Debates of Oct. 28th, 1999

Supply

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, very quickly, I would like to give the member for Charlevoix a chance to finish what he was saying about regional transportation in the future.

The 10% rule issue is about whether we should allow concentration of powers or keep things fair. As for regional transportation, I know that the Bloc Quebecois would like another, broader debate.> Small regional carriers do exist but, right now, there is at least one Canadian company having trouble providing good regional service because of major financial difficulties.

I would like to hear whether my colleague agrees that the issue of regional air transportation rules should be debated again. In my view, this is a truly important issue.

[Gérard Asselin, Bloc, Charlevoix, QC]

Mr. Speaker, any discussion about regional transportation is a discussion about an essential service. It is not a luxury to travel by air when one lives in the regions.

Consideration must also be given to travel agencies and passenger safety. As the Minister said in his speech “Safety remains Transport Canada's top priority”.

How can the minister explain that, just under a year ago, on December 7 in Baie-Comeau, a plane registered to Mira Aviation in Gaspé crashed, unbeknownst to any air traffic controller?

How does the minister explain that a Nordair plane flying out of Sept-Îles crashed, forcing passengers to walk several kilometres through a wooded area to reach a road and obtain help?

How does the minister explain that, last December 7, an Air Satellite plane operating out of Baie-Comeau crashed, and that it was a six-year old girl who discovered the plane?

This is air service? This is the sort of good service Nav Canada is providing? I would not want to alarm the public, but I worry when I take a plane these days. If it was important to have air traffic controllers and firefighters in 1975, it is even more important to have them in 1999.

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I am pleased to speak to the motion to affirm the 10% limit on individual holdings of voting shares in Air Canada.

Mr. Speaker, I will be splitting my time with the hon. member for Port Moody—Coquitlam—Port Coquitlam.

I want to remind the House that on October 26 the transport minister issued a policy framework for the restructuring of the airline industry in Canada in which the percentage limit on individual holdings of Air Canada was addressed. In his remarks to the Standing Committee on Transport the minister reiterated the government's willingness to consider increasing the limit to a new level, to be decided following input from parliamentarians, if such a measure were to contribute to achieving a healthy Canadian controlled airline industry.

That is important. A healthy and viable industry is one in which airlines are financially fit and competing both domestically and internationally. However, in view of the circumstances in the air travel marketplace, a restructuring of Canada's airline industry resulting in one dominant airline appears likely.

Confronted with the probability of major changes to the airline industry, Canadians have been very active and vocal in expressing their views and concerns, and rightfully so. The transport minister and his officials have met with numerous direct stakeholders, have consulted with interest groups and members of the public and have received views through correspondence and other ways of getting in contact. A wide of variety of important concerns have been expressed by Canadians confirming the need for a clear government role in any restructuring of the airline industry.

I am proud to say that the government has listened carefully to Canadians and has developed a framework outlining our approach to protecting the public interest.

One aspect of the public interest that has received substantial attention is the predicted lessening of competition as a result of a major consolidation of airlines. Most Canadians want Canada's airline industry to be competitive. We have heard that and we have listened. They believe that competition is an effective way to ensure reasonable airfares and good quality air service. The government continues to agree with Canadians in this regard.

Early in the process the transport minister solicited the assistance of the Competition Bureau. The commissioner of the bureau submitted his report on October 22 to the Minister of Transport. The commissioner's analysis and recommendations were thoroughly considered by the minister, as a study of the policy framework will show.

The government is committed to fostering as much competition as possible in the airline industry in Canada. That is precisely what we are doing. We are convinced that reducing the barriers to market entry for new carriers and encouraging existing carriers to expand into new markets will mitigate the expected lessening of competition that may result from a consolidation in the industry. That is why the Minister of Transport announced the government's intention to take policy and regulatory steps to address competition issues.

Frequent flyer programs, for example, that have a significant influence on the air services that consumers choose, are a concern for competition. Other carriers would be greatly disadvantaged if they could not offer or redeem points in a dominant carrier's plan. The potential negative effects could be mitigated by allowing any domestic carrier to purchase points in the dominant carrier's frequent flyer plan at a reasonable cost, or by the dominant carrier's participation in independent loyalty programs.

