Bill C-10 (Historical)

An Act to amend the Air Canada Public Participation Act and to provide for certain other measures

This enactment amends the Air Canada Public Participation Act to provide that Air Canada’s articles of continuance contain a requirement that it carry out aircraft maintenance activities in Ontario, Quebec and Manitoba and to provide for certain other measures related to that obligation.

Air Canada Public Participation Act

[Kate Young, Liberal, London West, ON]

Mr. Speaker, as I mentioned, maintenance amounts to about 15% of the cost of doing business. I think we can all make sense of that. It is a very large number.

We need to be clear. We believe that Air Canada should commit to undertaking aircraft maintenance in Manitoba, Ontario, and Quebec. We intend to make sure that this is stipulated in the law, so that aircraft maintenance will continue in Canada.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, our colleague is telling us not to worry about jobs in the future. However, I would like to know what the government will do to maintain good working conditions for workers in the aerospace industry, when SMEs in Quebec, Ontario, and Manitoba will be competing for contracts.

[Kate Young, Liberal, London West, ON]

Mr. Speaker, our government is focusing on growing the economy and creating jobs across Canada. The Government of Manitoba, the Government of Quebec, and Air Canada have made an agreement to stop the legal action. This is an excellent start. However, it is certainly just a start. We need to bring new net good aerospace jobs to Quebec, Winnipeg, and Ontario. We remain committed to working with Air Canada to make that happen.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I would repeat the comments made by my colleague with respect to Bill C-10, which is obviously a very important piece of legislation for the aerospace industry. Something that really needs to be highlighted is that, in a relatively short time span, we have seen the federal government working with the different stakeholders to try to protect our aerospace industry in three provinces in particular. However, it goes beyond just Manitoba, Ontario, and Quebec, because we believe in Canada's aerospace industry and want to see it excel.

Could the member provide some of her thoughts or comments as to why it is important that, as a national government, we demonstrate leadership in working with the different stakeholders, which in good part is what ultimately has led to seeing this legislation that we have here today? At the end of the day, we will have a healthier aerospace industry, because that is something on which this government is committed to work.

[Kate Young, Liberal, London West, ON]

Mr. Speaker, my hon. colleague is right. The aerospace sector has grown significantly since the Air Canada Public Participation Act came into force 28 years ago and a lot has changed. We need to help make Air Canada more competitive. This legislation would allow Air Canada to organize its supply chain so it can be competitive and respond to evolving market conditions. It is important for our government to help companies remain competitive. That is exactly what we would do with this bill.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, in reading the bill, I actually find the description of where maintenance could take place to be rather open-ended, and I have to admit I am not entirely clear on the intention.

It is clear that the volume and location of maintenance activities in Ontario and Manitoba could change, but I do not see anything in legislation that makes it clear that those maintenance activities must not be offshore, that they must take place in Canada.

I am curious as to why that is not in the legislation to make it clear. Surely we want to ensure that jobs with Air Canada stay in Canada, and frankly, as an Air Canada traveller, maintenance to high-quality standards in Canada gives me an assurance of well-maintained aircraft and a strong safety record for Air Canada.

[Kate Young, Liberal, London West, ON]

Mr. Speaker, without a doubt, we intend for it to be stipulated in the law that we expect Air Canada would commit to undertaking aircraft maintenance in Manitoba, Ontario, and Quebec.

However, we do need to provide Air Canada with the flexibility to meet these requirements to compete in an evolving global marketplace.

We cannot predict exactly what will happen in the airline industry and how it will evolve into the future, but whatever happens, our carriers will need to adjust to meet the challenges and remain competitive. The bottom line here is that we must make Air Canada more competitive.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, we have heard from this member and other members on the government side about working collaboratively and about all the people with whom they are supposedly undertaking negotiations.

As far as I can tell, everybody is opposed to the bill except Air Canada, everybody including the provincial governments.

Aside from government members themselves, who support the bill, and aside from Air Canada, which obviously supports the bill, with everybody else seeming to be lining up on the other side, how does it all make sense for the Liberals to claim that this is the result of some kind of project of collaborative work?

[Kate Young, Liberal, London West, ON]

Mr. Speaker, there is no doubt that others are in agreement with this because it would continue to make Air Canada competitive and hopefully more jobs would be created because of that. If we do not go through with the bill, the chances are that we could lose jobs.

