Bill C-27 (Historical)

Canada Airports Act

An Act respecting airport authorities and other airport operators and amending other Acts

Question No. 206

[Geoff Regan, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

I am informed as follows:

Finance Canada

The air transportation industry is under pressure globally. The events of 9/11 exacerbated a weak air market caused by a slowdown in global growth. The war in Iraq and the SARS outbreak intensified these challenges.

In the budget presented to the House of Commons on February 18, 2003, the government reduced the air travellers security charge for air travel within Canada from $12 to $7 for one way travel and from $24 to $14 for round trip travel. This represents a reduction of more than 40 per cent that will benefit all domestic travellers in Canada.

To help the tourism industry, the government committed $20 million to promote Canada as a business and leisure travel destination. The federal government is also working with the tourism industry and provinces to promote Canada. The government continues to review carefully the policy underpinnings for a safe, reliable and viable air transportation industry for Canada.

I am informed by Transport Canadaas follows:

The government has taken, and continues to take, the necessary action to stabilize the industry in the long term interest of travellers and airlines alike. For example, after the events of September 11, 2001, the federal government created a fund to compensate carriers for revenues that were lost during the closure of Canada’s airspace. Later, a number of carriers received funds to reinforce cockpit doors to promote safety and security. Air carriers also continue to benefit from relief from insurance costs since the government is still providing coverage for war risk insurance.

Furthermore, in March 2003 the government introduced Bill C-27, the new Canada Airports Act, that will provide airlines with more input into fees charged by airports. The government is also undertaking a review of airport rents, since those rents directly affect the amount charged by airport operators to airlines using the airport.

The government is also assessing recommendations with respect to relief for the industry made recently by the Standing Committee on Transport.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, to answer the last question first, as to whether we need to have late night sittings, I suppose it depends on the co-operation on the part of the opposition, which is usually quite good, I must say.

Going to the substance for the next few days, we will continue this afternoon with the opposition day motion. The House does not sit tomorrow because of the Conservative leadership convention.

We are now entering June, the month when we try to wrap up the year's work and we will be consulting other House leaders on a daily, sometimes hourly basis, in order to determine the precise order of bills. However for the next few days we will be dealing mostly with report stages, third readings and consideration of Senate amendments to bills we have already passed.

The bills that will be considered next week will be, and I will start with the one on Monday, although we intend to have a minor conversation about another minor issue later, but generally speaking they will be as follows. We will start with Bill C-25, the public service bill. We will then move on to Bill C-31 respecting certain pensions for veterans and the RCMP. When that bill is completed I would hope to start Bill C-7 respecting first nations governance; and because they are all government days next week we are going to take them probably in roughly that sequence, Bill C-17 public safety; then Bill C-13, the reproductive technologies bill which is presently at third reading.

It would be my intention to then call Bill C-32, the Criminal Code amendments. When the bill is reported to the House, which hopefully will be one day next week, we could then commence Bill C-24, the political financing bill. We also have the amendments from the Senate which I understand might happen on Bill C-15, the lobbyist bill, and Bill C-10B, cruelty to animals.

At some point, we would also like to debate the second reading of Bill S-13, respecting the census, and Bill C-27, the airport bill.

As a matter of courtesy, I wish to indicate to colleagues that it is my intention to call the final supply day on or after June 12. This is not, of course, an official designation of that day at this point but that is why I say on or after, but at least to try and give an indication to colleagues in the event that they will not take other commitments at or about that particular time in order for them to be able to plan their agenda.

Canada Airports Act

[The Acting Speaker (Mr. Bélair)]

I wish to inform the hon. member that she still has 10 minutes in her speech and she will be entitled to a 10 minute question and comment period when debate resumes on Bill C-27.

It being 5.30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I too am very pleased to participate in the debate today on Bill C-27, the Canada airports act.

I will focus my remarks on part 6 of the bill. That part deals specifically with the main fees which are collected by airports. Part 6 establishes a brand new framework for amending existing fees or introducing new ones.

