April 29, 2003

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The Deputy Speaker

I have the honour to lay upon the table the report of the Canadian parliamentary delegation that travelled to Austria and Hungary from March 3 to 8, 2003.


Subtopic:   Interparliamentary delegations
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LIB

Geoff Regan

Liberal

Mr. Geoff Regan (Parliamentary Secretary to the 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 22 petitions.

Topic:   Routine Proceedings
Subtopic:   Government Response to Petitions
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LIB

John Godfrey

Liberal

Mr. John Godfrey (Don Valley West, Lib.)

Mr. Speaker, pursuant to Standing Order 34(1) I have the honour to present, in both official languages, the report of the Canadian delegation of the Interparliamentary Forum of the Americas to the second plenary session in Panama City, Panama, February 20 to 21, 2003.

Topic:   Routine Proceedings
Subtopic:   Interparliamentary Delegations
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LIB

Geoff Regan

Liberal

Mr. Geoff Regan (Parliamentary Secretary to the Leader of the Government in the House of Commons, Lib.)

Mr. Speaker, I ask that all questions be allowed to stand.

Topic:   Routine Proceedings
Subtopic:   Questions on the Order Paper
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?

The Deputy Speaker

Is that agreed?

Topic:   Routine Proceedings
Subtopic:   Questions on the Order Paper
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?

Some hon. members

Agreed.

Topic:   Routine Proceedings
Subtopic:   Questions on the Order Paper
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The House resumed from April 28 consideration of the motion that Bill C-27, an act respecting airport authorities and other airport operators and amending other acts, be read the second time and referred to a committee.


LIB

Stan Keyes

Liberal

Mr. Stan Keyes (Hamilton West, Lib.)

Mr. Speaker, as I started to say in my remarks late yesterday before the House adjourned its regular business, there is extreme concern in the airport community that Bill C-27, if not amended, would cripple an airport's ability to continue to work in what is clearly a very competitive international market.

Yesterday I spoke about how the air transportation industry has had an enormous impact on the Canadian economy. I pointed out that the viability of Canada's air transportation system is threatened and the consequences for Canada are enormous. I also gave reasons why the industry is in crisis today. I said that airports must adjust to the new realities of air travel, reduced frequency and the withdrawal of service. This means airports will have to reduce costs in order to minimize impacts on airlines and air travellers.

I stressed that the federal government too must act to cut costs to airports so these may be passed along to airlines in the form of lower fees and charges, and to air travellers in the form of lower air fares.

Ironically, at a time when the federal government should be reducing the operating costs of airports, the proposed Canada airports act, Bill C-27, does just the opposite. The proposed act, which would effectively re-regulate an economic sector that the government effectively and successfully deregulated eight years ago, piles one administrative redundancy upon another and introduces over 40 areas in which the minister may pass regulations, adding to the administrative burden of Canada's small airports.

The government is introducing these drastic measures without a single, overarching public demand for change and without having conducted a single regulatory impact or cost benefit analysis. In fact, a number of independent and government commissioned studies recommended a course of action substantially different from the government's proposed legislation.

I declared my bias and it is called John C. Munro Hamilton International Airport. I quoted from a letter to me from Mr. Tony Battaglia, president and CEO of TradePort International Corporation, operator of Hamilton airport. I read from his letter which said:

The act will have a profound impact on the growth of John C. Munro Hamilton International Airport. The act's one size fits all approach to airport government conflicts with Hamilton's unique and award winning public private partnership between the city of Hamilton and TradePort International, a private company operating the airport under terms of a 40 year lease. The act impedes the ability of the private operator to innovate and adapt to changing market conditions and customer needs in order to improve service and reduce costs. The act significantly erodes local control by the community—a founding principle of the Canada Airports Policy (1995).

Those are the concerns of a smaller airport like Hamilton, but what about larger airports like the Vancouver International Airport authority?

YVR is concerned that Bill C-27 would diminish Canada's reputation as a well respected source for excellent foreign international airport operators such as the Vancouver International Airport authority and its subsidiary YVR Airport Services Limited. It says that the bill would cripple or kill the ability of progressive airport managers, such as YVRAS, to compete in the international arena and provide much needed management and operator expertise to small and medium sized domestic airports. It also would negatively impact on small airports that need the type of management and operational expertise that larger airports can provide through consultant or management services in the manner that YVRAA provides through its subsidiary, YVRAS airports, to places like Kamloops, Cranbrook, Fort St. John and to more medium sized airports such as Moncton and my home town of Hamilton.