The great majority of flight bookings still go through travel agents. If agents are constrained from booking on other airlines for fear of not achieving the target set for their override commission by the dominant carrier, competition would be undermined. The government will examine ways to address the anti-competitive effects of this issue while recognizing the potential impact on travel agent revenues.

Any restructuring of the airline industry is expected to include some rationalization of services, particularly in the domestic market, such that the dominant carrier may no longer need all the aircraft in its fleet. These aircraft, already certified for safe operation in Canada, might be very attractive to other Canadian carriers. There is a risk, however, that the dominant carrier would prefer to divest any surplus aircraft offshore. If rights of first refusal for surplus aircraft on reasonable commercial terms were offered to an interested party in the domestic market during the restructuring process, this could assist in fostering more consumer choice.

Independent airlines may have little choice but to work with the dominant carrier when their passengers need a connecting flight to get to their final destination. A smooth exchange of passengers and their baggage, however, requires the co-operation of the dominant airline. If access to feed traffic and interlining were offered to unaffiliated regional and chartered carriers on commercially reasonable terms, this could help regional carriers to continue to function effectively. This is certainly a goal of the government.

Both major airlines have developed close commercial relations with regional affiliates or partner airlines to ensure that smaller communities are well integrated into their network. After all, that is what Canada is all about.

In these arrangements it is common for the larger carrier to provide such essential services as airport slots and facilities, aircraft leases, reservation systems, ticket processing, revenue collection and accounting. However, it is not clear whether all of the smaller regional carriers will remain connected to the dominant carrier in any restructuring. If any do not, they will need a period of adjustment so that they may replace essential services previously provided by larger partners.

For regional carriers formerly dependent on one of the two major carriers for essential services, if the dominant carrier were to continue to provide these services for a reasonable period of time at prices no less favourable than currently in place, this would help ensure continued service. Where feasible, the dominant carrier might also continue to provide items acquired through volume purchasing such as fuel, spare parts, aircraft leasing and insurance for a reasonable transition period.

Preventing excessively aggressive competition activity by a dominant airline will be a priority for our government, as will be ensuring smaller airlines reasonable access to airport facilities and services and to computer reservations systems.

The government has made it clear that in the new process the Competition Bureau will review any specific proposed merger or acquisition with regard to competition issues. The results will be taken into account by the Minister of Transport who will make a comprehensive recommendation to the governor in council.

These government initiatives regarding airline competition, in my view, are measured and reasonable to accomplish the policy objectives. Certainly they are in the best interests of Canadians wherever they live.

In closing, as stated in the government's October 26 policy framework statement, regardless of how things evolve in terms of airline industry restructuring in Canada, the government is intent on ensuring that the public interest remains paramount and is protected. The government is confident that the entrepreneurial spirit of Canada will remain strong and that competitive air services will develop and provide real options for travellers.

The government is also confident that the House and Senate standing committees will provide useful advice on the implementation of remedies for competitive issues. As well, these committees have been requested to provide their views on this issue.

I believe that parliamentarians in this House should be given a chance to provide views on this important issue. I oppose the hon. member's motion to make a decision on the issue today. We need to let the process take its course. I think that is what Canadians want and it is what all of us need.

[Benoît Sauvageau, Bloc, Repentigny, QC]

First of all, Mr. Speaker, I would like to congratulate the hon. member for his great performance in reading his speech. It was written either by Department of Transport officials or by Onex bureaucrats, we do not know exactly. In any case, we have to admit that he read it very well.

With all due respect, I also want the hon. member to know that I would have liked to direct my question to the hon. member for Notre-Dame-de-Grâce—Lachine, the hon. member for Vaudreuil—Soulanges or the hon. member for Verdun—Saint-Henri, but as my colleague, the member for Frontenac—Mégantic, said today, we will not hear a peep from them. It would be nice if their constituents had the opportunity to hear them, here in the House of Commons, or outside, in the foyer, or in their riding. One member, the hon. member for Lac-Saint-Louis actually did speak out, but oddly enough, we have not seen much of him lately.