I am sure everyone will agree that one of the most significant concerns expressed by airlines and passengers alike has been the inability to consistently obtain a reasonable explanation of the fees being charged by airports across the country. Many times when I have travelled across the country, I have asked myself what certain fees were for. I am sure many other Canadians have experienced that same kind of feeling. I know that internationally other airports charge fees as well but we are always questioning the fees. We have paid for our tickets and in addition to that we have to pay another fee.

I am glad to announce that the new Canada airports act will actually address this shortcoming. It establishes a framework for fees that will provide users with the necessary information to understand each aeronautical and passenger fee. It also provides users an additional opportunity to influence the airport's decision making process each time these fees are amended or a new fee is being reconsidered. It is not that we just show up and the fee will be an additional $10 or $15. This framework will apply to all airports affected by the legislation and will deal only with two revenue sources on the airport.

First, there are the fees that are collected by airports from air carriers for the use of services and facilities and second, the fee collected directly from the passengers, which is usually called the airport improvement fee or the passenger facilitation fee. It is that fee which is annoying because we have to pull out our wallets to pay an additional fee as we are running to get on a plane. I think Canadians are most familiar with that fee.

There are four components to the framework and I would like to go through each one of them. First, it sets out charging principles to be followed in establishing these fees. Second, it has a charging methodology that the airport must develop to explain how each fee relates to the financial requirements of the airport. Third, it has a consultation process that is to be followed. Fourth, it gives an appeal process for users who claim that an airport operator has not complied with the charging principles or the prescribed consultation process.

The charging principles contained in the bill establish a minimum set of rules, and I underline minimum set of rules, that airport operators must follow with respect to fees.

These principles require airport operators to develop a charging methodology, to relate fees to costs so as to prevent overcharging users, to avoid discrimination in charging among users as required by Canada's international obligations, and to ensure that safety is in no way diminished by the fee structure.

With respect to the second component of the framework, each airport operator must develop and announce its charging methodology. This methodology must explain in detail the financial requirements of the airport that are to be met through fees and how each fee relates to these financial requirements.

Passenger fees attract specific reporting requirements under the legislation. Airport operators must identify the specific major capital program that the passenger fee is paying for and must also report how long the fee will be in place in relation to that program.

I have gone to certain airports which I have not been to in years and at that time there had been an airport improvement tax. I can understand when I see ongoing construction that there might be a need for this tax. However, it seems to me that years later when I have returned that same fee is still there and I cannot believe that they would have already started charging for a future improvement.

Passengers would finally have a feeling that there is some accountability here and that is very important. I should add that, for airports with fewer 400,000 passengers annually, revenues from passenger fees would be permitted to help pay for airport operations and maintenance costs as well.

It is important that we look at smaller airports and that a distinction is truly made. As in any type of industry, as a government, we must be careful that we take into account the fees or the operations of the smaller operators. As the former parliamentary secretary, I was involved with the Department of Canadian Heritage for the past two years. We always looked at the small broadcasters and the small cable operators because we had just finished a study at the Department of Canadian Heritage on the Broadcasting Act. We hope to table a report before the House recesses for the summer.

It is good to see that the government is establishing new policies, and that we are looking at ways to help the smaller businesses and smaller parts of our industry deal with the regulations. When we are speaking about regulations, one of the important things in the Speech from the Throne was our priority to ensure that we have smart regulations. The Prime Minister recently announced a special advisory board. It all fits into what we as a government are trying to accomplish under the act.

The third component of the framework provides airport operators with a minimum consultation process to be followed each time a fee is amended or a new fee introduced. That is so important. It is certainly something that we are constantly being badgered by the opposition. It says that we do not do enough consultation. It does not matter how much consultation we do, there never seems to be enough. It is important that we recognize that within this act we are requiring of airports the same kind of consultation process that we conduct and that we need as well in order to affect proper policy.

