November 8, 1978

LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

To conclude, the opposition motion, as explained by the Leader of the Opposition, conflicts with this essential objective for this country and its people. Therefore, I say it should not be supported. We should defeat it and go on to put into effect policies maintaining a strong central government, one which responds to the challenges and potential of this country and its people.

U)

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 58(9)-NON-CONFIDENCE MOTION-LACK OF COMPETITIVE AIR TRANSPORT POLICY
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PC

Thomas Edward Siddon

Progressive Conservative

Mr. Thomas Siddon (Burnaby-Richmond-Delta):

Mr. Speaker, I count it a great privilege to address this House today, sparsely populated as it is. I had hoped the minister would be here to hear my remarks because I have some things to say to him. It gives me great pleasure to be here together with the Leader of the Opposition (Mr. Clark) and with my highly respected colleague from Hamilton-Wentworth (Mr. Scott), and to speak in support of the motion before the House.

This motion of non-confidence cites a failure by government members opposite, a failure to implement a competitive air

transportation policy which recognizes the legitimate and rightful aspirations of our private sector airlines. Indeed, this motion indicts the government for its repeated refusal to pay more than lip service to the common-sense principle that private sector airlines be allowed far greater freedom to compete with Air Canada. To be more specific, we believe that privately financed airlines should be entitled to a much greater share of the air transportation business in Canada, and that future growth must be directed almost entirely toward these privately-owned industries.

Today I will discuss the long and frustrating struggle of CP Air, formerly known as Canadian Pacific Airlines, which, as members know, is Canada's only privately-owned international flag carrier. In spite of its outstanding record of service to Canadians for more than 36 years, CP Air is restricted today to only one third the service volume of its major competitor, the government-owned Air Canada.

These unfair and inequitable policies of discrimination against private airlines such as CP Air must be laid squarely at the feet of the present Minister of Transport (Mr. Lang) and his predecessor, Mr. Marchand. These ministers have, since 1973, demonstrated a remarkable dexterity. On the one hand, the ministers have repeatedly announced new initiatives which created the appearance of favouring CP Air's case for greater access to air routes.

On the other hand, and in each case, these same Ministers of Transport have reversed their earlier public commitments by giving approval to CTC recommendations and policies which were highly favourable to Air Canada and generally detrimental to the future of CP Air. The record bears close examination on this score and I intend to return to this point later to cite specific instances.

Mr. Speaker, as this occasion might be deemed my "maiden speech" in this House-I do not feel much like a maiden at the moment, but I will not go into the technical details of that-I beg your indulgence to allow me to digress for a few moments. It is certainly a great honour and a great obligation to be elected to this House as the representative of more than many thousands of people in the British Columbia riding of Burna-by-Richmond-Delta. I look forward to a healthy and productive fellowship with all members of this House and intend to conduct myself with diligence, decency and dignity in the prosecution of my duties here.

However, it would be remiss of me if I did not underscore the nature of my mandate for the next few months. I have been elected to bring the strong feelings of my constituents to bear on the deliberations of this government during its final days in office. I have been elected to help reveal the ineptitude, the inefficiency, and the callousness exhibited by the present administration during its ten years of dominance over this House.

The people of my riding have spoken, as did many other Canadians in at least ten ridings across this nation on October 16. Canadians are demanding a return to integrity and efficiency in the management of Canada's economy and of our human and natural resources. Canadians are fed up with this

November 8, 1978

rudderless, bankrupt government. They are fed up with a persistent erosion of individual rights and freedoms by an increasingly authoritarian, centralist power. They are fed up with socialistic over-regulation of the private sector, excessive taxation, and irrelevant, wasteful spending from the public purse, a purse which is now empty save for some staggering IOUs. They are frightened by a growing tendency for a guilty government to cover its tail in secrecy, by a breakdown in parliamentary traditions, and by a dwindling lack of optimism in the future of this country. My constituents are frustrated with a government run by back-room empire-building bureaucrats who have had their job security guaranteed by decades of Liberal dominance in Ottawa, a dominance which attaches very little importance to the problems and aspirations of western Canadians.

