House of Commons Hansard #97 of the 36th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was competition.


Correctional Service CanadaOral Question Period

2:55 p.m.

Cardigan P.E.I.


Lawrence MacAulay LiberalSolicitor General of Canada

Mr. Speaker, when I was informed of the situation on Friday I indicated to the House that I contacted Correctional Service Canada immediately and action was taken.

Does my hon. colleague feel that I as solicitor general and other ministers and politicians should be involved in police investigations? Around the world that has not worked very well and it will not happen in this country.

HealthOral Question Period

2:55 p.m.


Libby Davies NDP Vancouver East, BC

Mr. Speaker, I know that the Minister of Health is aware of the desperate situation in Vancouver's downtown east side where the death toll continues to mount from people who are dying from drug overdoses. I also know that the minister is aware of the increasing number of reports from medical experts and scientific experts who call on him to show leadership and do what has been done in Europe which is to take a comprehensive harm reduction approach.

When will the minister act? How many more people will have to die before the Minister of Health takes action on this very critical issue?

HealthOral Question Period

2:55 p.m.

Etobicoke Centre Ontario


Allan Rock LiberalMinister of Health

Mr. Speaker, the member will know that Health Canada has already acted in the sense that money was made available for important community services including a resource centre. We have worked with the community groups to identify how that additional money is best spent. Most important, we are participants in a three government partnership, federal, provincial and municipal, to address these very complex and tragic problems. Our interest continues. We are working very closely with those other governments. If the member has specific suggestions, we would be happy to receive them.

Grain TransportationOral Question Period

2:55 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, last week three ministers of the crown held a press conference to tell us their vague intentions with respect to grain transportation in western Canada. One of the ministers, the minister responsible for the Canadian Wheat Board, even suggested that there would be a memorandum of understanding signed between the Canadian Wheat Board and the government to find out what its participation will be in those changes.

Is the minister prepared to table the memorandum of understanding prior to the legislation, and will other stakeholders have an opportunity in those negotiations of the memorandum of understanding?

Grain TransportationOral Question Period

3 p.m.

Wascana Saskatchewan


Ralph Goodale LiberalMinister of Natural Resources and Minister responsible for the Canadian Wheat Board

Mr. Speaker, obviously work is ongoing on the memorandum of understanding. It will, in fact, be a public document.

Let me remind the hon. gentleman of the reactions of some of the important organizations in western Canada to the announcement we made last week. I refer to the reactions of the Keystone Agricultural Producers, the Saskatchewan Association of Rural Municipalities, the Wild Rose Agricultural Producers, the Canadian Federation of Agriculture, the Government of Saskatchewan, the Government of Alberta and the Government of Manitoba, which were all favourable.

Grain TransportationOral Question Period

3 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Mr. Speaker, the minister has obviously put on the table a number of testimonials in favour of that particular suggestion. He has not put on the table the testimonials opposed to it.

Will the minister please table the memorandum of understanding prior to tabling the legislation so that we can have an understanding as to the influence of the Canadian Wheat Board on grain transportation in western Canada?

Grain TransportationOral Question Period

3 p.m.

Wascana Saskatchewan


Ralph Goodale LiberalMinister of Natural Resources and Minister responsible for the Canadian Wheat Board

Mr. Speaker, the memorandum has obviously not yet been negotiated. There will be ample discussion about the content of that memorandum. And, yes, it will be public before the legislation comes into effect.

Government Response To PetitionsRoutine Proceedings

3 p.m.

Scarborough—Rouge River Ontario


Derek Lee LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to five petitions.

Questions On The Order PaperRoutine Proceedings

3 p.m.

Scarborough—Rouge River Ontario


Derek Lee LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I suggest that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

3 p.m.

The Speaker

Is that agreed?

Questions On The Order PaperRoutine Proceedings

3 p.m.

