International Interests in Mobile Equipment (aircraft equipment) Act

An Act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment

This bill was last introduced in the 38th Parliament, 1st Session, which ended in November 2005.

Sponsor

Jean Lapierre  Liberal

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment would implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Privilege

October 6th, 2005 / 10 a.m.
See context

The Speaker

I am now prepared to rule on the question of privilege raised on Monday, September 26 by the hon. member for Calgary East concerning the work of the Ethics Commissioner. I would like to thank the hon. member for raising this matter, as well as for the additional information he provided.

In presenting his case, the hon. member for Calgary East argued that the Ethics Commissioner had not followed the proper process for conducting an inquiry as defined in the Conflict of Interest Code appended to our Standing Orders. Specifically, the hon. member claimed that the Ethics Commissioner failed to provide him with reasonable written notice that he was the subject of an inquiry. In addition, the hon. member stated that, by commenting on the inquiry to a journalist, the Ethics Commissioner failed to conduct the inquiry in private.

Finally, the hon. member alleged that the Ethics Commissioner's comments to this journalist had damaged the hon. member's reputation and unfairly prejudiced the investigation.

For those reasons, he charged that the Ethics Commissioner was in contempt of the House and asked that I find a prima facie breach of privilege.

As both the position of Ethics Commissioner and the Conflict of Interest Code are relatively new, I believe it would be helpful to review how they came into existence.

On March 31, 2004, Royal Assent was given to Bill C-4, An Act to amend the Parliament of Canada Act (Ethics Commissioner and Senate Ethics Officer) and other Acts in consequence. This act created the position of Ethics Commissioner, whose role in relation to Members of Parliament is specified in subsection 72.05(1) of the act, namely to:

“perform the duties and functions assigned by the House of Commons for governing the conduct of its members when carrying out the duties and functions of their office as members of that House”.

On April 29, 2004, the House adopted the 25th report of the Standing Committee on Procedure and House Affairs, which recommended that a Conflict of Interest Code for members be appended to our Standing Orders. This code, which came into force at the beginning of the 38th Parliament, assigns several responsibilities to the Ethics Commissioner.

I mention these events to underscore that the Conflict of Interest Code contains rules that the House has adopted for itself and that the House has mandated the Ethics Commissioner to interpret and apply the code. However neither the act nor the code provide a mechanism for members to make a complaint against the Ethics Commissioner regarding the discharge of that mandate. By the same token, there is no mechanism for the Ethics Commissioner to defend himself against a complaint about how he performs his duties.

Having no other recourse, the hon. member for Calgary East has asked me to rule on whether or not the Ethics Commissioner has breached two specific portions of the code. The first alleged violation relates to subsection 27(4) of the code which reads:

The Ethics Commissioner may, on his or her own initiative, and on giving the Member concerned reasonable written notice, conduct an inquiry to determine whether the Member has complied with his or her obligations under this Code.

The hon. member stated that the inquiry into his conduct began last May, but claimed not to have been notified officially until August 23, 2005 of the nature of the allegations against him.

Second, the hon. member claimed that by revealing details of the investigation to the media, the Ethics Commissioner has failed to conduct his inquiry in private. This requirement is found in subsection 27(7) of the code which states:

The Ethics Commissioner is to conduct an inquiry in private and with due dispatch, provided that at all appropriate stages throughout the inquiry the Ethics Commissioner shall give the Member reasonable opportunity to be present and to make representations to the Ethics Commissioner in writing or in person by counsel or by any other representative.

Those two allegations are troubling in themselves and the correspondence provided by the hon. member lends further weight to his case, so I have concerns about how this matter has progressed.

That being said, it is unclear what role, if any, that I as your Speaker have to play in ensuring that the code is properly interpreted and enforced. For example, is it up to the Chair to determine what constitutes “reasonable written notice” or to say to what extent inquiries are to be conducted in private? Can the Chair be expected to rule on what constitutes “due dispatch” or on whether a member who is the subject of an inquiry has been given a “reasonable opportunity to be present and to make representations?” A close reading of the act and the Standing Orders suggests to me that that responsibility lies elsewhere.

Subsection 72.05(3) of the act specifies that the Ethics Commissioner shall carry out his duties and functions under the general direction of a committee of the House. The House has designated the Standing Committee on Procedure and House Affairs to be this committee. Pursuant to Standing Order 108(3)(a)(viii), the standing committee has the mandate to “review and report on all matters relating to the Conflict of Interest Code for Members of the House of Commons”.

Since, as I stated earlier, the code is still relatively new, I believe it would be beneficial both for the office of the Ethics Commissioner and for the House if the committee considered this matter. This would afford the Ethics Commissioner an opportunity to explain the process by which inquiries are conducted and give hon. members a chance to raise any concerns. The Chair hopes that such a dialogue between the committee and the Ethics Commissioner will clarify matters for all involved.

To summarize then, while the Chair is hesitant to rule that the conduct of an officer of Parliament constitutes a contempt of the House in the absence of a thorough review and assessment by the responsible committee, the Chair is nevertheless sympathetic with the hon. member for Calgary East who is seeking guidance on what avenues are open to him to ensure that this very serious matter is resolved. In particular, the Chair is concerned that the absence of a clear process to address these kinds of disputes leaves both hon. members and the Ethics Commissioner lacking the clarity to which they are entitled in the performance of their respective roles.

For these reasons, and to afford the House an opportunity to pronounce itself on how it wishes to proceed in this very delicate case, I am prepared to find a prima facie question of privilege, and I therefore invite the hon. member for Calgary East to move his motion.

The Budget
Royal Assent

February 24th, 2005 / 12:20 p.m.
See context

The Deputy Speaker

Order, please. I have the honour to inform the House that a communication has been received which is as follows:

Rideau Hall

Ottawa

February 23, 2005

Mr. Speaker:

I have the honour to inform you that the Honourable Louis LeBel, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy of the Governor General, signified royal assent by written declaration to the bills listed in the Schedule to this letter on the 24th day of February, 2005, at 11:02 a.m.

Yours sincerely,

Curtis Barlow for Barbara Uteck

Secretary to the Governor General

The schedule indicates that royal assent was given to: Bill C-7, an act to amend the Department of Canadian Heritage Act and the Parks Canada Agency Act and to make related amendments to other Acts--Chapter No. 2; Bill C-4, an act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment--Chapter No. 3; Bill C-302, an act to change the name of the electoral district of Kitchener--Wilmot--Wellesley--Woolwich--Chapter No. 4; Bill C-304, an act to change the name of the electoral district of Battle River--Chapter No. 5; and Bill C-36, an act to change the boundaries of the Acadie—Bathurst and Miramichi electoral districts--Chapter No. 6.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:55 p.m.
See context

The Acting Speaker (Hon. Jean Augustine)

The question is on the motion that Bill C-4 be read the third time and passed. Is it the pleasure of the House to adopt the motion?

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:50 p.m.
See context

Liberal

Roger Valley Kenora, ON

Madam Speaker, it is a great pleasure to rise today for this third reading debate on Bill C-4, an act to implement the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft equipment. I would like to take this opportunity to discuss the legislative amendments that will come into force once this convention is ratified.

