House of Commons Hansard #24 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

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

11:50 a.m.

Bloc

Mario Laframboise Argenteuil—Mirabel, QC

Mr. Speaker, first I would like to congratulate my colleague on her learned remarks as well as on her appointment as our party's transport critic. This is the file that I was dealing with during the last Parliament. Now my past is catching up with me. I am thus the critic for infrastructure and communities, which encompasses municipalities, of course.

My colleague summarized Bill C-4 quite well, but also gave details on the future of the aerospace industry in Canada. My question will focus on that. The Minister of Transport quoted Jean Chrétien, when he was the Prime Minister, saying, “The aerospace industry is to Quebec what the automobile industry is to Ontario”. It is good to repeat this, and it was dramatic for us in Quebec.

They closed the GM plant in Boisbriand. Before the election, they invested $500 million in an automobile industry recovery program in Ontario. However, there is still no money for the aerospace industry, which is concentrated to a large extent in Quebec.

It is on this issue that I ask myself the following question. Yes, it is good to introduce a bill such as Bill C-4, which promotes bank interests in aircraft. The problem in the aerospace industry at this time is that no bank wants to lend money for aircraft. If we established a national register, it would be good when the industry recovers. However, in the meantime, we need major assistance for the industry.

I would like my colleague to elaborate a little further on this assistance that might be provided by the government, whether in loan guarantees, or simply in aid to develop new aircraft, as Bombardier is asking, and also Bell Helicopter for its helicopters.

Consequently, there should be a real policy on the development of the aerospace industry in Canada. I would ask my colleague to elaborate a little on this.

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

11:50 a.m.

Bloc

Caroline St-Hilaire Longueuil, QC

Mr. Speaker, I thank my colleague for his question. It is a bit strange that it has been put to me. The government should be asked this question.

We have been waiting for years for an aerospace policy. The Liberals have been in power for a very long time, for too long, actually, and have never introduced any sort of aerospace policy. We have been experiencing problems.

When my colleague was the transport critic, I know he worked on this issue. Since the government does not seem to be doing anything, the Bloc Québécois will soon present an aerospace policy. This government is slowing us down. Is it short of ideas because the aerospace industry is an issue that concerns Quebec? If Ontario had been concerned, would the government have moved more swiftly? I am really wondering.

As to my colleague's question, I think we should invest more in industrial research and research and development. This is a very important foundation. We should also support the industry at the international level. We do know that other companies in the world are subsidized much more heavily than Canadian companies.

We will have to invest through the technology partnerships Canada program. This would be a way to help the industry. We should also encourage exports. This market is essentially an international market, and not necessarily a Canadian market. We should support the industry.

We could discuss this at length, but, personally, I would expect the government to propose something. If it had any leadership and initiative, and if it was the least bit interested, it would come up with concrete measures. But, given this lack of leadership, it is probably the Bloc Québécois that will present an aerospace policy which will meet the industry's needs.

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

11:50 a.m.

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

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

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

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

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

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

11:55 a.m.

Bloc

Caroline St-Hilaire Longueuil, QC

Mr. Speaker, I know that I might have offended the parliamentary secretary when I talked about the realities that we have to face in Quebec, particularly regarding this non-existent aerospace policy at the federal level.

He might have found his little visit interesting, but I also invite him to go and meet the people from Bombardier or Pratt & Whitney who face problems daily.

We know that the Brazilian government has financed an average of 80% of Embraer sales. And what is our federal government doing? I think we are now at 37%. We are far from meeting the needs.

We know that investment in the area of industrial research is essentially increasing by about 8% every year, while the money invested by the federal government stays more or less at the same level. There is no increase while the needs are growing.

If the member feels threatened, he can talk to his Minister of Transport, or to the Minister of Industry, to ensure that this government will have some sort of aerospace policy to propose tomorrow. However, as far as I am concerned, this government is not at all giving Pratt & Whitney and Bombardier the help that the industry needs.

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

11:55 a.m.

Liberal

Jim Karygiannis Scarborough—Agincourt, ON

Mr. Speaker, I want to point out that Cyclone is located in the riding of my hon. colleague, the member for Mississauga—Streetsville.

