House of Commons Hansard #97 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was airport.

Topics

International Transfer of Offenders Act
Government Orders

4:15 p.m.

The Acting Speaker (Ms. Bakopanos)

Call in the members.

And the bells having rung:

International Transfer of Offenders Act
Government Orders

4:20 p.m.

Liberal

Marlene Catterall Ottawa West—Nepean, ON

Madam Speaker, discussions have taken place among all parties and there is an agreement pursuant to Standing Order 45(7) to defer the recorded division requested on second reading of Bill C-33 until Tuesday, May 13 at 3 p.m.

International Transfer of Offenders Act
Government Orders

4:20 p.m.

The Acting Speaker (Ms. Bakopanos)

Is it agreed?

International Transfer of Offenders Act
Government Orders

4:20 p.m.

Some hon. members

Agreed.

The House resumed from April 29 consideration of the motion that Bill C-27, an act respecting airport authorities and other airport operators and amending other acts, be read the second time and referred to a committee.

Canada Airports Act
Government Orders

May 7th, 2003 / 4:20 p.m.

Liberal

John Bryden Ancaster—Dundas—Flamborough—Aldershot, ON

Madam Speaker, I am pleased to speak to Bill C-27 because as the House is aware I have been a long proponent of increasing transparency and accountability in the financial administration of government and crown corporations. Indeed, it is a principle that I would apply to any kind of institution that is charged with looking after the public trust, whether it is a private corporation, a crown corporation or a government.

This business of transparency and accountability has come to be rather accepted in this day and age, particularly after the public collapses in the United States of large corporations like Enron. The idea that institutions should be foremostly transparent and accountable is somewhat novel in comparison to the situation of just 10 years ago.

When I first came to this House in 1993 and started this crusade to bring transparency and accountability to everything the government touched, part of that crusade was to reform the Access to Information Act and to amend the Canada Business Corporations Act, and do a number of things including bringing transparency and accountability to charitable institutions.

I guess I was a voice in the wilderness originally but as time went on the government, I am happy to say, has bought more and more into the principle that there must be legislated transparency and accountability wherever taxpayers' money is being spent or wherever the public trust is being looked after in a way that involves finances.

In 1994, the first year of the government's mandate, the government took over a program that had been initiated by the former Tory government. It was the implementation of the national airport policy. That involved taking federal airports and transferring them through specific agreements to local authorities who in turn often hired or came into agreements with private operators to run these airports. This legislation deals with these entities. In the grand sense the entity that runs, for example, Pearson airport is an airport authority in this legislation. There is also a smaller category of airport operator which by and large applies to John C. Munro Hamilton International Airport in my riding in Hamilton.

When those agreements were struck across the country that basically semi-privatized the federal airports, the principle of ensuring that there was a single standard of corporate governance, a single standard of financial reporting, and a single standard of disclosure to the public was not implemented at that time. These airport authorities and airport operators were set up with different types of standards. Over the nine years since these airport authorities and airport operators have been operating, it has become apparent that the level of disclosure and the level of transparency has been uneven across the country. There have been some concerns expressed about the management of some of these airport authorities and airport operators.

In 1996 the government embarked upon a similar program to transfer the federal marine assets over to port authorities. In my riding the Hamilton Harbour Commission was replaced by the Hamilton Port Authority. The difference between 1994 and 1996 was that the government inserted into the legislation, creating the port authorities, excellent standards of corporate governance, transparency and accountability. I was very proud at that time because I would like to think I had some role in that because I was pestering the minister of the day about the necessity of bringing that type of standard in with the port authorities.

We now have Bill C-27 which, nine years later, is the logical step to take after bringing the regimes of corporate governance to port authorities and bringing them to airport authorities and airport operators. It is a good thing to do.

I have been following the debate in the House and I cannot fail but note that even on my own side there have been colleagues who have criticized Bill C-27 and have spoken against it. I must cite the member for Hamilton West who is a colleague of mine. On an earlier day of debate he gave a speech on the bill in which he castigated the government for this legislation. I must note that nowhere in his speech did he actually cite a single criticism of the legislation. He decried it in general but not in specifics.

