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 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.

Privilege

[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

[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

[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?

[Roger Valley, Liberal, 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.

[Michael John Savage, Liberal, 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.

[Mario Laframboise, Bloc, 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.

[Jim Karygiannis, Liberal, 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.

[Mario Silva, Liberal, 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.

[Jim Karygiannis, Liberal, 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.

[Caroline St-Hilaire, Bloc, 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.

[Rob Nicholson, Conservative, 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.

[Jim Karygiannis, Liberal, 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.

[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

[Tony Valeri, Liberal, 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

[Jim Gouk, Conservative, 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

[Tony Valeri, Liberal, 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

[Karen Redman, Liberal, 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

[Benoît Sauvageau, Bloc, 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”.

[Marc Boulianne, Bloc, 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.

[Marc Boulianne, Bloc, 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.

[Christian Simard, Bloc, Beauport, QC]

Madam Speaker, I am pleased to speak today. First, I congratulate you on your appointment and your presence here this afternoon.

There is no doubt that for a new member of Parliament, it is both an honour and cause for nervousness to speak after such distinguished colleagues as the members for Hochelaga, Chambly—Borduas and Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

We are dealing here with a technical bill. Actually, it is quite symptomatic to have highly technical bills at the beginning of a new session. It is symptomatic of this Liberal or neo-Liberal administration to introduce a stopgap solution to problems—as it unfortunately seems to be doing with the submarines—instead of coming up with actual policies.

I was born in Chicoutimi, where my family still lives. I realize that I have always been in contact with the transport industry. In my childhood, I remember that we used to go and watch the famous white ships of Canada Steamship Lines. At that time, they did not belong the Prime Minister's family but rather to the Soeurs de la charité of Quebec City. We do not know much about that. I was also distressed to see that this marine industry, which was the engine of economic development, disappeared, as usual because of a lack of vision or policy.

Later on, I moved to the North Shore. I lived in Baie-Comeau. The port of Baie-Comeau is also suffering from underfunding and has been all but abandoned by the Liberal government. This is due to reforms that are stillborn, if I may put it that way, reforms that do not go all the way, that lack means. Because of that, Baie-Comeau, which was once a vital component of the Quebec economy, is now sliding into a kind of economic stagnation that is often due to shortsighted policies and to a lack of understanding of transportation.

I now represent the Beauport—Limoilou riding, just opposite the Davie shipyard. My colleague from Lévis—Bellechasse was telling me that there are now only eight workers left in a shipyard that certainly employed more than 2,000 people at one point. It is very disturbing to see this yard, which has the biggest dry dock in Canada, crumbling because of a lack of policy that very often, let us face it, unfortunately discriminates against Quebec.

Of course we reiterate our general support for the principle of Bill C-4. We are sometimes disappointed to see the very narrow focus of the bills that are introduced, but sometimes they are necessary. The Bloc Québécois agrees with the principle of the bill.

We will recall that the purpose of this bill is to implement two international agreements, namely the Convention on International Interests in Mobile Equipment and the related Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment. These two agreements were negotiated under the International Institute for the Unification of Private Law, with the poetic acronym of UNIDROIT, and the International Civil Aviation Organization, whose headquarters are in Montreal, as we all know. In fact, that is no coincidence; it is headquartered in Montreal because Montreal is an important centre.

Hon. members know that I come from Quebec's national capital. As I indicated earlier, I have lived in the regions, but the economic vitality of Montreal is benefiting all of Quebec. And when we have centres as major a Montreal, we have to help them and their industries. Helping Montreal benefits the workers of Hochelaga as much as those of Beauport—Limoilou.

I would also like to share with you, Madam Speaker, something I feel is important for you to know. I have extensive experience in the field of sustainable development and environmental protection. I also worked in social housing.

What matters in sustainable development is the notions of environmental protection, of sustainability of resources, of equity and employability. Sustainable development requires that people have work, that their industry not be undermined, and that governments provide the support necessary to promote a fairer and more equitable society which shares its resources.

Unfortunately, that is not what we have at present. Here is a bill to better articulate the financing of heavy transportation equipment. We are talking about aircraft, but other similar legislation will be required in areas like aerospace, satellites, and rail. The protocols and conventions for those areas are not quite ready.

So, the government introduces an itsy bit of policy, this itsy bit of legislation to deal with financing, the mortgage and guarantees to secure financing and to have comparable international rules with respect to the financing and the procurement of air materiel.

At the present time, 32 countries have signed or ratified the convention and the protocol. Canada did so in March 2004 and the European Union has plans to do so. So this is all pretty recent. I would remind hon. members—since I believe there is an educational aspect to this House—that the purpose of the agreements is to ensure that countries have harmonized legislation when it comes to securities—what the rest of us might call mortgages—placed by lenders on mobile assets such as aircraft or trains.

As well, the agreements call for the creation of an international registry of aircraft, which would make it possible for lenders to readily determine the condition of a plane or to know whether there is a security against it and if so how much and by whom. Hon. members are aware that registries are important, or at least if they are properly kept.

Once again, unfortunately, we cannot say that the Liberal government's administration of such registries has impressed us much. One need only think of the firearms registry, and how laxly it was managed, with the result that the majority of Canadians and Quebeckers withdrew their support of candidates they associated with that government in this last election.

At the present time, much confusion reigns as far as the financing of aircraft is concerned. An airline 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. In short a situation as clear as mud, as they say.

If these countries do not have harmonized legislation, particularly concerning the order in which creditors are paid off, endless court battles could ensue, leading to long and costly delays when an airline is no longer able to make its payments.

As well, contradictory legislation causes a great deal of uncertainty and increases the risks for lenders, who offset this by charging high interest rates. One might describe what is called in Latin the statu quo ante , or previous situation, as a total financial mess. No matter what term one uses, the reality is that there is total confusion, an unworkable situation that prevented harmonious international commerce.

Currently every country keeps its own aircraft registry using its own criteria, which might be confusing. The passing of this bill and the passing of similar pieces of legislation in other countries in the world will help put an end to such confusion, decrease the risks for lenders and, therefore, for borrowers. So doing they will help improve the ability for air carriers to get airplanes. This will give the aircraft industry a hand, which is good I think.

I am talking about giving the aircraft industry a hand, but we could talk about giving it a finger because what would really help the aircraft industry would be a real aeronautics policy to keep jobs in Montreal and at Bombardier. We are not talking about peanuts; we are talking about 5,000 jobs that are at stake. Due to a lack of policy, workers in the aircraft industry face an uncertain future.

The Bloc Québécois demands an aeronautics and aerospace policy covering important elements. It would support industrial research. With close to a third of high-tech exports, Quebec is way ahead of the other Canadian provinces. When it comes to the number of jobs in the high-tech industry, the Montreal area comes second in North America behind the famous Silicon Valley in California, well-known for producing computers and for its high-tech industry in general.

Telecommunications, aircraft, aircraft engines and parts are among the ten top exports from Quebec. Quebec has climbed to the sixth place in terms of sales generated by the aerospace industry. Montreal is the fourth city in North America for the number of jobs in the bio-pharmaceutical industry. Quebec industries are innovative. Industrial research is the only area in which Quebec gets its fair share of federal research and development funding.

All this is being threatened by the government's procrastination and lack of vision. Currently several American states are courting Bombardier, which is seeking help and not getting any.

With 31 per cent of Canada's high-tech exports, Quebec industries are getting 30 per cent of federal funding. That being said, even though Quebec is getting its share, as a whole funding is grossly inadequate.

Developing a high tech product, be it a drug or an airplane, takes time and costs a lot of money. At this stage, government financing is vital. As the member for Hochelaga and my distinguished colleagues have said previously, the funding of the Technology Partnerships Canada program is stagnant. In constant dollars, it has actually decreased, with the result that we can no longer support this industry.

Furthermore, the government is starting to receive royalties for products whose development was financed in part with public money. Indeed, the Technology Partnerships Canada program is a risk sharing program established in 1996. Through this program, Ottawa invests in research and development. Then, once a product is marketed, five, ten or fifteen years later, the government gets its money back through royalties.

The government is starting to receive these royalties. And while industrial research spending is increasing by about 8% a year, government investment in the Technology Partnerships Canada program remains about the same. Eight years after being launched, this program is now clearly underfunded. This seriously threatens the aerospace industry, the flagship of Quebec industry as we have pointed out earlier.

Our aerospace industry, which exports 89% of its production, must be in a position to stand up to competitors, which get much more support. In the United States, this support comes from the military industry, and in Brazil, the industry gets a permanent and massive support from the government.

