which that
airline will go.
Those are some of the important issues we have to be debating
today. I end by saying once again that we support the motion put
forward by the Bloc. I think that the 10% rule will have to
stay. If it goes, we are in danger of losing not only Air Canada,
but Canadian as well within a few short years into the hands of
investors from the United States.
Mr. Wayne Easter (Malpeque, Lib.): Madam Speaker, it was
an interesting speech by the member for Regina—Qu'Appelle. There
were a lot of words but not much substance.
Let me be clear. I too am in favour of the 10% rule, but I do
not not want to see the government tie its hands so that we do
not have some flexibility.
One remark the hon. member made which did make some sense is
that people are concerned about the future of the airline
industry in this country. That is true. The government is
concerned. The minister is concerned. That is why the minister
outlined the five principles. That is why the minister dealt
with the Competition Act in order to try to solve this problem in
a very managed way.
The member took one personal shot at me which I should mention
and that is that I am a little bit left. Yes, and I am proud of
it. The difference between my party and that party over there is
that we are willing to look at some flexibility for the good of
the country. We do not bury our heads in the sand as does the
New Democratic Party which does not look at all the options.
What is the member's view on the five principles that the
minister has outlined?
Hon. Lorne Nystrom: Madam Speaker, I learned a long time
ago that there is a difference when a Liberal talks about
principles and when a Liberal puts something into action and into
effect. Sometimes there is a long distance between the two.
I remember my grandfather telling me many years ago about the
Liberal Party promising medicare in the campaign of 1919. I did
not see medicare in this country until about 1965 after it was
brought in by a CCF government in the province of Saskatchewan.
There is a long distance between the principles of the Liberal
Party and the action of the Liberal Party.
I remember very well the Liberal Party campaigning in this House
against the GST. Does anyone else remember that? I was here. I
saw the Liberals filibuster on the GST in the House of Commons.
They spoke in committee hour after hour, “If we are elected to
government in this country, we will abolish the GST. We will get
rid of the GST”. About the only one who stood by her word was
the Minister of Canadian Heritage who resigned her seat and ran
in a byelection because of her commitment on the GST. I remember
those debates.
I remember my friend from Prince Edward Island when he was the
national president of the farmers union based in Saskatoon. I
remember going out to his retirement and cheering him on as a
good progressive left-wing thinker. Part of the reason was that he
campaigned against the free trade deal. He was campaigning
against NAFTA.
His Liberal Party was campaigning against NAFTA and the free
trade deal. The Liberals were sitting in these benches calling
Brian Mulroney a sell-out. They were elected and what happened?
We are still part of the FTA. We are still part of NAFTA. There
have been no changes, no amendments, nothing. We are now talking
about selling our water. We are now part of the WTO. That
former Canadian nationalist, Sergio Marchi,—I can use his name
now as he is at the WTO—was campaigning against those deals.
What is he doing now? He wants to expand them more and more.
That is the Liberal Party. Madam Speaker, I am sure if you were
not in the chair you would get up and agree with me, because that
is the history of the Liberal Party. Liberals say one thing and
they do something else.
When members of the Liberal Party campaign in the opposition,
they campaign for the left and they sound like New Democrats.
When they are in government they sound like Conservatives, except
for the last few years when they have sounded like Reformers. The
Reform Party has set the agenda for them.
[Translation]
Mr. Gérard Asselin (Charlevoix, BQ): Madam Speaker, we are of
course pleased to have the support of the NDP, the Conservatives
and the Reform Party. The Bloc Quebecois will back them one
hundred percent.
1705
There must be a few Liberal MPs who support this motion, such as
the hon. members from Lac—Saint-Louis, Vaudreuil—Soulanges and
Thunder Bay, and I trust Mr. Lalonde will stir up some Quebec
members.
The primary intent of the Bloc Quebecois' motion was to inform
the public on issues relating to the future of air
transportation, as well as to ensure that this situation was
treated fairly and in the same way as the Caisse de dépôt et de
placement du Québec when it was told that one could not invest
more than 10% in the CN. The maximum for Petro-Canada and the
banks is also 10%. Why should it be different for Onex? What
complicity is going on between the Minister of Transport and One x?
Hon. Lorne Nystrom: Madam Speaker, this is not a very difficult
question and the answer is that Onex president is Gerry
Schwartz, and that he gives a lot of money to the Liberal Party.
This is why the member from Prince Edward Island does not dare
stand up in this House and vote in favour of the Bloc Quebecois'
motion. Mr. Schwartz contributed to the election funds of
several Liberal candidates in the Toronto area during the last
election campaign. This is one of the reasons why the Liberal
Party will not support the motion.
[English]
Mr. Roy Cullen (Parliamentary Secretary to Minister of
Finance, Lib.): Madam Speaker, I am pleased to enter the
debate on the restructuring of Canada's airline industry, not
necessarily to speak to the Bloc's motion. Usually when the Bloc
brings something to the House it is a sort of myopic view of
public policy. Here coincidentally, Air Canada's head office is
in Montreal, Quebec and Air Canada does not want to see any
change to the 10% rule. Therefore the Bloc has come in here
supporting no change to the 10% rule.
I would like to speak on the key issues here, which are the
amount of Canadian ownership and control in any industry in
Canada and the question of competition and service.
The 10% rule should be put in context. When Air Canada was
privatized however many years ago that was, the policy intent was
to ensure that the shareholdings were broadly held across Canada.
The government brought in a 10% rule to ensure the shares were
widely held.
The question now before the government is whether the 10% rule
should be relaxed. It makes eminent good sense to have a look at
that. That is all our government has said, that we should not
rule out any options, that we should have a look at the 10% rule.
The 10% rule does not apply to Canadian Airlines. What is the
magic of this 10% ownership rule? It has to do with how widely
the shares are held. It has nothing to do with foreign
ownership.