My hon. colleague across the way said that we have not engaged Bombardier and have not been talking to them. I do have to differ. There are ongoing conversations and ongoing negotiations. Members of Parliament from all parties are encouraged to participate in the file, to talk on the file and to engage us. I am looking forward to the member's party coming forward with some innovative ideas. We are looking forward to working with that party to make sure that the aerospace industry is leading edge in Canada. Certainly the participation in this Parliament has to be there.

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

11:55 a.m.

Bloc

Caroline St-Hilaire Longueuil, QC

Mr. Speaker, this is what I call lack of leadership. This government should be the one to propose concrete ground-breaking measures, but it is the opposition that will have to do it since the government seems to lack imagination, but that will come.

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

11:55 a.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, I want to acknowledge the number of comments made here this morning on this legislation. It is quite apparent that the legislation seems to have overwhelming support among the different parties.

To briefly comment on it, because I do not want to rehash everything that has already been said, the New Democratic Party broadly supports the bill and the Cape Town convention on mobile equipment. The ratification of the protocol could be a positive development for Canadian industry and Canadian workers as well as support for international development. The convention could also promote the use of newer, cleaner and more environmentally friendly aircraft, and actually that is one point that is not brought out here. Again, this is a bill that could give those countries that do not have a lot of dollars to work with an opportunity to purchase new rather than second-hand or used aircraft that other countries or airlines put up for sale.

Just to make it very simple for the Canadian public, because we all acknowledged at committee that this was very much a technical bill, our biggest challenge was in making sure we were not missing something just in case there was some underlying sneak attack on us that we did not want to miss. As committee members, we acknowledged that the legislation is very technical. In checking with people involved in the industry, we found that it was broadly supported so it certainly was not our intent to hold it up.

I am going to try to simplify it as briefly as possible. The bill makes it easier and more orderly for people who lend money to an airline for purchase of a new aircraft to repossess that aircraft in the event that the borrower stops paying off the loan.

The international registry will keep track of every aircraft, listing who owns it and/or who owes what on it. This will facilitate the return of the aircraft to the lender in the event that the borrower stops paying. In theory, the result should be somewhat lower financing costs for countries where the credit risk is perceived to be too high, especially in developing countries, but the new mechanism will apply to all aircraft purchases.

An international mechanism is necessary because of the big differences between countries in terms of their respective bankruptcy laws and because of the ability to move aircraft, unlike tangible assets that are used in collateral loans. There is a potential benefit for the Canadian aerospace industry.

As has already been stated by my colleague from the Bloc, loans are under provincial jurisdiction and, for this reason, it is necessary for the provinces to come on side and enact their own legislation to work concurrently with this piece of legislation.

To try to clear up what happened at committee, I want to make a comment related to the amendments that were supposed to be put forth on this bill but were not. I acknowledge the Speaker's comments today and I think we take them as justifiable comments. As a committee, we were hearing from witnesses. Right toward the end of the witnesses' presentations, they mentioned that we needed amendments in the bill to acknowledge the differences in language.

My colleague from the Conservatives has mentioned this as well: the differences in language between different countries and how things are perceived. Within this legislation there were two terms that we would see as maybe having the same meaning, but which would not necessarily be seen that way elsewhere. So we know that we have a piece of legislation before us which we need to vote on, but as committee members we think--and certainly other members of Parliament now know--there is something missing in the legislation, which is going to make it hard to deal with. I am not totally sure about how the government is looking at addressing that.

It has been mentioned that the government has been dealing with this convention for a number of years, but had the government come forth with a complete bill with those changes it would have had support. It is certainly not our intention to hold up the legislation or to make it unworkable. It will be interesting to see how we deal with this, because this is actually one time where we do have agreement. The government, by not getting the job done properly, has created a problem for the industry and it is going to take up a bit more of Parliament's time to deal with it.

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

Noon

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

Mr. Speaker, I thank my hon. colleague for her comments and her party for its support for this bill. However, I do want to set the record straight. The government has done due diligence. It has reached out to all stakeholders.

