Debates of May 17th, 1996

Civil Air Navigation Services Commercialization Act

[David Anderson, Liberal, Minister of Transport]

moved:

Motion No. 13

That Bill C-20, in Clause 23, be amended in the French version by replacing lines 17 to 21, on page 14, with the following:

"par écrit qu'une majorité des usagers qui seront touchés de façon significative par la fourniture de services supplémentaires est favorable à ce projet."

Motion No. 14

That Bill C-20, in Clause 23, be amended in the English version by replacing line 23, on page 14, with the following:

"(6) For the purpose of subsection (5), a".

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, this group of motions has within it two motions.

Motion No. 13 is necessary to correct two differences between the French and English language versions of Bill C-20. The French version in the reprinted Bill C-20 of May 8 contains the requirement that a person requesting additional services from Nav Canada must agree in writing to pay all incremental costs associated with the provision of the additional services, and the standing committee agree to eliminate this requirement, and the English language version of the legislation reflects this agreement.

The French version of Bill C-20 does not include the requirement which is contained in the English version that the person demonstrate, through written evidence, that a majority of affected users agree to the provision of the additional services.

Motion No. 14 is a consequential amendment to a motion that carried at the Standing Committee on Transport. At this time I call for the question on the third group of motions.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 13. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare Motion No. 13 and therefore Motion No. 14 agreed to.

We now move on to Group No. 4.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

moved:

Motion No. 15

That Bill C-20, in Clause 32, be amended by replacing lines 25 to 37, on page 16, with the following

"(2) A charge authorized by the Minister of National Defence may be imposed under subsection (1) a ) on a user; or b ) on a user in respect of a state aircraft of a foreign country.''

Mr. Speaker, in this bill that will commercialize air navigation services, the motions in Group No. 4 are aimed at ensuring that the Department of National Defence will do its part in funding and running Nav Canada.

This bill currently provides that the Department of National Defence will not be subject to the charges that other carriers will have to pay. In our opinion, this distorts the real assessment of DND's operating costs, of the budget funds allocated to national defence, and may have a negative impact on some airports when services are shared by DND and all private air service users.

Why should DND be exempt? The easing of international tensions in recent years has led to perhaps insufficient but still significant cuts to DND. Further cuts are needed, but DND should still be held accountable for all its spending.

If DND is exempted from paying air service charges, its annual estimates will give the impression that it costs less than it really does.

Military flights still mean something in Canada. Our training bases are used by Canadian soldiers, but some of our flight training areas, notably in Labrador, are also used by other countries. Why should DND not pay its share? This would also help us determine what parts of the country benefit from this kind of spending.

If DND generated significant revenues for a special purpose airport, this would allow us to consider the economic impact of this bill on air navigation activities.

Ultimately, what we would like to see prevail, and this is the principle found everywhere else in the bill, that is why we are somewhat surprised at the government's position and we think it would be a good idea to correct the situation, is the user pay principle.

Would there not be a benefit today in ensuring that the real expenses incurred by a department are paid by that department? There are other sectors of government activity that will have to defray these costs directly or indirectly. For example, if we take the health sector, ambulance airplanes are used in Canada to reach remote areas. These people will have to cover the planned charges. Why would this kind of charge be picked up by the health sector and not by the national defence sector? It applies in the health sector, but it could also apply in the tourist sector.

The tourist industry in Canada is very important. It has grown considerably and is expected to grow even more in future. With the new charges, many small carriers may see their economic activities jeopardized. They will have to change their method of operating accordingly. This is not required of a huge department like defence, which spends enormous amounts on protection, but, at the same time, it would not be charged the portion of air navigation costs that apply in its case.

It strikes us as most surprising that, in sectors like health, tourism, businesses, they are trying to justify fee scales for private sector flights but there none for defence flights. Is that not a double standard? Is that not a mistake, in fact?

This seems to be perpetuating, in relation to the defence sector, practices which existed in the government some 15, 20, 25 or 30 years ago. People became aware that these practices were having devastating effects, a loss of control over the cost of operations. If defence does not have to bear its part of the costs, does this not lead to a tendency to use available services more, and to put increased pressure on the system? Finally, there can be no real assessment of what the costs of air navigation for the defence sector are. Are there not facilities in certain parts of Canada which will need to be put into place specifically for defence purposes, without there being any corresponding charges levied?