The people of Canada spoke out on October 16. They are calling for new leadership from a new national government. They want leadership which reflects the hopes and dreams of all Canadians, not just a narrow few. They want relief from the burden of excessive taxation, over regulation and regimentation which has so stifled the independent spirit of Canadians these past ten years under the leadership of the present Prime Minister (Mr. Trudeau). They want an elimination of waste, bureaucratic red tape and palatial extravagance as practised by the present government. Make no mistake about it; there is only one political philosophy which recognizes that productivity and prosperity can only be achieved by hard-working individuals, freed of the heavy hand of government. There is only one national leader today who can build a team to implement that philosophy, indeed who has built a team to implement that philosophy.

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Sub-subtopic:   ALLOTTED DAY, S.O. 58(9)-NON-CONFIDENCE MOTION-LACK OF COMPETITIVE AIR TRANSPORT POLICY
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?

Some hon. Members:

Hear, hear!

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PC

Thomas Edward Siddon

Progressive Conservative

Mr. Siddon:

1 look forward to serving with that leader, as a member of a new government, in a new era for Canada.

Thank you for your indulgence, Mr. Speaker. The point I was making was that the October 16 indictment, the appallingly weak record of this government, is reason enough for members present to support the motion of non-confidence which is before this Elouse. Elowever, I wish now to return to the question of a more competitive air policy, a concept which has been denied to Canada's privately-owned airlines for far too long.

I submit that if Canadian airlines had greater access to competition with Air Canada, if Air Canada would stop growing at a faster rate than any other Canadian airline, indeed if Air Canada would consider the possibility of zero growth for a while, we would have far less trouble and conflict among the privately-owned regional and third-level air carriers. We would not have shutdowns, lay-offs or squabbles with Time Airways, Transair, PW Air, BC Airlines, West Coast Air, Great Lakes Airways, Quebecair, Eastern Provincial Airways, Nordair and all the rest. These Canadian airlines would have more room for growth and more opportunity to flourish. These private airlines must already operate with greater efficiency than Air Canada, not having the benefit of the public

National Air Policy

purse to bail them out, as was the case with the recent recapitalization of Air Canada to the tune of about $1 billion.

I turn now to CP Air and place it in special focus for two reasons. First, CP Air has maintained its home base of operations for many years on Sea Island, in the municipality of Richmond, a part of my riding. In 1978, CP Air will pump more than $280 million into the B.C. economy. Of this, $106 million will be the payroll of CP Air employees in the Van-couver-Richmond area. These persons account for 4,400 of the total work force of 7,100 people employed by the CP Air system, which spans five continents. CP Air also makes a significant contribution to local property taxes raised by the municipality of Richmond.

Secondly, Mr. Speaker, CP Air is a spirited industry, built on the dreams of the late Grant McConachie, one of Canada's bush-flying pioneers. There is a family-like quality among the employees of CP Air. At all levels of responsibility there is a high degree of mutual support, a pre-occupation with excellence of service, and an instinct for corporate survival on the part of everyone who works for the airline. Would that the same could be said about the government airline. Air Canada.

As I indicated earlier, CP Air has had its share of false optimism from the present Minister of Transport, and his predecessor, Senator Marchand. Now the minister has tried it yet again, in his press release of yesterday, November 7, wherein the minister stated, and I quote:

The government is considering the manner in which current restrictions on CP Air Limited should be eased and how CP Air and Air Canada, along with regional airlines and Wardair, a major charter operator, may continue to be strengthened as our major airline operators in Canada and abroad.

Such a statement probably sounds impressive to the average voter, at whom the minister's press release is obviously aimed. However, in the eyes of private sector airlines these statements are little more than meaningless, hollow, baffle-gab. They have heard the song before somewhere, and it usually means "watch out, there's trouble coming!"