I have two very simple questions to ask the hon. member. Could he give us an example, in Canadian history, of the 10% rule being violated? For example, for the banks, did the rule stand, yes or no? I am sure that the hon. member looked into this issue at length before delivering his speech, and I would like him to give us any example in Canada, since 1867, of the 10% rule being violated. My second question is this one: as things stand now, is the proposal from Onex legal or not?

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I thank the hon. member for his question.

It is important that we on the government side, however we do it, elucidate clearly what we are saying and how we are going about this very important process, unlike the sovereignists opposite who seem to flail around and do not quite focus on this all important issue. I can tell the House that we have nothing to learn from those people over there.

I think back to the 1980s when Quebec Air was nationalized by the then Parti Quebecois. What did it do then? Did it consult with the people? Did it take a look at what should happen? No, it barrelled ahead and did all kinds of outrageous things.

Now those members on the other side are trying to tell us what we should do now. It is outrageous that they would sit in their seats and try to make that kind of pretension because they do not practise what they preach. All they do is flip-flop around and make all kinds of nonsensical issues in the best interest not of Canada, not of Quebec, but of their own small minded way.

Canadians will have no part of that because they saw through them in what they did with Quebec Air in the 1980s, and what they are preaching today is nothing but phony, phony, phony.

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Mr. Speaker, I have two questions for the hon. member. He mentioned in his speech that the entrepreneurial spirit was alive and well, that they were fostering it and all that sort of thing.

When the minister asked the Competition Bureau to investigate the restructuring of the aviation industry, could the member explain why the minister did not restrict it to one narrow vision, the minister's narrow vision of a dominant carrier? Why did he not ask the Competition Bureau to bring back all the options and all the potential possibilities that may include the competition which this one does not? Instead, he just focused on one area and limited the bureau's review to that.

I would like him to comment on another matter. When the government called for proposals on August 13, it said that it would consider proposals for 90 days. Why did the government not then consider or make public its intention to consider changing the 10% rule? Why did it wait until there were only 16 days left in the process when nobody else had a chance to put a proposal on the table?

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I thank the hon. member opposite for the question. I reject outright his premise that we did not have a broad consensus in terms of where we are going. It is not a narrow vision. It is, rather, in the best interest of our great country and of all Canadians.

I have been amazed by the Tories since 1997. I was doing some research on this very important area. Two years ago the Tories called for cutbacks of $35 million from Transport Canada, and here they are today wanting to argue the other side. Can we imagine calling for those kinds of cutbacks and now arguing the other side?

I was reading not so long ago in the Montreal Gazette that the member for Cumberland—Colchester accused the minister of changing the ground rules to favour the Onex takeover bid. It is truly amazing that those Tories who wreaked havoc when Mulroney was in power are trying to do things today which are totally at odds with what we as a government are doing in a very effective and promising way for Canadians. Such nonsense will not be tolerated by the Canadian people.

[Lou Sekora, Liberal, Port Moody—Coquitlam, BC]

Mr. Speaker, I am pleased to speak to the hon. member's motion concerning the government's policy framework for the airline restructuring in Canada announced on October 26 by the Minister of Transport.

The motion before us concerns whether the current prohibition on any person or persons holding more than 10% of Air Canada voting shares should be maintained. The government has clearly stated in its policy framework that it is prepared to consider increasing the limit to a new level after input from parliamentarians, if such a measure contributes to achieving a healthy Canadian controlled airline industry. In this context it articulated a number of key elements in its policy framework, including the desire to foster as much competition as possible in the airline industry in Canada.

This framework also clarifies the government's intention to review Canadian international air policy in a new Canadian airline environment.

A revised international air policy is a critical element of the new policy framework for airline restructuring. International air services account for more than 50% of the revenues of Canada's two major airlines, Air Canada and Canadian Airlines International.