All of these questions lead us to wish to see an amendment to the bill, one ensuring that this department assumes its share, as other departments must, and as the private sector is required to do, paying its way in the reconfiguration resulting from the creation of Nav Canada and the commercialization of air navigation services.

Reference is also made to foreign government aircraft, which whould also be made to pay. I think it is important, from the safety and security points of view, to know what is going on with these flights, what costs they will generate, what sort of protection we can provide them.

Just imagine something which I certainly do not wish to ever see happen: a collision between a defence or military aircraft and one belonging to a private carrier. This would create a somewhat artificial situation in which one of the parties involved in the accident had never been required to contribute to the quality of safety services. This would surely contribute to a poor opinion of the defence sector. These days I do not think there is anything to be gained by adding to the negative image of a department described yesterday by its minister as in a "painful situation", when serious questions are already being asked about its efficiency and transparency.

The purpose of our amendments is to ensure greater transparency, to make sure that the exact air navigation costs of department of defence activities will be known. This will, I believe, be worthwhile both to the House and to those concerned with costs, in these

times when people are questioning whether money is being used properly. It will be one way of knowing what the real costs are.

Also, private air carriers and Canadian taxpayers should not necessarily be the ones paying for national defence. Why should they have to foot the bill in this case? This is tantamount to giving additional importance to the defence sector. As I said earlier, if I could favour certain sectors by granting them such an exemption, flying ambulances would definitely take precedence over military flights. Let military aviation officials know exactly how much it really costs to fly their aircraft. This is important and it should be taken into account. This is the purpose of our amendment, and we hope the government will support it.

Small carriers really wonder about the additional pressure put on their activities through the new tariff structure. They are justified in saying there should not be a double standard in Canada but, rather, a level playing field. Whether it is the military or the private sector, everyone must bear the overall costs. Under the user pay principle, everyone must make an adequate contribution, so that when the time comes to determine the real costs of defence activities, these costs will be based on actual figures, not incomplete data that does not allow us to know the overall government costs in this sector.

I hope the government will seriously consider our proposal. It is based on sound arguments and it is fully justified. In the middle term, the government's decision to exempt DND from having to pay these costs would certainly not prove efficient from an administrative point of view, or in terms of the follow up of air navigation costs, which is the very basis of the legislation.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, if the argument being put forward by the Bloc member were as simple as he stated, I might even support this motion when it came to a vote.

We discussed this at the Standing Committee on Transport. It was made very clear why the government would reject this motion. Motion No. 15, the only motion within this grouping, demonstrates again a total lack of understanding of the charging aspects of Bill C-20, in particular the charging aspect as it relates to DND services.

The Bloc motion tries to eliminate the exemption for Nav Canada's charges for aircraft operated under the authority of the Minister of Transport and for aircraft of a foreign state. Let us deal with the foreign state issue first. The exemption for foreign state aircraft is the least significant of the two. Bill C-20 reflects the fact that many states do not levy charges on state aircraft and in the interests of reciprocity, in the interests of symmetry the state aircraft of such countries should not be charged for Canadian air navigation services.

The Bloc should take great comfort in the fact that the bill leaves the door open for the governor in council to authorize charges on state aircraft of countries coming into Canada that charge Canadian state aircraft at the present time or in the future when they fly to those countries. I hope that would satisfy members opposite.

The more significant exemption being asked for is the one in respect of aircraft operated by the Minister of National Defence. Rather than an outright exemption, this is just an element of an arrangement between Nav Canada and the Minister of National Defence.

The arrangement recognizes that the minister is both a user and a provider of air navigation services. As a provider of services, the minister operates the air navigation services in designated military air space which includes the air space around military bases such as Comox, Cold Lake, Moose Jaw, Trenton, Bagotville, Goose Bay and others. At present the Minister of National Defence does not charge for any of these services.

The arrangement is for Nav Canada not to charge the Minister of National Defence's aircraft for the use of Nav Canada's services. In return, as compensation, the Minister of National Defence would allow Nav Canada to charge civilian users for air navigation services provided by the military. That means Nav Canada gives up some of its revenue in respect of services it provides and it gains some revenue from services provided by the Minister of National Defence.

