Public Safety Committee on May 26th, 2008

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Yes.

[The Chair, Conservative, Garry Breitkreuz]

Please go ahead.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

The Mont-Tremblant Airport is the only Canadian airport where passengers who land on regular commercial flights during working hours, which are generally from 8 a.m. to 8 p.m., have to pay a customs fee. Quebec, of course, is much more aware of what the Mont-Tremblant resort represents. However, based on my own experience, it seems that Canadians generally have heard of the extraordinary success of the Mont-Tremblant resort.

The resort, for example, has launched a major advertising campaign to attract private aircraft. But we are not here to plead for the private aircraft owners, but rather for the income generated by these visitors. However, what worked with wealthy owners of private jets might certainly be copied on a wider scale and applied to passengers of lesser means. People wealthy enough to own a private jet look for places to go. If you've got a plane, you might as well use it, otherwise...

So Mont-Tremblant launched an advertising campaign in New York City and Boston, more specifically, which said that good fishing, snowmobiling or downhill skiing was just an hour away. Continental ran with the same idea based on the proximity of the resort. I think this is a smart way of selling a resort which has been expanded and improved. Since the airport which lies close to the resort is a former military airport, its runways are long enough for long-haul aircraft.

In Ontario, Continental offers this type of program for flights to Vail and other places in the United States. But now the company is being asked to pay $1,100 per aircraft, and the company has replied that if the fee is not eliminated by next winter, it will stop doing business in Canada because it is just too complicated. So Continental will then only fly tourists to Vail.

Eighty percent of the passengers who came to Mont-Tremblant on a Continental Airlines flight had never been to Canada before. These people come and spend money. It is estimated that GST revenues generated by these visitors are about $1 million, as compared to the much lower amount of $450,000, which is collected by all the private airports where these flights land. So it's much less for Mont-Tremblant.

If we don't solve this problem quickly, the future of the Mont-Tremblant Airport is up in the air. Continental has said that it was extremely satisfied with the program, that it had a plan in place, and that it is willing to carry on next year, but that the custom fees had to be eliminated.

Sure, the situation is the same for Canada's other 200 small airports, but none of them charges customs fees to commercial flights during regular operating hours. What is strange is that other airports do not charge these fees and they do not attract the same clientele. The airport in Bromont does not charge customs fees. Why? Other airports are in the same, although not identical, situation. I know that this is the case in Kamloops. I also think there is one in Fredericton. There are four. But the situation of Mont-Tremblant is particular.

Earlier, the minister said that the agreement had been signed; this is what he was told. Yes, but when it was signed, they were told that if they didn't come on board, they would not be eligible for the program. So there was a one-year trial period for the program. It was a huge success because many middle-class Americans decided to visit Canada.

Further, it is an exceptional site. I think this is why it has a very good reputation in Canada. The location is exceptional. It is the highest mountain in Quebec, perhaps the second highest, and it is the most accessible one. I am convinced that if Whistler, which is in western Canada, had the same problem, it would have been solved a long time ago. The minister has been told about the situation for about a year now. In fact, the people who have spoken to the minister have admitted that he is not very familiar with the file. That much is obvious in light of the answers he gave this afternoon.

I am very sensitive to the situation of Mont-Tremblant, and I am sure that the entire province of Quebec is as well. Indeed, it is significant that the Minister of Economic Development, Innovation and Export Trade of Quebec, Mr. Raymond Bachand, supports this measure. He has the unanimous support of the National Assembly.

If you want to turn Quebec down, perhaps I should be happy about that, but I do not like the politics of the worst-case scenario. As I have often said, I neither hate Canada nor Canadians; what I do hate, however, is the Canadian Constitution, which I would like to see amended.

The fact remains that the situation is urgent and we must at the very least find an interim solution. They have been working on a solution for two years. Two years might not seem like such a long time for the officials of his department. I understand that the minister himself is fairly impatient. A motion like this one might convince him to get his officials to work on a fair solution. But until that happens, the fee should not be collected. If there is the threat of the fee being collected next year, we will lose the potential for tourism which we have created. This is a situation where we have created wealth because foreigners spend their money here. It's good for our economy. The government has done well by this, and that is probably why the government does not collect customs fees from passengers arriving on commercial flights. However, the government has no problem collecting this customs fee from passengers arriving on private flights, because they are wealthy enough to pay.

[The Chair, Conservative, Garry Breitkreuz]

Thank you very much.

I have two people on my list so far--Mr. Cullen and then Mr. MacKenzie.