To argue, actually to cheat, to say that we should not bring any
policies forward that do not comply with legislation, the next
time Air Canada or any interest group phones me and says that we
need to change these policies or legislation, I will tell them
that I am sorry because the legislation is here and that is what
we are working on, so we will not consider any proposals. That
is what I would do.
Our role is to legislate. We have a proposal in front of us
which someone has asked us to look at. We must debate it. It is
a good debate. Our government has said that parliamentarians are
going to debate it.
I will certainly be voting against the Bloc motion. In a public
policy sense it does not make any sense. Why would we close down
that door at this point in time?
I would like to address the other hypocrisy I have seen in this
debate. On the one hand the Reform Party says let the market
decide, that the market should control these things, that it
should determine what the best mix of air service and air
structure is in Canada. Then the minute the government lays down
some public policy principles, the Reform Party says that the
government is interfering. The minute the government says that
we should really look at the 10% rule, the Reform Party says we
are creating favouritism. In fact we are creating favouritism
the other way if we do not open that door because Canadian
Airlines is not governed by the same 10% rule, not at all.
We need to get serious in this debate.
1710
In terms of the government's role, we came out with a set of
five principles. To my mind that was what we needed to do, had to
do and it is what we did. We said that rather than nickel and
dime every single proposal or alternative that is out there, we
are going to set a framework. The government has embellished
that somewhat since the first five principles were set out. No
matter what proposal we look at, the government should weigh it
against these five public policy objectives. That is what our
government did.
I would like to reiterate those five policy principles. The
government said that no matter what proposal comes forward, and
by the way, we do not have any firm proposal right now because
nothing has been approved by any shareholders. Once a proposal
is approved, we will evaluate that proposal against these
criteria: Do we have Canadian control and ownership? Will we
have good competition and service to consumers? Will we have
good pricing in Canada? Will we be able to serve small
communities? What about the rights of employees? Will they be
protected as best as they can?
Of course safety underlines everything. That is the mission of
Transport Canada. That is its number one objective. Safety is a
concern in the context of any proposal that would come forward.
Our government laid out the five principles. In fact, when the
government relaxed section 47 of the Competition Act, I thought,
naively perhaps, that maybe the airlines would start talking to
each other.
In fact, the government's policy purpose may have been to have
Canadian and Air Canada talk to each other to try to rationalize
some of this excess capacity out of the system. It is no secret.
People in Canada recognize that when there are two flights at
the same time from Toronto to Calgary, one Canadian and one Air
Canada, at 7 p.m., 8 p.m., 9 p.m, and 10 a.m. It is called wing
tip to wing tip flying on the same routes. We cannot have the
luxury of that kind of excess capacity.
Some pilots will say that the planes are sort of full. Probably
they are, but at what price? We know the way the pricing is done
these days. There are about 60 different prices. About 80% of
the people sitting in that plane are covering the variable costs
maybe, but that is about it. Airlines cannot survive that way,
Canadian or Air Canada.
We know Canadian Airlines is in deeper trouble, but Air Canada
really has not performed that well over the last 10 years either.
We have excess capacity and we have to deal with it. We cannot
hide. We cannot run. We have to deal with it.
Canadian ownership is an issue that is important to all
Canadians. Frankly, I do not think we should compromise on the
25% rule at all.
In terms of the proposals we have in front of us, at least in
terms of propositions, the question becomes how do they stand
against that test? There has been a lot of misinformation about
that in my view.
The Onex proposal is really proposing that American Airlines
would have about 15% of Canadian. In fact, its shareholding goes
down. In terms of its equity participation I think it is one
member of the board of directors, or two out of thirteen,
something in that order. We know that is not effective control.
The Canadian Transportation Agency will rigorously look at any
proposal that comes forward. It will deal with the question, is
it effective Canadian control?
The ringer, the hook, is in all the side agreements. There are
side agreements with American Airlines and Canadian. We know
about the reservation systems, maintenance.
The Canadian Transportation Agency will look at any proposals.
It will study them and come back to the government and say that
it has looked at them in some detail. The agency will say that
it has looked at every single agreement that Canadian Airlines
has with American Airlines and that from a policy perspective it
is either effectively controlled in Canada or it is not. However,
it is a valid public debate to have notwithstanding that we do
not have all those facts in front of us.
1715
Another aspect is the Competition Bureau. Its criteria is what
does it do to competition. It does not have to worry about
effective control or Canadian control. It just has to answer the
question what is in the best interest of competition.
That is a very valid question but the bureau does not have to
worry. If we look at cabotage, it means that we would open up
our doors and allow foreign airlines to come in, pick up
passengers in Toronto and take them to Calgary. It could be
American Airlines, United or whatever. The bottom line in my
view is that with the economies of scale of some of the huge
American airlines our airline or airlines would be hard pressed
to compete.
Why would we allow cabotage in Canada without getting the
reverse, for example, in the United States? That would be folly.
I do not think the Americans are prepared to allow cabotage in
the United States. That to me is not an option.
The Competition Bureau clearly has a role to play. We are
essentially looking at a one airline policy in Canada. Anyone
who thinks that we cannot do anything about that is not really
thinking through the facts. As a government we have a lot of
options.
We could look at reregulating the industry. It is not an option
that I would support, but we could do that in some limited way. I
am very concerned about service to remote areas of Canada and
some areas that might be marginal.
However, if we give an airline a chance to rationalize some of
that capacity, instead of 12 flights a day into certain centres
by Air Canada and 12 by Canadian Airlines almost at the same time
maybe we would end up with 8 in those centres but we would have
service to other areas on a much more frequent basis.
How do we structure that? We cannot structure it on the basis
of hope. We have to put some policy meat on those bones. Our
government through debates and discussions with all
parliamentarians should consider that.
I do not like either of the deals that have been proposed the
way they stand right now. I understand that Onex has come back
with something today. It is trying to limit the perception of
American Airlines effective control, but until we see all the
side deals I do not know if we can really deal with that.