Canada is a leader in electronic registries and has one of the most modern asset based financing systems in the world. Canada already has a sophisticated financial regime that uses assets as collateral. However, implementation of the convention and protocol would benefit the aviation sector by amending insolvency legislation and establishing an international registry specifically for aircraft equipment.

The convention and protocol would establish an international registry in which interests in aircraft equipment would be registered. This registry would replace individual national registries. It would record the existence and prospective rights and determine their priority for the use of purchasing and financing of aircraft.

Currently, in Canada each province and territory maintains their own aircraft registry and the federal government maintains a registry as mandated by the Bank Act. The establishment of a single worldwide international registry would replace both federal and provincial registries for aircraft and aircraft parts in Canada, greatly simplifying aircraft registration.

On March 31 Canada signed the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft Equipment. Justice Canada officials regularly consulted with the provinces and territories throughout the negotiations leading to the adoption of the convention and the protocol. This will create a uniform, secure and predictable environment at the international level for Canadian business. This is in line with Canada's goal of achieving enhanced transparency, security and predictability in international business.

The Bank Act special security regime allows banks in Canada to register security interests on a national basis for certain types of defined products listed in the act. The types of products that can be registered under the Bank Act are technically broad enough to include aircraft equipment covered by the new protocol.

Since the goal of the protocol is to create a single international registry, amendments to the Bank Act would be required to avoid overlap. The most effective means of doing this would be to remove aircraft equipment from the application of the Bank Act.

The international registry would allow aircraft owners, lessors and financial institutions to record their rights, including security interests in aircraft and aircraft engines. Registration would establish the purchaser's or creditor's priority over the unregistered or subsequently registered interests of other parties.

Information on the Internet based registry will be available to and accessible by any individual or company directly. This will provide a considerable advantage in terms of time, cost savings and improved certainty in resolving questions of priority of interests.

Aviareto, an Ireland based company, was selected as registrar through a tendering process supervised by the International Civil Aviation Organization. The establishment of the international registry has begun, and Aviareto will operate the registry once the convention and protocol come into force.

Before Canada ratifies the convention and protocol, a careful examination will be done of the final acceptability of the terms of operation of the new international registry. Canada will withhold ratification until it is satisfied that the registry is fully operational and secure.

Amendments to the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-Up and Restructuring Act would also be required in order to implement the convention and protocol. The bill would provide for a special remedy in the case of insolvency that would impose a fixed stay period of 60 days. After this period, creditors could reclaim an aircraft or aircraft equipment on which they had a security.

Under current legislation, there are various periods within which creditors are subject to a stay on their ability to enforce security interests. These stays can sometimes extend to more than a year. The adoption of a fixed 60-day period would increase certainty in the system and level the playing field between Canada and the United States. The U.S. industry already benefits from a similar provision under the U.S. bankruptcy code.

The adoption of consequential amendments to Canada's insolvency laws would benefit Canadian aircraft manufacturers, financiers and airlines on the international level. Although these changes would provide better protection for creditors, they would not materially impact debtors' ability to pursue reorganizations in case of insolvency.

The federal legislation required to implement the convention and protocol would make the necessary amendments to the relevant acts. Legislative amendments may be proclaimed into force at different times, but no later than a date on which a convention and protocol enter into force in Canada.

It is clear that the adoption of the bill will be an important step in the creation of an international regime that the aviation industry worldwide sees as beneficial. I applaud the quick and thorough work done by the Standing Committee on Transport, and I encourage all members to support third reading of Bill C-4.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:45 p.m.
See context

Liberal

Michael John Savage Dartmouth—Cole Harbour, NS

Madam Speaker, I am pleased to rise in the House today to offer my support during third reading of this important legislation. I wish in particular to briefly highlight the anticipated benefits of adopting the proposed international interests in mobile equipment act.

It is clear that we all agree that a strong competitive aviation industry is an important component of Canada's economy in the upcoming century. Adopting the bill will help the Canadian airline and aerospace industries compete more effectively in the global economy by facilitating their access to capital markets. It is for this reason that both the industry and leaders support the bill and it is apparent that most members of the House do as well.

On March 31, 2004, Canada signed the Convention on International Interests in Mobile Equipment and the protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.

Extensive consultations with interested parties were held throughout the process. Representatives of the Canadian industry were present and participated in many of the meetings leading up to the diplomatic conference in Cape Town as well as the meeting that formally adopted the instruments.

The convention and protocol will establish an international framework for the financing of aircraft equipment. Within this framework, the value of the aircraft would be used as security for payment, much like a mortgage or a lease. Adopting legislation to implement the convention and protocol will reduce the financial risk to creditors, allowing them to make greater levels of financing available for the purchase of aircraft. This could translate into lower costs for airlines purchasing or leasing aircraft, which would enhance their competitiveness and strengthen the airline and aerospace sectors. The expected result is a direct positive impact on airline earnings, investment and overall profitability.

Among the benefits of implementation is greater security for creditors, an increase in the global competitiveness of the Canadian aerospace and airline industries, and very important, maintaining jobs in Canada and spinoff effects for various regions within Canada.

If Canada were to ratify the convention and protocol and adopt implementing legislation in a timely manner, Canadian purchasers would be able to benefit from reduced exposure fees. For example, the U.S. export-import bank is offering a one-third reduction in its exposure fee to companies whose home states have signed, ratified and implemented the convention and protocol before September 30, 2005. This offer recognizes that reducing uncertainty translates into lower costs. This kind of advantage would contribute to the industry's competitiveness.

As the Canadian aviation industry becomes more cost competitive, the benefits could be passed on to consumers through increased airline services and lower fares. A healthy aviation industry will of course translate into more jobs for Canadians. As airlines become more competitive and grow, they will expand their workforce. This has spinoff benefits for the aircraft manufacturing sector. The airline and aerospace manufacturing industries generate many high paid specialized jobs. The importance of such jobs and their spinoff effects in the economy cannot and should not be ignored.

In the west, Alberta and western Canada will benefit from WestJet's increased competitiveness. As the home of Air Canada, Jetsgo, Pratt and Whitney Canada and Bombardier, Quebec will no doubt enjoy a boost in its economy.

The reason that I am pleased to stand today is that CanJet and Pratt and Whitney Canada in eastern Canada will provide a positive economic impact for eastern provinces. Nova Scotia is one of the provinces that fully supports the bill and is ready to adopt the protocol and convention. It will assist our growing aerospace industry.

Nova Scotia is more known for shipbuilding, another industry that we must keep our eye on and for which we must ensure support. However, the aerospace industry has grown in Nova Scotia and it sees great potential for further growth.

Smaller airlines across the country will also enjoy the benefits created by the convention and protocol. In addition, aircraft manufacturers and their numerous subcontractors throughout Canada will be positively affected by the increased certainty that this will provide.