Go ahead, Mr. Cullen.

[Roy Cullen, Liberal, Etobicoke North, ON]

Thank you, Mr. Chair.

I'm going to ask a question of the parliamentary secretary, because I have a suspicion that this particular matter relates to the question of cost recovery. I see the parliamentary secretary nodding, so he's been involved with this file; I certainly was. In fact, the Minister of Public Safety in our mandate charged me with fixing this. We started the process, but it's a big challenge.

I'd like to explain some of the background for the benefit of the members. What happened around 1995 was that the government of the day, our government, took the decision that all the fees charged by Canada Customs was part of Canada Customs and Revenue Agency, so the customs fees were going to be grandfathered at that date. In other words, all the services that were provided free of charge would continue to be provided free of charge, but any new services beyond that would be provided on a full cost-recovery basis.

Prince Rupert was a good example. The Port of Prince Rupert came to us and said they wanted to put customs people in Prince Rupert but the Canada Border Services Agency, as it then had become, was going to charge a fee for having customs officers in the Port of Prince Rupert. That meant that the Port of Vancouver would have a cost advantage over them, so it would be hard for them to compete in bringing freight in from the Far East.

What happened was that the cabinet considered a whole package for Prince Rupert, and included in that they had to get approval from the government to exempt Prince Rupert from the cost-recovery proposal, and they did.

There's another example, Windsor-Detroit, where they wanted to increase the ferry service to take some of the pressure off the bridges because of the backlog in traffic. They had an entrepreneur there who said, “I can take a lot more trucks over to Detroit, but the customs people, because of cost recovery, say it's a new service. I'd have to pay on a full costed basis, and I can't make the numbers work.” Well, that was looked at.

In any case, what the government then decided--I don't know where that's at today, because it was a project in progress--was that the idea of grandfathering services doesn't make a heck of a lot of sense. It might have been an imperative then, but what the Canada Border Services Agency should be doing is defining core and non-core services. In other words, define a package of services that will be provided by the Canada Border Services Agency for free, then define those non-core services that will have to be paid for on a cost-recovery basis.

So I can tell you that the process had begun. It was a really.... It's tough job to define those things. Plus you come along to someone in some port somewhere and say, yes, those services were free but now we're defining them as non-core.

Anyway, that's by way of background. The reality is that the government--and the government has done this in the past--can make an exception to this cost-recovery program. But they have to do that...and I think a preferable thing to do would be to come up with some solutions.

Mr. Parliamentary Secretary, there's a problem with cost recovery but it's not going to go away. We're going to get more and more issues like this.

I think to say of Mont Tremblant that the only reason they're charging them is because it's a bunch of fat cats.... I suspect that may not be entirely the reason why they're doing it. I think they're doing it because Mont Tremblant now is at a point at which they want to put on full customs programs. The Canada Border Services Agency can say, “Fine, we can put out a whole customs program and we can have people there 24 hours a day if you want, seven days a week. Oh, but there's a little catch. You're going to have to pay for the cost, 100%.”

I only give that by way of background. I mean, I think it is a bit unfair but it's really part of this broader issue. Perhaps the parliamentary secretary could comment on where this cost-recovery initiative is.

I know there was a heck of a lot of work going on--that we started--so I wonder if he could comment on where in the heck it is right now.

[The Chair, Conservative, Garry Breitkreuz]

Mr. MacKenzie.

[Dave MacKenzie, Conservative, Oxford, ON]

I guess it's fair to say that you created this problem.

[Some hon. members]

Oh, oh!

[Dave MacKenzie, Conservative, Oxford, ON]

No, with all due respect, there are some issues within the motion that may not be totally accurate. You're talking about customs charges on regular commercial flights. I don't think these are regular commercial flights that are coming in. That's one of the other things. They are charter flights coming in to the airport. On that I wouldn't want to argue. I simply don't have enough background on it, because I'm not involved in it, as Mr. Cullen mentioned.

Our other problem is that this was a signed agreement, as there are a number of other agreements. The fees went up because the size of the aircraft went up, and so did the number of people coming in. There are some other issues when the flights come in. If they come in within an hour or two of each other, then the customs agents can stay and do two flights, or whatever the case may be. But if they're seven hours apart, customs agents go somewhere else and then come back in. So there is certainly cost.

The other issue, which I know we have, and you have heard of it in the House, is that Moncton believes they should have it. Certainly in Ontario we've heard from a number of places. Collingwood, for instance, which is a ski resort, believes they should have somebody there who can clear international flights coming in from the U.S., particularly. We've heard it from Owen Sound. My friend at the end of the table thinks Brockville should have customs, because they have people coming in from the U.S.