I am glad these companies are at least thinking of how they can
try to meet the public policy objectives of the government. I
looked at the Air Canada proposal. In my mind I saw one proposal
that was a heavy, dominant American Airlines proposal and another
one with Lufthansa and United. It was sort of like pick our
poison. We have some work to do.
I would have liked to have seen one airline do the major
financing in Canada. I am not convinced that it cannot be done.
Why can it not be financed in Canada?
I am not sure that the Air Canada proposal deals effectively
with excess capacity. They are going to run Air Canada. They
are going to run Canadian Airlines as a separate entity. They
are going to throw in a computer discount airline into Hamilton.
What does that do to our capacity? By the same token, unless the
new Onex deal has some interesting propositions with respect to
American Airlines effective control I think that proposal is
problematic.
I remember being at the transport committee one day when we were
looking at the competitiveness of the air transportation sector.
I asked a pilot group or some group about code sharing on
domestic routes. All the airlines do code sharing
internationally. Instead of having both a Canadian Airlines and
an Air Canada flight leaving Toronto at 7 p.m. to go to Calgary,
why would they not code share that?
Naively I thought when the government relaxed section 47 that
the airlines would talk.
All they have done is gone off their own separate ways and now we
are into mergers. Maybe a merger is the only solution. The
airlines say it is.
1720
I was hoping that while they had this opportunity they could
actually talk about rationalizing some of the excess capacity. On
the notion of cherry-picking routes, Air Canada proposed to
Canadian Airlines that it would take its international routes.
That is where Canadian Airlines makes its money. Is that really
working toward a solution?
The airlines have to get serious about dealing with this issue.
I would like to see a little more creativity and imagination
because at the end of the day we will have some very tough policy
questions in the House. I am not sure that we are getting much
closer. I really hope that we can.
Air Canada pilots have been to see me in my riding of Etobicoke
North, which is very close to the airport. The seniority issues
are very serious for Air Canada pilots. Whatever happens I would
like to see the airlines, if merger has to be the solution, deal
with it in a very complete and concrete way.
If merger is the only answer there are some exciting
possibilities. For too long in Canada we had Canadian Airlines
and Air Canada beating each other up, sometimes deliberately,
while at the same time the international carriers were coming in
and picking up our business.
If we end up with one airline with some rules and benchmarks in
terms of competition and service, it will be our job as
legislators to put that into play. I think the prospects are
incredible exciting. We can then take on the world with whatever
airline comes out of this and actually create a very profitable
airline that serves all Canadians very well. We are not there
yet and still have some more work to do.
There is the question of providing a regulatory framework. We
have Canadian Airlines and Air Canada with regional carriers.
Some of the regional carriers like Air Nova, Air Ontario and
Canadian Regional are owned by the major airlines. Somehow there
has to be some rationalization of that capacity. I am not quite
sure how that will work without ending up with a monopoly
situation.
I look back to an experience in Toronto of a few years ago when
we had a neat little airline called City Express. It was flying
out of Toronto Island, Montreal and Ottawa. Some entrepreneurs
put together the airline using Dash 8s. It was a great service.
It was going very well. Suddenly Air Ontario came in with deep
pockets and priced City Express out.
I am concerned about that. How do we make sure that if we have
a monopoly type situation there will be competition. I am
hopeful we can reach some sensible conclusions around that. We
talk about the rhetoric of a two airline policy but in Canada we
have about a six airline policy. There was a time when it was
Air Canada and Canadian Airlines, but now we have some very
serious players in the market; Air Transat, Canada 3000 and the
WestJet.
As long as we can create an environment that is friendly to them
and if we end up with one airline, perhaps that will be part of
the solution on competition. We really have to apply our minds.
The airline industry has to be much more creative. I do not want
to pick on Air Canada, but frankly I am not that keen on the Onex
bid either.
To line up Lufthansa and United and flow the money through to
the shareholders, throw something into Hamilton and not deal with
the capacity issue, would not be highly constructive. I am not
sure that what is on their minds is picking up the pieces of
Canadian Airlines.
1725
I know we have talked about it but I will put it on the floor
here. I do not think Canadians have a big appetite for that. The
Government of Canada assigns the international routes. The other
day I asked someone from Air Canada whether Air Canada presumes
the international routes, if Canadian Airlines flounders, would
be allocated without any question to the new Air Canada. It
seems to me that our government would have options. I do not
know. I am not privy to those considerations of the government.
We could take Air Canada's international routes and give them to
Air Transat or Canada 3000. Why are we obliged to give them to
any surviving airline? We have options.
I hope that all the players in the industry would stop playing
games, apply their minds, be creative and try to come forward
with propositions that meet our public policy objectives and the
concerns and needs of all Canadians. As legislatures let us get
down to the business of setting the policy framework that will
make this happen in a way that is acceptable to the Government of
Canada and to all Canadians.
Mr. Deepak Obhrai (Calgary East, Ref.): Mr. Speaker, I
listened to my colleague's address. He raised all the problems
that exist in the airline industry and put all the issues on the
table. However, he did not say what should be done. He is
leaving that to the airlines to sort out. He touched on some
very good points, the biggest being competition. He talked about
a regional airline that priced the other one out of business.
My question to my colleague is about increasing the foreign
level as the Competition Bureau has indicated. Most people point
out that it would go to the so-called new airline. I am looking
at it another way. I am looking at airlines like WestJet that
has done a tremendous job for services in the west. These
companies are growing bigger and are taking over and providing
that competition for Canadians—
The Speaker: I do not know if there was a question there,
but the hon. member can address himself to the statement.
Mr. Roy Cullen: Mr. Speaker, the member opposite is a
member of the Reform Party. Is it not your philosophy to let the
market decide? Suddenly the government has to decide what—
The Speaker: My colleague, always address your statements
to the Chair.
Mr. Roy Cullen: Mr. Speaker, my apologies. The role of
government is to set a policy framework against which proposals
will be weighed.