It is important for people watching to know that even on this side of the House there is great freedom of opinion and we are able to debate openly. I do not begrudge my colleague's opinion about the legislation, but it was his remarks that prompted me more than anything else to set the record straight in my view, and remember, Madam Speaker, it is my view.

I would like to take members of the House through a bit of the legislation to give them an impression of what the legislation actually does and why I think everyone in the House should support it. There may be areas that could use some technical amendments, but by and large, I think it is excellent legislation.

I draw the House's attention to part 5 of the bill under the heading “Disclosure and Accountability”. Clause 120 would require all airport operators to prepare financial statements annually. In those financial statements there must be a statement of revenues and expenditures, a summary of capital expenditures, and a statement of revenues from passenger fees. This is important information because we must remember that these airports, even though they are operated locally, are institutions of the public trust. In other words, every airport is derived ultimately from the Crown, so the public would expect to have access to that kind of information.

Clause 123 would require every airport operator to submit a business plan for the upcoming five years. I am probably a bit fanatical about the need for financial disclosure with the public and institutions, including private corporations. The legislation would require that the airport authority or airport operator provide annual financial statements. The legislation goes into great detail about what is required in these financial statements. It says, for example, that financial statements must disclose the revenues derived from landing fees, terminal fees, other aeronautical fees, passenger fees, and from car parking concessions and general rental.

This is a very important part of understanding the success of an institution, a business enterprise in this case being operated in the public interest. It is very important because ultimately these airport properties are a resource of the nation. It is very important for the public to be able to see for themselves through audited financial statements how effectively the airport operator is carrying out its task. I submit that this detailed requirement is an excellent provision to put in the legislation.

This is not to say that many airport operators are not providing this kind of information already. The important thing is that it is a standard that goes across all airport operators including the one in Hamilton and many others. Therefore, it is a very positive thing.

A little further in the bill we would expect to see and indeed we do find that there has to be an auditor's report of the financial statements. That of course should be a given. I am sure it is in most airport agreements, if not all, but it is very important to put it in legislation.

There is also a provision for regular annual meetings. A very good idea, that was derived from the port authority legislation which incidentally was Bill C-44 in its day, is this idea that every so often the airport authority must submit itself to a performance review. That performance review of its operations and everything that it is doing and the way it is carrying out business is to be done by an independent agent. That again is a very positive thing to do. I think the public must be satisfied that there is transparency and accountability.

However, realizing that not everyone is going to be scrutinizing the financial statements of the airport operator every time they come out, we must assure ourselves that there is something built into the system to ensure that there is an annual independent assessment of how well management is performing its task.

It is something that the government is very used to. We certainly have a system in the government where the performance of various departments are subject to annual review and indeed we apply it to many pieces of legislation. The Canadian Environmental Assessment Act is a good case in point because it was just in the House this week. This is legislation that comes up for review every five years. The Lobbyists Registration Act is another example. In the operation of government itself various departments have mechanisms in place to review performance from time to time. Therefore, I think this is very positive.

There is also material here regarding the mechanism for setting airport fees. Again, that is very important because we do not want a situation where an airport operator can arbitrarily set fees that may help generate revenue but may have a negative impact on passenger travel or access to the airport or whatever else. Airports like ports are not simply business enterprises. They are enterprises that have great national significance and they cannot be administered totally in isolation of national policy. This is why Bill C-27 has come forward.

Obviously I quite support the bill and I would like to put it also in the context of another piece of legislation that is coming before the House; it is in committee. That is Bill C-7, which is a bill that will bring financial transparency and accountability to the administration of Indian reserves. Some 600 bands and reserves are going to be covered by this legislation. What it basically does is put standards where none existed before, national standards pertaining to the election of officers of bands, their requirement to disclose their proceedings to their band membership, the need for audited financial statements and so forth.