At the end of the day, there are many unanswered questions around the table. We've been trying today to see if we could get somebody in from CBSA to explain where they are today with this whole thing. I understood from Mr. Ménard that he feels a time constraint, because somebody wants a decision by the first of June.

I honestly don't have a recommendation. If I thought for sure that we could get somebody to come in to give us more background on where CBSA is.... They're doing a core review that has been ongoing, and it deals with a number of small airports, this being one. Certainly Moncton is one you have heard folks from the other side ask about, and I think legitimately.

I understand what Mr. Cullen is saying. I don't know that they made the right decision or the wrong decision when they made it in about 1995, as he says, but the difficulty now is who gets free service and who pays for it. The decision was made back then, so a number are paying for it, but there are also a lot of other airports out there now that think they should have the same access as each of the others. I understand that maybe now that the contract has lapsed, it is not receiving international flights, but I am not certain of that.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

The experience with Continental Airlines took place during the ski season, which is now over. The company would like to extend the period in question, at it has done for private aircraft. It is currently conducting negotiations with the objective of designing an advertising program which would be launched on August 15. However, the last possible date was June 1.

The general point is that the fat cats with their private aircraft should pay, but passengers on regular commercial flights should not, because the money they spend in Canada is more than enough to pay for the salaries of customs officials.

[Dave MacKenzie, Conservative, Oxford, ON]

I think in other airports they pay it also.

[The Chair, Conservative, Garry Breitkreuz]

Ms. Priddy.

[Penny Priddy, NDP, Surrey North, BC]

Thank you, Mr. Chair.

I want to clarify two things with Mr. Ménard, if I may.

It seems that two words are being used interchangeably--“commercial” and “international”. It can be commercial in Canada, but there is no customs. So we're really only talking about out-of-country.

Second, somebody told me that they thought there were other airports in this situation. You said that there were not. I'm not questioning your word, I'm just checking it out to make sure....

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

It is a similar situation, but not exactly the same. What they asked is that the commercial planes, within their working hours only, don't pay. That is what happened in the rest of Canada. When commercial planes land anywhere in Canada between eight and eight, they don't pay the cost of it.

[The Chair, Conservative, Garry Breitkreuz]

Mr. Dosanjh.

[Ujjal Dosanjh, Liberal, Vancouver South, BC]

Maybe I'm wrong, but my understanding was that Mr. MacKenzie was trying to get somebody to come and explain--

[Dave MacKenzie, Conservative, Oxford, ON]

I haven't been able to confirm that I can get somebody here.

[Ujjal Dosanjh, Liberal, Vancouver South, BC]

My concern is that I don't have a comprehensive understanding of the issues affecting all of the airports in the same or similar situations. There may be none in exactly the same situation. There might be many in very similar situations.

My worry is that we would be voting in total darkness. But because it's urgent and it's a big issue in Quebec, if Mr. MacKenzie tells me that he can't get an official on Wednesday, and we can't adjourn until Wednesday, I'm actually willing to support the motion. I will then do some research on my own and bring other airports before this committee so that we can have fair treatment for them across the country. But because we don't have an official coming in, our hands are tied. I think we need to deal with this right now.

So I'll be supporting the motion as is.

[The Chair, Conservative, Garry Breitkreuz]

Mr. Cullen, you are up next.

[Roy Cullen, Liberal, Etobicoke North, ON]

I would suspect that some of this international commercial operation into Tremblant is either relatively new or the penny has sort of dropped in someone's head that they're paying customs and why are they doing that. I suspect it's tied to this whole question of cost recovery and core and non-core and new services. I don't know; Mr. MacKenzie didn't exactly confirm that, or otherwise.

Look, we know that in Quebec politics...and my Quebec colleagues will be after my head if I don't support this. The reality, though, in real terms, is that there's not a hope in Hades of this happening by the government by the end of May or June 1.

I'll support the motion, because my colleagues in Quebec would hang me if I didn't, but I think the reality is that the government won't do anything with it right now.

I would like to suggest that we deal with this at a later time in a comprehensive way in terms of cost recovery, in terms of which airports are treated like this--we're hearing conflicting information--and how this does or does not link into cost recovery and where we are going with it.

[The Chair, Conservative, Garry Breitkreuz]

Nobody else is on my speakers list, so I'll call the question.

(Motion agreed to [See Minutes of Proceedings])

This meeting stands adjourned.