As far as foreign ownership, as I said before the sole
perspective of the Competition Bureau is competition in Canada. I
wish the Competition Bureau would be as rigorous on this as it is
about gasoline pricing. I have certainly been involved in that
discussion. It does not have to look at the question of whether
it is Canadian controlled. That is a serious issue for
Canadians. I would have problems going above 25%. From a
strictly economic point of view one could argue that it might be
more efficient.
As policymakers we have to look at things other than economic
efficiency. In fairness to the Competition Bureau that is its
mandate, but as legislators we have to look at it more broadly.
[Translation]
Mr. Maurice Dumas (Argenteuil—Papineau—Mirabel, BQ): Mr. Speaker,
if I may, I would like to put a question to my friend from the
Liberal Party.
Does he remember Bill S-31, which limited ownership in a Canadian
company to 10%?
It was passed, of course, to prevent the Caisse de dépôt et de
placement du Québec from buying shares in Canadian Pacific. I am
surprised to see that today the government is willing to set
aside the act to accommodate the Liberal Party's bagman, the
Onex president, and increase the 10% limit to allow Onex to take
over Air Canada.
1730
[English]
Mr. Roy Cullen: Mr. Speaker, as I said in my remarks,
when Air Canada was privatized the decision was made to limit
single shareholders to 10%. That was done so that the shares
would be widely distributed across Canada. I was not there at
the time, but it was probably a sensible policy decision. My
colleague was there and he agrees with me. The irony is that
there is no such requirement for Canadian Airlines.
Foreign ownership is another interesting twist. In the Onex
proposal, American Airlines would actually own less of Canadian
Airlines than it owns today. I think it owns about 34% or 35%
today. That would come down to about 15%. How can we apply one
standard for Air Canada and another for Canadian Airlines?
The policy objective of widely distributing participation in Air
Canada has been met. Why do we perpetuate this? It is a good
debating point, but to me it does not make any sense to close
down the option until we have had a discussion about it.
Frankly, I do not see the public policy objective.
The unfortunate thing is that when Canadian Airlines was in
severe financial difficulty American Airlines came in, put a lot
of money into Canadian and sewed up a lot of agreements which, in
the final analysis, as a business proposition, was probably the
thing that had to be done. However, at the end of the day,
Canadian has been strapped with some agreements which have really
hampered it.
I am not very happy with the extent of control American Airlines
might have over Canadian the way it is structured now. However,
I gather that Onex has come forward this afternoon with a new
proposal and I will read it with interest.
Mr. Gerald Keddy (South Shore, PC): Mr. Speaker, I was
listening to the member's speech and, for the life of me, I do
not know in which direction he is headed. He started at one
point in the circle and he chased himself all the way around the
circle. I will ask him a direct question which has to do with
foreign ownership.
On October 26 the minister said that he would address the 10%
foreign ownership regulation. He said that he would take another
look at it. That has not happened yet, but there is a lot of
discussion on it. The minister is willing to look at it. We now
have a new Onex bid, with direct Liberal connections, that is
apparently proposing 14.5% foreign ownership.
If the minister wanted to open this up for direct competition,
would it not have been better to open up the foreign ownership
bid early on when the Competition Act was cancelled? When the
foreign ownership part is opened up 78 days later there are fewer
people willing to put a bid together in the timeframe that is
left during the 90 days when the regulations of the Competition
Act have been suspended.
We are stifling competition. We are allowing one person to bid
because they have already done their homework, they have already
spent millions of dollars, and they already know how much and
what limit they can reach.
Mr. Roy Cullen: Mr. Speaker, I will answer on two fronts.
First of all, the member is in error. As many Canadians are
doing, he is mixing up the 10% ownership rule with the foreign
ownership rule.
The 10% rule means that for Air Canada, not Canadian Airlines,
no single person or body can own more than 10% of Air Canada.
That was implemented when Air Canada was privatized. The foreign
ownership rule is the 25% rule.
When the Onex proposal came forward it was in the form of a
proposition. Clearly, if the government at that point in time
had a policy decision that it was not going to contemplate
increasing the 10% rule, the government would have said so. Onex
would not have proceeded up to this point if it did not feel the
government was open to that discussion.
I find it amazing that Air Canada would be so dogmatic about the
10% rule. I think it is somewhat self-serving. If Air Canada
came forward with a proposal which violated the 10% rule, my take
on that would be that it would be saying that it does not meet
the requirements of the law of the land now, but it would
respectfully submit that there is a proposal on the floor which
now exceeds the rule and it would like its proposal to be
considered as well.
1735
We are legislators. When people talk to us they ask us to
legislate. Why is it so impossible for someone to say that we
should reconsider the 10% rule?
At times, when it is convenient, people hide behind these rules.
No one has actually increased the 10%. No one has done that. No
one has violated the law of the land. Someone has come forward
and said that perhaps we should reconsider. Frankly, if Air
Canada had done the same I do not know how our government could
possibly have said “You cannot do that”, because we did not say
that to Onex.
I am fully confident that if Air Canada had come forward with
that proposition we would have had the same kind of policy
framework that has been articulated more recently by the
minister.
Are we playing games or are we interested in solutions? Let us
try to work on this.
Mr. Peter MacKay (Pictou—Antigonish—Guysborough, PC):
Mr. Speaker, I would indicate at the outset that I will be
splitting my time with the hon. member for Kings—Hants.
I am very pleased to rise to take part in the debate, a debate
which I think has caused a great deal of uneasiness. There have
obviously been even elements of consternation in the debate
today.
As we have seen in a number of instances, it appears that the
government is now lapsing into crisis management. We have seen
it in the fisheries as a result of the Marshall decision. We
have seen it in the debate over the pay equity settlement. Let
us hope that this particular situation is not going wind up
before the courts. The hon. member who just spoke has indicated,
quite rightly, that we as legislators have to deal with
situations such as this.