Experience has taught the private airlines that a one night stand with the Minister of Transport generally leaves nothing more than a headache the morning after. I would like to elaborate, Mr. Speaker. In its international aviation policy of 1965-66, the government clearly established the right of CP Air to serve the low volume, long range routes to the Pacific rim nations-Asia, Australia and New Zealand-southern and southeast Europe and South America. To Air Canada were assigned the more lucrative routes to the United Kingdom, western, northern and eastern Europe and the Caribbean. Subsequently, CP Air found a way to make many of its marginal routes productive.

Then in a major statement on air policy in November of 1973, the minister at that time, Mr. Marchand, said:

While Air Canada remains the pre-eminent carrier in terms of its very significant domestic role as well as its international role, there is room for a substantial expansion of the second, privately-owned airline.

November 8, 1978

National Air Policy

Hon. members should remember those words "there is room for a substantial expansion of the second, privately-owned airline".

As part and parcel of this 1973 air policy the minister then proceeded to reassign many areas formerly in CP Air's territory to Air Canada. Thus, Air Canada picked up access to Venezuela, Colombia, the former Guianas, Yugoslavia, Lebanon, India and Pakistan as well as popular destinations in Southeast Asia such as Hong Kong. Together with Brazil, these were reassigned to be serviced either by Air Canada or CP Air, or both. All these destinations had formerly been the exclusive right of CP Air and many had been developed successfully into paying ventures. The 1973 policy also assigned all of Africa to Air Canada with the exception of a few sparsely populated North African countries which were cast off to CP Air. So much for CP Air's share of Air Canada's world.

In his 1973 policy statement, the former transport minister, Mr. Marchand, also stated:

This transcontinental policy, favouring 75 per cent pre-eminence by Air Canada, is basically to be retained although I have asked for a report on the feasibility of relaxing certain restrictions on CP operations which now oblige them to originate and terminate all flights in Vancouver and Montreal.

Some five years have now passed, Mr. Speaker, but that promised report has never reached this House. CP Air is still required to turn around its transcontinental flights at Vancouver and Montreal resulting in sections of some flights being forced to operate at times when the public does not want to travel. Because of government interference, CP Air is unable to provide a completely competitive product to the travelling public. Indeed, CP Air has to absorb the costs of this inefficiency against its operating margin, all because of this redicu-lous government regulation.

What would be the practical solution to this turnaround problem? To use the words of Mr. H. D. Cameron, a vicepresident at CP Air, it would be-

-to have the same type of licence as Air Canada: all their Canadian points are licensed without restrictions against turning flights around at any point.

CP Air has repeatedly attempted to obtain such a consolidated licence which would serve to integrate several of the point to point domestic licences the airline has obtained over the years.

On June 28, 1977 the present minister was quoted in a press release as saying:

The government will have no objection to consolidating all CP Air services in Canada under one licence to allow it to operate flights between any two points named in the consolidatd licence.

Well, Mr. Speaker, CP Air subsequently made formal application for such a licence and the request was turned down. So much for the public commitment by the Minister of Transport.

Perhaps the most incredible injustice of all occurred as a result of the Canada-U.S. air agreement of 1974. In his 1973 policy statement the minister of transport announced he would "encourage more co-operation between CP Air and Air Canada in the context of benefits to Canada." I ask members

to listen carefully to one example of such co-operation as described by the president of CP Air, Mr. Ian Gray, in his recent address to the Men's Canada Club of Ottawa:

We recognize that it has been government policy to assure the pre-eminence of Air Canada. But in the case of the allocation of the new trans-border air routes as a result of the Canada-U.S. air agreement of 1974 we believe there was a serious miscarriage of justice.