We cannot go back. We have to look forward, and that is exactly what we are doing.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I congratulate the hon. parliamentary secretary on her excellent comments.

I am very pleased that the Air Canada head office needs to remain in Montreal, and I understand the obligations of the bill to retain Air Canada jobs in maintenance in Quebec, Ontario, and Manitoba.

One of the concerns that continues to be expressed is that, as soon as this law is passed, Air Canada would suddenly move some 2,000-odd jobs out of the country.

Is the hon. parliamentary secretary aware whether Air Canada has any obligation beyond keeping the head office and these maintenance jobs in Canada? There are tens of thousands of other Air Canada jobs that exist with no legal obligation to keep them in Canada, and somehow the vast majority of them have been retained in Canada.

Is the hon. parliamentary secretary aware of why Air Canada has kept so many jobs in Canada, even though there is no legal obligation to do so?

[Kate Young, Liberal, London West, ON]

Mr. Speaker, my hon. colleague is right. Air Canada has continued to have 28,000 jobs in Canada, and that is because it knows the quality of the work we do. Whether it is maintenance or any other area of Air Canada's business, it knows the best work can be done in this country.

It is Air Canada and it will continue, and we will stipulate in the law that it must continue maintenance work in Canada.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is a pleasure for me to rise and address at third reading this very important subject of the government's proposed changes to the Air Canada Public Participation Act. I am sure for many people watching this at home their first reaction when they hear the Air Canada Public Participation Act is to ask what is that.

The reality is that the bill is important. The changes the government is making are important, in part because of the substantive effect of those changes on the workers and others who will be impacted, but also because of what it tells us about the government's broader economic philosophy and the direction in which it is going perhaps on a wider variety of files. There are some things we should say about the bill right off the bat.

First of all, there is a strong multi-party consensus, at least outside of the government, opposing this legislation. Conservatives, New Democrats, and the leader of the Green Party have all spoken very forcefully against the changes the government is making, and for different reasons coming from different economic philosophies, but it is very clear we all have concerns about it. We on this side are collaborating in our opposition.

On the government side we hear an abuse of language and that is consistent with many of its arguments. The Liberals talk about modernizing, moving forward, that it is the 21st century. This is the all-purpose argument with the government. Stating the current century, stating the current year and talking about modernization is the all-purpose argument which can be used to justify anything, it seems. It is not an argument at all, but we hear this coming from government members and we hear them talking about collaboration on this file.

However, as I mentioned in questions and comments and alluded to already, there is actually a strong consensus in this House of opposition to the bill among a wide range of different parties and philosophies. Within civil society there is an opposition to it from a variety of different quarters. The previous Manitoba government had concerns about this as well. The Quebec government said that we should not be rushing into this right away. As well, the union representing the workers who are affected has concerns about it. There is broad concern about the government's agenda for reasons that I will get into later on.

What we saw at second reading is pretty clearly a government which did not want to talk about the bill. This is strange because it is actually the first new substantive legislative idea we have seen from the government. Yes, the government has proposed bills to implement court decisions. The Liberals brought in a budget. They proposed repeals of measures which the previous government brought in. However, in terms of something substantive and new, this is the government's one big idea so far. It would be strange that the government which has put this degree of importance on the bill actually does not want to talk about it. This is the first bill that the Liberals moved time allocation on. Even before they moved time allocation, they were not keen to put up speakers and the debate was sustained back and forth by Conservatives and New Democrats speaking about concerns about this legislation.

This is a strange situation we have. We have a piece of legislation that is presumably important to the government, and certainly it is important to the people whom it affects, and yet the government is not very keen to talk about it. The Liberals are abusing language around it and there is a growing consensus of opposition to the bill. That is important to underline as we move forward.

In fact, we had a vote today on the bill and it almost was defeated. We had a member of Parliament from Manitoba who voted against the bill at second reading, but who voted for it at report stage, which is disappointing because that member had an opportunity to actually stop this bad legislation from going forward at a time and in a way that would have mattered much more than at the second reading vote, but he chose to follow the government whip instead of to line up behind his constituents.

What is happening with the bill? What is the substance of the bill and why is it important? Let us go over the background one more time.

In 1988-89, Air Canada was privatized and the mechanism of privatization was through a share issue privatization. This means that the government previously had owned Air Canada. It issued shares, and sold those shares. At the time, those shares were subject to certain conditions. There were four main conditions proposed on Air Canada at the time of this share issue privatization: Air Canada had to be subject to the Official Languages Act; it had to maintain its corporate headquarters in Montreal; 75% of its voting shares had to be held by Canadians; and it had to maintain operational and overhaul centres in Winnipeg, Montreal, and Mississauga. There were four different conditions that were placed on Air Canada.