The Minister of Transport told us we should avoid a subsidy war, but we should not turn a blind eye either. We should not ignore the problem, but we should realize the competition is international. If, strangely enough, we let down an industry that creates wealth in Quebec while we support the automobile industry in Ontario, this will be an unacceptable double standard.

We are in an society where jobs should be supported. We should not support lame ducks, but we should help successful industries. The aerospace industry is successful. This is not a joke. Nobody wants an open bar or a subsidy war. I think some are indulging in theatrics or try to hide the facts in order to avoid responding to this emergency.

The impact of not responding right now with a serious offer and a partnership with Bombardier would be extremely serious. We risk losing a massive number of jobs. This lack of vision and policy could cost us dearly.

During the election campaign, the Minister of Transport made a habit of using shock formulas and distasteful images that evoke the funds received by the Liberal Party. The management of a department or of policies is not a matter that can be handled in a 10-second clip on television, or by saying that one is against interventionism, when there was a lot of intervention in sponsorships, and the management of the gun registry, which was completely botched.

The government intervenes a lot to take away from working and unemployed Quebeckers and Canadians what is rightfully theirs. In these cases, it is very interventionist.

When the time comes to pay off a deficit on the backs of the provinces and the unemployed, when the government hides surpluses in an incredible way—we are talking about $9.1 billion instead of $1.8 billion—we realize that this government is characterized by secrecy, lack of vision and arrogance. As a result, there is no policy to support programs. We are always in a minefield. We are always facing the possibility of losing jobs and emptying the regions.

This lack of policy does not relate only to transportation; these are realities. We find ourselves without a consistent employment policy. The government undermines employment insurance, as my colleague from Chambly—Borduas has demonstrated. It does not allow youth who have seasonal jobs to stay in their region in the winter, perhaps to create a small business. It sends them instead to urban areas such as Quebec City or Montreal. It sends them to cities, which literally empties the regions. It fears after the fact that Montreal and Quebec City will have the same problem. This lack of policy is very negative.

What we are calling for is a policy to help Bombardier, not only very specific bills, framework legislation and broad views which should not be used to spend public money but to attract industries and improve what is already functioning well.

Obviously, even if Bill C-4 is a step in the right direction in terms of financing the purchase of aircraft equipment, it does not solve the real problem of Quebec's aerospace industry, which is the lack of an aerospace policy.

Bombardier is being courted by three American states who would like the company to set up shop there for the construction of its 110 and 115 seat airplanes. According to the CBC, these states are all offering over $700 million. Can we accept the Minister of Transport's response that the government does not want a bidding war? Could this not be translated to mean that the government does not want to intervene and that it will let the American market dictate where our jobs will go? It is extremely cynical and dangerous. This is playing with fire.

I hope this will not be the only response of the Minister of Transport and that someone, somewhere, is trying to reach an agreement with Bombardier and to support this job-creating industry. However, if this is not the case, if there is no policy to quickly reach a solution on an urgent basis, I think such an attitude would border on irresponsibility. They will then have no excuse for saying that they thought the American states were bluffing and that they were not serious.

Quebec's aerospace industry, which has annual sales of $14 billion and employs more than 40,000 workers, represents almost half of high-technology jobs in Canada. Of the 250 businesses in the sector, 240 are small and medium-sized businesses. As Prime Minister Jean Chrétien said, the aerospace industry is to Quebec what the automotive industry is to Ontario. If the automotive sector gets help, so should the aerospace sector.

It is urgent that this government implement an aerospace policy.

[Réal Ménard, Bloc, Hochelaga, QC]

Mr. Speaker, you will understand that it is with barely contained excitement that I join the debate on Bill C-4 which, on the surface, might seem very dry and technical, but still has its romantic side. I will get back to this later on.

Having said that, while we support the bill, as all my predecessors have said, there is nevertheless a certain amount of disappointment . The member for Outremont and Minister of Transport was so outspoken during the electoral campaign. All my colleagues remember this. He said that he would be very vigilant in defending Quebec's interests. Given what the member for Outremont has been saying, we would have expected one or two legislative initiatives before the introduction of Bill C-4.

Not that this bill is not important. I will get back to this. It is a bill to implement international conventions that give loan guarantees and that pertain to a whole series of processes for mortgages, mobile equipment and aircraft registries. We are not saying that it is not important since a number of industrialized countries have signed on to this convention. However, would it not have been more important for this House to deal first with former Bill C-26? Would it not have been more important for the Minister of Transport to take his responsibilities and reintroduce former Bill C-26 that gave the Canadian Transportation Agency--a quasi-judicial administrative tribunal--power to mediate in those cases where the railway companies do not act properly or do not respect the surrounding communities?

I am sure that, through you, we could ask those members who represent ridings where railway companies show no respect for the local communities, making noise and switching engines at all hours of the dayi n a residential area, to raise their hand. In my riding of Hochelaga, on Moreau street, the CP is operating 24/7. I have been told that, in the Lévis area, this very beautiful area of Quebec's national capital, a former mayor has called the Government of Canada on this matter. In Outremont, there is a switching yard. Some of our fellow citizens are being deprived of their quality of life, by a lack of respect, a lack of regulations. When the transportation agency proposed regulations, the CP went to court. As a result, the Federal Court of Appeal brought down a decision, saying that the transportation agency did not have jurisdiction to propose such regulations.

All this to say that, when my amiable colleague from Longueuil and transportation critic spoke this morning, she urged the Minister of Transport to restore former Bill C-26. We need legislation like that, because, in every province, in every community, there are railway companies behaving like barons of industry, interested only in money and with little or no regard for our fellow citizens. When, in a residential area, a person lives next to a railroad track, has to fight with railway companies behaving in an irresponsible fashion, we believe it is the role of this Parliament and of the Minister of Transport to become more vigilant and to introduce a bill to remedy the situation much sooner than they have.

Were we not entitled to expect—we have been talking about it in the Bombardier file—that we would be presented with a policy on aeronautics and aerospace? Every time the federal government prepared to fulfill its responsibilities in the area of transportation, it failed miserably. The oldest members in this House—not in chronological terms, but the oldest politically speaking, those who were here before the June 2004 election—can recall the disaster brought about by the Minister of Transport with his policy of divestment of wharves in smaller ports.

The government wanted to entrust the management of these ports to the communities, but without making the necessary resources available. If it had not been for the members of the Bloc, this file would just about have gone unnoticed by the Quebec Liberal caucus.

People will recall, of course, as the member for d'Argenteuil—Papineau—Mirabel mentioned, the boondoggle created by Pierre Elliott Trudeau. I can think of no other words to describe the white elephant that the whole issue of the Mirabel airport became. It was the kind of anarchic way of doing things that was questioned.

I could also talk about shipping. As you know, I have been the member for Hochelaga since 1993. In the 1980s, not that long ago, shipyards in Canada, in my constituency and in various provinces were closed. I do not know how old you were then, Mr. Speaker, but I am sure you were sufficiently aware and interested in public affairs that you can remember that.

In Hochelaga—Maisonneuve, generations had worked for the MIL Vickers Inc., a shipbuilding industry. In the 1980s, we realized there was a 30% shipping overcapacity throughout the world. The decline in this industry is not due to any lack of vigour on the part of the workforce, but to a lack of will to continue improving our product and technologies. These workers were left to their own resources, and the federal government shunned its responsibilities.

The provinces did take theirs. I remember the excellent government of René Lévesque—and I am talking here with the objectivity I am known for—had already suggested elements of a policy to help workers adjust and move to another career.

I am sure my colleagues remember the Program for Older Worker Adjustment, or POWA, which goes back to the days of Brian Mulroney's Conservatives. The initiator of this program was minister Cadieux. This program had a big flaw. In communities with a population of over 100,000 residents, like Montreal, 100 workers had to be laid off for them to be eligible. We had layoffs in a number of communities, but POWA could not kick in because the number of laid off workers was not high enough.

On several occasions, Bloc Québécois members introduced bills to rectify this situation, but the government never provided any support to get such a bill passed.

This file has been a disaster right from the beginning. The Mirabel file is a disaster too. When it comes to shipyards, the government missed the boat.

I remember the excellent work done by the former member for Lévis-et-Chutes-de-la-Chaudière, whom I can call by name now since he no longer is an MP. I am sure you have fond memories of him too, Mr. Speaker. I am talking about Mr. Antoine Dubé. On several occasions he put forward bills and organized workers to get the federal government to invest in a shipbuilding policy, to help workers at the then Lévis shipyard.

