Debates of Nov. 21st, 1996
House of Commons Hansard #104 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was families.
- Point Of Order
- Royal Commission On Aboriginal Peoples
- Government Response To Petitions
- Credit Card Interest Calculation Act
- Committees Of The House
- Questions On The Order Paper
- Questions Passed As Orders For Returns
- Elaine Pomajba
- Kenworth Plant Workers
- John Munro
- Government Of Prince Edward Island
- Royal Commission On Aboriginal People
- Ben Powell Sr.
- Parliamentary Matching Program
- Copyright Legislation
- Industry Canada
- Canadian Council For Refugees
- Royal Commission On Aboriginal Peoples
- Canadian Embassies
- Montreal International
- Native Peoples
- Capital Gains
- Aboriginal Affairs
- Capital Gains
- Research And Development
- Government Contracts
- Francophones Outside Quebec
- Income Tax
- Canada Post Corporation
- Atlantic Groundfish Strategy
- Indian Affairs
- Points Of Order
- Business Of The House
- Supplementary Estimates (A)
- Citizenship Act
Vic Althouse Mackenzie, SK
Madam Speaker, two days ago I rose to ask some questions about the Canadian Airlines International situation and asked if the federal government had done any substantial analysis of that situation and what changes, regulatory or financial, the government was prepared to make in face of the potential losses that were described by some analysts on the west coast.
They had looked at the situation and had shown that if there are 16,400 jobs lost, which is the employment at Canadian Airlines, another 54,000 indirect jobs would be lost at airports, ticket outlets, agencies, fuel suppliers, caterers and so on. The total loss in contributions to unemployment and pension funds would be $314 million.
The total loss to the federal government in income taxes would be an additional $1 billion. The loss in GST rebates would be $21 million. The loss in fuel, airport taxes and other minor taxes would be an additional $225 million. The taxes lost to declining disposal income would be an additional $168 million. For those who are able to get jobs their income would decline. Unemployment insurance costs for all workers for one year would be $1.5 billion, making a total of $2.9 billion in losses to the federal treasury.
If 30 per cent of the employees find work immediately within a year, that loss is reduced to $2.5 billion. If two-thirds of them find employment, the loss goes down to about $2 billion, but there is still a new loss to the treasury for the first year after Canadian Airlines hits the wall, which is now expected to be the case about November 30 if nothing else changes.
The federal government will lose between $2 billion and $3 billion. I would have thought the government would have had a contingency plan available. According to the response I got that did not seem to be the case. That was strange because in June 1993, just prior to the last election, the Liberal leader of the day who is now Prime Minister said that the key features of his airline policy would be safety, competition and Canadian control. He went on to promise that he would do something to make the industry more stable.
This you will remember, Madam Speaker, was about a year after a previous restructuring of Canadian Airlines International and at which point the company successfully urged some of the employees to buy stock in the airline at $16 a share. Those shares are now worth about $1.80. We do not hear them offering shares any
more to employees, they are simply offering wage cuts of 10 per cent. Yet even the Prime Minister has said a loan would not make this company any more profitable, it just extends the problem a few more months or years. A 10 per cent cut in wages is equivalent to a loan.
I think the government, given that it has more than $2 billion at stake, should do a better job of handling this situation.
Joe Volpe Parliamentary Secretary to Minister of Health
Madam Speaker, it is with some regret that I hear the information given by the member because he takes a position that is negative from the very beginning and continues that way. I am sorry because the member opposite is showing a lack of confidence in the ability of Canadian Airlines to carry out a successful operational reorganization.
The company has already identified the ingredients it needs to go forward successfully. The company plan does not include any government assistance. It also does not include any request for changes in the regulations. This company wants to make it on its own.
Those, like the member, who are calling for re-regulation of the air services sector fail to see how counterproductive such action would be. Turning back the clock would not be in the interests of the travelling public. Outlawing seat sales and shutting down discount carriers will not ultimately save a single job at Canadian Airlines.
Government policy is serving the interests of the travelling public. Look at what it has already accomplished. First, an increase in new routes and services into about 100 transborder markets, making air travel more accessible for more Canadians. Second, low discount fares, thanks to the arrival of new air carriers and increased competition. Third, Canadians are travelling in increasing number. Domestic travel this year will be up some 10 per cent.
The government continues to follow the situation closely and we have all the confidence that the management, the employees and the shareholders will take the action necessary and required for this company to turn in the right direction.
The Acting Speaker (Mrs. Ringuette-Maltais)
The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 6.48 p.m.)