Of course, when we put conditions on the sale of something, it is going to have some impact on the share price. That is fairly obvious. To use a simple analogy, if I sold my house but said to the new owners that I had to have access to the backyard even after I sold the house, the new owners might agree to that, but they might say that they would pay less for the house if it was subject to that kind of condition, because that condition would be inconvenient for them and any subsequent owner.

This is essentially what happened when the government privatized Air Canada. These were not arbitrary conditions that the legislature came up with at a later point and chose to impose on a private company. These were conditions of sale. They were built into the deal. They informed the share price at the very outset of that deal. That is fundamental to understanding what is fair and what is right going forward in terms of these conditions.

Now, albeit significantly later, the government has decided to sort of unilaterally just give up those conditions. To extend the backyard analogy, it is writing off that condition that was previously written in the deal with no kind of compensation, for no obvious reason, not getting anything in return, giving Air Canada shareholders these windfall gains, giving value to Air Canada free from the state that was not there before. Had these conditions not been there in the first place, the government could have received more for those shares. It does not really make sense to say, “Here you go Air Canada, here are some total windfall gains”. It does not make sense to do it on that basis.

I should note that, despite all this talk about competitiveness and a level playing field, the government is removing one of four conditions and maintaining the other three. It does not appear to have any interest in removing conditions around official languages, corporate headquarters, or around the number of voting shares that have to be held by Canadians. This is not some grand latter day conversion to market liberalization by the Liberal government; rather, the Liberals are removing one specific condition, which allows the outsourcing of jobs. They are not undertaking a broader shift to try and enhance competitiveness. As I will get to later on, I think there are a number of other things the government can do, and might be wise to consider doing, which would in fact have a better impact on competitiveness.

We are certainly for strengthening the aerospace sector, and we are certainly for measures that will increase competitiveness, but not at the expense of basic fairness in the marketplace, not at the expense of taxpayers, and not at the expense of jobs.

Given the conditions that were put on Air Canada as a condition of the purchase of those shares, and given where we are now with this process, I think many people listening to this debate will wonder why in the world the government is doing this. Why did the Liberals decide now all of a sudden that they were going to give this nice little gift to Air Canada? It does not make a lot of sense unless one knows that there is something else going on.

The arguments the government gives do not really add up. However, there is one thing we hear consistently from government speakers, and there have not been that many over the course of this debate. However, when government members want to speak to this debate, what we hear them alluding to is Bombardier. They are saying there is this thing happening with Bombardier, that it is going to have these centres of excellence, and Air Canada is making these investments. This is very much something happening that is separate from the Air Canada Public Participation Act.

The Air Canada Public Participation Act does not mention Bombardier. The member for Winnipeg North was alluding to negotiations that have taken place, that the government has undertaken negotiations. There is no specificity at all. I have asked repeatedly in questions and comments if the government could establish the link here. What are the Liberals talking about when they say that there is something happening over here with Bombardier and therefore they have to bring in a bill on the Air Canada Public Participation Act? There have been repeated questions about this link. They are hinting at it, but they are not willing to acknowledge it. I think there may well be a link between those events, but we have to understand why the government is not actually willing to talk about it.

Here is the connection between these events and the timeline that goes with it: On February 17 of this year, Air Canada announced that it had started negotiations with Bombardier to purchase C Series aircraft. These were aircraft, incidentally, that it had not previously expressed interest in. That was on February 17. Very shortly after that, on March 8, the minister put this bill on notice. Then the governments of Quebec and Manitoba suspended litigation and there was a variety of commitments made in the context of that by Air Canada.

It is interesting that this litigation has been suspended; it has not been halted. The government, by introducing this legislation, has actually pulled the rug out from under the provinces, should they wish in the future to continue litigation. That is an important point which I will get back to in a few minutes.

We see these events following very closely one after the other. Air Canada expresses interest in a purchase from Bombardier and then right after that, Air Canada receives the benefit of the proposal of this act. What seems to be happening is that Air Canada is receiving the free removal of a condition of its privatization at the same time as it is exploring a previously unplanned purchase from Bombardier.

