Bill C-4 (Historical)
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.
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.
International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders
November 15th, 2004 / 11:30 a.m.
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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.
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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.
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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.
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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.
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.
Business of the House
Oral Question Period
October 28th, 2004 / 3 p.m.
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Hamilton East—Stoney Creek
Ontario
Liberal
Tony Valeri Leader of the Government in the House of Commons
Mr. Speaker, this afternoon we will continue with the allotted day.
Tomorrow and the first part of next week, the order of legislation will be second reading of Bill C-14, the Tlicho governance agreement, and reference before second reading of Bill C-13, the DNA data bank bill.
We will then proceed to the reference before second reading of Bill C-15, respecting the convention on migratory birds and second reading of Bill C-9, respecting a regional development agency in Quebec.
We would then turn to the reference before second reading of bills to be introduced early next week dealing with the Competition Act, first nations fiscal institutions, Telefilm, certain controlled substances, and an amendment to the Criminal Code with respect to impaired driving.
I will be discussing with the other parties the exact order of these bills. We would hope, by the end of the week, that we would be in a position to deal with report stage and third reading of Bill C-4, respecting aircraft equipment.
Next Thursday will be an allotted day.
On Tuesday evening there will be a take note debate on the compensation for victims of hepatitis C.
With respect to the specific question asked by the hon. member across the way, certainly it will be very forthcoming in the near future and I am sure we will also have a discussion among House leaders.
International Interests in Mobile Equipment (Aircraft Equipment) Act
Government Orders
October 19th, 2004 / 10:05 a.m.
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Liberal
Karen Redman Kitchener Centre, ON
Mr. Speaker, discussions have taken place between all parties concerning Bill C-4, an act to implement the convention on the 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 listed on today's order paper and I believe you would find that you have consent for the following motion. I move:
That the motion for second reading of Bill C-4 be deemed carried.
International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders
October 18th, 2004 / 6:20 p.m.
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Bloc
Benoît Sauvageau Repentigny, QC
Madam Speaker, I too am pleased to have an opportunity to speak to Bill C-4. It is, of course, always important to refocus the debate and to give some explanations for the benefit of our listeners. People who watch our debates should know what Bill C-4 is about. It is also important for members of Parliament to know that we are a part of the discussions.
I therefore note that Bill C-4 is an act to implement two international agreements. The first is the Convention on International Interests in Mobile Equipment and the second, the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.
Bill C-4 deals primarily with these two international conventions. We live increasingly in an era of globalization. The purpose of this act is to bring Canada into line with other countries of the world as far as aerospace policies are concerned.
The purpose of Bill C-4 is to adapt federal legislation to the requirements of the convention. This bill includes the following five aspects.
The Canadian aircraft registry has been dropped and replaced with an international registry. My colleagues have clearly expressed how, in the international construction scheme, an aircraft engine could be bought in one country while the fuselage was made in another country, and so on. We get to a point where we do not know who owes what to which country. In this way, by keeping an international registry of aircraft properties, it is much easier for aircraft equipment companies and for investors. This is to the benefit of all.
The purpose of this bill is also to amend the Bank Act, particularly to replace the references to the national registry with references to the international registry. The changes and improvements have to be adopted and implemented. Another purpose of the bill is to amend the Bankruptcy and Insolvency Act to harmonize the payment order lists for the secured creditors or the mortgages with the requirements of the international convention. A little more is involved for an aircraft than for a house.
This bill also seeks to amend the Companies' Creditors Arrangement Act to ensure that a company cannot give as a guarantee something that is already used as an international guarantee. In the wake of September 11 events, we witnessed the problems experienced by some airlines. We do not want these carriers to be able to use loopholes in the legislation and have two or three loans, two or three guarantees for the same aircraft.
Finally, Bill C-4 seeks to amend the Winding-up and Restructuring Act for the same purpose, namely to comply with international agreements.
I want to express the views of my constituents, as my colleagues have done. In Quebec, what does this mean? We are Bloc Québécois members. My friend, the NDP member, said that our speeches deal primarily with Quebec. I hope he is not surprised by this. I remind him that our party's name is the Bloc Québécois. We protect the interests of Quebec and we promote sovereignty.
The Quebec aerospace industry generates annual sales of $14 billion. It employs 40,000 people. This is close to half of all high tech jobs in Canada. Quebec produces one third of the world's civilian helicopters. The civilian helicopters made in Quebec to be sold do work, contrary to the submarines bought from Great Britain, which sink while en route.
Bombardier is one of the primary employers in Quebec's aerospace industry. This makes a lot of our Conservative friends cringe, because their party is not represented in Quebec. The others are Pratt and Whitney, and Bell Helicopter. Out of 250 companies in that industry, 240 are small or medium size businesses that act as suppliers for large companies. This means that there are 10 large companies out of these 250, while 240 are either subcontractors or small businesses that act as suppliers for these 10 large companies. Together, these 240 small and medium size businesses account for 10% of the total sales of Canada's aerospace industry.