The reason why I mention it is that this is part of where the government has been going in the last few years and I am extremely pleased that it is going in this direction. More and more, we see the government moving toward patching up areas of the national fabric that have existed for many years without adequate oversight. Because when we talk about transparency and accountability, what we are really talking about is public oversight of enterprises that are in the national interest.

Bill C-7, Bill C-27 and the bill on the port authorities represent very important progress on the part of the government in this direction. That gives me an opportunity to encourage the government to carry on in this direction, because there is much more to be done. I remind the House that I have been campaigning very hard over many years to persuade the government to reform the Access to Information Act. That would bring greater transparency, accountability and scrutiny, shall we say, to the administration of government. This was pioneering legislation in its day. It needs overhaul very desperately and I hope the government will move in that direction very shortly. I would rather it did it immediately because time is running out on this particular government's mandate.

There is another area that I really wish the government would move forward on. It has been very slow and I find it very unfortunate. It is the whole idea of bringing in standards of accountability, transparency and corporate governance to charities. It is just like port authorities, just like airport authorities. Charities are large enterprises that spend billions of taxpayers' dollars.

I believe the charity sector in this country, which we can rightly call an industry, has revenues and expenditures in the order of about $100 billion a year. This is a huge amount. These charitable institutions, be they large hospitals or the small charity that gets on the telephone to us, or usually to our aged parents who cannot think very clearly for themselves, and solicit money and spend that money, these organizations are still not under meaningful, legislated standards of corporate governance and transparence. I know that sounds incredible. Canadians listening probably think it is absolutely amazing that a $100 billion a year industry should be without the basic standards of corporate governance that exist in this legislation.

Finally I would say in conclusion that the government is moving in the right direction. This is what Canadians want. This is what society wants. I think it is very clear from the catastrophes in the financial market, particularly in the United States, that we cannot rely on trust alone to ensure that enterprises that are acting in the public interest are living up to their commitments. So we must bring in legislation that defines standards of corporate governance and deals with transparency and accountability. I think Bill C-27 is a good step in that direction, but there is much, much more to be done.

Canada Airports Act
Government Orders

4:40 p.m.

Canadian Alliance

James Moore Port Moody—Coquitlam—Port Coquitlam, BC

Madam Speaker, I have a question for my colleague. I agreed with him when he mentioned at the end of his talk that when airports go from being government run to essentially private sector corporations they are essentially monopolies and therefore there has to be regulation of these monopolies.

What Bill C-27 does is mandate the makeup of the boards of directors of these companies to ensure that all the voices are heard, but the number one problem with the current composition of the boards of the airport authorities is that the air carriers and the air industry do not have representation on those boards. Because of the inelasticity of the price of airline tickets and because it is so competitive and so on the margin, the ability for airports themselves and airport authorities to impose airport improvement fees without receiving those measured opinions through a specific mandate on the boards of directors is a huge flaw in the bill.

I see that the member is taking a minute to flip through the bill. I want him to go to that section if he has a moment. That is a principal problem with the bill, because the air industry wants a greater say in this country. It wants a greater say with how airport authorities are managed because there is a real problem.

For example, we get complaints, and whether they are justified or not I will not say, about the Vancouver International Airport, which is a great airport. Larry Berg is the CEO and he does an amazing job. He is a great guy and does a great job of managing the airport. However, we receive a lot of complaints from smaller carriers and even Air Canada about Vancouver International Airport essentially becoming a giant mall with boutiques and restaurants and stores and tie shops and everything else, rather than just a port of entry and exit for airlines.

The federal government says it needs to regulate that because it is getting out of control, but it has not put air carriers and the air industry on the boards of the airport authorities, which is a fatal flaw. It is one thing to say there has to be management. However, not to have the air carriers there in order to make the argument about the inelasticity of prices and the problems of airport improvement fees is a fatal flaw in the bill.

Canada Airports Act
Government Orders

4:40 p.m.

Liberal

John Bryden Ancaster—Dundas—Flamborough—Aldershot, ON

Madam Speaker, I thank the member for his intervention. I did read the clause on fees and I was impressed by the fact that there were parameters put on the way airport operators can impose fees. I think that is very positive.