It is important for passengers to participate. I should note that the public will have the opportunity to review and comment on the justification for every fee proposal. The minimum review period of 60 days is similar to what is required today of the airport authorities pursuant to their leases with the federal government. There is indeed a precedent for those consultations and I welcome them. It is so important for consumers to know what it is they are paying for and how long they will be paying this as well. I commend the government on how it has reacted to the consultations that we have had to ensure that there continue to be consultations as the fees are collected.

Finally, I want to speak to the fourth component of the framework. The Canada airports act would permit users and passengers to appeal the decisions made by airport operators. The appeal process would be limited to appeals regarding compliance with the charging principles and with the consultation process. If passengers are not satisfied with the consultation process or how the charging principles have been involved, they have the opportunity to appeal. That is very important. If they feel they have been left out of the consultation process or it has not been done properly, there is that ability to appeal and that is important as well.

The Canadian Transportation Agency would hear these appeals and would be empowered to order airport operators to cancel a fee, but more importantly, they would have the opportunity to issue refunds to users if an appeal is successful. That is a wonderful opportunity. Canadians should know that they can be part of the process and actually get a refund if they find that the consultation process or the charging principles were not taken into account as required under the act.

To sum up, the act would establish for the first time a common set of rules that would guide airport operators in their management of fees and it would do so without being unduly prescriptive. Airport operators would still have the freedom to decide what their financial requirements are and how they would generate revenues to collect them. It is important that airports continue to have this freedom since many have borrowed where lenders have based their decisions on their knowledge of this freedom.

Finally, the focus of the legislation in this area of fees would promote transparency and provide a more consultative process for users. We believe that it would contribute to the efficient and effective management of Canada's critical airport infrastructure.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I had the opportunity this past week to meet with the Atlantic provinces airport authority representatives who were here in Ottawa. They are very concerned about the bill. In fact they are saying that the bill will probably kill the airports in P.E.I. and many in Nova Scotia, Newfoundland, New Brunswick and in other smaller areas across the country. They have issues in so many areas that they wish to discuss.

The transport committee should be travelling across the nation. The bill should not be dealt with until the transport committee meets in all of those areas. Does the hon. member agree that the transport committee should go and listen to the many concerns of the airport authorities out there right now? If the committee does not, Bill C-27 will kill the airports in those smaller areas.

[Lynne Yelich, Canadian Alliance, Blackstrap, SK]

Mr. Speaker, I am pleased to join today's debate on Bill C-27, the Canada airports act, a piece of legislation which in my mind is remarkable for what it does not do rather than for what it does do.

The air transportation system is a vital component of the economy not just here in Canada but on a global scale. Let me give the House some figures. Airports produce more than $34 billion in total economic activity each year. They generate more than $4 billion in tax revenues. Construction at major airports has attracted more than $5 billion in private sector capital investment.

That said, our airline industry is in a crisis. The number of passengers has decreased. Service has been cut. The need for security has overridden our desire for convenience, and costs are skyrocketing.

When I said Bill C-27 is notable for what it does not address, these are the issues that come to mind. Outrageous airport rents are one of the costs passed on to airlines and subsequently to consumers.

Starting in 2005 Saskatoon's airport, which serves the people in my riding, is expected to pay more than $500,000 in rent annually. Saskatoon Airport Authority representatives have said this is unaffordable and have recommended that rental charges should be scrapped in an effort to reduce the volatility of the airline industry. Other facilities such as Winnipeg International Airport will be hit even harder in the next few years. Rent there is expected to jump to $7 million by 2007.

According to the Canadian Airports Council, the 26 airports in the national airports system paid $240 million in rent to the federal government. That figure is expected to rise another $20 million this year.

The situation is a major concern to Canada's airports and a problem for the aviation industry in general. Federal rent, the single largest uncontrollable cost for most airports, drives up the price of the services that airports provide to customers.