YVR says that the bill would reduce or eliminate opportunities and employment for Canadian architects, engineers, lawyers, professional advisors, designers and project managers in the field of overseas management and development of foreign airports.

Foreign governments are particularly attracted to the management skills of well run airports such as Vancouver. The fact that YVRAS has developed to the point that it should be able to stand on its own reputation is clouded by the views of foreign governments. They want the reputation, expertise and backup like an airport like Vancouver International can provide.

Realistically the development of these types of businesses and positive effects that it has on the Canadian economy is based on well run large Canadian airport authorities exporting reputation, expertise, technology and technical services through subsidiary airport operator management corporations and/or joint ventures.

The market for foreign airport privatization is huge. Today, while less than 5% of the world's airports are privatized, the World Bank forecasts that the operation of 150 airports will be transferred from government to the private sector within just the next few years. Several leading companies have identified airport privatization as a new strategic industry for the 21st century. This creates huge opportunities for Canadians that should not be stifled. That is the view of an airport such as Vancouver.

Devolution of airports to local control has been instrumental in the evolution of Canadian airports from money losing government run entities into full cost recovery operations under the principle of user pay. The government's vision document “Straight Ahead” says:

Transportation policy must provide market frameworks that allow carriers and infrastructure providers to adapt, innovate, remain competitive and serve the public.

Yet Bill C-27 creates a static, inflexible governance regime. The devolution of the Hamilton airport, for example, to local ownership and management has been an overwhelming success. By 2002 the local operator, TradePort, had invested over $25 million and attracted another $48 million in private sector investment at our airport.

Hamilton International Airport's economic impact study completed in 2002 found that there were 1,550 direct jobs at the airport, up over 116% since TradePort took over its management.

Hamilton International Airport's direct contribution to GDP is $170 million and that is up 129% since 1996. Its total economic output is $410 million, up 224% over the same period. Taxes paid to three levels of government by the airport community exceed $32 million.

In spite of all these successes, the Canada airports act includes 210 sections to micromanage the country's airports. By way of comparison, the entire Canada Transportation Act, which as we know governs rail, transit, marine and airlines, has only 280 sections.

My fear is that Bill C-27 embeds in legislation that which is normally dealt with through regulation. The bill will go before the Standing Committee on Transport shortly and I for one will be keeping an eye on this legislation.

It is quite obvious that we have a success story since deregulation. According to the airports and the airport authorities that have contacted many of us here in the House, and my particular concern is for Hamilton airport, I think demonstrates that a return from a deregulated industry of the mid-1990s to a re-regulated industry serves no useful purpose.

Again, I look forward to seeing the bill at committee stage when we conclude our second reading debate. I think it will be very important to go clause by clause through the bill and have these witnesses come before us to demonstrate to us why the government should proceed in the way it is proceeding and why we should not do everything we can possible to help the industry, not through re-regulating the industry but through those administrative practices that can encourage them to grow, to continue to grow in the fashion they are growing.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

James Moore

Canadian Alliance

Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance)

Mr. Speaker, I appreciate the comments by the member for Hamilton West very much.

As he knows, the Hamilton and Moncton airports are doing well not because the airports are managed well. They are doing well because air carriers such as WestJet are flying into them, which in turn gives them money which allows them to prosper. It is not that the management of the airports is so great that they succeed.

With that aside, the member raised a number of objections with the bill, the vast majority of which those of us in the Canadian Alliance agree with.

He is speaking against the bill, so I would assume therefore if there was a vote today that he would vote against the bill. What specific amendments must there be to the bill to prevent him from voting against it? If those amendments fail, I assume we will see the member voting against the bill?

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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LIB

Stan Keyes

Liberal

Mr. Stan Keyes

Mr. Speaker, at first blush it worries my considerably that the Canadian Alliance Party thanks and congratulates me on the work I am doing. That troubles me somewhat.

The member spoke about the management at Hamilton airport and said that it was really the business of WestJet. If it were not for TradePort and the management at the airport, they would not be out in the marketplace luring companies like WestJet to use Hamilton as its eastern hub. They went out and made their case for Hamilton demonstrating to WestJet that Hamilton was the place for it to locate.

Quite frankly, it is not just that passenger loads have gone from some 23,000 in 1999 to last year in 2002, 385,000 passengers at Hamilton. Hamilton is an extremely important and busy centre for cargo. Hamilton airport between 10 p.m. and 5 a.m. becomes a city onto itself, with the activity going on at Purolator, UPS and all the other carriers that transport cargo.