I am sure Mr. Dubé's successor, the member for Lévis—Bellechasse, who, as you know, is a Bloc Québécois members, will keep on urging the federal government to come up with a shipbuilding policy.

I digress. We might reasonably have expected other bills to come before Bill C-4.

But let us back to Bill C-4. We will support it at least at this stage. We will see if we can continue supporting it in committee. As the member for Longueuil said with her traditional dynamism we will support the bill in principle.

We are aware that they are differences between Canada and Germany with regard to the law. In Canada, even though the executive might ratify an international convention, it does not in itself create law. In Germany, it does. They have a monist system. As soon as the executive creates or signs a convention, it creates law.

Here in Canada for a convention to be implemented, we need an implementation bill. Bill C-4 is exactly that.

I am sure that television viewers are anxious to know that Bill C-4 seeks to implement international agreements. What are these agreements? They are 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.

What do we want to achieve through these conventions? We want to change somewhat the rules of the game in the international aerospace industry. Let us face it: if there is an industry that has been affected by globalization, it is the aerospace industry. A number of companies have their head office in Montreal or in Toronto. Many subcontractors are involved in the building of an aircraft. Sometimes, subcontractors may even be located abroad.

When an aircraft is built, creditors involved in the funding process will sometime ask for loan guarantees. The hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques knows about this, because he follows very closely what is happening on the international scene. When such guarantees are requested, they must of course be provided. It is what is commonly called a mortgage.

Incidentally, this notion is studied in law school. While I would definitely not go so far as to say that these are the most popular courses, students must pass them, because they are mandatory.

When mortgages are sought to provide funding, those who provide them may ask for guarantees. We could have a situation where an international consortium may be the debtor regarding various equipment located abroad, in different countries, and incorporated under different laws.

Bill C-4 proposes to harmonize all this, so that things will be a little clearer. This legislation is good for both creditors and debtors. The bill even proposes an international registry in which the names of all those involved in commercial transactions relating to aircraft would be listed.

Therefore, it would be difficult for the Bloc Québécois not to support such a bill, or at least its underlying principle. However, we remain just as disappointed by the fact that Bill C-4 was given priority over other measures which, we feel, should have taken precedence.

Let us take the example of Bombardier. As members know, I represent a riding of Montreal and I would like to say a few words about Bombardier.

We know that Bombardier is currently being courted by many. The media is reporting that some U.S. states—our neighbours to the south—and European countries, have made concrete proposals. Bombardier has been offered several million dollars for its expertise in aircraft, especially for 100 and 110 seat airplanes.

The Minister of Transport has been very vocal in other arenas, but not very firm when it comes to defending Quebec's interests. We would have expected him to defend Bombardier's interests a little more vigorously.

When we think of modern day Quebec, we think of a certain number of things: René Lévesque's political party financing legislation, the Quebec education system, CEGEPs, and so on, but also the aeronautics industry. Generations of workers in today's Quebec—Quebec since the Quiet Revolution—have worked in the aeronautics and aerospace industry. In today's fiercely competitive market, Bombardier is not in a vulnerable position, but in a highly competitive position.

That is why in the previous Parliament, the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup will recall, the Bloc Québécois was extremely clear in its call for better funding for Technology Partnerships Canada. We feel that public funds are needed in situations like the one Bombardier is in.

My colleagues will agree that we in the Bloc Québécois are not extreme interventionists. However, we find that the lending package that Technology Partnerships Canada provides is a connection between private enterprise and the role of the government. That is why we think it is important for the Minister of Transport to deal with this issue.

I do not know what my colleagues think, but I was very unhappy when I heard the Minister of Transport say in two or three televised news reports that there would be no counteroffers. What a thing to say. As though it were a question of counteroffers. Of course not. Public funds have to be used wisely.

From the time that a proposal is put on the table, that jobs are at risk in Quebec and, thus, that there is a threat to one of our most important industrial sectors, is it not the role of the transport minister, particularly if he is a Quebecker, to put a proposal on the table? One would have expected him to make a formal proposal rather than serving us up a clever but meaningless speech which is actually a denial of responsibility.

It is in situations like this that Quebecers will realize how well advised they were, in June, to put their confidence in the 54 members of the Bloc Québécois. Rest assured that the Bloc Québécois will work relentlessly to make sure that those jobs are not lost to the Americans. It will also make sure that the Minister of Transport tables a proposal at the appropriate time. Finally, the Bloc Québécois will try to make sure that Bombardier remains among the 20 top industries of the aeronautics sector. This is no small matter.

In light of the success Bombardier has achieved, we should not hesitate to act and answer the call of these members of the business community.

When I was elected in 1993, I think you were in your early twenties. Lucien Bouchard asked me to take on the file of the restructuring of the military industry into a civil industry and the file of technology. I was somewhat surprised by his choice. I am a big-hearted person, but I had trouble hooking up my VCR; I was not very knowledgeable about technology. However, I took an interest in this file and I discovered that there was a program called DIPP or Defence Industry Productivity Program.

As a critic, when I delved into--

[Mario Laframboise, Bloc, Argenteuil—Mirabel, QC]

Mr. Speaker, you will understand that having in my riding the beautiful Mirabel region, home to a fair chunk of the aerospace industry in Quebec, it is a pleasure for me to rise and speak to Bill C-4.

My colleagues have stated the Bloc Québécois's position several times already. We are in favour of the bill entitled: 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

We have all understood that the bill is meant to allow bankers to take equipment sold as security. It is true that the industry is facing financing problems and that airlines have difficulty getting the required financing for equipment they sell because buyers, at present, are close to insolvency. All major airlines are seeking protection under the Bankruptcy and Insolvency Act. Some U.S. airlines are considering that protection for the second time. Therefore, this bill is clearly needed.

I repeat the comments I have been making since the beginning of this debate. Once again, I find it rather odd that the Minister of Transport is bringing this legislation before us on its own, without any real plan to revive and relaunch the entire aeronautics and aerospace industry in Canada.

I say that because our companies are under enormous pressure, not only because they have trouble financing themselves, but also because there are many other countries that want to see this industry move to their own territory.

For some weeks, we have been listening to our American neighbours. Three states in the U.S. are ready, on their own, to offer the same amount as the Government of Canada to help Bombardier, among others, launch its complete new aircraft concept, for example.

This is a difficult message for the aeronautics and aerospace industry in Canada. I can give the House a few figures. The United States invests $45 billion per year in aeronautics and aerospace research and development. Some $6.5 billion goes to three companies—Boeing, Raytheon and United Technologies.

In Europe, Airbus receives $3 billion for research and development from various European countries. Here in Canada only $165 million is available, not for Bombardier alone but for the entire aeronautics and aerospace industry.

It should be clear to everyone that this sector is underfunded. Obviously, I have a lot of trouble with that. I will repeat that I come from the Mirabel region. We have heard that men and women who work in this fine industry are going to lose their jobs. Some have already lost them. That is unacceptable.

It is unacceptable when the only action the government is taking is to introduce a bill whose purpose is to have the banks fund this industry. It is as if the Government of Canada said to all industries, “Look here. What we are proposing today is that you go see your bank. The banks will provide financing for your buyers”.

And yet we know that, even if this bill is passed, even if all the countries in the world passed this legislation and an international registry were created, there are not many bankers who would be more interested in taking airplanes as collateral, given the state of this industry throughout the world.

Will it help? Yes, the industry thinks it will; it is asking for this legislation. It has been asking for it for years, and Canada has been waiting for years.

The problem is people are now hitting the panic button. We want a major recovery plan for the aerospace industry throughout Canada. The industry is hitting the button, but obviously, nobody in the federal government is responding. A drama is taking place in the industry. It is a drama, because 55% of all jobs in aerospace are in Quebec.

I repeat that when I started as a member of Parliament in 2000, the Prime Minister, Jean Chrétien, made a declaration, which he repeated during the election campaign. It struck me. Understandably so. Such things are of interest to an MP whose riding includes Mirabel. He said that the aerospace industry was to Quebec what the auto industry was to Ontario. At the time, he pointed out that a little more than 61% of all aerospace jobs were in Quebec.

Unfortunately, since then, we have lost 7% of them. The figures have just come out. The industry prepared an update, and representatives reported it to us last week. The Liberal members refused to meet with them. But the representatives reported that the figure is now 55%. The Liberals are happy that Quebec has 55% of all jobs in this sector, despite the fact that this figure represents a 7% reduction for Quebec. That is the reality.