As to the member's point, however, I think he raises a very important point. If memory serves me correctly, the way the port authorities are composed, and this is in Bill C-44, the marine bill that I alluded to, which changed the administration of harbours to port authorities very much like what we have here, certainly in the Hamilton instance it did require that stakeholders be represented on the board of the port authorities.

It may be a little bit more difficult in the case of airports in the sense that the carriers may not be in the same city; they may be based elsewhere in the country. I think the member raises an important point and that is something that should be dealt with and examined in committee.

I will make a further point. This is one of the reasons why we have debates such as this: so that we can hear constructive suggestions like that of the member.

Canada Airports Act
Government Orders

4:40 p.m.

Canadian Alliance

James Moore Port Moody—Coquitlam—Port Coquitlam, BC

Madam Speaker, I have a brief comment. It is something that the member might want to consider. I know that Hamilton airport, particularly since WestJet began flying in there, has been very helpful to his region of the province. He is not a member for Hamilton, he is the member for Ancaster—Dundas—Flamborough—Aldershot, but it certainly has been very important.

There is a model that the government should consider and I am pleased that the parliamentary secretary is here and will be considering Bill C-27 at committee. The model the Canadian Alliance would like to see is a model that the government has used before. The model is that of Nav Canada. Again, a government corporation goes into private hands, and the board of Nav Canada that is now being used is the proper model for airport authorities themselves, perhaps with some slight modifications. The model of Nav Canada has the airlines in it themselves. What was understood was that the fees of Nav Canada can be a detriment to the airline industry, as we have seen in the short term. That is something certainly my colleague can comment on. I have another question, but I wanted to present that as an alternative. With his considerable weight, influence and power within the Liberal Party, I hope he can draft that amendment and get it passed just like that.

Canada Airports Act
Government Orders

4:45 p.m.

Liberal

John Bryden Ancaster—Dundas—Flamborough—Aldershot, ON

Madam Speaker, I trust the member was not being sarcastic and that it was really an attempt at gentle humour, because actually I do feel that here in the Liberal backbenches we can have an impact and we can sometimes get an amendment put forward. I do hope that the member will move his own amendment on that in committee.

He gives me an opportunity to make a further comment. He triggers the comment by the reference to Nav Can. Possibly one of shortcomings in what we are trying to do here with this legislation, Bill C-27, is that by off-loading federal enterprises or federal ministries or federal responsibilities, shall we say, to the private sector, as in the case of the port authorities and the airport authorities, it is certainly true that if we put in the proper regimes for accountability we have enterprises that should run like a public business. My problem is that we lose the ability, however, to examine them internally with the Access to Information Act.

Nav Canada is a good example. To me it is not enough in the end that the airport authorities operators or the port authorities conform to the standards set out in Bills C-44 and C-27. What we really need to do is to bring these arm's length institutions under the Access to Information Act so that we do not just see audited financial statements, so that we do not just see the numbers. Those things are important, but what we really need to be able see is that there is no nepotism in the operation, that there is no fundamental mismanagement.

One of the reasons why I campaigned so vigorously to reform the Access to Information Act is not that I believe the bureaucratic part of government is being run so badly. There are a lot of checks and balances in the way government ministries are actually operating in delivering services to people. What concerns me is this terrible movement in the provinces and in Ottawa here in the federal government to off-load the provision of services to arm's length organizations, be it the CRTC, Nav Canada, or these airport authorities, because they are then out of the reach of the Access to Information Act. They are out of the reach of our ability to really ensure in the public interest that they are being managed appropriately.

So my ultimate target in trying to reform the Access to Information Act is to create a model, particularly with crown corporations, that could be applied to institutions like these authorities we are talking about and that ultimately could be adopted by the private sector. Because I really do believe that in this global economy where competition is everything and survival is everything, how one wins in the global market is not just by one's prices but by one's efficiency as a corporation.