The hon. member's direct question was whether I would stand and vote against the bill if nothing was done to it. I am going to see the glass half full. When the bill goes to the Standing Committee on Transport and we hear from witnesses and the cases they make on Bill C-27, I have every confidence that the amendments will be put to the bill that will drastically improve the bill and continue down the path that we began many years ago; that is to allow businesses to continue to do business and not let government interfere with that business.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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PC

Loyola Hearn

Progressive Conservative

Mr. Loyola Hearn (St. John's West, PC)

Mr. Speaker, I agree with a lot of what the hon. member said. He made some excellent points. I would however like to ask his opinion on the privatization of airports. We have seen a lot of that over the last few years and I would say with a great amount of success. However as times get a bit tougher and we see some problems within the industry generally cuts usually have to be made. One of the flexibilities at airports, and perhaps airlines because Air Canada also has the same problem, is dealing with their employees.

Newfoundland and Labrador have small problems right now at two of its airports. Outside workers have been on prolonged strikes that are causing a lot of trouble and perhaps a loss of business. Of course it is a vicious cycle. If they lose business, they have fewer dollars.

I agree with the member that one has to look at this as the glass being half full rather than being half empty. I would like the member's take on privatization, especially in light of what is happening in the industry, and his suggestions on how we can come through this present crisis without the workers, in particular, paying the price for it.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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LIB

Stan Keyes

Liberal

Mr. Stan Keyes

Mr. Speaker, we have already seen a demonstration of how workers understand that when times get tough, as they are with Air Canada, there will be an accommodation by the employees at airlines through their unions. The unions are sitting down with their employers and saying that they understand there is a cash crunch and an overburden of seats available and that they may have to go to smaller planes.

Then of course more specifically, the airports are affected because in many cases, especially on our Atlantic coast, many of these airports are served only by Air Canada and therefore Air Canada will have to make decisions on whether it will go into these smaller communities. It will be up to the private operators at these airports to negotiate with the airlines.

It is a threefold track.

The first is the employees and unions understand where the problems are and they are prepared to make the sacrifice or contribution to the bottom line for the survival of that small airport.

The second is the small airport itself. It too will have to do the business of ensuring that any opportunities that come along to save money are passed along not just to the airport itself but to the all important air traveller through to the airlines.

The third link to this chain of course is the government. The government has to be prepared to do its part in reducing these rents and reducing, for example, the security charge. It is the only form of transportation in this country where the passenger has to pay for security. They do not on the roads. They do not on the railways. They do not in the shipping industry. Yet we are charging air travellers. There is no consistency and that is not fair.

It is incumbent upon the government to make a decision as to whether it will, at the very least, give some kind of a reprieve to the industry, pick up the tab on security for at least a couple of years and understand that if we reduce these costs, the airports remain viable. Then they, as viable airports, can pass along savings to the airlines and the air travelling public.

The government has to play its part, the airport managers have to play their parts and the unions and airport employees play their parts. If we all play ball, we can get through this. If any one of these links in the chain breaks, or decides not to open, then of course we will not do well.

I am very confident that I see this glass as half full. I see the approach of Air Canada and how the employees are working with it to keep it viable and to keep it as our flag carrier. If we all work together, we can make this happen.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

Jay Hill

Canadian Alliance

Mr. Jay Hill (Prince George—Peace River, Canadian Alliance)

Mr. Speaker, I agree with my hon. colleague from across the way that if we all work together we can improve this legislation. Certainly that is the approach the Canadian Alliance members have always had even before when we were with the Reform Party of Canada.

Unfortunately, all too often we have seen government committee members get their marching orders. The whip is cracked and very worthwhile amendments, regardless of whether they are put forward by members of the government, like the hon. member who just spoke, or opposition members from whichever party, are voted down. Because of party discipline, we do not get the opportunity to work together to improve the legislation in this place.

That aside, I want to ask the hon. member a question. He referred to YVR in Vancouver and the airport operating authority that runs the Vancouver airport. He questioned any need to re-regulate that which is contained in the act. I have some concerns in that regard.

I have raised a number of times in the past the free hand that was given to the airport operating authorities. In many cases these airport operating authorities are held quite accountable by the boards that oversee their operations. However in other cases some of the business decisions they make are certainly questionable.

In particular I call into question ongoing airport improvement fees that are charged at airports like Vancouver, while at the same time they are making decisions to invest offshore. Specifically, the authority that runs the airport in Bermuda receives investment dollars from Vancouver.

