Madam Speaker, it is my pleasure to share my time with my colleague the member for Mississauga West.
I rise to speak against the motion raised by the Bloc today. In his policy framework for airline restructuring in Canada, the Minister of Transport indicated on October 26 that the government was prepared to consider increasing the 10% limit to a new level to be decided following input from parliamentarians, only if such a measure contributes to a healthy Canadian airline industry.
The importance of a healthy airline industry in Canada cannot be overstated. Canada's airlines provide employment to thousands of skilled workers and are important contributors to our economy. In a country as large as Canada, they help support the very fabric of our society by connecting communities separated by hundreds, sometimes thousands, of kilometres.
As international trade and travel increase, our airlines provide Canada with critical links to the rest of the world. Canada needs a healthy airline industry to continue to enjoy these benefits and to create even greater benefits.
As my hon. colleagues are aware, the government has been very closely monitoring developments in the industry. It has assessed the implications of a major restructuring in order to form its policy framework.
The Government of Canada is committed to protecting the public interest in issues such as pricing, service to small communities and the rights and concerns of airline employees. I and my caucus colleagues have been made intimately, sometimes forcefully, aware of the concerns of the employees of both Canadian Airlines and Air Canada.
As the member of parliament for Mississauga Centre, I represent a riding that is home to hundreds, sometimes it feels like thousands, of airline employees. It is the employees of both airlines as well as the Canadian traveller that I remain most concerned about.
Travellers are justifiably concerned about airfares. Competition encourages lower airfares and increases the affordability of air travel. Currently almost 90% of air travel within Canada is on discounted fares. Seat sales allow families in Vancouver to visit relatives in Montreal. They allow small business people on restricted budgets to travel more easily. They encourage tourism.
It is reasonable to be concerned that a major restructuring of the Canadian airline industry could lead to higher airfares for all consumers. The government is very much aware of these concerns and the importance of affordable air travel to all Canadians.
As stated in the policy framework for airline restructuring in Canada, clearly the best way to promote affordable air travel is to have an air industry that remains healthy as well as competitive. It is competition rather than government intervention that will be most effective in moderating airfares in the long run. However, we must consider that competition may not exert sufficient control on prices in all circumstances. It is for this reason that competition concerns have been addressed at such length by our government.
The government already has tools at its disposal to address pricing concerns, including section 66 of the Canada Transportation Act which allows the Canadian Transportation Agency to act on complaints regarding basic fares on monopoly routes. As the Minister of Transport has stated, the government will go further and assess whether these provisions should be broadened to address market dominance.
As well, the government will require commitments on pricing from the dominant carrier during any restructuring process. The government will consider adding relevant conditions to its approval of any restructuring. The government will not tolerate any price gouging of Canadian consumers.
The importance of air travel to small communities is also a very serious concern. Our airlines help support the fabric of our nation by providing crucial air service to hundreds of domestic destinations, many of them accessible only by air.
Small communities rely on air services often more than large communities. Airlines provide links to larger markets, help attract investments and provide an indispensable lifeline to the rest of Canada.
As my hon. colleagues can appreciate, a major restructuring of the airline industry could lead to a rationalization of some air services. In this regard the public, consumer representatives and northern residents have expressed their concern that air services to smaller communities could decrease or even disappear. As set out in the government's policy framework, the key to addressing this issue is to ensure that barriers to entry and to growth in the market of small regional airlines are reduced to the greatest extent possible and that there are protections from possible predatory behaviour on the part of a dominant carrier.
History has demonstrated that where there is a demand there will be entrepreneurs willing to provide service, even in small markets. There must be an environment that will allow competition to exist. With this in mind our government has indicated that it will work to ensure that the necessary conditions for attracting competition are in place.
I would like my hon. colleagues to note that the Canada Transportation Act already requires the last and second last carrier serving any community to give notice of their intention to stop service so that there will be adequate lead time for any other carrier to prepare to offer replacement service. These sections will be reviewed to determine if they remain adequate.
In addition, the government has stated that it will require commitments on service to small communities from the dominant carrier during the restructuring process and will consider adding more conditions before restructuring is approved.
Lastly, I would like to address concerns regarding employment. The Canadian airline industry employs thousands of skilled workers directly and indirectly. These employees have worked diligently. Many of them have made significant sacrifices to ensure the success of their companies. They have endured economic downturns and have witnessed corporate downsizing. They have agreed to pay freezes and to pay cuts. They are important contributors to the Canadian economy. I believe they merit the consideration of our government in any airline restructuring.
The government has already consulted various groups on the issue. Labour leaders have expressed the concern that employment levels may be substantially affected by a restructuring of the airline industry. They want to ensure that job impacts and dislocations are minimized and that any employment adjustments are handled exclusively through normal retirement, attrition and voluntary separation packages.
Airline employees are very concerned that airline consolidation will cost them their jobs. They fear forced relocation and layoffs. It is for this reason that the government will insist that employees be treated fairly and will require commitments from a dominant carrier to this effect. The government will encourage labour management discussions with a view to reaching an agreement which is satisfactory to all.
The government believes that Canadian consumers want and deserve the benefits of competition, that small communities require air service and that airline employees deserve to be treated fairly. At the same time the government believes that these objectives are consistent with a healthy, Canadian controlled airline industry.
If my hon. colleagues believe that these are laudable goals, then they should agree that we must be prepared to take the necessary steps to manage a major restructuring of the Canadian airline industry. I call on my hon. colleagues to support the government initiatives presented by the Minister of Transport on October 26, including a provision for the government to consider increasing the 10% limit on individual ownership of Air Canada's voting shares.
The Minister of Transport has been very clear on his willingness to consider a legislative change right from the beginning. One has to look no further than the minister's news release of August 13, 1999, in which he said:
The Government of Canada will also consider what further action might be required, including the possibility of introducing legislation to facilitate the implementation of an acceptable proposal and making any necessary changes to the policy and regulatory framework governing airlines.
Clearly the government has stated its openness to legislative change from the day the use of section 47 was announced, which was August 13.
This issue will only be decided following input from parliamentarians and then only if such a measure contributes to achieving a healthy, Canadian controlled airline industry.
I will repeat this for the sake of all here. The government has stated that a change to the 10% limit will only be considered if it will contribute to achieving a healthy, Canadian controlled airline industry.
To make a decision prior to proper consultation, as is effectively proposed by the hon. member's motion, would not only deprive the government of the benefits of the advice of the parliamentary standing committees, it would also be unfair to the proponents of the private sector proposals that are seen to be addressed by shareholders.
For this reason, I oppose the motion. I also appreciate, as my colleague did, the opportunity to state my position in the House. Perhaps it will relieve me of the millions of phone calls I have been getting.