Bill C-4 is an important step toward strengthening Canada's aviation industry which will generate competitive and other spinoff benefits right across the country.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:15 p.m.
See context

Bloc

Mario Laframboise Argenteuil—Mirabel, QC

Mr. Speaker, I am pleased to speak to Bill C-4. I will take a moment to read the title of the bill, which reads as follows:

An Act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment

It is a scholarly and complicated enactment. The International Civil Aviation Organization, or ICAO, adopted these protocols in the fall of 2001. We recall, of course, September 2001, and the grave crisis the whole airline and aerospace industry faced at the time. The ICAO met and decided to negotiate protocols to facilitate the taking of aircraft as collateral by the banks, starting in the fall of 2001. Since then, 32 countries have signed this protocol. Canada, however, did not sign it until March 2004, in spite of the industry's pressing need. If the International Civil Aviation Organization met in the fall of 2001, it was because there was danger in waiting. It wanted to standardize the taking of guarantees around the planet. That was the intention, so that, in the event aircraft had to be repossessed, bankers would have the ability to exercise their guarantees and repossess as required.

Bankers were nervous and did not want to finance new equipment. Even though it was requested by the industry and discussion was urgently required in the fall of 2001, this convention was not signed by Canada until March 2004. Today, in November 2004, we are still debating a bill that was introduced following the election. We are understandably skeptical when we hear about an emergency and a request from the industry. I think the industry has moved on. The aerospace industry is going through a grave crisis. The expectation in the industry would have been that the government provide a real aid package for the aerospace industry, not introduce a bill that should have been introduced back in 2001, or in 2002 at the very latest.

Once again, the Liberal government has decided that to help the aerospace industry, it would present a bill to make it easier for bankers to secure their interests. The problem is that bankers are not jumping at the opportunity to finance planes these days. Such is the reality. The industry will work, appear before the committee, propose changes and try to have a decent bill so that one day when bankers become interested in the aviation industry again, there will be laws to protect them. We are talking about creditor protection because this bill will amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, the Winding-Up and Restructuring Act and the Bank Act. Once the bankers secure their interests throughout the world we want them to be able to require compliance with conventions and the application of a uniform law.

The Bloc Québécois agrees with this bill. We would have agreed to its being tabled in 2001 and passed in 2002, but the Liberals have been too slow to take action. Today, in 2004, after the election, we have a protocol that was signed in March when we should have had legislation just before the election, but no, it was not considered urgent enough. Today they are trying to tell us this bill urgently needs to be passed when what is truly urgent is what I will explain in the second part of my speech, that we need a real plan to help the aerospace industry. We need a true national aerospace policy.

It is unthinkable that Bombardier and other companies are still, month after month, year after year, having to go to the federal government cap in hand. I had the opportunity to attend an international aerospace exhibit at Bourget a few years ago. You were there as well, Mr. Speaker. It was amazing to see how many countries were courting our national flagships, Bombardier and the others, to get them to relocate to their part of the world. Aerospace is seen as a glamour industry. There are a number of countries that are prepared to take our best companies, but Canada appears not to understand. Yet Canada has no trouble understanding the Ontario auto industry's need for money.

That they can understand. I repeat the words of the Minister of Transport which—surprisingly, since he is a staunch supporter of the Prime Minister—echo what Jean Chrétien said when he was Prime Minister: “The automotive industry is to Ontario what the aerospace industry is to Quebec”. The reverse is equally true: The aerospace industry is to Quebec what the automotive industry is to Ontario. It makes little difference. He may have reversed what Jean Chrétien said.

Nevertheless, what hit us hardest was the bit about the automotive industry and Ontario, because GM was closed down in Sainte-Thérèse-Boisbriand and everything was concentrated in Ontario. There was a plan, prior to the election, to help out aerospace with $500 million. In the meantime, the likes of Bombardier and Pratt & Whitney—not to mention Bell Helicopter—are asking for a little help from the government. Nothing huge.

I have heard comments from members of other parties in this House that this makes no sense, and I have read newspaper articles asking what can be given to Bombardier. It is not a matter of what we can give Bombardier. It is a matter of matching what other countries are prepared to offer in order to attract a leading edge industry, a glamour industry.

If we are not willing to do anything, and if Canada wants to drop to second, third or tenth place, it should say it. But other countries are interested in having the flagships of our industry and building their own aircraft. A single American state is ready to offer what the Canadian government is now refusing. I am not talking about the United States but about a single state. Three states are offering what Bombardier is asking from Canada.

I find that the Bombardier people are quite polite. I was present at one meeting, and they said, “We do not want to leave Canada”. We are fortunate that this is a home grown industry. Otherwise, it would have left a long time ago. It is trying hard to be heard. Ministers tell us that it is not easy. I heard Bombardier's president say, “Canada is too small for us”. A G-7 country is being told that, and nobody says anything. The industry minister was there, and the foreign affairs minister also, and he said, “We have to make do with limited means.”

Limited means are passé. There was no new money for the aerospace industry, but the government found some for the Ontario auto industry. Existing programs are being used. This is difficult for Quebeckers, because the aerospace industry is second in North America to the Silicon Valley in importance. We are proud of this flagship aerospace and high tech industry, because it is a high tech industry. This is what the aerospace industry is today.

This is why countries or states want to have this type of industry. Because it is glamourous and because it is leading edge technology. We are lucky enough to have it here. Quebeckers want to keep it, and it is normal for them to.

We want the government, which has always helped them, to keep on helping them. Exports are under its jurisdiction and responsibility. It is not that Quebec would not like to be a country and is not working toward this goal. However, we are still a part of Canada, and the federal government is in charge of exports and has to help in this regard. We are thus asking the government to assume its responsibilities in areas under its jurisdiction.

Let us have a look at all the investments that the federal government is trying to do in all sorts of areas that have nothing to do with its own jurisdictions: the health care system, the child care system, the municipalities, all areas that are not under its jurisdiction. However, the export programs do fall under its jurisdiction, and the government is not doing anything. It does not want to do anything. It has no money. It is not increasing the budgets in this area. This is the harsh reality.

Once again, it is not rocket science. The federal government is responsible. It has export programs. We can give them all sorts of ideas. However, the industry is well aware of those ideas. There are programs and I will give you a short list. The problem is there is no new money. This is the harsh reality. So the government must increase the amounts in the existing programs.

Bombardier wants to finance new aircraft. There are finance programs for that purpose. It is the same with Bell helicopters. Just last week, the company announced in Les Affaires that, with no help from the federal government, it would also leave.

I met with Bell Helicopter officials. I did not do like the parliamentary secretary to the Minister of Transport. I did not talk about it: I went to see these people. The problem that they have is simple: they have offers in other countries. If we say no, they too will take their business elsewhere. Of course, Bombardier is the number one issue. We cannot let it go. Bombardier keeps asking the federal government to help it upgrade its operations; it is not asking for an extraordinary amount of money.

Bombardier is asking for is what other countries are offering it. Some members in this House have a problem with that and they wonder why Bombardier should once again get help. We will support a high technology industry that other countries want to take away from us. This is what we will do. It is as simple as that. We are not going to do so by giving them too much money, but by giving them what the others are prepared to give them, and no more than that.

As I said earlier, Bombardier has been very respectful. It is only asking for what the others are prepared to give to it and what it needs to be able to develop new equipment. Of course, you have it there. We are asking for an increase in support for industrial research.