Would the hon. member agree that this is an area which needs addressing? We need to study it at committee and possibly look at some better control or accountability for airport operating authorities that continue to charge airport improvement fees to passengers which are obviously over and above what is necessary to operate that particular airport because the money is going out of the country.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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LIB

Stan Keyes

Liberal

Mr. Stan Keyes

Mr. Speaker, when it comes to legislation, the hon. member refers to the government whip and the cracking of the whip, et cetera. I am very fortunate that when I was elected in 1988 in opposition I worked on the transport committee. Pat Nowlan was the chair, as our Speaker would recall. We had a great working relationship.

Then, of course, we became the government in 1993. Very specifically, the Hon. Doug Young as minister of transport worked with me as chair and the then member for London East as the parliamentary secretary. Privatizing CN, commercializing air navigation services, and commercializing our ports and harbours all took place in just a three year period.

Does the member not know that during that those three years, although nothing was perfect, there were many amendments brought forward and we all worked together as a unit and very much was accomplished on all those fronts? We as the government are very proud to have achieved what we achieved in cooperation with the opposition.

When it comes to relationships between YVR and offshore, that is what the business of these airports is. I invite the hon. member to do a little homework, because that is what the airports are saying. They are saying they need that opportunity to export their expertise. They are making money by doing this. It is not costing the YVR or the government a dime. They are making money by making these investments overseas at different airports and selling their technology and expertise.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

James Moore

Canadian Alliance

Mr. James Moore (Port Moody—Coquitlam—Port Coquitlam, Canadian Alliance)

Mr. Speaker, I would like to comment briefly on the previous speech. Unregulated monopolies that are imposing airport improvement fees without the consultation of air carriers or the communities are not a good idea, or an idea that needs to be exported anywhere. In fact, unregulated monopolies are generally not a good idea.

I rise to participate in the debate on Bill C-27, an act respecting airport authorities and other airport operators and amending other acts, otherwise known as the Canada airports act. In just the past couple of weeks I can think of various transport related priorities and priority actions that this Parliament has called on the Liberal government to implement. In fact, one only need go back to the last day of the House sitting just before the Easter break, on April 11, when the Standing Committee on Transport tabled our unanimous report, “An Industry in Crisis: Safeguarding the Viability of the Canadian Airline Industry”.

Our standing committee heard witnesses, read reports and then made four specific recommendations to the House and to the Liberal government. Three of them could be implemented immediately without any need to impose new legislation. It could be done in regulations with the stroke of a pen by the Liberal cabinet. Recommendation 2 was that, and I quote:

The federal government eliminate the Air Travellers Security Charge.

Recommendation 3 stated:

The federal government suspend rental payments by airports for a two-year period and the airports shall pass the rental savings on to air carriers.

Recommendation 4 stated:

The federal government, for a two-year period, reduce by 50% the federal aviation fuel excise tax rate.

There are three things that need to be said about these recommendations. First, they were unanimous. They were supported by all five political parties in the House. Second, they are clear and they are unambiguous. There is no doubt whatsoever as to their meaning, their intent and their consequence. Third, they can be implemented today without passing any new legislation.

These changes are what virtually every industry stakeholder, from Air Canada to its competitors and from the travel industry to various unions have been demanding from the government for well over a year. The government's complete unwillingness to take concrete action to solve the problems affecting the airline industry is both baffling and astounding. It is also, given the number of jobs involved in both the airline and tourism sectors, somewhat tragic.

We have all heard the expression, “rearranging the deck chairs on the Titanic ”. It is meant to apply to a situation where those in control do nothing substantial to remedy the situation but then take some superficial action so that it cannot be charged against them that they did not take any kind of action at all.

The airline industry is in trouble and the House Standing Committee on Transport sought and received the industry's advice as to what constructive steps this Liberal government might take. The committee then unanimously adopted recommendations and forwarded them to the government. However, the Liberal Minister of Transport does not want to do anything substantial to help the airline industry and he does not want to be seen to be doing nothing, so he has introduced the bill that we are debating today, Bill C-27, the Canada airports act. Truly, he is rearranging the deck chairs on the Titanic .

Even if we were to consider only the government's policy with respect to airports, the Canada airports act fails to address some of the more important issues facing airports. As a member of Parliament, the single most common airport related concern that I receive is related to an issue known as CARs 308, a recently imposed five minute emergency response time at smaller airports that has dramatically increased the operating costs for smaller airports. The federal government has not offered a dime in operating assistance. This unfunded federal government mandate is a requirement and it is the biggest single issue facing many small airports. It is completely absent in this bill we are debating today. It is the number one concern. It is what we hear most about and it is not in this bill.