That is why the Minister of Transport and member for Outremont stated in one of his famous and magnificent rhetorical flights that the aerospace industry is to Quebec what the automobile industry is to Ontario. If that is true, let the federal government give the Quebec aerospace industry the equivalent of what it gives to the automobile industry in Ontario.
If Dennis Mills, a former member from the Toronto area, were in the House today, maybe he would tell the hon. member for Outremont what he said during the election campaign or just before, that “the hon. member for Outremont should either filter his thoughts between his thinking and his speaking, or do what he says.” I will quote more pronouncements by the hon. member for Outremont to show how Dennis Mills could sometimes be right.
The Minister of Transport said that the aerospace industry was the equivalent in Quebec of the automobile industry in Ontario. As my colleagues made it their duty and their pleasure to point out during the election campaign, there was no debate or vote in the House of Commons. The government went to southern Ontario and announced that, since the automobile industry had problems, it would get $500 million. The GM plant in Boisbriand had just closed down, and no funds were available then, but that was not important. The automobile industry in Ontario would get $500 million. If the majority of electors there were to vote for the Liberals, if their votes were needed, the government would hand out $500 million because things were not looking as good.
I ask the Minister of Transport once again: if aerospace is to Quebec what the automobile is to Ontario, why does he not provide money?
The Minister of Transport says one thing and does another, which means that he does not help Quebec's aerospace industry at all or only barely. Since he has been away from Parliament and government for a while, I advise him to take a look at what has happened in Canada ever since he first sat, as Minister of Transport, of Industry, or in some other capacity.
The Minister or Transport should know why we should invest in Quebec. He could take a look at the sectors of activity where the federal government has invested outside Quebec. He could accompany the Industry Minister in the Maritimes and stop in Newfoundland. He would see the billions of dollars invested in the Hibernia platform. The federal government helped them out by the billions of dollars. The Minister of Transport would surely be astounded to see what has happened in Newfoundland with federal help, and also in the Maritime provinces.
After Newfoundland, he could visit Ontario's nuclear energy industry, where the federal government has invested billions of dollars. Because there was no hydroelectricity, they developed nuclear energy. As he aptly said himself, the transport minister could look at the automobile industry in southern Ontario, where the government invests billions of dollars.
If he wanted to deal with these issues, the transport minister could go to downtown Toronto to see how much money the federal government has given to GO Transit for the development of public transit, such as highways, the subway or buses. The federal government provided this money.
In the meantime, how much did it give to Quebec? Nothing. Not a penny. If he moves west, he will see that the federal government has invested billions of dollars in the oil of the Western provinces. He could say that the aerospace industry is to Quebec what oil is to Alberta. He could say that the aerospace industry is to Quebec what the nuclear industry is to Ontario. He could say that the aerospace industry is to Quebec what Hibernia is to Newfoundland.
On each count, we could tell him, “The funding is not there like it is, for example, for Hibernia in Newfoundland, for nuclear energy development in Ontario, or for oil discovery in western Canada”.
International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders
October 18th, 2004 / 6:10 p.m.
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Bloc
Marc Boulianne Mégantic—L'Érable, QC
Madam Speaker, as I have said, the principle of Bill C-4 is there. They want to make an effort. For example, loan guarantees absolutely must be harmonized. That is important, as is reducing the confusion between partners. This is a starting off point toward solving certain problems. This is in answer to the question by my colleague for Lévis—Bellechasse, for which I thank him.
So this represents an effort to solve the problem, but as has been said, although one must not fault good intentions, they are not enough. A bill such as this one is not enough to fix the major shortcomings that have been described. What is needed is a true three-point policy based on what I have already listed: industrial research and development, exports and small and medium sized businesses.
As far as the latter are concerned, it is not specified that these must be in aerospace. Any kind of small or medium business could develop an affinity with a major industry.
To answer the hon. member's question, I think that what they are wanting to do is insufficient. That Bill C-4 is not enough, as it addresses only one aspect. What is needed, and as quickly as possible, is a general policy.
International Interests in Mobile Equipment (aircraft equipment) Act
Government Orders
October 18th, 2004 / 5:50 p.m.
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Bloc
Marc Boulianne Mégantic—L'Érable, QC
Madam Speaker, the riding of Mégantic—L'Érable is indeed a beautiful one. Riches of all kinds are to be found there: granite, chrysotile asbestos, maple syrup. This is quite important.
I would first want to congratulate you, Madam Speaker, on your appointment. I also want to congratulate my colleague for Beauport—Limoilou, who gave us a heartening speech on Bill C-4. I would also like to congratulate the member for Hochelaga. Earlier, he gave us the full background of the various modes of transport. To me, this is important. This afternoon, we were given historical explanations, which were very interesting.