I can only suspect that is because a direct bailout of Bombardier is unlikely to be acceptable to the public, especially at a time when Bombardier, like Air Canada, is outsourcing jobs, and so it has come up with this scheme of an indirect bailout. That is what appears from these events and certainly that is what is hinted at by the government, even though it will not answer a direct question about the relationship between the Air Canada Public Participation Act and Bombardier.

The benefit of the removal of conditions flows freely from the government to Air Canada and the benefit of a previously unplanned large purchase would then flow from Air Canada to Bombardier. Again, the benefit of the removal of conditions would flow from the government to Air Canada and the benefit of the previously unplanned large purchase there then flows from Air Canada to Bombardier.

This is what appears to be happening. If it is happening, it is something that Canadian taxpayers and workers should be very concerned about, because normally, if one were going to undertake a bailout, not that that is ideal under any circumstances, one would impose conditions on that bailout. Instead, there is only the removal of conditions of a previous privatization and there is no guarantee that there will be economic benefits or jobs here in Canada.

If people are skeptical about this connection, this connection was actually made explicit by the Quebec government when it discontinued its litigation against Air Canada. Here is what it said: “Subject to...final arrangements, the Government of Quebec has agreed to discontinue the litigation related to Air Canada's obligations regarding the maintenance of an overhaul and operational centre following Air Canada's agreement to collaborate with the Province to establish a Centre of Excellence for C Series”. Of course, tellingly, the Quebec government does not want this legislation passed at the breakneck rate that the government seems to be pushing it forward, because it suspended its litigation subject to “final arrangements”.

Air Canada has expressed interest in the purchase from Bombardier, but the deal has not been closed. There has been talk of opportunities by centres of excellence of new investments and jobs in Quebec and Manitoba, but these are all things that Air Canada has dangled as possibilities. Meanwhile, the government has not just dangled this legislation, it is trying to push it through. It is trying to push it through very quickly, with limited discussion, with time allocation, and with, it seems, as few government members speaking to it as possible.

If the government proceeds with this legislation this quickly before these investments have even been made in Manitoba and Quebec, then it will have pulled the rug out from under those provincial governments. Even then, given what the government may be trying to do to produce this kind of indirect bailout effect, it has gone about it in a very ham-fisted way that will likely not have—I should not say “likely”, but may well not have the effect that it wants it to have.

This is underlined by a press release that the Government of Manitoba released on May 9, “Government of Manitoba opposes Bill C-10”. It said:

[The deputy premier] presented to the federal Standing Committee on Transport, Infrastructure and Communities to reiterate the Manitoba government's opposition....

“There are significant implications to moving forward with Bill C-10 without further dialogue and consideration,”.... “The Government of Manitoba is requesting specific commitments from our partners in the federal government to ensure the proposed changes to the Air Canada Public Participation Act will provide a net benefit in terms of investment and job creation for Manitoba’s aerospace industry.”

The press release goes on:

In February 2016, the previous government wrote the federal government requesting that amendments to the Air Canada Public Participation Act be limited to expanding the geographical scope of Air Canada’s commitments within Manitoba. The proposed amendments go significantly further than the geographical scope.

It is interesting that in Manitoba, as well as here, there is a unity between the previous NDP government of Manitoba and the new PC government. They are both concerned about the act, just as in the House, Conservatives and New Democrats are both very concerned about the direction this is going.

To come back to this point, it is clear that there is a strong consensus in terms of opposition between different political parties at different levels, and throughout civil society, as well.

However, what are the arguments we hear from the government in favour of this bad and unpopular legislation? We hear talk about the health of the aerospace industry. All of us want to see a stronger aerospace industry. All of us would like to see Air Canada do well.

My colleague from Carlton Trail—Eagle Creek has done a very good job of outlining other things that could be done that would actually be stimulative. What about following through on the government's plan to lower taxes for small business? It made a previous commitment to do that. It is raising taxes on small business, which flies in the face of a commitment that not only it made during the election, but all of the parties in the House made during the election.

Aside from the aerospace industry, just thinking about the economy as a whole, what about follow-through on the commitments they made with regard to business taxation?

Here are some things specifically toward the industry that could improve competitiveness: tying airport improvement fees to specific projects with explicit sunset provisions; overhauling the financing model for security; increasing the number of existing trusted traveller programs; increasing the foreign ownership limit of Canadian-based airlines to 49% for air carriers operating commercial passenger services; reforming Nav Canada to reduce costs imposed on airlines; improving governance in airport authorities; establishing a set of principles to guide all airports in Canada when determining fees; better aligning regulations with the U.S. and Europe; and continuing to streamline immigration and customs processes.