This is not difficult, for the simple reason that the only money available comes from Technology Partnerships Canada. TPC has no new money. How does it operate? When companies develop a new product, they get funding from Technology Partnerships Canada. TPC lends them money, and when the product is sold, it collects royalties. Currently, royalties paid annually by companies are estimated at $50 million. This is the money that is available. There is no new money. The money collected is reinvested; there has hardly been any budget increase.

I have to be honest here. The contribution did increase by 8% annually, but it is practically 30% in other countries. This is the reality. Canada increased the budget of Technology Partnerships Canada by 8%. This is in addition to the royalties paid by companies that sell equipment for which they got funding from TPC during the developmental stage, several years earlier.

As regards the jets that Bombardier is building across Canada, when the company sells one, it pays royalties to the government. This is what brings money to Technology Partnerships Canada. The problem is that this fund does not increase quickly enough to meet the needs of the industry, and these needs are similar to those in other countries of the world. It is no more complicated than that.

That is an area of federal responsibility. Yet, the federal government makes a conscious decision not to invest in its own jurisdiction, exports. Again, this is difficult to understand.

I can understand Bombardier, Bell Helicopter, Pratt & Whitney and the 240 aerospace subcontractors in Quebec alone. They are wondering why there is no increase. If funding for research were increased, Bombardier could finance its new equipment, and Bell Helicopter could get financing for its new aircraft.

We are talking about design. This is an industrial research program to design this new equipment. That is what the $700 million requested by Bombardier, among others, was for: to develop its program. Bell Helicopter is asking for approximately $250 million to develop its series of aircraft in order to be competitive.

Why are they doing that? Not for the sake of having new aircraft, but rather because the competition is playing hardball . That is how it is. They have to watch out and always be up to date, or else they are overtaken by the competition.

Let us take a look at some competitors. There is Embraer in Brazil, for example. In this case, I would say that, on top of the government assistance available to the company, Brazil is financing exports. This means that, when an aircraft is sold, the Brazilian government actually finances the buyer. Last year, it financed 80% of Embraer's deliveries. That is not easy. Not to be chauvinistic, but Bombardier and Embraer are about the same size.

Here in Canada, only 41% of exports were financed this past year. In 2003, it was 37%. The percentage actually dropped in previous years. In recent months, the government made a little effort in an attempt to help. But it really does not measure up to what is done in other countries. There is no comparison, as my hon. colleague from Terrebonne—Blainville would say. That is the harsh reality.

I understand why the presidents of Bombardier, Bell Helicopter, Pratt & Whitney and all the other companies are telling the federal government that a real development policy for the aerospace industry in Canada is needed. Such policy is indeed required, along with the necessary funding based on what is spent elsewhere.

Of course, once again, when we think that, in research and development alone in the United States, the Pentagon spent US $45 billion for the aerospace industry last year. For Boeing alone, it spent $6.5 billion. How can a Canadian company like Bombardier hope to compete with that? For the multinational Bombardier to compete with the multinational Boeing in terms of equipment, it would take phenomenal assistance. Of course, we are not equal to the task.

In Europe, Airbus received US $3 billion. This is an industry where research and development must be funded. These funds must be provided through royalties when aircraft are sold. We are therefore asking for an upgrading of the Technology Partnerships Canada program.

Concerning exports, Export Development Canada guarantees equipment deliveries. We would like to see them at the same level as the Bombardier competitor, among others. When Brazil guarantees 80% of client purchases, we would like Canada to be able to be competitive, at 41%. I am not saying that we must reach 80% in the same year. We would not want to shock the Liberals. We will give them a chance. We will have a program that will be adjusted and that will grow, so that Bombardier can predict the demand and be able to make its deliveries and harmonize its order book with the guarantees that might be provided by the Government of Canada.

This is very important at present because of the events of September 11, 2001. The aviation and aerospace industry is in crisis throughout the world. Solutions need to be found. One day, when things are going well, the bankers in this world, GE Capital and the like who financed a big part of airlines' fleets, will see the light and recognize the potential for profit and will decide to guarantee loans in the place of governments by means of the legislation we are passing today. However, that is yet to come.

It is as if the government were saying that with Bill C-4 we are telling bankers that they can now secure interests since all laws are standardized and that it will be no problem for them to lend money because they will be able to recover the equipment. The problem is that no bankers are interested these days. If we took a survey of those bankers interested in buying a plane, very few would say they are prepared to provide a guarantee. This is because some companies are still under bankruptcy protection in the United States. Air Canada just came out of bankruptcy protection. It is not easy.

Things might change, but in the meantime the federal government has to use its means under its area of jurisdiction. I cannot emphasize enough that exports come under federal jurisdiction. The government prefers to take away responsibilities from the provinces and interfere in their jurisdictions. It probably finds this more glamourous. However, if it lost the aerospace industry, if it ever let aviation and aerospace companies go because of a lack of funding, I am not sure the world would view Canada the same way.

I am not sure Canada would still be a leader in the G-7, as it often likes to point out. The government says we are number one and the best country in the world, as Jean Chrétien said. However, the best country in the world is in the process of losing its aviation and aerospace industry to competitors who want these companies and think it is the perfect time to finance the industry, which is at the cutting edge of technology. Such is the reality. There are countries ready to do this.

What will we do when those industries are shut down? We will lament the fate of the workers of Bombardier. Already, 2,000 workers in the Montreal region have lost their jobs. This is not good news for us, in the House. We would like not only to see these people keep their jobs, but 2,000 more hired. That is what we would like.

If the Liberal government really wanted to do its job in the export industry, that is what it would do. It would ensure that sufficient funds were made available to businesses to help them not only maintain existing jobs, but create new ones. However, that is not what it is doing. With Bill C-4, it is focusing on damage control.

The reason for our cri de coeur is that the aerospace industry is not made up only of Bombardier, Bell Helicopter and Pratt & Whitney, but also comprises 250 small and medium-sized businesses which live on royalties. This is how a cluster works. A big corporation is at the top, and many small supplier businesses cluster around it. This is why Quebec is the second most important hub in North America, after Silicon Valley.

We hope to keep that leadership. We hope that the Liberal government will not risk losing it to other American states or other countries, just to punish Quebec.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:15 p.m.
See context

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

Mr. Speaker, I rise on a point of order. I am grateful for the ruling given by the Speaker this morning on report stage amendments to Bill C-4.

There have been discussions among parties and I believe you would find consent for the following motion. I move:

That this House deem the report stage motions that were listed in today's order paper to have been proposed and carried and the Bill to have been concurred in at the Report Stage as so amended.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 12:10 p.m.
See context

Liberal

Mario Silva Davenport, ON

Mr. Speaker, I am pleased to stand before the House today to support Bill C-4, legislation that seeks to implement the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft equipment.

Canada played a leading role in the negotiation and development of the Cape Town convention and protocol. This active involvement highlights Canada's commitment to seek global solutions to global problems in cooperation with the rest of international community. In fact, it was a Canadian delegate to the International Institute for the Unification of Private Law, or UNIDROIT, who first proposed the establishment of an international registry for security interests in aircraft in 1988.