Both carriers had to make costly concessions in the form of new competition from U.S. carriers as part of the agreement. It was understood that each of the two Canadian carriers would be compensated proportionately in the award of the new routes. Certainly, few anticipated that the division would be anything less than the 25/75 ratio which exists between CP Air and Air Canada on the transcon route. To our astonishment and chagrin, however, Air Canada was handed 11 of the 12 non-regional type trans-border routes and CP Air got only one-Vancouver to Los Angeles.

Mr. Gray of CP Air went on to state:

Air Canada was assigned Montreal-Toronto-San Francisco giving them an additional competitive entry into the Pacific rim market and further encouraging the flow of Canadian traffic across the Pacific by means of inter-line connections with foreign carriers to the detriment of the Canadian economy.

Also damaging to us was the award to Air Canada of direct services from Edmonton and Calgary to San Francisco and Los Angeles. This has the effect of diverting substantial traffic from our services to California.

Such decisions are certainly not in the national interest. I understand that Air Canada is now actively promoting Pacific Rim travel packages from Eastern Canadian points to the Orient and Australia via Los Angeles and San Francisco. Air Canada flies the 20 per cent portion across North America while various foreign air lines fly the remaining 80 per cent portion across the Pacific. What does this do for Far-Eastern tours operated by CP Air out of Vancouver? Indeed, what does such foolishness do for the Canadian economy generally?

I could go on and on, Mr. Speaker, giving examples of questionable commitments by the Minister of Transport. However, I will close with just two more bafflegab utterings by the hon. gentleman. On June 28, 1977, he said:

CP Air is currently allowed 25 per cent of the trans-continental market capacity between Vancouver and Montreal and while this base ratio will be continued for current capacity the airline will be allowed a slight increase through a larger share of growth in traffic to 35 per cent in 1978 and 45 per cent in 1979.

This statement does not say what it appears to say. It does not make any commitment to increasing Canadian Pacific's share to 35 per cent or 45 per cent of the total pie. Given a fairly healthy rate of air traffic growth at 4 per cent per year, the minister's statement merely allows for an increase in CP Air's share of the transcontinental market capacity to about 28 per cent by the end of 1979. My recommendation would be that CP Air should enjoy 100 per cent of the growth on transcontinental routes each year for the next few years until it has achieved an equitable 50 per cent of the trans-continental service. We could then begin to talk about true competition between our two flag-carrying national airlines.

On a final note, Mr. Speaker, I refer to yesterday's press release by the Minister of Transport in which he announced that the government "has no objection to CP Air applying to the Canadian Transport Commission for permission to operate into the Atlantic provinces in conformity with the CTC's regulatory requirements." The truth of the matter is this: CP

November 8, 1978

Air has requested the minister's permission for access to Atlantic Canada on a number of occasions during the past two years. Competitive service is justified now between Vancouver and Halifax via Toronto. The applications have been put in for some months. What we have here, as so aptly put in a recent edition of the Halifax Chronicle-Herald, is a case of "Too Lang a delay".

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 58(9)-NON-CONFIDENCE MOTION-LACK OF COMPETITIVE AIR TRANSPORT POLICY
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?

An hon. Member:

Oh!

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Sub-subtopic:   ALLOTTED DAY, S.O. 58(9)-NON-CONFIDENCE MOTION-LACK OF COMPETITIVE AIR TRANSPORT POLICY
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PC

Thomas Edward Siddon

Progressive Conservative

Mr. Siddon:

To sum up, Mr. Speaker, we hope this House will tell the government what it thinks about its creeping socialistic takeover of private sector industries. I appeal to members on the opposite side of the House who truly believe in the principle of private enterprise to join with us today in support of this motion of non-confidence in this most incapable government.

