Madam Speaker, today I am speaking on behalf of the New Democratic Party in opposition to the bill as it is. We have agreed that we will do what we can to get the bill to committee as quickly as possible, recognizing the seriousness of addressing the issues concerned with the merger of our two major airlines and the reality of there being one dominant carrier in Canada.
I must say that I was disappointed with the Liberal government on this bill. As the New Democratic Party representative on the transport committee I worked very hard on this issue as did all the committee members from all the parties. Last fall the committee heard from literally dozens of expert witnesses on this issue.
I was disappointed but not surprised that the Liberal government and the transport minister ignored what Canadians had been saying all these months. Instead it came up with a bill that fails to address the key concerns of Canadians. Even the minister, I know, recognized that the bill is far from perfect, but I do not think there is anything wrong with our looking for that perfection when we get to committee and fixing the bill where it has fallen short.
The government still does not understand the basic problem facing Canada's airline industry. Our airline industry has gone from crisis to crisis since the Mulroney government deregulated it in 1987.
Deregulation has been a disaster for Canadians. The cost of flying in Canada has gone up massively since deregulation began. Ticket price increases have been rising faster than inflation. The overall cost of flying has gone up a whopping 76% since 1992.
That is not what was supposed to happen under deregulation. Bay Street lobbyists said that deregulation would bring competition which would drive prices down, not up. They said there would be more airlines flying to more destinations than ever before. So where is the competition?
It has been almost 13 years since deregulation began and we have fewer airlines, not more. Deregulation has resulted in fewer airlines flying to fewer destinations and Canadians are being charged more for those tickets. This is what happens when we let market forces take the place of smart public policy.
The New Democratic Party is not against markets. Often when we criticize the government for pandering to the market, people say we are against the market. That is not the case. We are not. We recognize to have a strong country we need a strong market economy, but a healthy market is not the only thing we need for a healthy country. We need to balance a strong market with sensible public policy.
That is not the ideology of the Liberal government. Call it corporatism, call it laziness, call it lack of vision, call it whatever we will. The Liberal government refuses to accept that the market alone cannot solve every problem. When it comes to the airline industry the government cannot see the forest for the trees. This is what happens when we are dealing strictly with that ideology. The Liberal government's uncritical faith in the free market blinds it to that reality.
This is the reality. Under deregulation Canadians have less choice and are paying more for flying. The airlines have cut service to small and medium size communities across the country. The government had to spend millions of dollars to bail out Canadian Airlines and then it wound up collapsing anyway. There have been job cuts and wage cuts for airline employees. By anyone's standards deregulation has been a public policy disaster. Yet the Liberal government still clings to this policy with the blind faith of ideology.
I want to talk about the effect of deregulation on my own riding of Churchill. Few areas of the country are more expensive to fly to than rural and northern Manitoba. It costs more to fly from Thompson to Winnipeg than it does to fly from Halifax to Vancouver. Airfares have skyrocketed and passengers are not satisfied with the service quality and availability. What this demonstrates is the Liberal government's short-sightedness in letting market forces replace public policy.
Under the logic of the market, the airlines have made decisions to maximize their profits by charging the highest fares they can get away with without concentrating on service. This makes perfect sense from a narrow market point of view but makes no sense at all from a public policy point of view.
Market driven decisions in remote areas kill economic growth. They deter people from moving to rural and northern areas and setting up businesses there. If the Liberal government was looking at the big economic picture, it would see this and do what it could to keep airfares and the cost of doing business in remote areas down. But the Liberal government is not looking at the big picture. It is ignoring the fact that deregulation is killing jobs and businesses in rural and northern Canada.
It gets worse. Not only has deregulation nailed ordinary Canadians with higher airfares and less service, not only has it killed jobs and hurt rural and northern Canada, it has not been good for the airlines. From the minute deregulation kicked in, Air Canada and Canadian Airlines were in a death match that has taken a huge toll on both companies.
Competition can be a good part of the market economy or it can be destructive. We have to distinguish between healthy competition and destructive competition. Healthy competition delivers low prices and better services to the consumers. Destructive competition does the opposite and leads to monopolies. Need I say more?
The competition between Air Canada and Canadian Airlines was the destructive kind. As we have seen, it led to higher prices, not lower prices. It resulted in less service to communities, not more.
Healthy competition thrives in a stable market with rules and boundaries. Under deregulation there are no rules and competition turns destructive.
New Democrats want to see healthy competition in Canada's airline industry. That is why in the minority report I called for modern regulations to promote competition and protect the Canadian public. I do not want to see a return to the kind of regulation we had 20 years ago. Over-regulation is as bad for competition as is deregulation. What Canada's airline industry needs is the balanced approach. This bill does not provide the balanced approach to Canada's airline industry needs.