Implementation of the convention and protocol in Canada would reaffirm Canada's leadership role in international civil aviation. The convention and protocol represent an unparalleled example of cooperation between governments and industry in creating international regime. Representatives of the Canadian aviation industry were present and participated in many of the meetings leading up to the diplomatic conference at Cape Town, as well as the meeting that formally adopted these international instruments. The convention and protocol were concluded in Cape Town, South Africa, in November 2001.

I believe we all agree that a strong, competitive aviation industry is important for Canada's economy today and into the 21st century. Furthermore, it is widely recognized that this sector has faced significant challenges over the past few years.

The aviation sector is particularly vulnerable to economic shocks and other geopolitical events. September 11, SARS and record high fuel prices have all had negative effects on this sector. Industry stakeholders have been calling on the Government of Canada to implement broad measures to help improve the difficult situations facing the airline industry and aerospace sectors.

These stakeholders have been continuously consulted throughout the process leading up to the tabling of this bill and they remain supportive. Indeed, on November 2, 2004, representatives of certain air industry stakeholders, Air Canada, the law firm of Cassels, Brock, and the Air Transport Association of Canada, were called as witnesses by the Standing Committee on Transport. The witnesses made a joint representation in strong support of the international treaty and the intent of Bill C-4.

Passing the bill and ratifying the convention and protocol will demonstrate the government's commitment to and support of the long term viability of Canada's airline and aerospace industry. Adopting Bill C-4 will allow these industries to compete more effectively in the global economy by facilitating their access to capital markets. Improving the competitiveness of the Canadian airline and aerospace sector will help maintain highly paid, specialized jobs in Canada, leading to positive spinoff effects in all regions of Canada and throughout the economy.

Stakeholders expect to see substantial benefits following the adoption of this proposed legislation and Canada's ratification of the convention and protocol. For example, airlines expect that the new regime will enhance their ability to obtain financing for aircraft due to the increased security that the system offers creditors.

Since the rules provided for in the convention, the protocol and this bill reduce their financial risks, it is expected that creditors will make greater levels of credit available at lesser cost. This will have a direct financial impact on airlines since it will reduce their costs of borrowing money.

Consumers can, in turn, be expected to benefit through increased airline services and/or lower fares assuming that airlines pass the realized cost savings to the end users.

Aircraft manufacturers should benefit from the increased sales volumes that will result from reduced financing costs. Furthermore, air transportation can become safer and environmentally cleaner once airlines are allowed to purchase more modern aircraft at reduced costs.

Not only Canada would benefit from the adoption of this treaty, but so would developing nations. The implementation of the convention and protocol in developing countries will result in reduced financial costs and will make financing available where it might not otherwise be. As a result of the increased certainty afforded to creditors, airlines will be more willing to dispose of surplus aircraft in developing markets. These markets will benefit from obtaining safer, more efficient and more environmentally friendly aircraft than what may be in current use.

For a country like Canada, the convention contains a few major innovations. However it will provide other countries with a considerable measure of legal improvements that may well assist in them getting the most out of their economies, while at the same time providing enhanced opportunities for Canadian business.

The first major feature of the convention and protocol, which is what will help increase certainty in the industry, is a provision for a special remedy in the case of insolvency that would impose a fixed stay period of 60 days. After this period, creditors could reclaim an aircraft or aircraft equipment on which they have a security if the lessee has failed to meet its obligations under the lease.

The second major feature of the convention and protocol involves the creation of a worldwide Internet based registry for aircraft equipment. This registry would be available to and accessible by any individual or company 24 hours a day, 7 days a week.

The existence of a single worldwide electronic international registry for recording and searching interests in aircraft equipment is viewed by stakeholders, including the legal community, manufacturers and financiers, as a considerable advantage in terms of time, cost savings and improved certainty.

The registry will be set up and operated by Aviareto, an Irish based company that was selected through a tendering process supervised by the International Civil Aviation Organization, ICAO. A permanent supervisory authority will oversee the operation of the registry.

Some of the authority's responsibilities will include: appointing and dismissing the registry operator; making regulations dealing with the operation of the registry; establishing a procedure for receiving complaints; setting the fee structure; and reporting to contracting states.

As a signatory party and key participant to date, Canada will continue to work through ICAO to ensure that Canadian interests are protected throughout this process.

In summary, the benefits to Canada of implementing the bill and ratifying the convention and protocol include: greater security for creditors; increased competitiveness of the Canadian aerospace and airline industries; maintaining jobs in Canada; and spinoff effects for various regions within Canada.

As the House can see, adopting Bill C-4 will have positive effects on the aviation industry and on the Canadian economy as a whole.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 11:50 a.m.
See context

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

Mr. Speaker, I want to thank my hon. colleague and the members of her party for their support in committee and in the House in order to make sure that Bill C-4 has swift passage. However, when the hon. member says we are not forward looking in helping the aerospace industry in Quebec and there is no leadership, I beg to differ. Not only is the aerospace industry important to Quebec, it is important to the rest of Canada.

I want to point out to my hon. colleague that just last week I went to Cyclone Manufacturing, a manufacturing facility located in the riding of my hon. colleague behind me. It is located at Rapistan Court, Mississauga. It has been in business for 40 years. Its president, Andrew Sochaj, held a celebration for the company's 40th year in business. Industry Canada was there. We are helping the company and working with it. Infrastructure support has been provided by Industry Canada. This is an industry that started 40 years ago by providing small things to the City of Toronto and has suddenly grown to be a leading industry in the world, providing aircraft parts around the world.

That is why I am wondering about my hon. colleague saying that this government has not taken any action. I want to point out to my hon. colleague that this is not the case. There is active participation on the file. The Minister of Industry and the Minister of Transport are working diligently. This government has provided leadership in order to make sure that the aerospace industry is leading edge, and the auto file is also something that we are working on. Making statements that this government has absolutely done nothing is something that I think my hon. colleague might want to examine.

The Government of Canada and its ministers are supportive of the aerospace industry and of the auto file in Ontario. We are working diligently with all members of the House to make sure that we have leading edge technology that will make us leaders for the 21st century, especially in the aerospace industry.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 11:40 a.m.
See context

Bloc

Caroline St-Hilaire Longueuil, QC

Mr. Speaker, I want to say from the outset that the Bloc Québécois supports Bill C-4, as we said when the bill was at second reading.

As we know, this bill seeks to implement two international agreements, namely the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.

Of course, this was aptly mentioned by some hon. members previously, but these two agreements, negotiated under the International Institute for the Unification of Private Law, in cooperation with the International Civil Aviation Organization, ICAO, whose head office is in Montreal, were adopted during a meeting of participating countries held in Cape Town, South Africa, in the fall of 2001.

Currently, 32 countries have signed or ratified the convention and the protocol. While the European Union intends to do so, Canada signed these agreements in March 2004. The purpose of these agreements is to have signatory countries standardize their legislation with respect to the security—or mortgage, in layman's language—lenders take on mobile equipment such as aircraft or trains.

These agreements also provide for the creation of an international aircraft registry that will make it easy for lenders to find out about the state of an aircraft or whether it has been mortgaged, by how much and by whom.