My hon. colleague was there when the industry stakeholders said they would like to have a last minute change. They said they would like to have some last minute amendments. My hon. colleague was right there at that point. She could not not have seen this. She was right there. It was visible. Automatically, as soon as the committee left, officials from the Department of Transport and the Department of Justice sat right there, and we proceeded to make sure that the amendments they were suggesting were something that we worked on. It is not that the government did not do due diligence. It is not that this government did not do what it must. It is just that the industry said this at the very last moment. All of the industry has been consulted. It has been asked. We sat down at the table with the industry. At the very last moment, industry said, “We would like to add these too”.

I am sure my hon. colleague will agree with me that automatically we jumped at the opportunity to make sure that happened. Saying that this government has not done due diligence and is asleep at the switch is certainly a little far fetched, I think. If my hon. colleague would clarify for the record that this was done, I certainly would be very appreciative.

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

12:05 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, I certainly agree with how my colleague, the parliamentary secretary, has portrayed what took place at committee. Quite frankly, that is exactly what I was saying; I said “the witnesses” and he said “the industry”. I was trying to be more tactful and suggest that it was not the industry that prepared the legislation but the government. I guess the parliamentary secretary has made it quite clear who actually prepared the legislation and where the fault was in the legislation.

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

12:05 p.m.

Liberal

Jim Karygiannis Scarborough—Agincourt, ON

Mr. Speaker, I do want to thank my hon. colleague, but there is a need for clarification. It is not the industry that came forward with this legislation. It was the government that came forward, reacting to the industry's request. It was the government that took the initiative, and when the stakeholders of the industry came forward and said they would like us to add a few things, it was the government that did. As for stretching it this way or that way, I think we are all supportive of this bill. My hon. colleague and her party are supportive. All the parties are supportive. I will let it go at that, but I just wanted to set the record straight.

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

12:05 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, as I have indicated, there is certainly support for this bill. I know that my colleague, the parliamentary secretary, does as most parliamentary secretaries do at committee: they really take it to heart when legislation does not flow totally smoothly because they feel responsible for everything that happens. However, I am not going to hold up the discussion any further. I just want it to be indicated that there is support for this bill and certainly we do not want to hold up Parliament, so we are looking forward to whatever route the government can take to fix up the mess.

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

12:05 p.m.

Bloc

Mario Laframboise Argenteuil—Mirabel, QC

Mr. Speaker, perhaps I should give a small clarification for my colleague. I was listening to the Parliamentary Secretary to the Minister of Transport tell us how good his government had been. We must keep in mind that the ICAO protocol was signed by 32 countries. Canada, which had been negotiating since 2001, signed it in March 2004.

The problem is that it should have introduced a bill long before that. An election was announced by the Prime Minister and we now find ourselves with a bill that the industry asked for, but which was introduced at the wrong time. Even if we tried to change the standards and legislation to give reasonable loan guarantees to banks, there are no clients, there are no takers for these guarantees on aircraft at this time, because of everything that happened on September 11, 2001.

This bill should have been introduced well before March 2004, well before this session. Once again, the Liberal government dragged its feet. There have been discussions about the agreement at the ICAO since 2001 and Canada signed it in March 2004. The Liberals did not pass a bill immediately, there was an election and now, belatedly, it must pass a bill which will be useful and which the industry is asking for, but which is far from being an agreement or an aid program to the aerospace industry in Canada.

I would like to ask the member what she thinks about this.

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

12:05 p.m.

NDP

Bev Desjarlais Churchill, MB

Mr. Speaker, my colleague, who sat with me on the transport committee in the previous Parliament, is absolutely correct. There is no question that the benefits from the bill will not be recognized for some period of time.

The bill also will not resolve the situation we have faced within the airline industry, both in the production of aircraft and the aerospace industry, as well as in the air transport industry. We need to look at the broader picture if the airline industry is to benefit.

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

12:10 p.m.

Liberal

Mario Silva Davenport, ON

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Scarborough—Agincourt
Ontario

Liberal

Jim Karygiannis Parliamentary Secretary to the Minister of Transport

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

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

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