By raising the cost of travel, this situation threatens the many benefits that have been realized from the transfer of NAS airports to local control in the early 1990s. Not only has the airport devolution process relieved the federal government of the responsibility and financial burden of managing airports in terms of capital and operations, it has enabled local communities to operate airports in a manner consistent with local needs. Despite the heavy burden airport rents put on the industry, the issue is not addressed in Bill C-27.

With air security having become such a headline issue following the September 11, 2001 attacks in the United States, one would think by now that Canada would have a secure air system. After all, Canadians have been paying heavily for security ever since the air travellers security tax was introduced to fund tighter controls. Reality however tells a different story. The fact is our airports have become slightly more secure than they were. That is not to say they are secure, or that all airports have the same level of security. They do not.

One of the most obvious holes in our security is that in most cases once passengers enter the system, they are in regardless of whether they were screened at a large airport where security is naturally tighter, or at a small local airport where security is lax or even non-existent. Unlike in Europe, passengers entering the system from small centres are usually not re-screened. It certainly is not mandatory, even though such a practice could offer better security. Bill C-27 does not address this point.

Talking about security reminds me of fees. When the air travellers security charge is collected, it is held in trust, which means it is protected. It is not so for airport improvement fees which tend to be included in ticket prices and therefore collected by the airlines before being turned over to the appropriate airport authority. If the airline collecting that money falls into financial peril, there is no guarantee that the airport authority could collect the money it rightfully deserves.

Again, if I might use the Saskatoon Airport Authority as an example, when Air Canada slid into bankruptcy, it owed the Saskatoon Airport Authority about $300,000 worth of airport improvement fees. Because the airport authority stands as an unsecured creditor and the money was not held in trust, the authority could lose the entire amount. There is some indication that part of the money will be repaid, but the potential for losses is what I and the airport authority find disturbing. Again, Bill C-27 does nothing to ensure that airport authorities will receive the money the bill itself allows them to collect.

That addresses some of the opportunities that are overlooked in the bill. Now I would like to talk about what is in the bill.

When I look around me today I see people who travelled here from across the country. Some arrived by car or train, but it is likely most came to Ottawa by air. To get here each person made his or her way through at least two different airports in different communities. I suspect there were noticeable differences at each of those facilities. That is because, like the communities and the people they serve, each airport has its own unique profile. Some are large international hubs while others cater solely to domestic clientele.

Bill C-27 does not recognize those differences. In this attempt to re-legislate the current management practices at Canadian airports, the government has chosen to adopt a blanket approach that forces some of our smallest airports to match the obligations of their larger, busier, metropolitan counterparts.

No one within the air industry has called for such measures and I question why the government has chosen this path. The real irony is that within this blanket system, Bill C-27 proposes a two tier approach that will hold former national airport system airports to one set of rules while non-NAS airports will have to abide by another.

For example, clause 57 of the bill limits a former Transport Canada airport authority's ability to invest in another corporation to 2% of gross revenues per year.

Clauses 62 to 64 deal with the corporate governance of airports but do not require the board to have an airline industry representative. Again, this applies only to certain airports.

The proposed Canada airports act is flawed. It essentially re-regulates airports without any obvious benefits and does so in a way that does not reflect the unique needs and characteristics of our airports.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Speaker, I am surprised to hear those replies because Bill C-27 would establish principles for fees imposed by airport operators and my hon. colleague on the other side, along with his party, forever keeps criticizing the fees, whether they be high or low. The bill would look into the fees imposed by airport operators as defined in the legislation, including an appeal process to the Canadian Transportation Agency on future aeronautical and passenger fees that meet the past threshold.

I was under the impression that he had looked into this bill but from his comments, I feel that he has not looked at that part.

What about the creation of the adequate opportunity for users of airport facilities, including air carriers and the travelling public, to provide meaningful input into major airport decisions on charges--

[Gurmant Grewal, Canadian Alliance, Surrey Central, BC]

Mr. Speaker, the parliamentary secretary to the minister has prepared questions by bureaucrats and he is asking those questions, so his approach is naturally biased.