At the present time, there is a great deal of confusion. A carrier can be subject to the law of one country, have loans from lenders in two different countries, owe money to an aircraft engine manufacturer in a fourth country, who has placed a security on one engine in the event of non-payment. Worse still, when lenders decide to execute a seizure, the good itself could be located in a fifth country.

If these countries do not standardize their laws, especially with respect to the order in which creditors are paid, endless legal battles can ensue, leading to long and expensive delays when the airline company is unable to make payments.

Furthermore, contradictory legislation causes a great deal of uncertainty and increases the risk for the lender, who often compensates for this by charging higher interest. Moreover, currently every country keeps its own aircraft registry using its own criteria, which might create a great deal of confusion.

Passing this bill and other similar legislation in other parts of the world will help end the confusion, reduce risks to lenders and, thus, costs to borrowers. It will help improve the capacity of airlines to purchase aircraft. In turn, this will help the aerospace industry which sells the aircraft, not to mention that it will be easier for companies in the industry to deliver the aircraft under lease, if their assets are better protected.

Before ratifying the convention and the related protocol, Canada must first adapt a number of its laws. It has to abolish its national aircraft registry and replace it with the international registry. It also has to amend its Bank Act, Bankruptcy and Insolvency Act, Companies' Creditors Arrangement Act, and Winding-Up and Restructuring Act. That is the purpose of Bill C-4.

Of course, this legislation can deal only with matters of federal jurisdiction. Matters relating to loan guarantees are more matters of civil law, which comes under provincial jurisdiction. Therefore, the implementation of the convention and protocol will be possible only if Quebec and the provinces also amend their own legislation.

All the more reason to involve the provinces closely in any negotiations and in the signing of international agreements. In addition to allowing them to defend the interests of their citizens, such involvement would make the implementation of international treaties much easier.

Let there be no mistake. I hope the government realizes that, while Bill C-4 is a step in the right direction, it does not solve the real problem in the aerospace industry, which is the lack of an aerospace policy.

In case this government has forgotten, especially because of its lack of action, Quebec's aerospace industry, which has sales of $14 billion and which employs more than 40,000 people, accounts for close to half of high-tech jobs in Canada. Of the 250 companies in this sector, 240 are SMEs. It is urgent that the government put in place a real aerospace policy.

The aerospace industry exports 89% of its production and must be competitors, which get much more support.

We know that two of the main employers in Quebec's aerospace industry are Bombardier and Pratt & Whitney. They have facilities in Longueuil in my riding. Both of these jewels of Quebec's industry have condemned the insufficient federal support for an industry which is facing strong competition. If the federal government does not act, the United States or Great Britain or some other country will move in. Endangering these two jewels of the aerospace industry would not only threaten 40,000 jobs; it would also be a hard blow to numerous small and medium-sized enterprises serving that sector.

As the Minister for Transport was saying, the aerospace industry is to Quebec what the automobile industry is to Ontario. I want to say to the minister that it is time to take action and move quickly to implement a real aerospace policy. Ontario has been benefiting for decades, in terms of federal support, from special regulations, substantial grants and even special trade agreements like the Auto Pact.

Ratification of international agreements is one thing, and the Bloc Québécois supports Bill C-4 in principle. However, we also must act swiftly on the domestic scene. Besides, Canada has nothing to be proud of, since it is practically the only developed country which has no clear and consistent policy in this area. Everywhere else in the world, it has been acknowledged that this sector must have the support of high technology research and development before it can design its final product. In other words, huge investments must precede marketing. Therefore, this industry is highly research and development intensive. Other countries have understood that, but Canada still has not. This is why the Bloc Québécois has been calling for an aeronautics and aerospace policy for years now.

As far as Bill C-4 is concerned, the convention has a number of advantages for the transportation industry. By clarifying and harmonizing the rules concerning securities and inaugurating a single and readily accessible register, the convention lessens the risks for lenders and for lessors. If the contract is less risky, financing will become easier for airlines to obtain, and the cost of borrowing, that is the interest rate, is also likely to decrease. All of this ought to make things easier for airlines wishing to acquire new aircraft as well as improving prospects for the aircraft construction industry.

The purpose of Bill C-4 is to adapt federal legislation to the requirements of the convention, Among other things, it includes the abolition of the Canadian registry of aircraft and transfer to the international register; amendments to the Bank Act, to replace the references to the national registry with references to the international registry; amendments to the Bankruptcy and Insolvency Act to harmonize the payment order lists for the secured creditors, and amendments to the Companies' Creditors Arrangement Act to ensure that a company cannot give as a guarantee something that is already used as an international guarantee, and to the Winding-up and Restructuring Act for the same purpose.

For all these reasons the Bloc Québécois will be supporting Bill C-4.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 11:30 a.m.
See context

Conservative

Rob Nicholson Niagara Falls, ON

Mr. Speaker, Bill C-4 is called an act to implement the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft equipment. That is quite a mouthful. Bill C-4 would establish an international registry whereby creditors and debtors could register interests in what is referred to as mobile equipment. Mobile equipment is more specific than that generic term. It includes aircraft, helicopters, and could even include satellites.

What can be reasonably said about this is that there has been unanimous consent and support for this legislation, and I think that is appropriate. The matter was referred to the Standing Committee on Transport after a reasonably short debate in the House and it was interesting to me that we did not have one objection to this piece of legislation. We had, on one afternoon, representatives of the aircraft industry and they made generally very supportive comments. I was a little surprised that right at the final minute of the testimony it was suggested to us that a couple of minor amendments could be made to the implementing legislation.

As you know, Mr. Speaker, you ruled earlier today that those amendments will not be entertained. The Senate has a role in our parliamentary system, and part of that role is to have another look at those things that are done by this chamber. I would hope that the Senate would have a look at those amendments.

I believe that they are technical in nature. Indeed, one of them is very technical. One of the amendments is to remove one of the zeds that describes one of the subparagraphs. I am sure there will be many controversial matters before the 38th Parliament. Removing one z from the English translation of this is not something that will be objected to, I am quite sure. I hope that the Senate would have a look at that.

The representatives of the industry also pointed out a number of things in relation to the definition of a creditor. They indicated that the definition of a creditor in English common law is somewhat dissimilar to that for instance in the civil code. They were concerned that any definitions that were used in the bill would coincide with the different types of law so that there would be some certainty. Indeed, that is what this bill is all about, it is to establish some certainty in this particular area.

That is a good thing, and not something that is unusual. We have a couple of different systems of law in the world. When Canada drafts legislation, we must be cognizant of the fact that one of the provinces of Canada has a civil code and nine of the provinces have English common law. Throughout the world, it is split basically between the two systems of law.

I always remember a colleague of mine who was trying to get some evidence entered into a court case in Sweden. He had his client prepare what we refer to as an affidavit in common law. The affidavit is a statement by an individual that is then sworn out by a notary public or a commissioner of oaths and affidavits. My colleague sent this to Sweden with the appropriate translation. I asked him some time later how it went and he said that the authorities had no knowledge of what we were talking about in regard to affidavits. Because one swears to a statement as being true does not make it any more or less true within the system of law as it is applied in Sweden. So, again we see the two systems of law coming together.