The second biggest issue that many of us face is trying to meet new and heightened security standards while understanding that small airports are often the weakest link in the security system. Other countries such as Germany, England and France, with more experience in dealing with terrorists at airports, require arriving passengers from certain destinations to go through security screening upon arrival before proceeding to connecting flights. Essentially, these passengers arrive in a non-secure part of the larger airport and must proceed through security screening in order to get into the secure portions of the airport.

Such a system in Canada would allow for passengers departing smaller centres on small aircraft to go through security only if they were connecting to a major centre. The Europeans use this system because it costs less and offers the type of security they have needed in the past to fight organizations like the IRA, the ETA and the Baader-Meinhof group. Nowhere is this idea found in Bill C-27, the Canada airports act.

I know that the Canada airports act deals only with larger airports. Nonetheless, if the average member of Parliament is getting mail on small airports and the Liberal government introduces a bill dealing with big airports, there are some who would say that the government is really not listening to Canadians. We certainly have a transport minister who does not listen to the transportation sector.

We have a Liberal administration that has ignored the Standing Committee on Transport's unanimous recommendations on how to help the airline industry. We have a Minister of Transport who has chosen to ignore Canada's single biggest airport related issue when telling his department what issues he wants them to address. He has ignored CARs 308.

Then, and this is the best part, we have a Minister of Transport who has introduced a Canada airports act that is at best totally unnecessary and at worst a huge step backward.

When we talk to the airline industry, the airport operators and the flying public, we find a general acceptance of the way that airports are being run. Of course there are a few problems, but no one has yet contacted my office and said that there is something wrong with the airports which must be addressed rapidly and we need a new law to deal with them and we have to get this done. We just do not hear that from Canadians, yet that is precisely what we have here in this legislation.

Every law that a government tables presumably is aimed at solving a particular problem. Thus, every act has a summary of the ways in which it would improve the status quo or remedy a particular wrong. In analyzing the Canada airports act, it is instructive to look for the motivation. The national airports policy laid out in section 7 of the Canada airports act calls for a “national network of airports in Canada” that are operated in a consistent manner. Essentially, Bill C-27 believes that all airports in our “national network” should be run in a similar way.

The logical problem with this approach becomes readily apparent when one realizes that the scheme would apply equally to both Gander airport, which handled 86,000 passengers in 2000, and Toronto's Pearson airport, which served 28 million passengers. For every person who goes through Gander, 325 will go through Toronto. In fact, with 17,000 people working at Toronto international airport, Toronto has about one-fifth as many staff as Gander has annual passengers. Yet under Bill C-27, both would face similar obligations and regulations.

To the extent that Bill C-27 is aimed at providing a one size fits all solution for a huge range of airports, this is not only a bad idea but also a solution for a problem that simply does not exist. In fact, the bill provides for two very different regimes. One regime, described in parts 2, 3 and 4 of Bill C-27, applies only to the following 18 former Transport Canada operated airports: Charlottetown, Fredericton, Gander, Halifax, London, Moncton, Montreal, Ottawa, Prince George, Quebec, Regina, Saskatoon, St. John's, Thunder Bay, Toronto, Vancouver, Winnipeg and Victoria. Another regime applies to all Canadian airports that have had an average of 200,000 emplaned and deplaned passengers over the last three years. Right away we realize that Gander does not reach the 200,000 threshold, so we might think that the Canada airports act would not apply to Gander. But because Gander was a major international airport a few years ago, it is not only covered by the act but by the same standards that are currently applied and would be applied under Bill C-27 to Toronto's Pearson airport and Vancouver.

We see similar problems when we compare Thunder Bay and Hamilton, both of which served roughly 550,000 passengers in the year 2001. Bill C-27 would hold Thunder Bay, a former Transport Canada facility, to a higher standard than Hamilton, WestJet's eastern hub. Thus, 84 of Bill C-27's 215 sections do not apply to Abbotsford, Kelowna or Hamilton, all of which have non-stop service to cities at other ends of the country, but they do apply to smaller airports simply because these airports were formerly owned by Transport Canada.

Prior to the introduction of Bill C-27, Canadians were not overly concerned about the poor management of our nation's airports. So Bill C-27, by imposing a one size fits all regime, fixes problems that did not exist and creates a whole new bunch of problems by treating different airports similarly and similar airports differently.