In my region, as you know, Mirabel is close to Boisbriand. We benefited a little bit from the auto industry. The one remaining auto manufacturing plant in 2000 was there. However, in the past three years, since the statement by the prime minister, the GM plant in Boisbriand has shut down. Before the last election, the Liberals announced a support and recovery program for the auto industry in Ontario. Once again, Quebec and the whole aerospace industry are crying for help, arguing that survival was despite all odds. I am very pleased that it got through the events arising from September 11, 2001. The industry managed to survive. But we are currently witnessing drastic staff cuts and, obviously, fierce competition from the US and other countries in the world. They are prepared to ask our businesses, our Bombardiers of this world, the flagships of Quebec's and Canada's economy, to build a plant there, because they have money for them.

Once again, playing fair, Bombardier asks Canada to tell it promptly what its intentions are before it responds to the offers made elsewhere. Today, in this chamber, we are discussing Bill C-4 on the financing of equipment and the fact of putting the future of Bombardier into the hands of the bankers. Everybody knows that it will help and that we agree with that. The problem, though, is that Canada does not have a relief and recovery plan for the industry.

We have the figures to back up what we are saying, with the analysis provided by the famous Technology Partnerships Canada program for research and development. This program was established in 1996. Believe it or not, not one cent more has been made available since, more or less. Despite the fact that the industry's research and development expenditures increase by 8% per year, the budget for the Technology Partnerships Canada program has not been increased. Why? Assistance is provided to the industry and, under this program established in 1996, royalties are paid. Financial assistance is provided to the industry and, when the industry makes sales, it pays royalties, which are reinvested into the program. The only money available is the money that comes in. Because agreements were signed respecting the development of equipment, be it helicopters or airplanes, throughout the industry, no matter what company, money is coming back. The only new money available is the money that has been put back by the industry since the program was established in 1996.

The industry says that this does not make any sense at a time when competition is becoming ferocious. In the United States, some $45 billion is available, and $3 billion U.S. in Europe. That is how much is available to those competing with our industrial flagships, the likes of Bombardier or Pratt & Whitney, which manufacture all aerospace components in Quebec. The recovery or development plans developed by theses industries cannot be too extensive. Yet, that is what Bombardier wants to do in order to be competitive: introduce an entire line of new aircraft. The first phase of the plan includes research and development, production and construction of new lines.

There is also financing to promote exports. In addition, it is true that the bill will help bankers get guarantees. All countries, however, have funding support programs for equipment.

This has been the object of many debates in recent months. There was the loss of the contract. Air Canada bought some equipment from Embraer. This is how things work: the country where the industry is located, Brazil in the case of Embraer, provides some of the funding required. This is why I said earlier that this bill is good, because it allows bankers to take security. However, the problem is that, right now, bankers in the world do not have confidence in the aerospace industry, and particularly not in buyers. Therefore, governments are forced to provide guarantees.

Currently, Brazil is funding 80% of Embraer's deliveries, while here, the Canadian government is funding only 41% of the deliveries of Regional Jet and Bombardier. So, after the buyer paid a visit to the bank and was told that it could not get help, or that it could but only up to a certain percentage, and as Embraer needed venture capital, it turned to the Brazilian government, which guaranteed the loans. This is of course the system in place. Liquid assets must obviously be protected.

In this regard, Canada's program has not been reviewed. Once again, we are debating a bill that is indeed important and one that the industry has been asking for years. However, it merely delegates to bankers the responsibility for getting the aviation and aerospace industry back on track, but this is not what we need. We need a major federal support program, otherwise, unfortunate as this may sound, the new Bombardier regional jets will be developed in some American states or in other countries.

Of course, when we put questions to him, the Minister of Transport says that we should be realist and respectful of the ability of Canadians to pay. I hope that the minister will also be respectful of the ability of the Brazilians, Americans or Europeans who fund this high tech industry so important to us.

During the last Parliament , I had the opportunity to go with you, Mr. Speaker, to the international show at Le Bourget as the Bloc Québécois representative and transport critic; you too were involved in the transportation file. I was surprised by the eagerness of countries without an aircraft or aerospace industry that would have liked at all cost to attract aerospace manufacturing to their country. Having such an industry is very glamourous for a country. It is high tech at its highest level. This is the reality.

We in Quebec are fortunate to have the second highest concentration of aerospace and aeronautical industries in North America. That is very fortunate. We have the fourth highest concentration of aerospace manufacturing in the world.

Once again the federal government is dragging its feet. However, during the last election campaign, it did not forget to invest to help the automobile industry. It did not forget, and it was done at Quebec's expense. As you know, since the Boisbriand GM plant closed down, no car is manufactured in Quebec although the province is one of the biggest producers of aluminum and magnesium in the world. Some 85 per cent of these metals are used to build automobiles. We are one of the biggest producers of those basic materials. We do not manufacture automobiles and very few car parts because, as you now know, it is all about industrial clusters. When you have an automobile industry, a whole spare part industry gravitates around it. That is what is meant by an industrial cluster.

They set up shop in Quebec. That is what happened with the aviation and aerospace industry, but we are losing ground. I explained it earlier. In 2000, we had 62% of jobs; in 2004 we only have 55%. I repeat we must put money where ideas are. Of course I remember the statement by the then Prime Minister of Canada, which the new Transport Minister has repeated, namely, that the aerospace industry is to Quebec what the automobile industry is to Ontario. However money speaks louder than words. On must be able to invest where needed. A vigorous aerospace industry expansion program is long overdue. Time is of the essence.

Such a program ought to have been tabled simultaneously with Bill C-4. That is what we ought to have been hearing today, speeches in support of the government, as there are for this bill. All parties would have risen to speak in support of a massive renewal effort for the aerospace and aeronautical industry. But it is not there.

When will it be? We have just heard some members tell us that yes, they are working on it. Let them go and talk with the owners of the aviation and aerospace companies and they will see that they know what they want. They could provide you with a draft program in no time. Agreement would not be long in coming.

The problem is that there is no desire on the part of the federal government to create any major revival of this industry. Why not? I would say for political reasons. Of course, there are still bitter feelings toward Quebec. That is the harsh reality, and that is why many Quebeckers feel Canada is not their country and they would be better off on their own.

Once again today we find ourselves faced with the same reality: a federal government that is turning a deaf ear to the demands of an industry that is, once again, concentrated in large part in Quebec, but has lost a lot of ground since 2000.

The Bloc Québécois will do everything in its power in this House to return the aerospace industry to its former status in Quebec, and in Canada of course. We are here to defend the interests of Quebec. We were here, we will continue to be here, and in greater numbers than in 2000. We have many new colleagues with us now to tell this House that Quebec has needs

If Canada cannot give Quebec what it wants, it just needs to let us go. It is as simple as that, no more complex than that. We will take our own tax money and with it will be able of helping these leading lights of our industry. That solution fully respects the interests of each party.

Once again, on behalf of the people of Quebec, I am asking the federal government to waste no time in tabling a recovery plan for the entire aerospace and aeronautical industry across Canada. The entire industry needs help, and so does the part of it that is situated in Quebec.

I will end on that note. Mirabel experienced Liberal-style management. Land was expropriated for the construction of Mirabel airport. That was the approach taken. The dream came true at a cost of displacing more than 3,000 people, the greatest deportation of men and women since the deportation of the Acadians. That is what happened in Mirabel.

An airport was built in the middle of nowhere. I know there is no turning back once the airport is built. The only problem is that the Liberals have never had the courage of their political decisions. It was the Pearson government that decided to put Mirabel airport there. Do not tell me that when the airport was built they did not have plans for autoroutes 13 and 50 and a high-speed train to make it accessible. A station was built under the terminal. Anyone who has followed this file closely, knows it.

The only problem is that the Liberals lacked the political will. Just think back to when the decision was made. Mirabel was built in order to close Dorval and have all flights go through Mirabel. That was the objective, but no highway or railway links were ever built. When there were 75 Liberal MPs in Quebec it was decided that Dorval would stay.

It is time to stop thinking that the Liberals have the answer to everything. When it comes to Mirabel, they caused most of the problems we are having. In my view they have been in power far too long. The Liberals have been in power for 30 of the 40 years since Mirabel was announced. We have seen the results.