Because the two amounts for all intents and purposes are just about the same, it is a good arrangement for both parties. In addition, the Department of National Defence avoids having to establish a whole separate billing and collection system for charges it would otherwise likely have to introduce for air navigation services provided by the military.

Because the two amounts are roughly equal, it is not correct to say that the exemption burdens civilian users with costs that should be borne by the Minister of National Defence, as outlined by members opposite. Users will also benefit from this arrangement by receiving only one invoice from Nav Canada, even when they use services provided by both the Minister of National Defence and Nav Canada.

This motion would completely destroy this arrangement. For the same reasons that we stated last week at the Standing Committee on Transport, we would reject this suggestion.

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, like my hon. colleagues, I am pleased to participate in this debate today on Bill C-20, an act respecting the commercialization of civil air navigation services. Among other things, this bill establishes a business corporation called Nav Canada, or NAVCAN.

We are now at report stage, at Group No. 4, to be more precise, Motion No. 15 put forward by the Bloc Quebecois. This motion is to amend clause 32 of the bill to ensure that DND and state aircraft of a foreign country are not exempt from paying charges.

To listen to the parliamentary secretary to the Minister of Transport, you would think that the Bloc Quebecois never understands a thing and always introduces useless motions. He claims this is a good arrangement between the Department of National Defence and Nav Canada, which will apparently split the costs about 50-50. I would be curious to see the parliamentary secretary's figures in this.

At any rate, I should point out that a proposal has already been tabled by small air carriers, suggesting that DND should have to pay for its use of services at airports in Quebec and Canada.

The problem, then, comes from the need not to make taxpayers, passengers and air carriers pay for military aircraft, and there is no guarantee whatsoever that it will not be the case.

The Bloc Quebecois feels it is unfair to have private users pay for services required by national defence. If clause 32(2) is not amended, defence expenditures will once again be hidden. We have always demanded a reduction in military spending. For this to happen, we first have to know the actual costs. However, in its present form, clause 32(2) will not enable us to know these costs.

Again, it is not up to private air carriers and Canadian taxpayers to pay for DND's flying activities until the minister tables the figures relating to such activities.

Our motion is based on the notion of transparency. It seeks to avoid an artificial reduction of the national defence budget, so as to ensure that actual costs and expenditures relating to such activities are accounted for.

Taxpayers living in remote regions-including those represented by the hon. members for Abitibi, Lac-Saint-Jean, Gaspé and others-must sometimes pay two or three times more per kilometre to go to Montreal or Quebec City than people who travel between Montreal and Toronto. Therefore, I do not see why national defence should be exempted from having to pay the costs associated with its flying activities.

Since the Liberal government is cutting social programs, programs helping the handicapped, old age pensions and women's support programs, I wonder what could possibly justify keeping clause 32(2).

If there is such a thing as natural justice, the Liberal government has definitely missed the boat in this case and forgotten about the principles of fairness which underlie our laws.

I ask all members of this House to support Motion No. 15 moved by the Bloc Quebecois, so that national defence, for the reasons I mentioned, will not be exempt from paying fees to Nav Canada.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I will raise a few points at report stage of Bill C-20, which is to privatize NavCan, and on the group of motions we are currently speaking on.

I listened to the Parliamentary Secretary to the Minister of Transport just a few minutes ago. He explained the tradeoffs between the Minister of National Defence and NavCan: I will not charge you for your services if you do not charge me for the services I provide to you. This is a wonderful way to do business.

Perhaps that is why NavCan is being created to be one of these not for profit organizations. Perhaps profit and efficiency are not the operative points which are trying to be achieved with this exercise. It is only an exercise to move the civil servants who work in the air navigation industry off the government payroll into some other organization which is far enough removed that there is no accountability. It will not be part of the normal operation of government and therefore will be removed from the scrutiny of the House. That is the point I will speak to.

If NavCan is to be a privatized organization, why would it provide services for free and expect services for free when there seems to be no real relationship between the services being provided, other than to have a gentleman's agreement to ignore them? Is that privatization? Does that seem to be the way the private sector does business? The Income Tax Act calls that barter and it is taxable.