All this leaves one asking what grave problem Bill C-27 was meant to solve. Given that parts 2, 3 and 4 dealing with airport authorities' legal status, corporate governance and obligations do not apply to places like Abbotsford, Kelowna and Hamilton or, for the moment, Edmonton or Calgary, it does not seem likely that issues such as corporate governance motivated the minister to table this bill.

Part 1 is one of four parts of Bill C-27 and would apply to all airports. In it we find clause 18. Subclause 18(1) reads as follows:

(1) Airport operators of airports serving international traffic must

(a) display the national flag of Canada, and erect signs welcoming passengers to Canada, in prominent places for arriving international passengers; and

(b) display the national flag of Canada at other prominent places on the airport.

We have the federal government mandating that there be flags in the airports. A pre-eminent concern for the state.

In my reading of Bill C-27 and the 1992 Airport Transfer (Miscellaneous Matters) Act, which is the act that started the process of handing over airports to airport authorities, this flag portion is one of the few clauses that is really new. It would almost seem to go without saying that the Canadian flag should be at Canadian airports, but surely this does not require legislation.

The Aéroports de Montréal website does not have either the Canadian or Quebec flags on it and neither does much of its printed material. However, there is a big Canadian flag on display greeting arriving passengers in English and in French together with a similar Quebec flag displaying a greeting for arriving passengers in French. Both of these were operational on Thursday, April 24, 2003.

If an airport is not more enthusiastic in its use of flags, that is not a problem. I do not believe that we can legislate patriotism, but apparently that is a pre-eminent preoccupation of the government. We have 35,000 Air Canada employees who could be completely out of work. We have airport authorities taxing Canadians. We have an air traveller security charge. We have a depression in the number of people flying. We have SARS and the government says that we need to mandate flags in airports.

The same kind of thinking can be found in part 4, clause 116 in the requirement of an airport authority to prominently display the Canadian flag. Subclause 116(1) reads:

(1) Every airport authority must

(a) display the national flag of Canada prominently at every air terminal building and at other places on the airport to which the public has access; and

(b) erect signs in prominent places at the entrance to the airport and to every air terminal building, proclaiming that the airport is owned by the Government of Canada.

(2) The Governor in Council may make regulations prescribing the locations of, dimensions of, and manner of displaying and erecting signs and displaying flags at their airport, and prescribing the contents of the signs.

However, clause 116 goes further than clause 18 in requiring the airport authorities to erect signs saying that the airport is owned by the Government of Canada. If the government believes that the ownership of buildings occupied by tenants have a higher profile, I would suggest it would begin by posting large “This building is owned by (blank)” signs on all Ottawa buildings that the federal government rents.

Curiously, clause 191 and 192 prescribe fines, a fine of up to $100,000 for every day an offence is committed. Therefore, if Bill C-27 passes, the airports better call the flag and sign folks rather quickly.

Clauses 16 and 118 are essentially silly, but at least one industry source has told my office that he believes this is the primary motivation for Bill C-27 as there were no calls by either the airlines or airports or the public to codify the status quo with a flawed one size fits all regime.

To the extent that one might tend to support Bill C-27, because of a desire to wave the flag, it is important to understand that any potential benefit to flag visibility would be more than outweighed by the flawed one size fits all regime of Bill C-27. This not only forces different airports to a common standard, but it also treats similarly sized former Transport Canada facilities and municipal airports differently. This is not just a flaw in Bill C-27. It has a serious commercial impact on airport authorities.

For example, clause 57 would limit an airport authority's ability to invest in another corporation to just 2% of gross revenues per year. The Vancouver airport authority, YVR, which owns the profitable YVR airport services, YVRAS, is concerned that this clause would limit its ability to finance YVRAS's projects in Chile, Jamaica or Hamilton. YVR writes:

...investment opportunities do not come in neat bundles, nor do they arise every year. (This) is also a demonstration of an “Ottawa knows better” (idea) than the community based board about what is good for the community (and the airport).

YVRAS operates 12 airports in five countries and competes against management subsidiaries run by Amsterdam Schiphol and London Heathrow. This is partially in response to page 49 of Transport Canada's national airports policy of July 1994 which talked of contributing “to the future competitiveness of Canada worldwide”. More recently federal cabinet ministers have promoted YVRAS's bids in other countries. Section 57 is a major reversal in Canadian airport policy.

However, the dual regime proposed by Bill C-27 makes section 57 doubly unfair because it would apply to airports like Vancouver but not nearby competitors such as Kelowna and Abbotsford.