As for 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, the Bloc Québécois gives its approval in principle. After all, there are important issues here. In fact, it was mentioned earlier that two contracts will be honoured. We have the Convention on International Interests in Mobile Equipment and, secondly, the Protocol to the Convention on International Interests in Mobile Equipment. When all this is implemented, laws on guarantees—which we agree with—will be better harmonized and there will also be less confusion.
This is still something important, which is why the Bloc agrees in part with this bill. It can be supported in principle; however, as I mentioned earlier, the bill is incomplete. Even though it goes in the right direction, the fact is that the real problem of the aerospace industry is the lack of policies. Indeed, there are problems that are major and that remain so.
For example, there is the Bombardier problem. It is around this issue that the bill should evolve and be converted into policy. My colleague from Hochelaga talked at length about competition; some American states want this company to move to the United States and they offer many opportunities. These are major competitors, which have a lot of money and offer much more that Canada can offer. We must focus on this project to solve the Bombardier case once and for all.
What is Ottawa doing in this issue? It has a wait and see approach. It supports research in a very anemic way. I believe research and development to be the central point of a major policy. The Technology Partnerships Canada program, even though it is funded at a certain level, is still underfunded. The same goes for the export contracts that are supported; there are still very few of them.
There are still problems that Bill C-4 does not solve. This is why it is vital to put in place a real policy. The hon. member for Beauport—Limoilou said earlier that, in Quebec, the aerospace industry's sales amounted to $14 billion. We will keep repeating it. It is very important. This industry employs more than 40,000 people. This is half of all high technology jobs in Canada.
The hon. member for Argenteuil—Papineau—Mirabel said another very important thing earlier. It is about SMEs. I will come back later to the role of SMEs, which, in our ridings and regions in particular, create jobs. Consequently, it is very urgent for the government to not only talk, but to act. When the minister and hon. member for Outremont says that the aerospace industry is to Quebec what the automobile industry is to Ontario, the words must not be hollow. The companies must also be supported, meaningfully. It is important.
The Bloc Québécois raised some very important points for the development of a real aerospace policy. They can summarized in the following three main elements: first, support industrial research. We talked about it earlier, it is essential. We must also encourage exports and, as I said earlier, we must support SMEs.
We talk about supporting industrial research, telecommunications, planes, engines, aircraft parts, which are among the top ten exports in Quebec. Quebec has climbed to the sixth place with regard to sales generated by the aerospace sector. It is a well-known fact that Quebec is the fourth North American city when it comes to the number of jobs in the bio-pharmaceutical industry.
Quebec industries are constantly evolving. They are innovative. Industrial research must be subsidized to the maximum. The same goes for high-tech exports. Again, the federal funding is inadequate. It is clearly not enough.
It takes a lot of time and money to develop a high tech product , be it an aircraft or a drug. It is not enough to quote statistics and say how much you give. It takes subsidies and time to develop a product.
If research is under-funded, the industry is jeopardized. It was mentioned earlier. The industry becomes anemic and does not develop. There is neither financial support nor technical support to develop resources.
This is why industrial research, which is one of the engines and pillars of development, is not working. And you cannot deliver. As we know, as soon as investment drops, and the goals are not met, jobs disappear. Some 2,000 once in Montreal. The SMEs are affected.
The same goes for sub-contractors. In our regions, in a riding like mine, SMEs are responsible for 40 per cent of jobs. As soon as subsidies dry out, sub-contractors suffer.
When it comes to research and development, one must make sure that the level of funding is not only adequate, but that it is enough to develop a product. It is urgent that we provide our industry with the same level of support as our competitors. We must provide the highest level possible of support.
This is why the Bloc Québécois is asking for a substantial and very quick increase in federal investments. We talked earlier about globalization. Manufacturing in this area is developing really fast. If we want to remain leaders in this market, we must act quickly. This was the first aspect of the position put forward by the Bloc in favour of an aeronautics policy.
There was a second aspect we talked about earlier, namely exports. Prospects for the aeronautics industry in the Canadian market are obviously limited. Our businesses will only be able to amortize their development costs if they invest in the global market. Globalization is a reality with which we have to live.
The aeronautics industry exports 89% of its production. Yet, in this area, Ottawa encourages export far less than do other countries. Thus, our businesses are more often exposed to foreign competition. Statistics show that in the past three years, Export and Development Canada financed, on average, 41% of Bombardier's airplane deliveries.
In the case of our competitors, it is much higher. Again, whether it be in research or in development, the federal government must increase its financial support for business export contracts to the same level—at least, if possible—to the level enjoyed by foreign competitors. We always come back to that.