I think that Canadian corporations have much to gain if the Canadian government can lead the way to harness the Internet so that there can be protocols of transparency the likes of which have never been seen before. I think that will enable Canadian enterprises, both public and private, to lead the world in their ability to compete.

Canada Airports Act
Government Orders

4:50 p.m.

Hull—Aylmer
Québec

Liberal

Marcel Proulx Parliamentary Secretary to the Minister of Transport

Madam Speaker, my colleague went through some of the changes. When we look at this there appear to be changes that affect the day to day operations of airports, such as setting strict requirements for meetings, publication of notices and reports, assignments of stocks and so on. I would like his brief comment on whether he feels this is bringing the government back into those day to day operations. I expect that he does not want to see this, but I would like to hear it from him.

Canada Airports Act
Government Orders

4:50 p.m.

Liberal

John Bryden Ancaster—Dundas—Flamborough—Aldershot, ON

Madam Speaker, all I can say is that I do believe the government can always use improvement, and as a backbench member of the government side I am always trying to achieve that end.

Canada Airports Act
Government Orders

4:50 p.m.

The Acting Speaker (Ms. Bakopanos)

Before we resume debate, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Peterborough, Agriculture; the hon. member for Brandon—Souris, Ethics.

Canada Airports Act
Government Orders

4:50 p.m.

Canadian Alliance

Gurmant Grewal Surrey Central, BC

Madam Speaker, I rise on behalf of the constituents of Surrey Central to participate in the debate on Bill C-27.

Before I begin, let me compliment the hard work done by our senior transportation critic on this issue in highlighting the problems related to this bill. Also, we will have a wonderful speech from the hon. member for Blackstrap with whom I will be sharing my time.

Bill C-27 is an act respecting airport authorities and other airport operators and amending the Canada Airports Act. Let me state that it is a combination of missed opportunities and attempts to solve problems that do not even exist.

When one looks at the state of Canada's airline industry and realizes that the Standing Committee on Transport is looking into the continued viability of the airline industry, one has to wonder why the government chose this time to introduce this legislation dealing with airports.

If we compare Canadian airports, both large and small, with similarly sized airports in other countries, the Canadian airports stand up rather well. At least there is no urgency or emergency to fix them. If something is not broken, why fix it? The real problem facing Canada's airline sector is not the way airports are run, but the way airport rent is charged by the federal government and passed on to the airlines.

This issue was raised and dealt with in the transportation committee hearings over the past few weeks. As a result, in an April 11 report this year the committee unanimously recommended that:

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

Further study is not needed. It is time to act. No one will find any discussion of airport rents in the Canada Airports Act.

In fact the Standing Committee on Transport made another unanimous recommendation to eliminate the air travellers security charge. This was connected to transferring responsibility for airport security to multi-modal agency that would be fully publicly funded. Here again an understanding of the nature of threats and security at small airports is helpful. Large airports have better security than smaller airports. The problem of course is that if the security is reduced at small airports but connecting passengers are allowed to proceed directly into the sterile or secure areas at big airports, the security of those large airports is compromised.

In Europe passengers arriving at places like Frankfurt, Paris or London from smaller centres are screened just like folks coming in off the street. They have to be screened before they enter the secure area of the airport to catch connecting flights. There is absolutely no mention of this idea in Bill C-27, even though it would offer better security at lower cost.

We are considering an airports act that applies to places as small as Gander with just 86,000 passengers and would also apply to any airport that has over 200,000 passengers annually. For most managers of small airports, the biggest single issue facing them is something call CARs 308. This is a recently imposed five minute emergency response time at smaller airports that has dramatically increased their operating costs. The federal government has not offered a dime in operating assistance and this unfunded federal government requirement is the biggest single issue facing many small airports.

The Regional Community Airports Coalition of Canada is calling on Transport Canada to suspend the introduction of CARs 308 indefinitely or to agree to pay for this regulation in its entirety to avoid the airports having to pass these increased operating costs on to the airlines. The coalition points out that these increased costs, applied in the form of a regulatory recovery fee, could increase airline fees at affected airports by up to 30% or higher. This will again affect the competitiveness and viability of the regional and community airports and therefore the communities they serve.