However let me put it like this. Bill C-27 overestimates or exaggerates problems which do not exist in the industry. We do not hear from the transport industry, the airport authorities or the stakeholders in the industry. It tries to solve those problems which do not exist and it does not do anything to solve those problems which already exist, like the problems I mentioned: the CARs 308 issue; the airport rent policy; the collecting of the airport improvement fee, which will be in trust and the bill does not do anything about that; the question of overly opulent terminals; the security issue; and the tax that smaller airports face in Canada.

How can the parliamentary secretary stand in the House and tell the House that the smaller airports can be governed and ruled by the same issues as the bigger airports? The smaller airports have different problems. One size fits all cannot be applied, regardless of the location or the size of the airport, it cannot be applied.

I urge the minister to look into those issues rather than having an arrogant approach to dealing with the airport authorities within Canada and having that tax grab which is a cash cow for the government continue.

At least the minister should look into the unanimous recommendations from the Standing Committee on Transport. which is a Liberal dominated committee. I am sure that the parliamentary secretary is aware of those recommendations and that he will look into them and apply them.

[Gurmant Grewal, Canadian Alliance, 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.

[John Bryden, Liberal, 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.

[James Moore, Canadian Alliance, 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.

[James Moore, Canadian Alliance, 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.

[John Bryden, Liberal, 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.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, it is very interesting to follow my seatmate, my colleague here, and his comments.

On the issue of the Cranbrook airport, when the city of Cranbrook took over the airport response times were stipulated at that point. Now, as we have just been discussing, response times are totally different . What it basically means is that there was an absolutely unpredictable, unforecastable expense that is now facing the city of Cranbrook and the Cranbrook airport.

I want to speak briefly, in the context of Bill C-27, about the city of Cranbrook and the Cranbrook airport. It is unique, as are all smaller airports, I am sure. It is unique in the fact that the overall airport traffic in the early eighties was approximately 155,000 passengers and today it is down to under 90,000 travelling passengers. This is a combination of two things.

One thing is that at that time, in the early eighties, with the amount of development that was happening in the Crow's Nest and people coming to the Cranbrook airport in 737s from Vancouver and Calgary and then going on up to the Crow's Nest, we had a very large volume of people coming through the airport. That development work has stabilized and now, as a result, we have a very solid employment base. My constituency, I should say, produces about a quarter of the world's metallurgical coal. Therefore, the development has taken place.

Now we end up with the situation that the airlines have chosen, to downgrade from 737s to Dash 8 300s, Dash 8 100s, Beechcraft 1900s and so on, the imperative being that the fewer the number of passengers on the plane the lower the landing fee. Therefore, because the landing fees have been increasing, they have been decreasing the number of passengers as they have been able to.

At the same time the government has consistently increased the taxes on airline travel, to the point that now it costs over $700 for a round trip between Cranbrook and Vancouver. It is absolutely outrageous. Furthermore, most people end up leaving the Cranbrook area, driving over to Calgary and taking advantage of WestJet and other discount carriers in the area.

In response to that, and because we have so many worldclass recreation facilities, unimaginable ski hills, golf courses, everything anyone could possibly want in the form of recreation in our area, a proposal has been put forward to extend the Cranbrook airport runway from 6,000 feet to 9,000 feet. That would permit charter planes as large as 767s to fly directly from Europe into the Cranbrook airport, thereby bypassing Calgary and coming directly to the worldclass resorts that exist in my constituency.