These services are even more important to Canadian's largest charter carriers: Air Transat, Canada 3000, Royal Aviation and Sky Service. These carriers operate extensive passenger charter services both domestically and throughout the world. In his policy framework announcement the minister clearly stated that the government would revise its policies for international scheduled and charter air services with a view to removing unnecessary restrictions on air services.

I am sure members would all agree that such a commitment is clearly warranted now that the industry structure appears to be changing. Canada's international charter policies, for example, were developed in 1978. One of its primary objectives was to allow charter carriers to compete effectively with scheduled carriers like Air Canada and Canadian Airlines for international leisure passengers.

The objective has been implemented through regulations administered by the Canadian Transportation Agency and effected through a series of charter fences such as pre-booking and minimum stay requirements. Therefore a policy approach that protects parts of the market for scheduled services from charter competition was deemed to be in the public interest.

In an environment where Canada might be faced with one dominant Canadian scheduled carrier operating both domestic and international air services, the minister has clearly signalled that the current degree of protection for scheduled air carriers from charter service competition on international routes will be reviewed.

The minister has also indicated that the government intends to review its international scheduled air policy. This is the policy framework by which the Minister of Transport exercises his authority to assign to specific Canadian carriers the right to operate scheduled international routes to specific countries.

Other than the Canada-U.S. market where any number of Canadian carriers may be designated, today's policy framework designation of international routes states that two Canadian carriers may be designated in markets exceeding 300,000 scheduled passenger trips per year.

In markets below that threshold only one Canadian carrier will be designated. This policy framework has developed over time. Historically international scheduled routes were granted to Air Canada and CP Air, later known as Canadian Airlines International. This approach was known as the division of the world approach whereby each carrier was assigned exclusive access to specific markets in order to support the broad viability of each carrier's operations.

Changes have evolved to make the approach more transparent and more competitive. The current policy framework includes a use it or lose it approach whereby airlines that are granted designations must operate them at a minimum level of service or potentially lose them to another air carrier.

Given the potential changes to the airline structure in Canada, the minister has indicated a need to revise these policies with a view to removing all unnecessary restrictions on air services. This clearly is in keeping with the objective of fostering competition as articulated in the new policy framework which has formed part of the recently released recommendations of the commissioner of competition in his letter to the minister.

The government has stated its intention to reconsider its approach to the 60 plus bilateral air agreements the government has negotiated with other countries. We will determine the extent to which Canadian and foreign carriers should have more international route opportunities. These agreements or treaties guarantee the airlines assigned by each country the right to operate specific international scheduled routes, the frequency of services permitted, the type of aircraft that may be operated, and even the number of airlines that may be authorized to operate.

Canada's bilateral air agreements are varied in their degree of openness. Sometimes Canada is not able to secure at the negotiating table all the rights it may seek. In the end this can have an impact on the kinds of services that may be operated. Canada does have considerable experience with open or liberal bilateral agreements.

The Canada-U.S. open skies agreement is a case in point. Before the agreement was concluded some 82 city pairs received non-stop scheduled services. After the agreement the number of such city pairs increased to 135. Passenger traffic has increased by 8.5% a year. The Canadian charter industry has remained active and has converted many of its services from charter to regular scheduled flights. Furthermore the Canadian airline industry has increased it share of the Canadian-U.S. market from 43% in 1994 to 49% in 1997.

In the context of a restructured industry where we want to foster and enhance competition and provide opportunities for Canadian carriers to operate international scheduled services, the government's decision to review its approach to negotiating bilateral air agreements, combined with a review of its international air policies, will be timely and warranted. The government has proposed an approach that will promote a healthy and viable air transport system in Canada.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I picked two words from the member's speech. Those two words were transparent and competitive, that the process is transparent and competitive. What is transparent is the strategy used by the government to make sure one company and one company only takes over the airlines. It is very transparent.

The member stated that on October 26 the minister started a new strategy and in a new direction to see how the airline would eventually be taken over. He would make the process more competitive by perhaps abandoning the 10% rule to allow an airline or a company to own more than 10% of a Canadian airline. We must realize that by October 26 there were only 16 days left in the process. There are only 14 days left in the process now. Suddenly we are opening it up.