The government is saying again that the rules that operate in the private sector do not apply to the government because the government makes the rules. The fundamental problem with much that comes out of the government is that it creates its own little environment by saying it makes the rules and it will say how the game is played.

The government is going to call this privatization. NavCan is a not for profit organization. It is not designed to make a profit. It is a cost plus organization. It is going to remove 6,500 people from the civil service and put them into this organization which will be removed from parliamentary scrutiny.

As well there will be no scrutiny by the Auditor General of Canada. It is not a crown corporation as defined in the Financial Administration Act. The government has come up with a new

hybrid. Therefore the auditor general has not been given the mandate to scrutinize NavCan, as he has with other crown corporations.

What is the government trying to achieve? When it set up Nav Canada, it had all these assets, computer equipment, buildings and goodness knows what else paid for by the taxpayer. What did it say? It told NavCan to go out into the money markets and borrow $1.5 billion. It is going to sell the assets to NavCan for cash. That is fine for the Minister of Finance because it helps him to meet his deficit reduction targets this year.

I come back to the very point that the parliamentary secretary made. These trade-offs and these gentlemen's agreements which are made are totally and absolutely banned by the Income Tax Act and not allowed in the private sector, yet he openly admits that it is the trade-off made. The government does not want to figure out how these services are to be valued. The parliamentary secretary thinks it is a good deal for Canadian taxpayers. I doubt it.

This organization, Nav Canada, is far removed from public scrutiny yet it has been given a monopoly. It has been given virtual taxing powers. There is absolutely no constraint on the way it spends its money. There is no constraint on what it says it needs and is going to pass on to the consumer, the airlines and so on. It will pass on costs through tickets to the Canadian consumer.

The government tells us that this is good for Canadians. The President of the Treasury Board admitted in committee the other day that the 6,500 civil servants did not lose their jobs but just got a new name on their pay cheques. This is part of his civil service reduction package. That way Canadians think the government is being downsized. Not one of these 6,500 people lost his or her job. On Friday night, they were working for the government and on Monday morning they were working for Nav Canada. We gave them $200 million cash because they got laid off.

These are the types of things that should be debated in the House. The government should be telling Canadians how it is spending their money. It should also be forthright with Canadians that this organization is far enough removed from public scrutiny that it does not have to worry about its financial statements.

I have already said that the Minister of Finance will take a $1.5 billion credit on deficit reduction courtesy of Nav Canada because Nav Canada will borrow the money from the private sector.

This organization is not going to be accountable according to the normal rules of the private sector. The parliamentary secretary has already admitted that the normal rules of the Income Tax Act and barter do not apply in this situation. How can he call it a private sector organization?

Everything the government is doing is obfuscation and deceit as far as this deal is concerned. If it wants to have a true private sector type of organization, it should have said so. If that is not what it wanted, it should at least have given the Auditor General of Canada the power of scrutiny over Nav Canada. That is why we have these problems.

In 5, 10, 15 years from now, people will find out that this organization has runaway costs. Canadian consumers are finally going to rebel and say it is too much. The government is not doing its job today.

Accountability is the number one issue in the private sector. If the government builds in competitiveness and if it expects and demands that Nav Canada work according to the same rules as the private sector, it may have something.

The government has removed NavCan far enough away that it has been swept under the carpet. The government is taking credit. There are 6,500 fewer civil servants. These people are still paid by the Canadian consumer: $1.5 billion deficit reduction claimed by the Minister of Finance courtesy of this equipment that is being used by Nav Canada, but there is no accountability.

Mark my words. If an organization has no accountability, it leads down a very difficult path that usually is the wrong path. I ask the government to think very seriously about that.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

The question is on Motion No. 15. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it.

And more than five members having risen:

[The Deputy Speaker]

The recorded division on the motion stands deferred.

We will now go to Group No. 5, Motions Nos. 25 and 26.