We have seen what that did to the automotive industry. GM in Boisbriand is now closed and demolished thanks to the Liberal government. I hope the aviation and aerospace industry will not experience the same fate as Mirabel and GM in Boisbriand. I hope the Liberals will be able to respect Quebeckers for once.

[Mario Laframboise, Bloc, Argenteuil—Mirabel, QC]

Mr. Speaker, I repeat my question. We are very well aware of the problem. I repeat that the Bloc Québécois supports Bill C-4. The problem is that the industry needs a major investment program in the aeronautics and the aerospace sector.

Can the member confirm that he will support quick action in order to help the whole industry?

[Marc Boulianne, Bloc, Mégantic—L'Érable, QC]

Mr. Speaker, may I also commend you on your appointment, as my colleague for Hochelaga has already done.

Mr. Speaker, it is a pleasure to be here to speak to Bill C-4. I have a comment and a question.

As far as the principle of Bill C-4, we are not against virtue. However, in my opinion, it does not solve all the problems. The lack of a real aerospace policy is a major issue. It was mentioned earlier. Someone talked about Bombardier and the fact that some American states are trying to convince it to set up shop south of the border. Meanwhile, Ottawa is waiting. In addition, support for research and development is anemic. Many issues are pending. Technology Partnerships also suffers from underfunding.

It is well known that the aerospace industry in the province of Quebec generates annual sales of $14 billion and employs 40,000 people. A huge number of jobs are at stake.

We feel it is urgent that the government implement a real aerospace policy. Does the hon. member of the government party not think that that would be the real solution, rather than focusing only on one element of such a policy with Bill C-4?

[David Christopherson, NDP, Hamilton Centre, ON]

I would say very directly, Madam Speaker, yes, we do support major investment in our aeronautical and aircraft industry, for the simple reason that if we look around the world, we will see that the most successful aircraft assembly, and quite frankly the only successful aircraft assembly, is in nations where the government is playing a major role. There might be the odd exception or two, but all the major players have significant investment in partnership with at least their national levels of government and sometimes other levels of government too.

As for us somehow believing that magically jobs are going to come here to Canada, I do not know why, or for whatever reason; they might think people just want to be nice to Canada. But that is not the way it is going to happen. There has to be R and D investment. That is why Bill C-4 is important, because it speaks to the marketing end of it.

There is the whole continuum of aircraft development, the research and development, the assembly, the parts assembly, the final assembly, the sale and the maintenance. All these big jobs are big money. I am certainly not going to get into a tussle over whether or not these jobs and investments should go to the member's province or mine. We will deal with that specifically as things come up one-off, but the question the member asked was, do we support in principle the philosophical argument that in order to have a thriving aircraft industry in Canada there needs to be major investment by and a role for the national government? The answer to that unequivocally is oui.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, I rise for the first time as the newly elected member for Hamilton Centre. I want to first thank my constituents and say what an incredible honour it is to stand here at this moment and address the House of Commons of our nation.

I am joined by colleagues who were in the class of 1990 at Queen's Park in the Ontario legislature, the hon. members for Sault Ste. Marie, Dufferin—Caledon and Halton. The four of us were together at Queen's Park for 13 years and we now find ourselves fortunate enough to be here in the House of Commons. Prior to that, I had an opportunity to service on Hamilton city council.

I came here elected with the NDP caucus to address a number of issues that are important to this nation, not the least of which is the missile defence star wars, which is about to be thrust upon the people of Canada if the government and certainly the Prime Minister have their way. There are many areas of interest to me, such as environmental protection, health care, education and social services. There is a whole litany of such areas, but there are a couple of them that are of particular interest to me.

One of them is the future of cities across Canada. One of the key things we talk about in virtually every bill is money and the lack of it at every level of government. There is not a study that I am aware of in Canada which says anything other than that the future of our economic growth from coast to coast to coast is focused on the ability to have successful cities and local regional economies.

We have heard a lot of promises from this Prime Minister and this government. I have been fortunate enough to be assigned the cities portfolio as critic and, as I see it, one of my roles is in large part to ensure that the government, at the very least, enacts the minimum promises it made to cities. To that degree, we have already seen the government backing away somewhat, with certainly nowhere near the kind of investment we in the NDP believe needs to be made in our cities.

The other issue is the steel industry. That of course is very germane to Bill C-4, because the bill speaks to the aircraft industry internationally but obviously nationally, too, and it is important to us for a whole host of reasons, not the least of which is, for a member from Hamilton, the steel industry. As my friend from Ancaster—Dundas—Flamborough—Westdale mentioned, a thriving, growing aircraft industry in Canada is good for the steel industry. We, along with my good friend from Sault Ste. Marie and a number of other communities, are the steel capital of Canada. That is not to mention all the support jobs generated by the parts industry in supplying both the steel industry and the aircraft industry and, by extension, the auto industry, which was also mentioned earlier.

This bill should, if enacted in the right way, provide us with a more thriving aircraft industry. Why does that matter to us beyond the obvious? It creates jobs, of course, but what really matters is the kinds of jobs that are created. We are talking about value added jobs. That is where we win. Canada cannot win by underbidding the rest of the world, whether it is in wages, occupational health and safety or environmental laws. We cannot win that game. There will always be someone who is forced, and often exploited, to work at wages that are well below what we would ever ask of any Canadian. So we win here in Canada by the fact that we have a healthy, educated, motivated workforce. We cannot create that through tax cuts or by watering down protection for workers or protection for the environment.

An industry like the aircraft industry is hugely important to us in terms of our future and our ability to provide well-paid, challenging jobs for our children and grandchildren. If this bill at the end of the day is going to make for a stronger aircraft industry, then that is going to create a stronger steel industry and auto industry, because of the availability of disposable income from the people who have these hopefully decently paid jobs with the disposable income that allows them to buy a car and allows them to buy the other things that keep our economy going.

I will wrap up my first time on my feet here--and I am so glad I remembered to do this because it is really important--by paying my respects to and complimenting my predecessor, the Hon. Stan Keyes. Stan served in this place for 16 years with great honour and distinction. He is well respected in our community. Losing an election can happen for a lot of reasons, as those of us who have been in politics for a long time all know, and one ought not to take it personally.

In this case, I want to underscore that this was nothing to do with Stan as an individual. It was the politics of the day and I ran a pretty good campaign to boot, but Stan is someone who is held in a great deal of respect in the city of Hamilton. I am honoured to follow in his footsteps. I will do the best I can to be the kind of representative for Hamilton Centre that I know Stan was in the past and that he would have been had he been here in my place.

[Pat Martin, NDP, Winnipeg Centre, MB]

Madam Speaker, it is an honour for me to speak to Bill C-4 on behalf of the constituents I represent in the riding of Winnipeg Centre. Our critic, the member for Churchill, has done a lot of comprehensive work with respect to the legislation. The NDP can see benefits in Bill C-4 and is broadly in favour of the bill as it currently stands.

The aerospace industry is a critical industry for Winnipeg generally and for Winnipeg Centre specifically. People in my riding are interested in any initiative that may stimulate manufacturing in the aerospace industry and add to the stability of the critically important jobs that people there enjoy.

Members of the NDP have commented frequently on the aerospace industry in the House of Commons. I have spoken about the health and stability of that industry in a number of contexts. I am reminded of one specific issue that came to light in the twilight days of the 37th Parliament. That was the rather alarming use, or one might say misuse or abuse, of a program called technology partnership loans to keep the aerospace industry solvent and healthy in Canada. We see Bill C-4 as an effort to stimulate the aerospace industry and a positive light toward helping to develop markets for the manufactured products of our Canadian industry as opposed to technology partnership loans which we see as a scandal of equal proportion and dimension as the sponsorship scandal, if not more. Billions of dollars were involved in technology partnership loans and not millions of dollars as in the sponsorship scandal.

It is really a misnomer to call technology partnership loans, loans. A loan is not a loan when it is not paid back. It then becomes something else altogether. Of the technology partnership loans, 2% have been paid back, 98% have not been. This includes $480 million to Bombardier and millions of dollars to Pratt & Whitney and other aerospace manufacturing companies.

To get one's mind around this rate of payback, let us look at another loan program operated by the Canadian government, and that is the Canada student loan program. Of all student loads, 96% are paid back, but the government hounds the remaining 4% to their graves. No stone is left unturned to recover every penny loaned to Canadian students for their post-secondary education. The government has threatened to garnish their wages, to kick in their doors and seize their property, for heaven's sake. Yet it knowingly and willingly ignored, at last count, $3 billion of outstanding technology partnership loans, the overwhelming majority of which did not go to struggling start-up companies in need of R and D development so they could market products. They went to the aerospace industry and to IBM.