By some type of a miracle or coincidence Onex puts a bid in for 14.5% Canadian ownership. It is a coincidence. I understand that, but the bottom line is that if he wanted to make the process competitive, should he not have changed the 10% rule at the very beginning of the process? Probably a number of other bidders would have bid on the process at that time. However, 74 days into the process they have been cut out. They will not come in now with a new plan so what we really have to do is extend the timeframe.

[Lou Sekora, Liberal, Port Moody—Coquitlam, BC]

Mr. Speaker, the fact is the rules have not changed. We always hear from the other side some kind of breeze, that some miracle has happened or that something has not happened. It is frightening that the member sits on the transport committee with me.

I have listened to all sides. We are reviewing. We have many witnesses to listen to. I do not know what the intention of those on the other side is, but my intention is to get the best airline service across Canada and we must save all the jobs we can.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, we all know that Wednesday morning, in the federal capital, all parties hold a caucus meeting.

Yesterday, many Liberal members, after their caucus, expressed their disappointment, their dissatisfaction on the Onex issue. Certain facts must be remembered.

Onex is an major sponsor of the Liberal Party, giving $5,000 for this, $5,000 for that.

The transport minister said yesterday that Marc Lalonde works for Air Canada. In today's Journal de Montréal , Michel C. Auger said that the transport minister works for Onex.

I would like to ask my friend across the way, who sits on the transport committee and who heard this week that the transport minister works full time for Onex, if the merger is legal, yes or no.

[Lou Sekora, Liberal, Port Moody—Coquitlam, BC]

Mr. Speaker, I sit on the transportation committee as the member does. I do not know what will be before us. I do not know what our final agreement will be as far as the transportation committee is concerned.

On Wednesday afternoons when we sing O Canada we do not see any members from the Bloc in here joining us. I do not think they believe in Canada. They believe in their own ways. They will not come and pray with us on a prayer day. They will not come and sing O Canada with us because they do not believe in Canada. I do not know where they are coming from.

[The Acting Speaker (Mr. McClelland)]

Unfortunately, there is no more time for questions and comments.

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I do not know if I can follow the same act. I suggest that this debate did not come to the floor of the House like the great historic transportation debates that took place in the past.

If we went back to Confederation and the years thereafter, the House and the committee spent months on the great transportation debate: The building of a railway across Canada, the national dream. The only thing in the last 100 years even comparable to that was a little bill called the national highway strategy program which was a piece of paper.

This is the big issue for this century. In the closing days of this century this will be the biggest transport issue since 1900 until the new millennium comes in. The most unfortunate thing is that the House first learned of everything that was going on through the papers. Most of what Canadians know about this great debate and the merger they learned through the papers.

I sit on the transport committee. I have enjoyed very much talking to some very key witnesses. Canadians phone me and ask if the same rules apply to everybody. They want to know if there is a level playing field. I cannot answer those questions but I have my suppositions. However, whatever happens in this great debate that will always remain in the minds of the people.

I want to congratulate my colleagues in the Bloc Party for bringing this to the floor of the House. Whether I agree with the 10% increase or not is not the issue. In the past, when we had these great transportation debates, we always brought in capital from all over the world to help us. This happened with the railway and originally with the airline industry.

What we have here is an emergency. I did not create that emergency. None of the parties on this side of the House created the emergency. It was going on. Unfortunately, the story broke when the House was not in session.

It was not only awkward for me and other members of the committee to hear statements being made when we were in our home constituencies, but two days before we arrived here I read in the paper who the new chairman of the transport committee was going to be.

I do not know if that was a charade, but we usually go through the actions of a committee meeting before making a decision as to who the chair will be. The second order of business would be to choose what topic we were going to discuss. That was pre-announced. I am not arguing about that because I think that would have happened anyway. What I am arguing about is that, unfortunately, and I am not blaming anyone, the House will never have the time, because of the urgency of this matter, to properly debate the issue.