These are a number of things that the government would be very wise to do and they would have our support in doing them, in terms of actually seeking to improve competitiveness. However, this is not about competitiveness. If this were about competitiveness, the government would be looking at a broader range of things. It is moving one specific condition, which was a condition of Air Canada's privatization, which allows Air Canada to send jobs overseas, and it is doing it at a time when Air Canada is perhaps suspiciously doing something else that meets with the government's objectives.

If we put this picture together, it clearly is not about competitiveness. We would have seen a much broader strategy if the government was actually interested in the health of the aerospace sector and improving the competitiveness of the aerospace sector. Like so many things, such as its emphasis on modernization, these are just words that the government uses with seeming disconnect from the actual, substantial meaning of those words.

Let me just wrap up by saying that I think this really is crony capitalism at its worst. There are three different parties in the House. Our party generally believes in the value of the market mechanism. Our friends in the NDP are more skeptical about that. However, we at least believe in a rule-based market system, that an effective market system requires adherence to rules. It means that if there are obligations that are part of a condition of sale, they have to follow through on those obligations. They cannot change the rules in the middle of the game for the workers.

The government does not really have a concept of a functioning rule-based market capitalist system. Its idea is that it gets together with the Air Canada executives and they talk about what they are going to do, and then it tries to get a few people's interests working in one direction. However, it ignores the interests of the workers, of the taxpayers, of broader society.

That is why we would say this is a crony capitalist bill. There is something to object to, for Conservatives, for New Democrats, or anyone in between.

I hope members stand up and oppose the bill.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Mr. Speaker, my colleague from Saskatoon—Rosetown—Biggar made a statement that Air Canada had some loosening of these rules and that the government had received nothing for them. He was quite adamant about that. Earlier today another member of the Conservative Party from Sherwood Park—Fort Saskatchewan made the link saying that the government had traded off orders for Bombardier planes to get that loosening up. There is an inconsistency that I would like to try to understand. Which of the two members is right? Did we get something for it, as was hinted at, or did we receive nothing for it?

Second, the Conservatives moved a motion not that long ago saying that the Billy Bishop airport should be expanded because then we would get something for it, for example, the sale of Bombardier planes, yet a member said earlier that would be a bad move.

There are two sets of inconsistencies that I am trying to understand. Did we get something or not, since we have two opinions here? If we did get something, is it a good thing or a bad thing?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, respectfully, I did not quite follow the question because of some mix-up in constituency names. I am the member for Sherwood Park—Fort Saskatchewan. The member referred to a member for Saskatoon—Rosetown—Biggar, which is the name of a constituency in the previous Parliament. Maybe he meant to refer to our colleague from Carleton—Eagle Creek, who in the previous Parliament was the member for Saskatoon—Rosetown—Biggar. I think that is where he was going. Unfortunately, the economic philosophy that informed the question is even more confused than the constituency names.

The removal of the conditions would provide no specific benefit to the taxpayer. The removal of the conditions would be a gift to Air Canada. If Air Canada buys Bombardier planes, there would obviously be some benefit to that. We would want to see Air Canada make investments in Bombardier. What we would be concerned about though is if there were some kind of quid pro quo involved, if the government had undertaken these negotiations to do an indirect bailout in a way that was not transparent. The government should make any efforts here transparent, at the very least.

Just to be clear, I strongly support the motion we put forward with respect to the Billy Bishop airport. I spoke in favour of it. I voted in favour of it. There was certainly no division on this side of the House on that question at all.

Our party has been consistent about wanting to see reasonable measures that are pro-market and respect the rules but also support the development of the aerospace sector. We cannot just give some windfall gains to one company and call that a strategy for the sector. That is not a strategy for the aerospace sector at all.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague for his speech.

As my colleague from Rosemont—La Petite-Patrie already said, we are pleased to hear him speak in favour of workers.

When he was going over the sequence of events, it would have been good for him to point out that the previous Conservative government could have worked to keep the jobs at Aveos. If we are going to talk about workers' rights, I would like to know what he thinks about the government bringing in voluntary measures to protect workers in Canada's aerospace industry.

How does he think this will make it possible to protect jobs and working conditions for workers in Canada's aerospace industry?