I want to congratulate the Bloc for bringing this motion
forward. The timeliness of it is extremely important. It is an
issue that is moving along at breakneck pace and one which has
not been handled particularly well by the government.
We will be supporting the motion because the motives behind the
proposal to increase the ownership limit of Air Canada, the 10%
rule, and the 10% public participation rule, are very important
and credible and should be considered free of all outside
influences. The 10% rule is one of the issues that is at the
very crux of this debate, as well as the confidence that
Canadians have in the deals which are being proposed and the
solutions to this crisis in our airline that are being brought
forward and supported, for the most part, by the government.
The current proposal calls for a change to the 10% rule. This
is one change that would be completely influenced by one proposal
over another on the issue of merger. It shows and smacks of
favouritism.
The process itself is one that has been fraught with a great
deal of misinformation and a great deal of confusion. The
government's timing of the announcement with respect to the
suspension of the Competition Act was something else that caused
a great deal of concern on the part of all Canadians and a great
deal of concern in particular in the business community because
it has broad, far-reaching implications for all business
practitioners in the country.
The proposal to change the 10% rule at the beginning of the 90
day negotiation period might have been acceptable. It might have
been acceptable. It would certainly have been more acceptable
than what we have occurring in this instance, which is, 16 days
before the end of the 90 day suspension of the Competition Act,
we have the government basically moving the goal posts, changing
the rules of engagement and allowing, without any doubt, a very
undue and unfair advantage to one of the proponents, one of the
proposed businesses that looked to engage and take over what is
our national airline, or our two national airlines.
To put this in its proper context, with 16 days to go in the 90
day window for negotiation, the government suddenly, out of the
blue, announced a plan to change the 10% ownership rule.
That left absolutely no time for any serious offer or any serious
business to come forward and develop, or at least put into the
mix a bid with respect to this offer. The new proposal, if it
were to come, would be at an unfair advantage. Even if a
proposal could be made within the 16 day period, it would be
completely unfair compared to a proposal made by, in this case,
one of the proponents in the time period it has had. The timing
itself is something that is extremely suspect and extremely
tenuous when it comes down to the issue of fairness and
competition, which is what is at the very root of this issue.
1740
On the issue of the 10% rule, the proposal to change the 10%
rule at this late date strongly demonstrates that the government
is flying by the seat of its pants, improvising daily as to how
to react or respond to the various businesses that are currently
involved. As I said before, the crux of the issue is that there
could have been more. In a competitive business world what we
would surely want when it comes to our national airline is to
have the best proposals and the best options to choose from. It
is a very fundamental motherhood issue.
As the hon. member for Cumberland—Colchester put it, in terms
that Canadians can understand, if we are going out to Canadian
Tire to buy a toaster, we are not going to buy one brand of
toaster without looking at the various options that are
available. Compare that to having national airlines worth
billions of dollars and the suggestion that we should simply buy
this one because it has been proposed and it is the only option
that is available because the government tells us so. Behind the
scenes we know that is not the case. This is not a situation
where there was fair competition, where the rules that applied to
one business applied to all. It is at the very fundamental root
of the Competition Act that this is the case.
The Competition Act was suspended. The rules were pulled away
and, very curiously, the minister asked that the bureau look at a
very narrow part of this deal. He has chosen to take out of the
mix the normal scrutiny that would be applied by the bureau and
he has, for all intents and purposes, emasculated the Competition
Bureau and given it a very specific mandate as to what it should
look at in the context of this deal. He has said: “The
minister's option is the preferred option and therefore I am
going to point you in that direction. I am not going to ask you
to look at the entire situation as you normally would if the
Competition Act were in full force and effect, but I am going to
suggest that you take this particular aspect of your job and you
follow it. In the meantime, I will continue to oversee the
situation”. It was a very paternalistic and narrow view taken
by the minister. The effect at the end of the day is that we may
wind up with a dominant carrier approach which will not serve
Canadians well.
One of the other fundamental motherhood issues is how this will
affect jobs, how it will affect the employment situation in the
country. The Canadian aviation industry includes thousands of
employees in all regions of the country. Again I congratulate
the Bloc for bringing the matter forward, but this is not limited
to any one region of the country. It has drastic implications in
the west, in the east, in the north and all over the country.
More than anything else, this is something the government has to
constantly have at the front of its mind and hopefully on its
priority list, as to how it examines, manages or mismanages this
issue.
What is the effect going to be on jobs in this country? There
are dozens of smaller airlines that will obviously be affected as
well, and there are hundreds of airports and hundreds of
communities, in terms of being isolated in the service that will
be provided to them, which will be affected in a profound way if
this issue is not resolved in a fair and equitable manner.
This is not a new situation. It is something the government
surely should have seen coming down the pike, but again, somehow,
for some reason which is beyond me and beyond the understanding
of many Canadians, the government is not reacting. It is simply
improvising and reacting in a day to day way, as opposed to
having some sort of concrete or deliberate path that it is
following, giving Canadians the confidence they should have in
their national government.
1745
I again hearken back to the issue of employment. The government
is proposing to completely restructure and revamp our national
airline in 90 days. That is less than the gestation period of a
mayfly. Somehow the government wants to completely change our
national airline and asks Canadians to have faith in the process,
all the while changing the rules of engagement as it goes along.
This is not something that should instil a great deal of
confidence in Canadians. It is something we should slow down and
something we should look at extremely carefully. We should
ensure that those who are in the know are actually making the
right decisions.
Part of the problem here is that we do not know who is in the
know. We do not know what information is available. We do not
know when the information was released that the Competition Act
would be suspended. We do not what information was exchanged
between the various airlines prior to the suspension of the
Competition Act.
We must be extremely diligent in the way we proceed in the next
number of days, months and years because the effect is going to
be profound and potentially devastating on communities in the
country.
I wish Godspeed to the minister and to the transportation
committee as they proceed in their deliberations because this is
a very serious issue. I am hoping and putting trust in those
members of the committee that they are going to hold to account
the government on this matter.