[David Anderson, Liberal, Minister of Transport]

moved:

Motion No. 25

That Bill C-20 be amended by deleting Clause 96.1.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

moved:

Motion No. 26

That Bill C-20 be amended by adding after line 21, on page 50, the following new Clause:

Privacy Act

106.1 The Schedule to the Privacy Act is amended by adding the following in alphabetical order under the heading "Other Government Institutions":

NAV CANADA CORPORATION Société NAV CANADA''.

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I cannot let the remarks of the hon. member for St. Albert go without reminding him that he did not spend a single moment in the transport committee when we dealt with this bill.

We addressed concerns between NavCan and ANS. He did not spend a second in committee, but he made a speech saying things that completely contradict the critic of his party. Can anyone imagine? The critic of his party is charged with the responsibility to go to committee to put forward the position of the Reform Party.

Yet the member for St. Albert made his statement. Yesterday the member for Kootenay West-Revelstoke, the Reform Party critic, made the position of the Reform Party very clear. Then his colleague from St. Albert got up and talked about something he obviously knows nothing about and contradicts the critic in his party. You have to wonder where these guys are coming from.

However, let us move on to the last group of motions. We are talking about the Privacy Act.

The hon. member for Kootenay West-Revelstoke yesterday made some remarks with regard to the Privacy Act. He said he called NavCan, the not for profit corporation which we would like to move this to. He said he had talked to NavCan and it has no problem with the Privacy Act being brought forward to this bill.

NavCan wrote a letter to the government on May 9 and also appeared before the Standing Committee on Transport. It is clear in the letter to the Minister of Transport and I quote:

First, the Privacy Act currently applies only to certain federal government institutions, including federal government departments and certain agencies and Crown Corporations. It does not apply to all Crown Corporations. It does not apply to corporations that have been privatized such as CN or Air Canada. It does not apply to any private sector corporations or organizations whatsoever.

The extension of the Privacy Act to any part of the private sector would represent a significant change in policy of the Government of Canada. It would bring with it to the private sector not only the necessity to substantively guarantee the protection of personal information (which is not in itself objectionable) but also the processes designed to apply to the federal government for correcting and amending records containing personal information and the requirement that a private sector corporation be subject to a complaint and investigative procedure by a Federal government officer, namely the Privacy Commissioner with, ultimately, decisions on the collection, retention and administration of records containing personal information being subject to review in the Federal Court of Canada. This degree of bureaucracy and administration would be inconsistent with the imperatives of the private sector and, certainly, with the rationale for the commercialization of the ANS.

Government could not agree more. We had discussions in the Standing Committee on Transport. In the government's reassessment of whether the Privacy Act should apply to Nav Canada, it became increasingly clear that the application of the Privacy Act to Nav Canada is completely unnecessary and inappropriate. The Privacy Act deals with the protection of personal information held by government and the rights of an individual to access that information.

As I said at the outset, it was interesting to hear the member for Kootenay West-Revelstoke yesterday saying that Nav Canada did not have a problem with this. Mr. Speaker, I must put this diplomatically because I do not want you to intercede. The hon. member was incorrect in that statement. The proof of the pudding is the letter dated May 9. If the Reform critic for transport wants more evidence of that he is invited to phone the officials at Nav Canada any time for a very clear explanation of why Nav Canada does not agree that the Privacy Act should apply in this not for profit corporation. I hope he does that.

We are wrapping up discussions at report stage and second reading of the bill. When we come back after working hard in our ridings next week, we will be discussing third reading of the bill. I hope the hon. member will retract his remarks.

As outlined by its letter to the minister, Nav Canada would be the only private sector entity subject to the Privacy Act. The act does not apply to previous government commercializations like CN and Air Canada. It does not apply to other regulated monopolies, not even those in key economic sectors like telecommunications.

When the privacy commissioner, Mr. Phillips, came before the Standing Committee on Transport, I suggested that if there was a need to extend the application of the Privacy Act to private sector

entities, it should be considered in the context of a comprehensive review of the fundamentals of the Privacy Act, not Bill C-20.

Why decide to pick on one area, one bill, one of the four major modes of transportation to apply an act against a not for profit corporation? That kind of review should provide an opportunity, if Mr. Phillips were to examine his own backyard on the Privacy Act in which all interested parties could express their views.

When all is said and done it must be remembered that the privacy commissioner can at any time investigate complaints and initiate investigations.