I see the minister is here. I believe he has given us a timetable of something like November 26. Our last witness in the transport committee will appear on November 24.

Mr. Speaker, I failed to announce that I will be sharing my time with the hon. member for Esquimalt—Juan de Fuca.

What was the immediate Canadian reaction? What are some of the questions? My phone lines have been busy with people asking if this is a fair procedure. The government will have to answer that. Is it a fair procedure?

The next question they ask is: Will it keep the regional airlines intact? Coming from the west, they have fallen in love with WestJet. We have received some assurances in committee that would take place but I would like to see that on paper.

The fundamental question is: If there is only one dominant domestic air carrier within Canada in the future, could it really be said that a monopoly exists given that there is a relative freedom of entry into the industry? I think that is a big question.

Provided a carrier can obtain a licence and meet the initial financial fitness test, should financial fitness be assessed on an ongoing basis? We have used the word “dominant” to replace the word “monopoly”, with the exception of some regional carriers. I submit that we will, even if it is not a necessity, go to a dominant, monopoly carrier.

I have to ask if that is really necessary at this time. I am not so concerned about where we get the money. I would suggest to my friends in the Bloc that I do not care where the money comes from for these ventures, whether it comes from Germany, France or the United States. In the history of the United States, when it developed much of its money came from Germany.

At any one time we have always had about 10% of the population of the United States. We have heard from witnesses that our major role and major profit in this industry goes south. That part does not worry me. I do not think we should have limitations. That is where I disagree with the Bloc.

I wish I was in a position today to make some guarantees about the future of the airline industry in Canada. Unfortunately, we have only had but a few weeks with just a few hours left before the decision is made. Let us hope for the travelling public, those who must use the airline, that it is a good decision and that the House will in the future be notified in plenty of time to have a debate on this great issue, as it did with the railways and other great transportation issues, on the floor of the House and in no other place.

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, I will be brief to give other members an opportunity to ask questions.

My hon. colleague from the Reform Party talked about consultations and the short time available for consultations. I would simply like to compare that to the prebudget consultations.

I would point out to him that the auditor general has found a $25 billion surplus in the employment insurance fund and that it is up to the minister to decide what to do with that money.

In all the prebudget consultations we have had since 1993, I do not recall the government asking people if they agreed with the way the finance minister intended to use the surplus. That is a good indication of the government's philosophy with regard to consultations.

This morning, the Minister of Transport said—and his colleagues read speeches prepared by his officials—that we were initiating an important debate. I want to point out that the Standing Committee on Transport will be studying this issue until November 26. It was said that, within the committee, the majority is Liberal and does as the minister says. In the House, the majority is Liberal and does as the minister says. In the Senate, the majority is Liberal and does mostly as the minister says. What does the member think about consultations in that context?

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, I would have liked to have had a pre-consultation. I think we had plenty of time before the House opened in late September. I could not see any reason for not calling together the Standing Committee on Transport. We could have had the same witnesses as we are having now. At least those people assigned from each of the political parties in the House would have had a chance to update this. We would have been able to spend more time discussing the matter with our colleagues who do not happen to be on the transport committee.

I believe the major flaw in the whole process was that the government did not see fit to ask the Standing Committee on Transport to meet as early as possible after the gates were opened.

[Bill Casey, Progressive Conservative, Cumberland—Colchester, NS]

Mr. Speaker, the member said that the number one issue on people's minds was whether the process was fair. On August 13 the minister announced a 90-day window of negotiation during which he would receive proposals to restructure the industry.

On day one the law of the land was and still is that the maximum that anybody could own of Air Canada was 10%. Two days ago, with only 16 days left in the process, he has announced that he may change that regulation to allow any bid to maybe considerably more of the company.

Considering it is a standard operating procedure for government to call for proposals and give a window of opportunity to receive them, does the member feel it is fair for the minister to change the rules with only 16 days left when obviously nobody else has an opportunity to put together such a comprehensive plan that is required for the issue?