Why in God's name did the Canadian government give technology partnership loans to IBM? Is it a struggling start-up company? Is it a Canadian company? No. Did it ever pay the money back? No. I am sorry to deviate a bit from the subject of Bill C-4, but it brings to my mind one of the shortcomings in the treatment of our support for the aerospace industry. It warrants drawing that comparison.

The NDP is in favour of the idea of the Cape Town convention and protocol which we understand would reduce the risks and costs of selling aircraft internationally. We support the intention of the protocol, which is to reduce the costs of purchasing aircraft for developing countries. We are sympathetic to the plight of developing countries. We are also sympathetic to the difficulty developing countries have in getting capital or finding lending agencies willing to provide the level of capital necessary to purchase large ticket items like aircraft. They pay ridiculous premiums on the international borrowing marketplace for capital of that nature. We understand the protocol is designed in such away to accommodate.

I have been negligent, Madam Speaker, in pointing out that am splitting my time with the member for Hamilton Centre.

I know the member Hamilton Centre has been following this issue with great interest and care because of the area he represents and the jobs associated with this type of industry sector. He is eager to share his views with the House today as well.

One of things that strikes me is that there is more than one way for us to promote the aerospace industry in the country, be it in Montreal, Winnipeg, Vancouver or anywhere where we have aerospace industry workers and plants. One is to try to enhance the marketplace as per the Cape Town convention and Bill C-4. Another is to provide stimulus or assistance to that industry so it can retool and stay current with the market demands that have been improved. Another is education and training and ensuring that there is an adequately skilled source of workers coming up through the labour market training system. We should address that in the House of Commons in the context of the health and well-being of aerospace industry.

We have seen a complete abandonment of any commitment to labour market training by the Liberal government. It has devolved that to the provinces in a very haphazard and less than satisfactory way. It has signed nine individual labour market training agreements with nine individual provinces, with no particular national standards and with a patchwork quilt of training.

The aerospace industry is one industry sector that has received very short shrift in any of the interprovincial or intergovernmental training strategies. One of the problems with that is it leaves the industry vulnerable. If we do not have a human resources strategy associated with an industry sector, we will be vulnerable and subject to raid within the industry sector for skilled people, one company raiding skilled people from the other. It does not build any kind of cohesive plan which will give us confidence that the sector will be stable and well served.

I would like to use my remaining moments to compliment and feature one such program in the city of Winnipeg, run by Tec-Voc School, initiated by the acting deputy minister of education, Dwight Botting. It has partnered with the aerospace industry, not at the community college level, not at the post-secondary education level, at the high school level to do an integrated work and learn program to groom young employees for the aerospace program. It is an overwhelming success. We have met an industry need with a sensible approach that keeps kids in school, gives them hope and optimism that they can go into well paying jobs. It also provides the stability and confidence for the manufacturers in the riding, knowing there is a pool of adequately skilled young people coming up through the ranks. The employees training is geared specifically to the manufacturing plants. That match will be a recipe for growth in the industry.

Therefore, there is more than one type of program to help our aerospace industry remain healthy. One is to help it develop international markets by supporting the Cape Town convention and Bill C-4. Another, which is equally important, is a suitably skilled workforce.

This is one thing we can expand on with vision. If the House of Commons chose to, we could give direction to the government to expand the role of the EI program to bring it back to one of its former designated uses and that is labour market training on a national comprehensive scale. The EI fund is showing a surplus of $500 million a month, not per year, but per month.

Income maintenance has always been the primary role for the EI program, but in the designated uses of the of the EI Act, there are also labour market training, apprenticeship, et cetera. We have devolved all that to the provinces without the financial backing to keep those programs solvent.

You are indicating, Madam Speaker, that I am out of time.

[Russ Powers, Liberal, Ancaster—Dundas—Flamborough—Westdale, ON]

Madam Speaker, I am pleased to expand upon the introductory comments made by the Parliamentary Secretary to the Minister of Transport. I will take this opportunity to outline some of the anticipated benefits of adopting the proposed act on international interests in mobile equipment, that is, aircraft equipment, known as Bill C-4.

I believe we all agree that a strong, competitive aviation industry is an important component of Canada's economy in the 21st century. Adopting this bill will help the Canadian airline and aerospace industries compete more effectively in the global economy by facilitating their access to capital markets.

On March 31 of this year 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. 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, like a mortgage or a lease.

Adopting legislation to implement the convention and protocol will reduce the financial risk to creditors, allowing them to access greater levels of financing available for aircraft purchasing. This would 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 are: greater security for creditors; an increase in the global competitiveness of the Canadian aerospace and airline industries; maintaining jobs in Canada; and spinoff effects for various regions within Canada. If Canada ratifies the convention and protocol and adopts implementing legislation in a timely manner, Canadian purchasers will be able to benefit from reduced exposure fees.

For example, in the United States, 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 service 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 associated spinoff benefits for the aircraft manufacturing sector also. The airline and aerospace manufacturing industries generate many highly paid, specialized jobs. The importance of such jobs and their spinoff effects on the economy cannot be ignored.

Alberta and western Canada will benefit from WestJet's increased competitiveness. As the home of Air Canada, Jetsgo, Pratt & Whitney Canada and Bombardier, Quebec will no doubt enjoy a boost in its economy, and the presence of CanJet and Pratt & Whitney Canada in eastern Canada will provide a positive economic impact for these provinces.

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 the convention and protocol will generate.

In short, adopting this bill will be an important step toward strengthening Canada's aviation industry, which will generate competitive and other spinoff benefits across this country.

[Caroline St-Hilaire, Bloc, Longueuil, QC]

Madam Speaker, I am pleased to speak to Bill C-4, an act to implement two international agreements, the Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment.

The purpose of the convention is to create an international legal framework to address the order in which creditors are paid and the seller's rights. The basic objective of the convention is the efficient financing of transportation equipment, which will assist in the development of expensive modes of transport using modern technologies, especially related to aeronautics.

The purpose of these agreements is to have the signatory countries standardize their legislation with respect to the security lenders take on mobile equipment such as aircraft, for example. These agreements also allow 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.

The huge outlays involved in the financing of such equipment make it essential for the creditor to be able to have confidence that if the debtor defaults in payment or other performance the relevant legal regime will respect the creditor's contractual and proprietary rights and provide the creditor with efficient and effective means to enforce those rights.

Normally in the case of conflicting legislation, that of the country where the secured property is located applies. When dealing with immovable property, it is quite simple. However, for mobile equipment constantly moving from one country to another it is more complicated and a costly source of uncertainty both for the lender and the borrower.

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 much higher interest.

Hence the need for international legal rules giving the creditors the required level of security and containing measures for the debtor's protection. This would represent a competitive advantage for the airline industry. Since the risks associated with the loans or the lease agreements will be reduced, funding will be easier for the air transportation companies to obtain.

Moreover, a reduction in the costs of borrowing can be expected. All this should help the carriers who want to buy new aircraft and ultimately improve perspectives for the aerospace industry that builds them.

We all know that there is a crisis in the airline industry. The fears generated by the events of September 11, 2001, cut passenger traffic. The creation of the low cost carriers resulted in a reduction in the price of tickets. The increase in oil prices, which represent 16% of the air carriers operating costs, is resulting in higher operating costs. All that reduces the carriers profit margin.

As a result, many airlines are in a state of crisis. Air Canada has filed for protection under the Companies' Creditors Arrangement Act. Sabena and Swissair have declared bankruptcy. Alitalia and American Airlines are having a very difficult time. It is easy to understand that lenders hesitate to provide them with the funds they need to upgrade their fleet, which funds are essential if they want to stay in business. The guarantee that the lender will be able to recover the aircraft in the event of non-payment can only be beneficial.

The goal of these conventions is therefore particularly appropriate and beneficial for both carriers and equipment manufacturers, and that is the reason why the Bloc Québécois supports the principle of Bill C-4 provided, of course, that the committee finds that it is, in all of its details, in compliance with both international conventions.

Of course the bill can deal only with matters under federal jurisdiction. Issues related to loan guarantees come under civil law, which is an area of provincial jurisdiction. The implementation of the protocol and treaty will only be possible if the provinces amend their own legislation.

That is one more example of why Quebec and the provinces need to be closely involved in negotiating and reaching international accords. In addition to allowing them to defend the interests of their fellow citizens, such involvement would make implementation of international treaties much easier.