It is a very worthy and worthwhile project but one can see how, with Bill C-27, which is basically a one size fits all kind of legislation, the requirements for the Cranbrook airport and the rules and regulations that will flow from Bill C-27, which will impact the Cranbrook airport, will be so substantially different than the regulations that would be in Castlegar in the west Kootenays, Cranbrook of course being in the east Kootenays, or I could refer to Lethbridge, which would be the next smaller airport to the east. The requirements for the Cranbrook airport will be so substantially different to the requirements for the Castlegar airport and Lethbridge airport that it is impossible under Bill C-27 to come up with any possible way of establishing proper rules and regulations that would fit all.

I want to read from a briefing note about the Vancouver airport authority. The reason I want to read about that is that the Vancouver airport authority airport services, YVRAS, is an organization that has taken over the management of the Cranbrook airport.

Under section 57, the bill would limit an airport authority's ability to invest in another corporation to 2% of gross revenue a year. The YVRAS is concerned that this clause would limit its ability to finance its projects in Chile, Jamaica, Hamilton and, I am sure if we are successful in the current negotiations, the project in Cranbrook at the same time. YVR writes:

...investment opportunities do not come in neat bundles, nor do they arise every year. This is also a demonstration of an “Ottawa knows better” than the community based board about what is good for the community.

This is part of the one size fits all, only it is more specific to the management of the Cranbrook airport. YVR has been doing a credible job for us. There is a responsibility to the citizens of Cranbrook at this particular time.

With ongoing negotiations between the City of Cranbrook, the Regional District of East Kootenay and other municipalities, as well as provincial and federal governments, to possibly fund the issue of getting the 9,000 foot runway, this insecurity over the funding and the backing of YVRAS is a significant concern to me, representing the people of the east Kootenays.

This bill, as with all bills, misses opportunities. We are looking at the fact that under airport fees, for example, we know that the Cranbrook airport, along with many others, has been hit badly by the Air Canada bankruptcy. The difficulty is that many of the funds were not in a place of trust. If they had been put into a place of trust, these smaller airports would not have been hit in that way.

Although this bill is a sincere attempt on the part of the government, it is seriously flawed and should go back to the drawing board.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I appreciate the opportunity to rise today and speak on this bill, one that certainly affects an airport in my riding in the city of Grande Prairie.

I believe that the bill is actually a bill of missed opportunities and attempts to solve problems that do not really 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 is choosing this time to introduce legislation dealing with airports, and specifically this type of legislation.

Based upon e-mails, phone calls and letters that my office receives, there is no real sense of urgency to fix the airport situation except for three specific areas that I am going to discuss today and which really are not addressed in this bill at all. In fact, most Canadians are reasonably happy with the status quo. When we compare Canadian airports, both large and small, with similarly sized airports in other countries, Canada's airports stand up rather well. So the question is, if the system is not broken, why are we trying to fix it?

What I believe is happening is that this really is about a missed opportunity to fix three specific problems that are not addressed in the bill. The real problem facing Canada's airline sector is not the way airports are run, because they largely have been turned over to airport authorities and down to a level of community involvement that I think is much better than it was before. The real question is about the way rents are charged by the federal government to these airport authorities and how that cost is passed on to the airlines.

This issue was raised and dealt with in the transport committee hearings over the past few weeks. As a result, on April 11, in its report, the committee recommended unanimously that “the federal government suspend rental payments by airports for a two year period” and that “the airports shall pass these rental savings on to air carriers”. We know that air carriers are experiencing some difficulty during this time. Further study is not needed. It is time to act.

However, we will not find any discussion of airport rents in the Canada airports act, Bill C-27. In fact, the Standing Committee on Transport made another unanimous recommendation: to eliminate the air travellers security charge. This was connected to transferring responsibility from airport security to a multi-modal agency that would be fully publicly funded.

The airport security issue is an important one, but we do not charge other people in our society for the cost of security, specifically those sectors. If we look to the model of why this was put in to begin with, on September 11 in the United States there were more people killed on the ground than there were in airplanes and specifically in airports. Security is a huge issue but it should be one that is taken out of general revenue.