I like the member's referral to the dominant monopoly carrier. It is very appropriate. When the minister asked the Competition Bureau to review the industry, he did not ask it to look at all possible options, he said “Just look at my favourite option,” the dominant monopoly carrier theory”. Does the member feel that was fair?

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, on the basis of what I have learned in the papers prior to coming back to the House and on the basis of what I have learned from asking questions, there is an element there that says it was an unfair situation. I do not think there is any question about it. I think the general public agrees with it.

The big question that should be asked and one that only the minister can answer is whether this was necessary. If we ever get an answer to the question of whether it was necessary to change the 10% at this time, I suspect we will find that maybe the 10% was put there for an obvious reason. However, it appears that it is being changed at this time because there is an unfair situation for one of the people who are presently bidding. I do not think there is any question about that.

There is another thing I want to mention about the dominant carrier. I have great fear that without some discussion and debate in the House, we will need to have some regulatory legislation in this industry in the years ahead. If that will be the case, and I fully suspect it will be, I hope it will come to the House. I hope it does not take place as this issue has in the past.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure to speak to the motion put forward by the Bloc Quebecois. It is a very interesting motion, which affects most of us because of the employees of both Air Canada and Canadian Airlines who live in our ridings. This issue is exceedingly important to them.

Part of their concern is that they want to know the truth about what is going on. Unfortunately what we have seen is a polarization amongst the employees of both companies, so much so that it is causing an extraordinary amount of acrimony.

I would say, and I am sure many members would agree, that Canadian carriers, both Air Canada and Canadian Airlines, have the finest staff, as well as some of the best planes in the world. Oftentimes Canadians wonder what we can do, as opposed to the rest of the world, and we need not look any further than those two carriers to see Canada excelling in the airline transport industry.

Having said that, there are things we need to do to ensure we are not left with an airline industry in disarray, which would affect the employees and especially consumers who want the assurance that whatever comes of these discussions they will be protected and not left with a monopoly and the possibility of price gouging. They want a fair and equitable decision for the employees of both airlines.

Let us look at the issue put forth by the Bloc Quebecois, which concerns the 10% limitation on ownership of Air Canada. We already have a 25% foreign restriction on the ownership of a Canadian carrier. That is a good thing.

If one professes to believe in allowing the market to decide, and allowing strong competition, why should we prohibit any individual or group in this country from having greater ownership of Air Canada? What is so wrong with having a person or group own a larger share of Air Canada or Canadian Airlines, or any company for that matter?

It is not right for the government to impose those kinds of restrictions upon a private carrier. It limits and creates a barrier to that company becoming as effective as it could be.

On the issue of competition, as I am sure most people here would agree, we would like to see two carriers, competitive, healthy and profitable, being able to take on not only other groups within Canada but also around the world, and win, which they can do.

The sad state of affairs today, with both of these companies having trouble, is that we are looking toward a merger. As my colleague, our critic, has mentioned before very eloquently, rather than having a merger take place in an environment of chaos, let us do it in a relatively controlled fashion so that market forces can take place, but we can be left at the end of the day with a merger that will strengthen the airline industry in our country. I think that is what we all agree ought to happen.

We need a level playing field, so that both groups can compete or both groups can merge.

The truth must come out about what is really going on. The issue of debt levels is very important in terms of how investors look at both companies and there has been a lot of misinformation about what the debt levels are in both companies.

According to the most recent information we have, Canadian's debt is around $1 billion and Air Canada's is around $9 billion. Many of the employees of both companies do not know that. They have been fed different lines as the political battles take place over the merger of the two companies.

As our eloquent transport critic has mentioned, we want to ensure that if we are left with a single carrier there will not be price gouging and there will be legislation in place to protect the public from it.

On the issue of service to small communities, given the nature of our country, its broad scope and sparse populations, we need access to adequate transportation facilities, in particular by air. We want to make sure that people in remote areas will be serviced properly and we will press the Minister of Transport to make sure that whatever comes of this there will be consideration in the legislation to ensure that those people living in remote areas will be protected.