That being said, Bill C-4 is a step in the right direction. However, it does not solve the real problem in the aerospace industry, which is the lack of an aerospace policy. It is a good thing that Canada is taking the lead in signing this treaty, but it must do a lot more and put in place a real aerospace policy.

The situation is more urgent than ever as witness the events of last week, when we heard that Bombardier was being courted by three American states wanting the company to locate its facilities on their territory to build 100 and 115 seat planes. It would appear that they each are offering more than the $700 million Bombardier is seeking from the federal government.

Ottawa is procrastinating. Support for research and development is anemic. Technology Partnerships Canada is underfunded. Export contracts supported by Export Development Canada are far too few.

The federal government must act quickly, otherwise a whole sector of a flourishing industry might suffer.

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, which act as suppliers to big business. Together, those 240 SMEs represent 10% of the total sales of Canada's aerospace industry.

Those SMEs could do much more. Indeed, foreign companies represent roughly two thirds of suppliers to Quebec's aerospace industry. This indicates the potential for growth of Quebec's SMEs if they succeeded in taking over part of this market. To do it, though, they need help.

To be certified as supplier in the aerospace industry, a SME must meet a series of very strict criteria set by the contactor. It must be able to be associated with the development of any new product, from the beginning of its design and through its finalization. In addition, it must meet the particularly strict demands of the contractor in terms of quality and competency of its workforce. All these demands are very costly, sometimes too costly for an SME to assume alone.

The federal government must support those companies which would be ready to move from the status of small business with precarious finances to that of a medium-sized business able to take the market head on, if given the means to do so.

We also know that two of the main employers in Quebec's aerospace industry are Bombardier and Pratt & Whitney. The latter has 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 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 present 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 of Transport that he should stop condemning a situation that we all know only too well, 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 for years been calling for an aeronautics and aerospace policy which should include several elements.

Let us take industrial research support, for instance. Developing a high technology product, whether it is a drug or an airplane, takes a lot of time and money.This is a stage where government funding is crucial.

As Mr. Louis Chênevert, President of Pratt & Whitney Canada, so aptly put it:

Pratt & Whitney Canada is a leader internationally because it has acquired a unique technology through its investments in research and development over the last 20 years.

He added this:

Because the federal government has contributed to this effort through its Technology Partnerships Canada Program, it will reap the benefits...Indeed, it pays to invest in research and development.

Through the Technology Partnerships Canada Program, Ottawa invests in product research and development and gets its payback in royalties. As you can well understand, it is a win-win situation.

However, while spending on industrial research is increasing by approximately 8% per year, the amounts invested by the government in the program remain more or less constant. This poses a serious threat to the aerospace industry, which, as I have already noted, is one of the shining lights of Quebec industry. It exports 89% of its production and must be in a position to stand up to competitors, which get much more support. In that sense, the program, created 8 years ago, is now significantly underfunded.

In the United States, for example, the Pentagon is investing US$45 billion in research and development, of which some $6.5 billion is going directly to Boeing, Raytheon and United Technologies.

Bombardier recently announced the elimination of 2,000 jobs in Montreal, and the worst might well be yet to come, if Canada continues to drag its feet and Bombardier accepts the American offer.

It is for all these reasons that the Bloc Québécois is asking for a substantial increase in the federal investments in the Technology Partnerships Canada program.

It is also important to promote export. As the Canadian aerospace market is limited, our companies can amortize development costs only by investing in the international market. The aerospace sector exports 89% of its production. However, since Ottawa is not promoting exports nearly as much as many other countries do, our companies have a hard time remaining competitive.

In the past three years, Export Development Canada, or EDC, the federal agency financing all export contracts, has financed an average of 41% of all Bombardier regional aircraft sales. By comparison, in the same period, the Brazil Development Bank financed over 80% of Embraer sales.

Worse yet, EDC's support dropped to 37% in 2003. The majority of the funds released were for existing contracts, while Embraer received the support of the Brazilian government for almost all its financing needs.

The Bloc Québécois is thus calling on the government to increase its participation in the financing of export contracts to the levels our foreign competitors might be granted.

There are a variety of steps the federal government could take if it really wanted to help the aerospace industry. Today, the consideration of Bill C-4 is a step in the right direction, but the fact remains that the government must implement as soon as possible a real policy for the aerospace industry.

Besides, with a surplus of $9.1 billion for 2003-04, money is certainly not an issue, especially since, as I tried to demonstrate, investments in that sector generate substantial economic spinoffs. I hope that the Minister of Transport and the Minister of Industry realize that. With such a return on investment, it is profitable for the federal government and also for the public as a whole.

Investing today will ensure the viability of a critical sector of our economy in Quebec.

[Rob Nicholson, Conservative, Niagara Falls, ON]

Madam Speaker, I am pleased to be able to make a few comments with respect to Bill C-4, an act to implement the convention on international interests in mobile equipment and the protocol to the convention in mobile equipment on matters specific to aircraft equipment. This would provide a continuation of the development of the security law sector. It is a step forward in the right direction. I think it should be viewed by members and Canadians as part of a continuation of the history of providing security.

Hon. members in the House who know or practice law will know that going back a couple of hundred years the only security generally that one could get was the mortgage on one's property or house. It worked very well because lenders were prepared to lend money on the basis that if they were not repaid the house or property could be seized. As a result, the lowest interest rates were always available for mortgages.

However, with the development of trade and other types of assets, it became necessary to find a way to provide security and obtain financing. For the most part, in the 18th and 19th centuries, that was confined to shipping, which was the common way of trade between countries. Over a couple of centuries, a body of law developed, which was referred to as the admiralty law, that contained a whole host of rules and obligations to govern shipping throughout the world. For the most part it worked well because it lent certainty to individuals who were in the business of trade throughout the world. There were consequences to those individuals or countries that did not pay attention to the rules.

A number of instances took place in the 19th century where ships were seized or impounded in various places around the world and in short order a number of individuals and countries discovered that a royal navy gunboat was in the harbour to back up the security.

As the 20th century developed, that style of enforcement of securities did not lend itself as well to modern trade, not only because of the directness of that approach but because there were other types of security. The development of the aircraft industry in the 20th century meant that other types of security would be necessary.

That has been very difficult because if we do not have a way of enforcing security throughout the world, lenders, understandably, become nervous about forwarding money. If one owned an airplane in Canada and the person wanted to fly to various countries around the world, those providing the financing would, understandably, want to know what would happen if the owner could not pay, especially if the plane were in a part of the world with different laws or perhaps no laws at all. As a result, lenders were very reluctant to forward money on that basis because they could not be certain of the security or of being able to realize on their security if the aircraft or other piece of equipment on which financing had been forwarded were in some other part of the world.

It was difficult for people in the aircraft industry to obtain financing and if they could obtain financing it was very expensive. That really did not work in anyone's interest. It does not work in the interests of those in the aeronautical industry and it does not work, quite frankly, for passengers. Those of us who use airlines want the fares at the lowest possible price but if the aircraft company is having difficulty getting financing that gets passed on the passengers and in turn it is bad for everyone.

I see something like a convention that would include, among other things, as the parliamentary secretary said, aircraft, aircraft engines, helicopters, railway rolling stock which is another type of equipment that moves outside of the country, and, interesting enough, space assets. Presumably we could put security on a satellite.

The good thing about it is that it is one stop shopping. Apparently, it will be available on the Internet so that throughout the world individuals can check to see what the security is on a particular piece of equipment. This would give peace of mind to everyone involved.

Canada has a very important aircraft industry. This will assist it. There has been quite a bit of talk about the struggles within the airline and aircraft industries. If they are able to obtain financing, this will go a long way to helping them. It would benefit everyone.

I asked the parliamentary secretary about the question of provincial jurisdiction and I would like to explore it a little bit further when this matter goes before the transport committee. For the most part contract law is within provincial jurisdiction. Each province has laws and rules that govern contracts. Indeed, the province with which I am most familiar, Ontario, has something similar to that called the personal property security act.

If we obtain financing for an automobile, it gets registered, and it goes into the computer. Anyone interested in buying or otherwise financing our car would be able to quickly find out through a computer station located at registry offices across Ontario what the security interest is in it. The province already has a regime in place, as do other provinces, and it has a huge interest in it.

I, for one, would be very interested to know when other provinces will be ratifying this agreement because we cannot have the federal government ratify something like this when so much of the jurisdiction is with the provinces. In particular, I would be interested in knowing the timeline of the Province of Quebec, which has a huge stake in the particular industry covered by the bill. Indeed, I would be very interested in the comments it may have on this. That is one of the aspects I would like to see addressed in committee and to hear what the provinces have to say.