Topic:   GOVERNMENT ORDERS
Subtopic:   BUSINESS OF SUPPLY
Sub-subtopic:   ALLOTTED DAY, S.O. 58(9)-NON-CONFIDENCE MOTION-LACK OF COMPETITIVE AIR TRANSPORT POLICY
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LIB

Charles Lapointe (Parliamentary Secretary to the Minister of Transport)

Liberal

Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):

Mr. Speaker, thank you for allowing me to speak at this time. Having heard the Leader of the Opposition (Mr. Clark) and a few members of his party who spoke on the motion, 1 admit that we could easily be led to believe that they are arriving today from some unknown planet and that they have never opened a Canadian history book. All we heard, Mr. Speaker, are the words competition and private enterprise as if it were a cure-all, as if they did not know that Canada-the second largest country in the world-is sparsely populated and without state intervention as far as air services are concerned, hundreds of communities in our country would be without them.

I wonder, Mr. Speaker, how the Leader of the Opposition sees our country. He voices approval at Alberta's purchase of an airline, but is suddenly shocked because we have a successful national airline, Air Canada, and because the government buys a regional carrier on behalf of Canadians. Why should we be shocked, Mr. Speaker, because Canadians are the owners of air lines? In that respect I think I share the view of the leader of the New Democratic Party (Mr. Broadbent) who feels that we do not have to be ashamed because we have spent public funds to provide essential services for Canadians scattered throughout the country. And if we take a look at the way things are done in several other countries, be it in France, in Italy, in Germany, in Switzerland or in Australia, we can see that these countries do not hesitate to have only one national airline responsible for both domestic and international services. We can see, therefore, that we should not hesitate to do our utmost to protect Air Canada and other regional air carriers in Canada.

In his speech, the Leader of the Opposition said that it does not make any sense that national carriers should take over the regional markets; he also complained about the fact that Air Canada has flown right out of Bagotville. Mr. Speaker, I

National Air Policy

cannot think of a more obvious contradiction. When one of my colleagues asked him whether he thought Air Canada should abandon the service in northern Ontario, for instance North Bay, all he could say was that he did not know if it was better to maintain competition with local, regional, third- or fourth-level carriers, but as he mentioned in his speech he did not want to commit himself and say whether Air Canada or any national airline should withdraw from regional markets.

He also said in his speech that if he were to take office he would develop a whole new policy involving the utilization of the short take-off and landing aircraft. He probably took his ideas from the report published by the Department of Transport under this minister on the future utilization of the STOL aircraft between Toronto, Ottawa, Montreal and, eventually, Quebec city and Windsor. He also said in his lengthy speech in support of his motion of non-confidence in the government that once in office he would set up a policy governing chartered flights, as if he was not aware that last spring this government, at the suggestion of the Minister of Transport, set up a chartered flight policy in Canada which is most advantageous for Canadian people who want to visit their country from east to west.

Mr. Speaker, commenting on the takeover by the government of Canada of Nordair shares, the hon. member for Rimouski (Mr. Allard) said that we wanted to cut the ground from under Quebecair's feet. I think this is the rrcst frivolous allegation made during the debate this afternoon, because we know very well that Quebecair made no offer for the purchase of Nordair when the company decided to sell.

Mr. Speaker, in light of this debate, I think it is important to have an idea of what kind of country we want. Do we think that by opening all valves on behalf of sacrosanct competition and private enterprise we shall eventually have ten or fifteen airlines, all the while applauding any province anxious to buy its own airline and forgetting the national interest, Mr. Speaker, which, I believe, should override all regional interests?

Mr. Speaker, I would like to state clearly and unequivocally that Nordair will remain a regional carrier and that, in the next twelve months, when we will be trying to find a better way of ensuring a coalition of regional carriers in the east, we will be able to maintain all air routes now served by this airline. We are trying, through this measure, to strengthen in some way the position of regional air carriers in eastern Canada. We are considering some changes at the regional as well as the national level. By strenghtening the activity of regional air carriers, we are hoping to improve service as well as to increase competition between carriers. This must be achieved, Mr. Speaker, without the participation of the government and of Nordair's management and operation. What the government would want to see is some form of regional merger to improve commercial operations on a greater number of routes in eastern Canada.