Another case of uneven treatment of Bill C-27 is the way it deals with corporate governance. Airlines have been contacting my office to ensure that they will play a greater role in influencing terminal design in order to reduce costs and possibly opulence.

Section 64 requires that the board must collectively have experience in “law, engineering, accounting, management in the air carrier industry”, but there is no specific requirement for the board to have a single representative from the airline industry or general aviation at all.

This is in stark contrast to Nav Canada, the private company that handles air traffic control in Canada. Given the ability of airport authorities to impose greater fees and passenger fees as well as seize certain aircraft, the lack of mandatory aviation industry representation is a fatal flaw of Bill C-27. Although section 97 requires the airport authority to meet with carriers once a year, this is a poor substitute for specific tangible power in terms of board representation.

I am not necessarily arguing for the Nav Canada model, but there should be room on the board of 15 people who run a major airport for at least one of those people to be named specifically by the airline industry. Like section 57, section 64 only applies to former Transport Canada facilities, so the board of directors at Thunder Bay must follow the requirements of Bill C-27. But Hamilton, which is growing more quickly, can follow its own independent bylaws.

Another clause that only applies to former Transport Canada facilities and that clearly shows the shaky ethical grasp of the Liberal government is section 96. It reads:

96(1) An airport authority must disclose any contracts involving expenditures in excess of $100,000 that were not awarded under a public bid solicitation process, the name of the contracting party, the purpose and value of the contract and the reasons why a public bid solicitation process was not followed.

Section 96 does not require a tender process for any project under $100,000. Worse, it also exempts larger projects from the tender process as long as the airport authority discloses that no bids were solicited for that project. Potentially, everything from truck purchases to consulting contracts could involve favoured, non-arm's length suppliers.

When we realize that just last October Transport Canada was looking into millions of dollars of untendered, non-arm's length contracts and questionable dealings connected with the Port of Digby, we would think that the government would apply higher standards to airport authorities. When we realize that the government wants to oblige 100% of airports to display the Canadian flag, but it is willing to let an airport authority hand $99,000 in contracts to its friends with no problem, we see an Alfonso Gagliano-type politics at work in the bill. Surely Canadians deserve better.

In closing, Bill C-27 is a dramatic failure on the part of the government. There are smaller airports that are struggling. We have a SARS problem, depressed consumer confidence, shaky fuel prices, an airport security tax that is unanimously opposed by every single stakeholder in the transport community, and constant problems in the airline industry, some 35,000 people whose jobs may be potentially lost at Air Canada.

The airline industry in Canada is in precarious times right now and the government puts forward Bill C-27 which does nothing to address any of the substantively crumbling pillars of Canada's airline industry. It is a bad bill. It is poorly written with non-priorities. It is rearranging the deck chairs on the Titanic by a Liberal transport minister who has shown zero leadership. Eight air carriers died in the six years that he has been transport minister. He has been a complete failure with regard to the air industry. With Bill C-27, we see that he has learned nothing from his mistakes.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

Ken Epp

Canadian Alliance

Mr. Ken Epp (Elk Island, Canadian Alliance)

Mr. Speaker, I appreciate the work that my colleague from British Columbia has done in this particular portfolio. He seems to have an uncanny ability to identify errors in legislation and errors in the things that the Liberal government is planning. I would simply commend him for the tremendously good hard work that he has done.

I have a question for him which deserves a little further exploration, and it is with respect to the success of WestJet. Would he expand on the fact that Hamilton has had such a massive increase in passenger load and the fact that WestJet has somehow been able to survive the tumult, turmoil, and turbulence of the air industry in the last several years?

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

James Moore

Canadian Alliance

Mr. James Moore

Mr. Speaker, WestJet has not only managed to survive, but has managed to thrive for a number of reasons. Chief among them is because it is a well managed and well operated company that is interested in making a profit rather than securing market share.

The dominant problem with Air Canada, with its current financial problems at least as I see it, is that it has been obsessed with gathering market share regardless of its costs to its bottom line. It was more interested in garnering market share because in the long term the financial worth of having a substantive network of a hub and spoke model imposed on a G-8 country with very little competition was an asset that was worth mortgaging over time by flying three quarter empty planes on routes and cannibalizing its own capacity on routes in order to squeeze its competitors out of business.