Other than the air security tax, the CARs 308 is the most important airport related issue missing in Bill C-27.

Part 6 of the Canada airports act deals with the issue of airport improvement fees. Essentially it subjects AIF to the same kind of accountability and appeal procedures that currently apply to Nav Canada fees. For airports just reaching the 200,000 passenger threshold, this will be a new level of bureaucracy, but I think that Canadians deserve to know how such fees are being spent.

If we held the Liberal government to the same standard, taxes like 1.5¢ per litre fuel tax that was aimed at cutting the deficit or the $24 air security tax would have to be much more accurately tailored to reasonable expenses, rather than a need to finance future Liberal spending or even the wasting of the money.

However even if one agrees with the general philosophy of the AIFs, the headlines that are dealing with this issue are not focusing on accountability but on the fact that the Air Canada restructuring has left many airport authorities in the red.

It seems that for many airports the AIF is included in the airline ticket prices and collected by the airlines and then handed over to the airport authority. Air Canada's financial problems are affecting many airports that trusted Air Canada to collect the AIF on their behalf. As of April 4, Canada's largest airports were owed a total $80 million in unpaid landing fees and airport improvement charges by Air Canada and that money is now tied up in the CCRA hearings.

However the air travellers security charge is not similarly affected, because Bill C-49 from last session required airlines to hold this money in trust. It does not require airlines, that collect the AIFs on behalf of many airports, to hold that money in trust as is done with the air travellers security charge.

Part 6, devoted to the question of AIF, we would think that the idea of any airline holding AIF money in trust so that airports would be paid even if the airline has a financial problem as in the case of Air Canada would have been included in Bill C-27, but it is not. This is another opportunity missed by this weak, arrogant Liberal government.

When we look at a list of priority airport issues facing the aviation industry, Bill C-27 misses virtually every opportunity to solve an existing problem. The government is trying to solve the problems that do not exist but it is not solving the problems that exist in the industry.

Bill C-27 is an attempt to codify the status quo in Canada's airline industry. This approach has two big problems.

The first is that there is no one out there calling for the status quo to be codified. No airline, airport authority or stakeholder is calling for legislation that would write down in one place the way Canada's various airports are run. It is an attempt to solve the problem that does not exist. Most of the language contained in Bill C-27 already exists in most of the leases that NAS airports have with Transport Canada. In many ways Bill C-27 is a complete waste of time.

The second big problem is that Bill C-27 would treat different airports similarly and similar airports differently causing true discrimination and causing far more problems than any codification of the status quo could potentially solve.

Since my time is almost over, let me conclude that a one size fits all solution, regardless of size and location, will not work.

Bill C-27 also fails to address major issues confronting airports, the CARs 308 issue, as I mentioned, the airport rental policy, the question of overly opulent terminals, the need for air industry representation and the need for the minister to get an arrogant airport authority to live within its mandate.

Bill C-27 is also introduced by the Minister of Transport who has repeatedly turned his back on unanimous recommendations by the committee to adopt the committee's recommendations as the department's priorities. The House should reject the legislation especially when, in cases such as this, it created more problems than it solves.

Canada Airports Act
Government Orders

5 p.m.

Hull—Aylmer
Québec

Liberal

Marcel Proulx Parliamentary Secretary to the Minister of Transport

Mr. Speaker, my colleague across criticized, for the 10 minutes he had, the bill and the Government of Canada. I therefore assume that he has read the proposed bill. I therefore assume that he knows it very well and I appreciate that.

In return, I would like him to tell us what he has against the fact that the bill would clarify the roles and responsibilities of the Canadian government, as well as those of the airport authorities and operators. I would like him to tell us what he has against the updating and strengthening of the governance regime for airport authorities. I would like him to tell us what he has against the establishment of requirements for transparency and consultations between airport operators and interested parties.