When it was brought to our attention in this particular legislation that we should have another look at the definition of creditor, and that we should clarify the provisions with respect to bankruptcy, one of the areas of federal jurisdiction, it seemed to me to make sense.

I am hoping that those matters will be taken up by the other chamber. If they are brought back here as an amendment, I think we can be reasonably certain that the House will accept them.

Again, the bill itself went through very smoothly. I want to thank my colleagues in the Conservative Party who have taken an interest in the bill. They all had a part in ensuring and satisfying themselves that this was good legislation. I particularly want to thank my colleague, the member for Regina—Qu'Appelle. He realizes that a healthy airline industry in this country is not only good for his province but good for Canada. I appreciate his support in this as I do indeed of all my colleagues. I congratulate the members from the other parties as well.

I think this is a great step forward. In the debate on second reading I pointed out to the House that for a couple of centuries there has been a great deal of certainty in the shipping industry when it comes to security interests. Indeed, the laws as they pertain to all sea going transportation have been relied upon by most of the countries of the world because people want certainty above all else.

I saw an article that talked about some transactions between Japan and Chile. Those two countries, for the purposes of their transactions, adapted certain elements of British admiralty law. Why? It was not because they had to. It was because it made sense that if there was one law, one set of rules governing the shipping industry in the world, then they were better off because it was easier to do business.

It seems to me that this too is a step forward in the right direction. If we have an international registry where creditors, lenders and debtors can look to one place and see whether there is a security interest then we are all better off. This is why it is not a surprise to me that everyone in the airline industry supports this, as well as the lenders. If people are in the position of lenders and trying to finance an airplane, they want to have some certainty that if something goes wrong with the transaction, they will be able to reclaim their security item.

If people are asked if this is a problem, it certainly can be a problem. In the testimony that the committee heard we were told of one example of a plane that a Canadian lender was trying to repossess because of non-payment and he ended up paying off everyone. Apparently everyone had a claim on this plane that was in Mexico. I believe the last person to be paid off was the wife of the airport manager.

This is exactly what we do not want to happen. We are all better off if there is some certainty because the airline industry then can obtain financing at a lower cost and a lower interest because of the security it is able to give. Lenders are more willing to invest in the industry knowing that they can realize on their security if that becomes necessary.

Bill C-4 is a step in the right direction. I have indicated to the parliamentary secretary in my question to him that this is not the end of the debate. Even if the bill is amended by the Senate and it comes back to the House and those amendments are concurred in, work has to be done with the provinces and the sooner the better. Other countries will have a look at what is being done by Canada. If these countries see that Canada has passed this legislation and implemented this protocol and convention, it seems to me it is an encouragement for them as well.

The sooner we have one system in place in the world, one registry where these security interests are registered, the better off Canada will be. I think that will be a tremendous step forward for the airline industry. Members of the official opposition support this because it is good legislation. The sooner it is implemented the better.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 11:10 a.m.
See context

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

Mr. Speaker, I am pleased to have the opportunity today to rise and address the House on Bill C-4, the international interest in mobile equipment (aircraft equipment) act.

The bill would permit the implementation of the provisions of the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft equipment that are within federal jurisdiction. It incorporates most of the provisions of the convention and protocol by reference and other provisions through amendments to existing legislation.

The convention and protocol will establish an international harmonized framework for the financing of aircraft equipment. Within this framework the value of the aircraft would be used as a security for payment as in the case of a mortgage or a financing lease.

The adoption of the legislation and the eventual ratification of the convention and protocol will help the Canadian airline and aerospace industries compete more effectively in the global economy by providing greater security for creditors.

The proposed amendments to the federal legislation will reduce the financial risk to creditors, allowing them to make greater levels of financing available for aircraft purchasing at more competitive rates. This will translate into lower costs for airlines purchasing or leasing aircraft which in turn will enhance their competitiveness and strengthen the airline and aerospace sectors. The expected result is a direct positive impact on earnings, investment and overall profitability for the Canadian aviation sector.

Canada played a leadership role in the negotiation of a convention and protocol because various groups, including provinces, territories, airlines, industry associations and aircraft manufacturers, supported the objectives of the instruments.

The convention and protocol were negotiated over the period of 1996 to 2000, with the support and participation of various groups. The negotiation process came to fruition in 2001 with the adoption of the instruments at a diplomatic conference in Cape Town, South Africa.

For the record, I want to read some notes about what happened.

In 1988 a Canadian delegate to the International Institute for the Unification of Private Law, UNIDROIT, was the first to propose the establishment of an international registry for security interests in aircraft. Since then, the governments and industry worldwide have cooperated in developing the convention and aircraft protocol.

Canada's active involvement in the negotiations, leading up to the adoption of the convention and aircraft protocol, highlighted its commitment to seeking global solutions to global problems, in cooperation with the rest of the international community.

It is evident, with recent events such as September 11, the global economic downturn, high fuel prices, SARS, which was an epidemic in my riding, that the aviation sector is particularly vulnerable to economic shocks and other geopolitical events. The industry needs to harmonize the international legal regime to reduce risk and increase certainty for the aviation creditors and this protocol will do that.

On March 31 Canada became the 28th state to sign the convention and protocol. Other countries with significant airline and aerospace industries, including France, Germany, the United Kingdom and the United States, have also since then signed.

Along with the adoption of the convention and protocol, Bill C-4 provides for targeted amendments to various piece of insolvency legislation and to the Bank Act. There are currently various periods within which creditors are subject to a stay under the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-up and Restructuring Act. There are no existing rules that apply specifically to aircraft and aircraft equipment. This is something that is hamstringing the industry. The industry is asking for a unified solution. The industry is asking that we come forth with specific regulations to the industry, and this is what we are trying to do here today.

Bill C-4 and the convention and protocol that it seeks to bring into force provide for a special remedy for creditors in the case of insolvency. It would impose a maximum stay period of 60 days on creditors with security on aircraft or aircraft equipment. This would give creditors, the financiers and the companies 60 days in which to come to some sort of an agreement or to hash things out. The adoption of this stay period will allow creditors to reclaim aircraft or aircraft equipment after 60 days if the debtor does not incur defaults under the security agreement. This will increase certainty for creditors by reducing their financial risks, resulting in lower financing costs.

Let us go over a couple of other facts. Consumers will benefit too through increased airline services and/or lower fares. Another benefit of facilitating the acquisition of more modern aircraft is that air transportation can become safer and environmentally cleaner.

The adoption of a fixed 60-day period will level the playing field between Canada and the United States, since the United States already benefits from a similar provision under the U.S. bankruptcy code. Stakeholders were consulted and supported the proposed approach.

The adoption of significant amendments to Canada's insolvency laws is expected to have benefits for Canadian aircraft manufacturers, financiers and airlines on the international level.

The convention and protocol would also establish an international registry in which interests in aircraft equipment would be registered.

Currently, in Canada each province and territory maintains its own registry and the federal government maintains a separate registry, as mandated by the Bank Act. We have one central registry for Canada and throughout the provinces other registries, which certainly hamstrings the industry and it presents obstacles for the industry. Bill C-4 would try to smooth things by having one international registry. The establishment of a single worldwide registry would replace the federal and provincial registries and would greatly simplify aircraft registration. We are talking about one registry, world wide.