The government's approach once again is selling Canadians short. At best this bill is a baby step. We are facing a monopoly in our airline industry, a monopoly caused by deregulation, and the Liberal government will not let go of the very cause of the monopoly. This monopoly is an unprecedented threat to Canadian consumers. If there was ever a time to protect the public interest, now is that time, yet the Liberal government has to be dragged away from regulation kicking and screaming.
The transport minister has said that this bill would protect the Canadian public. Sometimes something is so ridiculous that it seems funny. This was one of those times. Saying this bill as it is will protect the public from a monopoly is like giving someone one boot when it is 40 below and saying it will keep his feet warm.
That is not to say that this bill is all bad. Before I talk about what is wrong with it, I am going to talk about what is good about it. The bill implements four recommendations from the transport committee that I supported and fought to have included in the report.
First, it doubles the amount of notice an airline has to give the community before it abandons it.
Second, it improves the official languages section of the Air Canada Act.
Third, it gives travel agents the right to negotiate their commissions collectively with the dominant airline. This will help keep travel agents in business and continue to provide affordable service to the public. One message which was loud and clear was that travel agents are a critical and valuable link to the air transportation system. As a committee, I was extremely pleased that we all agreed and that the government implemented this within the bill.
Fourth, the bill gives the Competition Bureau expanded power to stop predatory pricing. I want to talk a bit about this fourth point because I like to give credit where credit is due.
One of the big problems with a monopoly is the dominant airline can crush any small competitors that come along and try to compete with it. With broader powers to prevent predatory competition, the Competition Bureau should be able to prevent this from happening. This will eventually make it possible for the market to correct itself and bring a return to some form of competition.
I recognize the minister in his statement indicated that if there had been intervention earlier on, we might not have been in the situation we are in right now. I commend the government for this part of the legislation.
I also want to talk about the extended notice period for community abandonment. This is also something I fought for in committee and I am glad to see the government has accepted this recommendation. However, extending the notice period alone does not go nearly far enough to protect small communities. All it does is give communities more warning before an airline pulls out.
It is important that there be a mechanism to make sure small and medium size communities in Canada have decent service. This needs to be done in a way that balances the public interest with the market. It is not reasonable to expect an airline to lose money hand over fist serving a community.
At the same time, airlines have a public trust to make sure all Canadians have reasonable service. The government has a responsibility to make sure the airlines live up to that trust. Operating an airline in our country is a privilege. The airlines have a responsibility to serve small and medium size communities even if they do not make quite as much profit as they do from serving Montreal and Toronto for example.
The Liberal government is not making Air Canada live up to its public trust with this bill. All it does is force Air Canada not to abandon any communities for three years. After that it will be open season for community abandonment. There is no review mechanism to make sure these abandonments are justified. This is another example of putting blind faith in a market.
The other area the Liberal government has bungled is that of airfares. This is an area that most Canadians are concerned about as a result of a monopoly. The anti price gouging measures in this bill, if we can call them that, will only be in effect for two years, possibly four. These measures are not even that strong. The Liberal government is relying on the Canadian Transportation Agency to regulate fares and is giving it slightly wider powers to do it. This is not going to work. The CTA is already mandated to control fares. It has been completely ineffective until now.
Does the Minister of Transport think he can just wave his magic wand and overnight the CTA will become effective? All this bill does is it broadens the CTA mandate slightly and gives it the ability to be a bit proactive for the next two years. Expecting the CTA to stop this new airline monopoly from price gouging is like sending one person with a shovel to stop the avalanche. There must be ongoing measures in the bill to prevent price gouging.
The third major flaw with the bill is in the area of labour relations. I have often wondered if the government has had any respect for unions or the democratic right of collective bargaining. This government has used back to work legislation to stop legal work stoppages more than any other government. This is the government that fought like mad to keep from giving pay equity, simple equality, to its own employees. It is no wonder it has completely ignored the thorny issues that this bill represents in the area of labour issues.
The bill needs to ensure that labour disputes, including the issues relating to seniority, can be dealt with in a timely manner. We need to ensure that airline unions are in a position to bargain effectively during this restructuring. We need to ensure that disruption in service with this new dominant carrier does not bring the country to a standstill.
The Reform Party would suggest that we do not allow the airline employees to have the right to collective bargaining or the right to strike. We need to ensure that the present Canada Industrial Relations Board has enough resources to give any disputes resulting from this merger top priority without it affecting any of its other cases. That is what we need to do to make sure that this works.
At the end of the day this all comes down to priorities. All that Canadians want from their airline industry is safety, affordability and decent service to communities. If the Liberal government shared these priorities, it would have done something meaningful to address them in this bill. Instead the Liberal government is turning an airline monopoly loose on Canadians with little protection for consumers, workers and communities.
I cannot help but make a point of commenting on some of the thoughts that came from one of my opposition colleagues and that would be the Reform member.