Hon. David M. Collenette (Minister of Transport, Lib.):
Madam Speaker, I want to thank the hon. member for his last
comments, in the best of parliamentary spirit, wishing all of us
well. This is a very difficult file and it does have
ramifications for travel throughout the country. How we handle
this will define who we are as a country and a people as we go
into the 21st century.
I was in and out of the chamber, for which I apologize because I
missed some of the hon. member's remarks, but I was led to
believe that he made a statement to the effect that I have said
that the 10% limit is to be raised.
What I said at the committee the other day for the public record
is that the government is prepared to consider raising the limit
of 10% if, and only if, there is an interest that will be pursued
in improving the airline industry. In other words, if it
improves the viability or the stability of the airline industry
then we would consider it.
I think what we are doing is in the best of parliamentary
traditions. We are consulting MPs. We are having a debate
today. I welcome the debate as well because I think it has been
a very good debate.
I hope the hon. member did not unintentionally mislead the House
with his statement a few minutes ago.
Mr. Peter MacKay: Madam Speaker, I appreciate the
attendance of the minister and his participation in the debate.
I think it is extremely important. As he said, the implications
are grave. This is probably the biggest and most complicated
file that this ministry has faced in decades.
I want to be very clear on this. I would never want to mislead
the House or misrepresent the facts in the debate. My
understanding is that the minister has floated the idea of
changing the 10% rule. He has not said that he would or he would
not.
However, the crux of the matter is that this causes confusion
within the industry. This causes the participants in the debate
to feel like they are on unstable ground as to what is going to
happen next. The lack of policy, the lack of leadership and firm
commitment as to what the rules of engagement are, is causing a
great deal of misunderstanding, mistrust and confusion among the
proponents and among Canadians.
I would encourage the minister to be perhaps more definitive and
more diligent in making his position clear to Canadians and
making his government's policy or plan clear to Canadians so that
we do not have issues swirling out there in the public debate and
this furore over what is going to happen and the confusion and
consternation. That is not what is needed.
1750
We need firm leadership from this minister and the minister of
fisheries on other issues, and many issues that are out there
right now. I am certainly glad that we have the ability to
debate this in the House.
However, it would have been nice if we had been back here on the
start-up date that was initially proposed in September. We would
have had a better opportunity to look at all of these issues at
an earlier instance.
Hon. David M. Collenette: Madam Speaker, I have two
questions for the member. First, he talks about a lack of
policy, has he read the policy framework that I deposited in
front of the committee the other day?
Second, is he suggesting that we should have said that we would
not consider raising the limit? I submit that if we had said
that we would have been accused of bias by eliminating one of the
proposals that will be considered by shareholders.
Mr. Peter MacKay: Madam Speaker, to a large extent, the
minister has fallen on his own sword with that last comment. He
deposited his government's policy the other day; 74 days into the
situation he deposited his government's policy. In the middle of
the game, he suddenly says “Oh, by the way, there has been a
rule change and here is where we stand on it”.
That the minister himself has suddenly come up with a policy on
this particular point is not the type of leadership nor the solid
positioning that those involved in this particular debate should
draw any sort of solace or comfort from.
As to whether I have read this particular policy that was
deposited the other day, the fact of the matter is no. We have a
very competent and able member of the committee, the member for
Cumberland—Colchester who, I am quite positive—and he is
nodding in agreement—has read it. He has certainly made his
views very clear on this and will continue to do so, I might add.
Mr. Scott Brison (Kings—Hants, PC): Madam Speaker, it is
a pleasure to speak today on this very important issue. The
future of the Canadian airlines industry is at stake and it is
very important that we take this issue very seriously in the
debate tonight.
The debate is about the 10% rule and that being the maximum that
any one group can own of Air Canada. I am not defending the 10%
rule. The issue before us should not be debated in the last
stages of a negotiation period or in the last stages of a period
during which the Competition Bureau has been suspended for at
least one of the proposed mergers.
The 10% rule has inherently some flaws. It can help protect
mediocre or even bad management. It can reduce shareholders
equity and the competitiveness of a company. Potentially, there
are even issues whereby the 10% rule could be seen as in
violation of NAFTA seeing as the 10% rule was utilized in 1988
and apparently, if one reads the fine print, because of the fact
that the privatization occurred before 1994 when NAFTA came into
effect, this 10% rule may not be actually tenable under NAFTA.
There are some real issues about the 10% rule.
The question is why are we not discussing the 10% rule and some
of these other issues, including the cabotage issue, as part of
the discussion of a general restructuring of the Canadian airline
structure when we are not in the middle of a crisis? The
difficulty here is that we always seem to get to a crisis
position before we actually deal with some of the structural
issues facing Canadians and the Canadian economy.
It is inappropriate to be trial ballooning significant changes
in the nature or the structure of the Canadian airlines at such a
difficult and heated time. We should have done this long before.
I would argue that the suspension of the Competition Bureau's
activities on the Onyx proposal should be considered an admission
of failure by the government to lead and to actually provide some
visionary restructuring to the Canadian airlines industry a lot
sooner.
The fact that the Canadian airlines industry is having
difficulty is nothing new.
We have known this for a long time. In fact this government,
which has been in power since 1993, has been aware of the
challenges facing the Canadian airlines industry.
1755
The consumers should not be asked to pay the price for the
government's dilly-dallying, dithering and failure to address the
major issues in a holistic, forward-thinking and visionary
manner.
The minister stated in one of the papers I read this morning
that he may be amenable to allowing foreigners to set up shop in
Canada to provide Canadian based airline units with foreign-owned
routes and servicing within Canada. Again, that is another issue
that should be discussed when we are not in the heat of an
airline crisis and in the heart of negotiations on at least two
fronts now with two proposals.
We should have been discussing the 10% rule, the notion of
cabotage and all these types of issues during a period of time
when we were less rushed and when we were in less of a crisis
environment.