November 8, 1978

National Air Policy

When it comes to merging, eastern Canada airlines such as Quebecair, Great Lakes and Eastern Provincial Airways immediately come to mind. However, one must not exclude any other group which would eventually be interested in purchasing the shares now held by government. Although the government now owns these shares, it must be pointed out that the company will continue under the present management team. For example, the president, Mr. Lefran

In reorganizing regional air transportation, I do not see any problem in there being both competition and co-operation between regional and national carriers. So there can be competition for routes and co-operation with regard to schedules, the main objective still being to provide an efficient service at a reasonable cost. Mr. Speaker, last week I had the pleasure of a discussing this problem rather specifically with representatives of the Miramichi economic society and representatives from Chatham who complained for instance of a lack of co-ordination between EPA schedules on flights between Chatham and Fredericton and asked for a connecting Air Canada flight to Montreal. So I think there is much room for greater co-operation among airlines and for competition.

Mr. Speaker, there is another thing I want to point out and which the Leader of the Opposition (Mr. Clark) mentioned in his speech, namely his shocked attitude when he spoke about Canadair and de Havilland operations. One might have thought the Leader of the Opposition was jealous of Cana-dair's unprecedented success, and I would have liked him to say to the 500 Canadair skilled workers and technicians that, in his opinion, it was high time this great state-owned and highly successful corporation be handed over to the private sector. He forgot to mention also the role of the government in the expansion of the Fleet company in southern Ontario which manufactures parts for long range patrol aircraft and how, as a result of government intervention, the number of employees has gone from 200 to 1,000 within 18 months.

To want to sacrifice everything for the sake of free enterprise and competition in this country is, as I said earlier, to disregard the entire history of this country which was first developed, if we go back to the beginning of the railways, thanks to the CNR and also, of course, because the fabric of

our history could be protected precisely by keeping a strong government hand in business while at the same time promoting a free enterprise system which could also make profits.

So I think that the motion before us today should be unequivocally rejected by all members of this House.

I think we picked up today in the statement of the hon. Leader of the Official Opposition (Mr. Clark) the most obvious contradiction that could be expected from a party which wrongly hopes-and very much so, Mr. Speaker-to replace us. On the one hand they argue that national airlines should not fly regional routes, but on the other hand they complain about the fact that national airlines no longer serve cities such as Bagotville and they are unable to say whether the national airlines or rather, in this case, Air Canada, will continue to operate in northern Ontario. Mr. Speaker, I do not think that by talking on both sides of the fence, as did the Leader of the Opposition today, we will succeed in setting up sensible guidelines in the field of air transportation.

The present policy of the government is to continue to have two main regional carriers and two main-

Topic:   GOVERNMENT ORDERS
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LIB

Denis Éthier (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Ethier):

Order, please. It being 5.45 p.m. it is my duty to interrupt proceedings and to put forthwith every question necessary to dispose of the supply proceedings now before the House under the provisions of Standing Order 58(9).

Therefore, the question is on the motion of Mr. Clark. Is it the pleasure of the House to adopt the said motion?

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?

Some hon. Members:

Carried.

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?

Some hon. Members:

No.

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LIB

Denis Éthier (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Ethier):

All those in favour of the motion will please say yea.

Topic:   GOVERNMENT ORDERS
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?

Some hon. Members:

Yea.

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LIB

Denis Éthier (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Ethier):

All those opposed will please say nay.

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?

Some hon. Members:

Nay.

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LIB

Denis Éthier (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Ethier):

In my opinion the nays have it.

And more than five members having risen:

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LIB

Denis Éthier (Assistant Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Ethier):

Call in the members.

Topic:   GOVERNMENT ORDERS
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LIB

James Alexander Jerome (Speaker of the House of Commons)

Liberal

Mr. Speaker:

I therefore declare the motion defeated.

It being after six o'clock, this House stands adjourned until tomorrow at two o'clock.

At 6.15 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, November 9, 1978

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November 8, 1978