WestJet is a true Canadian success story. As a western Canadian I like to say a true western Canadian success story. It is a well managed and well operated company. Clive Beddoe certainly deserves all the praise that he got from all observers for managing an airline efficiently and well. His company has grown exponentially over the last few years, but even though it is growing exponentially, he is growing it in a prudent, well managed, and reasonable way with measured responses to measured market forces and taking calculated risks. He is growing his company in an effective way.

It is worth knowing that while we do have all these crises in the air industry, the reality is that there are air carriers out there that are making a profit. JetBlue last week announced a profit in the United States. The United States has huge problems with United and American Airlines, Delta and others, but JetBlue just announced that it is making a profit. Ryanair Ireland and Southwest in the United States are still profitable. WestJet is still profitable. There is a real tectonic shift in the airline industry and certain air carriers that have learned the lessons of how one operates in a free market by providing reasonable products to people who are willing to reasonably pay for them can succeed. WestJet has shown that it can succeed.

The federal Liberal government needs to listen to companies that know how to build in the air industry, in the new era of air carriers and impose government policies that allow airlines to succeed, thrive, and grow in the new environment. WestJet has done it and the fact that the government takes policies that do not allow other air carriers to continue to grow in our environment along with WestJet is a tragedy. Eight air carriers have died in the past six years that we have had our current Liberal transport minister. I understand he will not be transport minister for very long. I know people are happy about that.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

John Williams

Canadian Alliance

Mr. John Williams (St. Albert, Canadian Alliance)

Mr. Speaker, I was taken aback by the comment that eight airlines have died under the leadership, or lack thereof, of the Minister of Transport.

As we seem to be coming to the end of an era where the Prime Minister is talking about leaving some kind of legacy, it seems to me that this is not the type of legacy he should be leaving, but it seems to be the type of legacy that he is leaving.

I would like the member to comment on what this is saying about leadership we have not enjoyed but had over the last number of years. Does he see any changes if the member for LaSalle—Émard becomes the Prime Minister? Can we expect anything better under his leadership?

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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CA

James Moore

Canadian Alliance

Mr. James Moore

Mr. Speaker, my colleague from St. Albert is exactly right. It is a pretty grim track record of the Liberal government specifically with the air transportation policy. Eight air carriers have died in the past six years.

Will the world be different if the former Liberal finance minister, the member for LaSalle--Émard, who is doing his focus group town hall meetings, becomes prime minister? The answer is no.

The worst thing that happened to the air industry in terms of government policy happened in December 2001. After September 11 there was a nosedive in consumer confidence. The first air transport policy response, the typical Liberal response to the drop in consumer confidence was to raise the cost of flying. The government imposed the $24 air tax in the December 2001 budget after the September 11 terrorist attacks. This tax was to be imposed on April Fool's Day 2002.

The air tax was the largest tax increase in the final budget of the former finance minister. His response to the crisis in the air industry after September 11 was to impose the largest tax increase in his final budget, the $24 air tax, which has devastated small air carriers, has further suppressed consumer confidence and continues to hammer the air industry. It is something for which he and the Liberal government should feel ashamed.

The supposedly fiscally conservative former Liberal finance minister's actions speak louder than his words. The air industry was struggling and he gave it a swift kick in the stomach while it was trying to catch its breath from having the wind knocked out of it on September 11. He learned nothing and listened to nobody. He did not listen to the transport committee when he was the minister of finance. He was a failure in terms of the air industry. If he becomes the prime minister of Canada, I expect him to continue his pristine record of arrogance and ignorance with regard to the air industry.

Topic:   Governement Orders
Subtopic:   Canada Airports Act
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PC

Greg Thompson

Progressive Conservative

Mr. Greg Thompson (New Brunswick Southwest, PC)

Mr. Speaker, a couple of months ago I met with Mr. John Buchanan, the chief executive officer of the Saint John airport. He suggested that we should take a careful look at Bill C-27. He has some pretty strong concerns about the bill and its impact on small airports to comply with the legislation. He suggested that the Saint John airport is only one crisis away from a critical stage. It is not only at the Saint John airport but at Moncton and Fredericton, New Brunswick as well.

I am quite familiar with the Saint John airport and the Fredericton airport, which are of equal distance from my home. I have a choice as to which one I use when I travel. Bill C-27 will place a huge imposition on those airports and their ability to meet the bottom line.

I would like the member's response to that. He has taken the minister to task on some of the provisions and fees that have been imposed arbitrarily on the airports by the Government of Canada. Could the member reference some of that and the future of some of the airports?

Topic:   Governement Orders
Subtopic:   Canada Airports Act
Permalink

April 29, 2003