If people want to see what is happening with the planes, or who owns them or who has liens on certain planes, they can go to the proposed registry 24/7 and see how they can reclaim equipment. The creation of the international registry is viewed by stakeholders, including the legal community, manufacturers and financiers, as providing a considerable advantage in terms of time, cost savings and improved certainty.

The Bank Act special security regime also allows banks in Canada to register security interests on a national basis for certain products listed in the act. The type of products that can be registered under the Bank Act are technically broad enough to include aircraft equipment covered by the new protocol. However, it appears that the Bank Act special security regime is rarely, if ever, used to register aircraft.

By bringing Bill C-4 forward, we would have an international registry. We could register aircraft and people could act upon it. Nonetheless, amendments to the Bank Act would be required to avoid potential overlap with a proposed international registry. The most effective means of doing this would be to remove aircraft equipment from the scope of the Bank Act, as set out in the bill.

Normally, matters relating to security interests fall within provincial jurisdiction. The provinces, through the Department of Justice Advisory Group on Private International Law, identified this initiative as one that we should pursue. As a result, Canada participated in the development and negotiation of the convention and protocol.

Once again I would like to state the work that was done by individuals throughout the whole process. A Canadian came out with it about 16 years ago. He said that we had to have this. A delegate to the International Institute of Unification of Private Law, UNIDROIT, was the first to propose the establishment of an international registry for security in aircraft. This is something of which we, as Canadians, can be proud. This is something that puts Canadians ahead and is an example for the rest of the world to follow.

Provinces were regularly consulted and showed support throughout the process leading to the adoption of the instruments. As an side, I hope we have such cooperation with the provinces in all the work that we do in the House. Provinces to date continue to be consulted through the Department of Justice Advisory Group on Private International Law and the Uniform Law Conference of Canada and consistently demonstrate interest and support for the convention and protocol.

Some provincial implementation legislation will be required before the convention and protocol can take effect in respect of Canada. With this in mind, the provinces developed a uniform implementing act at the Uniform Law Conference of Canada. Since then, Ontario and Nova Scotia have passed implementing legislation that will enter into force when the instruments take effect in Canada. We are working with other provinces and territories to ensure that what Ontario and Nova Scotia have piloted and brought to table will be followed. Adoption of the bill will encourage the remaining provinces, especially those with significant aviation interests, to pass their own implementing legislation.

I reach out to members across the way, as well as members on this side of the House, members who represent those provinces which have a significant aviation industry, to talk to their provincial colleagues and say to them that it is time we do this, that we should get on with it to ensure that Bill C-4 is a unified bill in Canada and that Canada is one of the first which is unanimously there.

This is an important step toward eventual ratification of the convention and protocol which would confer significant benefits to Canada's airline and aerospace industries and to the Canadian economy more broadly. I look forward to the passage of Bill C-4 and encourage all my colleagues to support it.

International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders

November 15th, 2004 / 11 a.m.
See context

The Speaker

Given that this is a new Parliament with many new members and that this is the first occasion that we are considering report stage motions to amend a bill, I would like to take this opportunity to briefly explain how report stage motions are treated by the Chair.

There are two initial decisions that the Speaker takes on each motion. The first one concerns procedural admissibility. If the motion does not respect the general rules of admissibility it will not be printed on the notice paper and will be returned to the member with a short explanation. This means there is no opportunity to debate such motions.

The second decision concerns whether the report stage motions on the notice paper will be selected for debate.

The Speaker has been rigorously exercising a power of selection since March 21, 2001, following an amendment to the Standing Orders made on that day, as I recall. The purpose of this discretionary power of selection is to ensure that the main opportunity for amending a bill is in committee stage and not later at report stage in the House.

Report stage exists as an opportunity for the House to examine a committee's work on a bill. If report stage either duplicates or replaces committee stage, then its original purpose is lost and the valuable time of the House is wasted.

The Speaker uses the following criteria for selection: report stage motions will not be selected for debate if they were ruled inadmissible in committee; they could have been presented in committee; they were defeated in committee; they were considered and withdrawn in committee; they are repetitive, frivolous or vexatious; or, they would unnecessarily prolong the proceedings at report stage.

Motions may be selected if they further amend an amendment adopted by the committee, make consequential changes to the bill based on an amendment in committee, or delete a clause.

If members believe that their report stage motion is of exceptional significance but does not meet the selection criteria, they should send a letter of explanation to the Speaker. From time to time the Chair may be persuaded to override the selection criteria in the interest of fairness, and this letter should be sent when the report stage motion is submitted to the Journals Branch.

Finally, I would like to urge all chairs of any committee with a bill before it to afford new members of Parliament every opportunity to participate fully. I recognize that this may take a little extra time but better in committee than in the House.

I would also remind all hon. members, experienced and new, that the committee staff are ready to answer any questions that you may have.

For Bill C-4 there are six motions in amendment standing on the notice paper for the report stage.

Motions Nos. 1 to 6 will not be selected by the Chair because they could have been presented in committee. Consequently, the House will proceed to consider the motion to concur in report stage.

Business of the House
Oral Question Period

November 4th, 2004 / 3:05 p.m.
See context

Hamilton East—Stoney Creek
Ontario

Liberal

Tony Valeri Leader of the Government in the House of Commons

Mr. Speaker, this afternoon, as hon. members know, we will continue with the opposition day debate.

Tomorrow we will begin with second reading of Bill C-9, the Quebec economic development bill. If that is concluded, we would then return to debate on the motion for reference before second reading of Bill C-16 respecting impaired driving. If there is still time remaining when that is concluded, we would consider a motion to refer to committee before second reading Bill C-18 respecting Telefilm.

As all hon. members know, next week is the Remembrance Week break. When the House returns on November 15, we will call at report stage and if possible third reading of Bill C-4 respecting the international air equipment protocol, and then bring forward Bill C-6 respecting public safety for report stage and third reading.

We would then return to any of the items already listed that have not been completed.

This will be followed by motions to refer to committee before second reading Bill C-19 respecting competition and Bill C-20 respecting first nations fiscal institutions.

We will then be consulting our friends opposite on the appropriate day that week to consider report stage and third reading of Bill C-7 respecting parks, a bill, I am informed, that is about to be reported from committee.

On Tuesday evening, November 16, the House will go into committee of the whole to consider the estimates of the Minister of Canadian Heritage.

Thursday, November 18 shall be an allotted day.

With respect to the specific question with regard to the motion mentioned by my hon. colleague across the way, it is government orders and it is a very important item. I know that we will bring that forward in the fullness of time.

Committees of the House
Routine Proceedings

November 3rd, 2004 / 3:35 p.m.
See context

Conservative

Jim Gouk Southern Interior, BC

Madam Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Transport.

Pursuant to an order of reference of the House of Tuesday, October 19 the committee considered Bill C-4, an act to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment. The committee has decided to report the same back to the House without amendment.

I appreciate the cooperation of all members and staff of the committee for passing the bill quickly so we can focus on the more contentious issues of transport.