Here again, understanding the nature of security at small airports is helpful. Just as a bank has a better security system than a Kool-Aid stand, large airports have better security than smaller airports. In fact, I was in New Zealand just recently and people who travel within the country of New Zealand have no screening at all. Only if they have connections to international flights are they subject to screening. Some cities like Winnipeg have been trying that model, and I think it is a model that would help save some money here in Canada.

The reason I am here today to speak to this bill is that I have a vested interest. I have to confess that quite frankly. My vested interest is that I have an airport in my riding. The airport is in Grande Prairie, Alberta and it is very concerned about the cost the federal government is imposing upon it through what is commonly known as CARs.

This is a situation whereby the federal government is now imposing on smaller airports a five minute emergency response time. One might ask what is wrong with that, but the fact of the matter is that about five or six years ago, when the federal government decided it wanted to offload the airports onto the municipalities and airport authorities, it told those same airports that they would not need to have firefighting units at the airports themselves. They could have them within about a 7 minute to 10 minute timeframe in a nearby city such as Grande Prairie. The airport is almost a suburb of the city of Grande Prairie. So the firefighting department at the airport was closed down. There were considerable savings, which were transferred to the city when it agreed to take over the airport authority as a result of that. That was one of the enticing factors that the federal government used with small airports, quite frankly, to convince the airport authorities to start managing them themselves.

Why has it decided to go back into this business of having these firefighting units right at the airport? Because there was an incident, I think it was in Moncton, a few years ago. Quite frankly I do not believe that even a firefighting unit at that airport would have resolved that problem. However because there was some negative publicity, all of a sudden the federal government reneged on its promises to the airport authorities and told them that they had to go back to this. All the savings that were realized, that were part of the deal that the government offered to take over this airport, now had to be paid for themselves.

I do not think that is fair to small airports such as Fort St. John, Grande Prairie and Fort McMurray. I think a number of airport managers are coming to Ottawa shortly to make this case themselves to the transport minister. If the Minister of Transport wants that kind of response time at the airport and if they are going to have to put in these capital expenditures again after it was all dismantled as a result of the minister convincing these small airport authorities to do just that, then I suggest he and the Government of Canada better pay those costs.

I personally do not believe a five minute response time is necessary in a city like Grande Prairie where the airport is located just on the outskirts of the city. The response time there for firefighting is about a seven minute but that is not good enough for the federal government. There is a huge cost of roughly $500,000 a year which that airport authority will have to incur.

There is an issue of fairness here. This is the government that convinced these people, like the airport authority of the city of Grande Prairie, that it should take over the airport. It was downloaded from the Minister of Transport because government was trying to save some money at a time when there was a cost cutting necessity. I have no objection to that but do not impose rules that change the conditions of that transaction which happened only a very short time ago. That is not fair. That changes the rules and puts airports in a position where they cannot operate effectively. If they have to put this capital expenditure in, companies like WestJet will be charged additional fees.

WestJet flies to Edmonton. It is about a half an hour flight by jet. It is a four hour drive. All of a sudden the cost starts to go up. Airport improvement fees, the security tax that the federal government is still imposing on airlines, now there is the added cost of CARs and pretty soon it does not become economical for companies like WestJet to fly to Grande Prairie. What happens is a substantial sector of the economy that makes it very attractive for business people to come to Grande Prairie by jet is killed. Business people will have to charter a plane or a scheduled flight that does not utilize jet traffic because these companies will have been priced out of business.

The government charges such as the airport security tax, airport improvement fees and all the other taxes represent a higher cost than the actual cost of the ticket itself from a company like WestJet. That is not acceptable, particularly when it was this government that told the airport authorities that if they took over the airports, they would not have to have these five minute firefighting response times with facilities right at the airport. They were told they could have it in the city, a short distance away. Now it is changing the rules and that is not fair.

This should be rejected. I know the Canadian Alliance will vote against it and I personally urge other members in the House to do just that because this issue is really an issue of fairness and the government is not living up to its responsibilities.