Instead of this crisis management, knee-jerk reaction that the
government is taking now, we could have actually provided a
framework to the airline industry to allow restructuring to occur
as opposed to having the airline industry and entities within the
airlines industry, in this case Canadian and Air Canada, actually
having to come up with proposals. The government is effectively
cutting the suit to fit the cloth on this one. It is not really
providing the structural framework that one expects from
governments for the private sector to respond in a more long term
and meaningful way.
The government's approach to the airlines is very similar to the
government's approach on the bank merger issue. Members will
remember that about a year ago we were very heavily ensconced in
the debate on the bank mergers issue? The government had
ignored, from 1993 forward, some of the structural reforms
necessary in the financial services sector until, at one point or
another, there were private sector proposals that forced the
government to make a decision on those specific proposals. In
this case and currently, we are focused in Canada not on the
holistic nature of reforming and restructuring the Canadian
airlines, we are focused on two specific mergers.
In the bank merger situation, the whole focus of Canadians,
which should have been on restructuring the Canadian financial
services sector to provide an industry that was more capable of
competing globally and at the same time meeting the needs of
Canadians, was suddenly focused on two specific merger proposals.
Unfortunately, this is not, in my opinion, the right approach to
develop public policy in the long term interests of the
competitiveness of Canadian industry and in the long term
interests of protecting Canadian consumers.
Since the government's merger decision in the financial services
sector, we have seen some of the ramifications or repercussions
of that decision. We have heard the Bank of Montreal announce
layoffs of 1,400 workers in direct response to the merger
decision. We have heard the Bank of Montreal announce that 100
branches will close. Members should keep in mind that one of the
conditions that the banks had agreed to if the mergers were
allowed was to maintain branch operations, to service all the
rural communities currently being serviced and to maintain
current levels of employment.
The finance minister, dealing with a crisis within his own
leadership aspirations and trying to shore up support among the
backbenchers, allowed for a Liberal caucus revolt. The Liberal
caucus witch hunt on banks occurred. What we saw was an uprising
within the Liberal backbenchers that effectively prevented a
focus on public policy that would have been in the long term
interests of the Canadian industry or in the long term interests
of Canadian customers.
It is also important to realize that there has been a $7.2
billion loss in bank shareholder capital in Canada since that
decision.
During the same period in the U.S. there has been a 7.4% increase
in shareholder value with U.S. banks. This is very important
given that 7.5 million Canadians are bank shareholders, directly
or indirectly.
1800
We have seen 1,400 jobs lost just with one of the banks involved
since then because of the merger decision. The Dominion Bond
Rating Service has downgraded Canadian banks, directly
attributing its decision to do that to the Minister of Finance's
decision. There has been a loss of market capital and a
compromising of the ability of Canadians to save and invest for
their future, in many cases for their retirement, all because of
that decision.
My concern is here we are again focused on specific merger
proposals and not dealing with the issues in a long term
revisionary way. It is in stark contrast to the previous
Conservative government's vision and courage to tackle the real
issues not just facing Canadians today or tomorrow, but facing
Canadians in the next century.
This government would not have had the courage to pursue a free
trade agreement. This government would not have had the courage
or vision to implement a significant tax reform and some tax
policies that were not popular but proved to be the right
policies in the long term. I do not believe this government
would have had the foresight and vision and courage to implement
some of the deregulation policies in financial services,
transportation and energy.
Instead, here we are again in the heat of merger discussions
coming up with policies to try to deal with specific mergers
proposed by the private sector, having failed to provide a long
term approach before a crisis situation. The government's
approach to this issue and most issues it faces is one of crisis
management. It is a knee-jerk reaction. It is analogous to
someone installing a sprinkler system while the house is on fire.
It is simply no way to run a railway as one saying goes. It is
no way to run an airline either, but it is also no way to run a
government.
[Translation]
Mr. Maurice Dumas (Argenteuil—Papineau—Mirabel, BQ): Madam
Speaker, I would like to ask a question of my colleague from
Kings—Hants, for whom I have the utmost respect.
It is the same question I asked of the Liberal member opposite.
He probably was a young student in 1982 and he may not remember
why Bill S-31, limiting to 10% the ownership of any company by a
buying company, was introduced at that time.
The Caisse de dépôt et placement intended to get substantial
ownership of Canadian Pacific.
The prime minister of the day—all the members will recall that
it was a certain Pierre Trudeau who did not like Quebec very
much and who feared Quebec's influence in everything—had Bill
S-31 passed. It was to prevent the Caisse de dépôt et placement
du Québec from buying Canadian Pacific. I must tell you that it
was not the loftiest of initiatives.
Now we see that the government, to favour its friends, to allow
the Liberal Party's bagman buy Air Canada, will use this
legislation to let Onex become part owner of Air Canada and
Canadian Airlines.
I hope my colleague from Kings—Hants will remember that. I wonder
if he would like to comment on that.
[English]
Mr. Scott Brison: Madam Speaker, in 1982 I was not old
enough to have a driver's licence. I do not remember the
specific legislation. However, I have a great deal of respect
for my hon. colleague, and I can say that the types of policies
that governments implemented in 1982 and in fact in the 1970s
were very different. I believe that even the Liberals realize
that part of the reason is that we are operating in a global
environment. We are dealing with many global realities which are
quite different from those which existed in the 1970s and early
1980s.
It is very difficult for me to compare those two issues because
I believe we are dealing with profoundly different global
competitiveness issues today.
What may have been appropriate then would probably not be
appropriate now in a policy sense. It is also important to
realize that Caisse de dépôt now owns 10% of Air Canada.
1805
I hope at least in some form that is an answer for the hon.
member.
Hon. David M. Collenette (Minister of Transport, Lib.):
Madam Speaker, do I take it from what the hon. member for
Kings—Hants said that he is in favour of bank mergers and
against airline mergers?