Those are two areas which will absolutely have to be developed, namely exports and industrial research.
Thirdly, we must support small and medium businesses. I mentioned earlier that my riding. Mégantic—L'Érable is said to be a special place for small and medium businesses, whether they are involved in iron, aluminum, chrysotile or metallurgy. We have many of them.
Thus, 40% of our jobs are within SMEs. When a region such as ours lives for several years from a single industry, chrysotile asbestos, that is to say, there comes a time when diversification has to take place, because the market is slowing down, there is a misperception of our product, asbestos, and there is bad publicity. Diversification is thus a necessity. The way to do it is with SMEs. We have companies such as CIF Métal, Industries Canatal Inc., Granirex. All of them are businesses which are involved in subcontracting and they are extremely important.
When Montreal is doing well, regions feel the impact: our SMEs and job creation are doing well, and our economic diversification is expanding. As my colleague from Beauport—Limoilou has said often, we are providing instruction. So I do that too. Quebec's aerospace industry, which has sales of $14 billion dollars a year and which employs over 40,000 people, accounts for close to half the jobs.
Canada must do more for SMEs. Foreign companies are important too, as they represent roughly two thirds of the industry's suppliers. That speaks of the potential of Quebec's SMEs for growth. If they managed to gain a part of the market it would be hugely important in terms of job creation. To achieve that, they need assistance. If we take as an example a SME in the city of Thetford Mines, its competitor could be a city in Germany or in London. Competition is extremely strong. Assistance is thus needed to support the SMEs, to create employment in the sector and also to diversify the product. We do not have a choice, above all when talking about diversification.
What happens in the area of the SMEs, which form a very important third component of a policy is that to be certified and become a supplier, an SME must comply with a series of very strict criteria set by the contract givers. It must thus be able to be associated with the development of any new product, from the beginning of its design to its finalization.
If legislation is inadequate and recognizes only one part, it will be hard to implement in the regions. This issue was broached earlier, and the hon. member for Argenteuil—Papineau—Mirabel was quite clear. He said we need a real plan, a real policy. They will help the small and medium businesses. They will be able to meet stringent requirements concerning quality, skills, manpower and, of course, job creation.
All of this combined costs money. A small business with 20 or even a 100 workers cannot do that all by itself. It needs help, and the government can help. The SMEs cannot meet the cost of this development by themselves.
The Bloc Québécois has among its priorities economic, fiscal and regional concerns. We are almost the only ones speaking often about regional development, regional economies and the SMEs and their development. With the aerospace industry, we have a very important opportunity using the aerospace industry to develop our SMEs and regions, and to be in sync with this policy.
The federal government's role is to help businesses, which are very often ready to make the transition from small or micro business with precarious financing to medium business, which can take on the market if only it is given the chance and the means.
I am thinking here of several business in our area which are on the borderline. They managed to succeed and create jobs. With a little help in the form of subcontracting or subsidies, they could eventually develop and make the transition to a much higher status.
We have to provide some very important measures in the case of small and medium business. As I explained at the beginning, I insist on this because it is an important reality in our region. First, we have to be vigilant and implement a loan guarantee programs to increase the enterprises' working capital.
When a small or very small business in financial difficulty comes to our office, the first thing we do is to look at its working capital. Afterwards, we look for programs to help. A problem in working capital is the major impediment to development. Therefore, we should establish a program to enable these businesses to get more involved in product development and to bid on more important contracts, as well. If very small businesses grow to small and then, to medium-sized, it should also be given the opportunity to bid and to play a more significant role in the operation and development of the economy, not only at the regional level but also at the level of the whole province of Quebec.
The second important point is that we will have to set up a program to support certification—this remains almost a daily problem—of SMEs with regard to large businesses. Everyone understands the linkages between an SME or a very small business and a large business. To operate requires certification. The objectives are the same for large and small businesses alike: job creation, economic development and local and regional development. It is therefore extremely important to enact this type of measure or, as we would prefer, to have it set out in a policy.
The third point has to do with something small businesses cannot do, unfortunately, and that is to establish measures in support of promotion and marketing. Often, the product is a good one. Problems come up and the situation reverses. The business can no longer market the product. It does not have the money to do it. It does not get any help to do it. Over the past few months, I have visited a number of these small businesses, where, as I said earlier, cupboards and aluminum parts are made. Some businesses score very well but cannot advertise. Promotion support is therefore needed.
Finally, we should also look into the possibility of helping out these SMEs with regard to subcontracting and contracts. In a general way, I believe that this bill will certainly help, but it is incomplete. As was said earlier, there are gaps in the bill. For example, government funding is insufficient. There is also a lack of clarity.
To conclude, speaking for the Bloc Québécois, I will say that we must use this opportunity to give ourselves a real aerospace policy so we may finally develop our regional economies along with the aerospace industry.