Be that as it may, I want to assure the House that we believe on this side of the House that the bill should go forward. This is a step in the right direction and I will be interested to hear from all the players in the industry. I think it will be widely accepted and quite frankly, welcomed. Any time we get anything that is 100 pages long, there may be some surprises in it, but let us deal with it at the second reading stage in committee because I definitely think this is a step in the right direction. I look forward to Canada ratifying it, our provinces ratifying it and indeed, all the other countries of the world getting on board with this regime.

[Jim Karygiannis, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, it gives me great pleasure to stand before the House today in support of introducing Bill C-4, which is proposed legislation that seeks to implement the Convention on International Interests in Mobile Equipment and the Protocol to the Convention of International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment. The convention and aircraft protocol were concluded in Cape Town, South Africa in November 2001.

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

As the House is aware, the aviation sector is particularly vulnerable to economic shocks and other world events: 9/11, SARS and record high fuel prices. All have had a negative effect on the sector. Industry stakeholders have been calling on the Government of Canada to implement broad measures to assist the difficult situation facing the airline and aerospace sectors.

The proposed legislation is one way the government is demonstrating its commitments to long term viability of the Canadian airline and aerospace industries. Adopting the bill will help these industries compete more effectively in the global economy by facilitating their access to capital markets.

Improving the competitiveness of the Canadian airline and aerospace sectors will work to maintain highly paid, specialized jobs in Canada leading to positive spin-offs in all regions of Canada and throughout the economy. Consumers also will benefit through increased airline services and/or lower fares. Another benefit of facilitating the acquisition of modern aircraft is that air transportation can become safer and environmentally cleaner.

In summary, through this bill and the ratification of the convention and aircraft protocol, the Government of Canada will actively support all elements of Canada's aviation sector.

Canada played a leading role in the negotiation and the development of the Cape Town convention and aircraft protocol. The convention and aircraft protocol represent an unparalleled example of cooperation between governments and industry in creating an international regime. In fact, it was a Canadian delegate on to the International Institute for the Unification of Private Law, or UNIDROIT, that first proposed the establishment of an international registry for security interests in aircraft in 1988. Since then, 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 Canada's commitment to seek global solutions to global problems in cooperation with the rest of the international community.

While it has taken more than 15 years for this initiative to come to fruition, it has met with approval from both the airline and manufacturing elements of the aviation industry as well as those providing financing for it. Throughout the process leading up to the tabling of this initiative, these stakeholders have been continuously consulted. Representatives of the Canadian industry were present and participated in many of the meetings leading up to the diplomatic conference at Cape Town as well as the meetings that formerly adopted these international instruments. 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 sees as beneficial.

The convention and aircraft protocol will establish an international legal regime that includes remedies to creditors in case of default. New rules will reduce the risks associated with financing and provide greater certainty to creditors and aircraft manufacturers. This will lead to larger amounts of credit being made available to airlines at a lower cost, ultimately generating increased airline earnings and profitability and important spin-off benefits to the broader economy.

The convention and the aircraft protocol will create an international registry for rights in aircraft and will set the order of priority among purchasers and creditors. The creation of a single international registry will provide considerable advantage in terms of time, cost savings and improve certainty in resolving questions of priority of interests.

The proposed bill will give force of law to the provisions of convention and aircraft protocol that fall within federal jurisdiction. Amendments to the Bank Act permit the carving out of larger aircraft equipment from its purview and direct registrations to the international registry. Amendments to the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-up and Restructuring Act will provide greater certainty for aviation creditors, thus benefiting Canadian aircraft manufacturers, financiers and airlines on the international level.

The bill would provide for a special remedy in the case of insolvency that would impose a fixed date period of 60 days. After this period, creditors could reclaim an aircraft or aircraft equipment on which they have security, if the lessee has failed to meet its obligations under the lease. The adoption of this stay period would increase certainty in the system and would provide a level playing field between Canada and the United States. The U.S. industry already benefits from a similar provision under the U.S. bankruptcy code.

On March 31 Canada became the 28th state to sign the convention and aircraft protocol. Our signature was added to a list of all countries with significant aviation and aerospace industries including France, Germany, the United Kingdom and the United States. Implementation of the convention and protocol in Canada will reaffirm Canada's leadership role in international civil aviation. The introduction of this legislation establishes that Canada is taking an important step toward eventual ratification of the convention and aircraft protocol.

Stakeholders have conveyed that substantial benefits are expected following the passage of this proposed legislation and Canada's ratification of the convention and aircraft protocol.

Airlines expect that the new regime will enhance their ability to obtain financing for their aircraft because the system would provide increased security for creditors. Since the rules provided for in the convention and aircraft protocol, and the bill reduces their financial risk, it is expected that creditors will make greater levels of credit available at a lesser cost. This will have a direct financial impact on an airline's bottom line by reducing the cost of borrowing money.

Aircraft manufacturers are expected to benefit from increased sales resulting from reduced financing costs. Consumers can also expect to benefit. Passengers stand to benefit from airlines that pass their realized cost savings to their end users. Furthermore, air transportation can become safer and environmentally cleaner by allowing airlines to purchase more modern aircraft at reduced costs.

Not only will Canadians benefit by the adoption of this treaty, so will other developing nations. When implemented in developing countries, this convention and aircraft protocol will result in reduced financing costs and will make financing available when it is not otherwise available. As a result of increased certainty that is afforded to creditors, airlines will be more willing to allocate surplus aircraft to developing markets. These markets will then benefit from obtaining safer, more efficient and more environmentally friendly aircraft than they may currently use.

A second major feature that will be achieved through the adoption of the convention and aircraft protocol involves the creation of a worldwide Internet based international registry. This will be available to any individual or company 24 hours a day, seven days a week. The existence of a single, worldwide, electronic international registry for recording and searching 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 international 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. A permanent supervisory authority will oversee the operation of the registry. It will, among other things, have the authority to appoint and dismiss the registry operator, make regulations dealing with the operation of the registry, establish procedure for receiving complaints, set the fee structure and report to contracting states.

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

It is important to note that provincial and territorial implementation legislation is also required before the convention and aircraft protocol can take effect in respect of Canada. The provinces and territories have consistently demonstrated their interest and support for these instruments.

Already, Ontario and Nova Scotia have passed implementing legislation that we could expect to enter into force following Canada's ratification of the convention and aircraft protocol. The provinces and territories continue to be consulted through the Uniform Law Conference of Canada and through the Department of Justice advisory group private international law.

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

As already outlined, the benefits to Canada of implementing the bill and ratifying of the convention and aircraft protocol include: greater security for creditors; increased competitiveness of the Canadian aerospace and airline industries; maintaining jobs in Canada; and spin-off effects for various regions within Canada.

I want to emphasize that the government consulted widely with stakeholders prior to signing the convention and aircraft protocol, and they remain supportive of this initiative.

The bill has been introduced prior to ratification of the convention and aircraft protocol because federal, and at least some provincial and territorial implementation legislation, must be in place before the agreements can come into force in Canada. Ontario and Nova Scotia have already passed implementing legislation and it is expected that other provinces and territories will follow suit, especially those with significant aviation interests.

In conclusion, adoption of the bill is an important step toward eventual ratification of the convention and aircraft protocol, which would confer significant benefits to the airline and aerospace industries and the Canadian economy more broadly.

[Jean Lapierre, Liberal, Minister of Transport]

moved that 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, be read the second time and referred to a committee.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I am sure that the minister will table the document at the first available opportunity.

With respect to the business going forward, this afternoon, tomorrow and Monday, we will continue with second reading of Bill C-5, which is on learning bonds, followed by second reading of Bill C-6, which is establishing the department of public safety; second reading of Bill C-3 which is the Coast Guard bill; second reading of Bill C-7 respecting national parks; second reading of Bill C-8 creating the public service human resources agency; and second reading of Bill C-4, which is the international air protocol bill.

There will, as the House knows, be divisions at 3 p.m. on Monday.

Tuesday and Wednesday will be the last two days of debate on the Address in Reply to the Speech from the Throne, and Thursday will be an allotted day.

International Interests in Mobile Equipment (aircraft equipment) Act

[Jean Lapierre, Liberal, Minister of Transport]

moved for leave to introduce 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.

(Motions deemed adopted, bill read the first time and printed)