The best advice we have is that any change in the 10% rule will
not abrogate any of our NAFTA commitments. The Alberta
legislature did away with the 10% rule on Canadian Airlines last
year because of course the parent was PWA, a creature of the
Alberta legislature.
The Competition Bureau will indeed very much be at play in
whatever happens. It will be looking at the merger in the normal
way.
I remind the hon. member that the government was faced with
three scenarios in July: a bailout of Canadian Airlines; a
potential failure of Canadian Airlines; or finding some other
way, imperfect as it may be, to find a proper solution.
Mr. Scott Brison: Madam Speaker, on the first question
relative to the bank merger issue, our party was not in favour of
bank mergers. We were in favour at that time of the Minister of
Finance negotiating the best deal on behalf of Canadians. He had
the opportunity to do that because the banks were willing to
commit to 10% reductions in services charges, services to rural
communities and branch openings and maintaining jobs with
Canadian banks. Unfortunately the Minister of Finance blew that
opportunity. He was so focused on the short term politics of the
issue that he forgot about the long term interests of Canadians.
That is the crux of that issue.
Relative to the crisis the government found itself in this
summer on the airline industry and Canadian Airlines, I would
suggest to the minister a more forward thinking and visionary
approach over the past several years in restructuring the
Canadian airlines industry in advance of this kind of crisis
would have prevented this evolution of events.
Mr. Stan Dromisky (Parliamentary Secretary to Minister of
Transport, Lib.): Madam Speaker, the discussion has been
exciting and debate during the day has been very interesting.
I will continue to deal with some of the issues that have been
presented. I realize that some of the concepts I will present
will be repetitive but we all know that if we repeat things often
enough it leads to an effective learning experience.
I commend the Minister of Transport for his presentation on this
subject before the House and the Senate standing committees on
Tuesday and the policy framework document he tabled. He has shed
a great deal of light on a topic that has been of consuming
interest to members of the House and to Canadians for several
months.
The government position is now known. Private sector parties
will now be able to act with full knowledge of the government's
policy framework and the process announced by the minister that
will be used to approve and condition any proposal to restructure
the airline industry.
I would particularly like to address two important issues raised
last Tuesday by the minister. Those have been the central theme
for much of today's debate. The first was the limit on ownership
of Air Canada's voting shares established in the Air Canada
Public Participation Act at 10%. The second was the limitation
on foreign ownership of any Canadian air carrier and the
requirement for Canadian control that are established in the
Canada Transportation Act.
Those two issues are often confused. They sound so similar but
they address different concepts. Both issues are very relevant
to airline restructuring and both were addressed by the Minister
of Transport in his policy framework and his statements.
I hope that by addressing them together I will not only be able
to illuminate two quite technical issues, but also to clear up
any confusion that may exist between them in the minds of some
members of the House.
Some members are quite confused.
1810
The 25% limit on voting shares held by foreign investors applies
to all Canadian carriers, including Air Canada. It is an
aggregate figure such that it places an upper limit on the
ability of non-Canadians acting separately or in concert with
others to influence the result of any shareholder vote. This
quantitative limit is accompanied in the Canada Transportation
Act by a qualitative test of control in fact by Canadians.
Responsibility for applying the ownership limit and the control
test lies with the Canadian Transportation Agency, a
quasi-judicial body that operates at arm's length from the
government and the Minister of Transport. Those are very
important points.
The other feature to note is that both the 25% test and the
requirement for control in fact are ongoing obligations that are
assessed before the airline is originally licensed to operate as
a Canadian air carrier. That can be reassessed at any time based
on developments with the airline that affect its ownership and
governance, or on any other new information that may come to the
agency's attention at any future time, or on the basis of
complaint.
The purpose of these two tests, which together I will refer to
as the Canadian ownership and control rules, is straightforward.
The purpose is to ensure that all Canadian air carriers are owned
and controlled by Canadians, that is, that this industry which is
so key to all Canadians remains Canadian in the full sense of the
term.
Moving now to a consideration of the 10% rule, this rule applies
to Air Canada only as it appears in the Air Canada Public
Participation Act, not the Canada Transportation Act or any other
federal act of general application. No other airline in Canada
is subject to such a rule, although this has not always been the
case. Until 18 months ago, Canadian Airlines was subject to a
similar restriction left over from the time it was owned by the
province of Alberta. The provision was rescinded by the Alberta
government in 1997.
The 10% rule is not aimed at non-Canadians per se. It applies
to all shareholders, both Canadian and non-Canadian. This rule
applies to any individuals as well as to individuals acting
together, such that shareholders are expressly forbidden from
entering into any agreement that would allow any person, together
with the associates of that person, to own or control directly or
indirectly voting shares which represent more than 10% of the
votes that may be cast to elect members of the board of directors
of Air Canada.
The 10% rule was included in the Air Canada Public Participation
Act when it was passed in 1988 in order to ensure that Air Canada
remained widely held. As I understand it, the idea was that Air
Canada was already widely held in that it was a crown corporation
owned in equal measure by all Canadians. So when the airline was
privatized, parliament was loath to contemplate that this
national carrier might some day be owned and controlled by any
individual or group, even recognizing that they would be
Canadians as provided for by the Canadian ownership and control
rules. It appears that this idea was sufficiently persuasive on
its face that it received little debate among Canadians in the
media or in parliament at that time and became part of the
legislation that governs Air Canada to this very day.
The point to be clear on is that the 10% limit is not, and I
repeat not—
The Acting Speaker (Ms. Thibeault): Order, please. It
being 6.15 p.m., it is my duty to interrupt the proceedings.
Pursuant to order made earlier today, all questions on the motion
are deemed put and a recorded division deemed demanded and
deferred until Tuesday, November 2, 1999 at the expiry of the
time provided for government orders.
[Translation]
It being six 6.15 p.m., the House stands adjourned until 10 a.m.
tomorrow, pursuant to Standing Order 24(1).
(The House adjourned at 6.15 p.m.)