The employees of Air Canada have a legitimate concern about their rights. Because they have a younger staff, if or when they merge with Canadian Airlines, they fear they will be taken over and put at the bottom of the barrel. That would not be fair and it would not be equitable.

On the other hand, Canadian Airlines' workers fear that if they are to be merged with Air Canada, which has a larger number of employees, their numbers will diminish and they will lose employees, which would be equally unfortunate.

We ask the Minister of Transport to ensure that there will be fair and equitable treatment of the employees of both Air Canada and Canadian Airlines.

On the issue of the proposed legislation to review the airline merger, there are a couple of points that we would like to put before the Minister of Transport. First, we take offence to and oppose the Competition Bureau being reduced from its legislative role to an advisory role. We would also like to see the transport committee take a larger role in this and advise the minister as to how this should take place. Members of that committee should be involved. The Competition Bureau, with its rules and regulations governing competition within the country, should not be suspended for this particular merger. That is not correct. It also adds an element of partiality which I know the minister would not like to see in this particular merger, given the well known connections that he and the government have with Onex Corporation. However, that should not preclude Onex from having a fair go at being able to merge these groups.

In closing I would like to say that members on all sides of the House are very much in favour of ensuring that whatever comes out of the Air Canada-Canadian Airlines trade war, which is what it is, we will be left at the end of the day with a strong airline industry which will be profitable and able to continue to take on competition and win in the aggressive airline transportation industry.

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, I realize that my friend was not particularly enamoured with the fact that under section 47 the bureau was given an advisory role, but I think he will agree that the report which has come from the bureau in the last few days is a comprehensive one and certainly has helped us, helped me, in developing the guidelines which I brought before the committee on Wednesday of this week.

Does the hon. member not now fully appreciate the fact that under the framework that I announced the bureau will very much be back in the picture, approving the merger, every aspect of the merger, negotiating with any proposer who comes forward and that this is a very crucial safeguard on the very essential issue of competition?

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I thank the hon. Minister of Transport for his question. Yes, we would like to ensure that the Competition Bureau will have significant input. What the minister said is obviously true, and we would definitely support that. We also want to make sure that members of parliament who are on the transport committee have a strong voice in what takes place. As members of the House are representatives of the people, the people should have a role to play, an understanding and a vote on what takes place in this competitive merger. The people, by virtue of the members who are in the House, should not and cannot be excluded from this process. They must be involved in it as well as the Competition Bureau.

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, I am very pleased to see the Minister of Transport taking part so actively in this debate on an opposition motion brought forward by the Bloc Quebecois. Our party is very concerned about the merger of two major carriers that are about to be swallowed up by Onex.

Yesterday, during question period, in response to a question put by the hon. member for Beauport—Montmorency—Côte-de-Beaupré—Île-d'Orléans, the transport minister said that Marc Lalonde works for Air Canada. Today, Michel C. Auger maintains that the transport minister is working full time for his friends from Onex, who are being very generous toward his political party.

I want to ask my Reform colleague if he also believes that the transport minister has put his cards on the table and is not on the payroll of Onex.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I would suggest that the member ask the Minister of Transport that question himself.

I would refer the member to the following: Why did the Bloc Quebecois say today that Canadian Airlines is being discriminatory against francophones? That is an insult to the 60,000 employees, both francophone and anglophone, who work hard for Canadian Airlines. It is an insult to every francophone who works for Canadian Airlines that members of the Bloc Quebecois would say that Canadian Airlines is somehow anti-French. That is nonsense.

The second point I would like to make is, why is there an obligation for Air Canada to have its headquarters—

[Jean-Guy Chrétien, Bloc, Frontenac—Mégantic, QC]

Mr. Speaker, I simply asked the hon. member from the Reform Party for his opinion. Neither I nor a member of my political party have ever insulted Canadian Airlines International. I regularly fly with this airline and my language rights have always been respected.

I ask the hon. member to withdraw his remarks. They were insulting.

[The Acting Speaker (Mr. McClelland)]

That is obviously a point of debate, but the hon. member for Frontenac—Mégantic has had the opportunity to put his words eloquently on the record.