Some hon. members


The House resumed consideration of the motion that Bill C-26, an act to amend the Canada Transportation Act, the Competition Act, the Competition Tribunal Act and the Air Canada Public Participation Act and to amend another act in consequence, be read the third time and passed.

Canada Transportation ActGovernment Orders

3:05 p.m.

Don Valley East Ontario


David Collenette LiberalMinister of Transport

Mr. Speaker, I am very pleased to take part in the debate this afternoon as we wind down on this very important piece of legislation. This bill is designed as a federal response to the restructuring of our two major airlines and to deal with the consequences as far as the rest of the Canadian airline industry is concerned, as well as travellers and shippers.

I would like to thank members of the Standing Committee on Transport. I have to say that this has been one of the more salutary efforts I have been involved with in the House, in the sense that there has been remarkable co-operation on all sides. There has been good, sharp, intense debate. Amendments came forward which received the acceptance of members of the other side, which helped to strengthen the legislation and clarify some things. I am extremely happy to have had that co-operation from members of the committee and I thank them publicly.

I want to put on the record my thanks to all of them. I know what long, and late, hours they put in to move this bill forward as quickly as they have.

My second reason for being pleased is that the prospects for passing this bill sooner are looking brighter.

Members of this House, I am sure, understand the importance of bring this bill into force, and I have no doubt the other House will be of the same view.

I would like to deal with a few of the important points of the amended bill.

The law at present provides the authority for the process to approve the airline acquisition deal between Air Canada and an Alberta numbered company and Canadian Airlines. This bill provides the mechanisms and the enforcement tools necessary to ensure compliance with the terms and conditions of the deal, which are the commitments made to me by Air Canada and to the undertakings negotiated between Air Canada and the competition commissioner.

This bill expands the powers of the Competition Act to ensure new protection against anti-competitive behaviour by the operator of a domestic air service that would impede or discourage the development of new services by other Canadian carriers. This is extremely important.

There has been much made in recent weeks about the need for competition. I have met with charter carrier officials and people from other airlines in Canada. I can assure the House that there is a willingness to step in and provide the necessary competition. But the people want some assurance of stability, some clarity of the rules and the knowledge that Air Canada would not use its pricing might, its capacity, to drive other airlines out of business. That is why this bill is so important.

We have not only brought in predatory pricing provisions through a clause that was developed by the Competition Bureau, we have actually toughened up that particular aspect of the bill.

This bill brings increased protection for consumers and new obligations to ensure that communities can make the case for the retention of services when carriers are considering reducing service, or withdrawing from a market.

This bill ensures that travellers and shippers will be able to deal with Air Canada and all its subsidiaries, current and future, in the official language of their choice, where there is significant demand.

I made a small comment on the importance of these amendments with respect to the Official Languages Act and its application to subsidiaries of Canadian Airlines International. This is a notable change in our policy, because Air Canada used to be a crown corporation, and now it is a private sector company.

Before commenting on what is new and improved in the bill as amended, I would like to say a few words about what is not in the bill. There is nothing in the bill which would change Canada's policy regarding Canadian ownership and control of our airlines.

Despite the lack of support for the policy by some editorialists and columnists, the government will maintain its policy. I know that members in my own party sought to increase foreign ownership from 25% to 49%. We have that statutory authority now, but we fixed it at 25% because we believe that the airline industry must be controlled by Canadians. That has been clear throughout this debate, through letters to the editor, e-mails we have received and polling. There was a poll done by Maclean's and CBC in December which showed that 83% of Canadians believe that we have to maintain a strong Canadian identity in this new century and that Canadian ownership of business in Canada should be even greater.

I would ask why we would want to arbitrarily increase the 25% limit when many other countries around the world keep that limit themselves. The Americans do not allow foreigners to have more than 25% ownership in any U.S. carrier. Hon. members will remember a few years ago when Air Canada owned 25% of Continental Airlines. It was a very good investment by the former president of Air Canada, which reaped great benefits for Air Canada, but it could not hold any more. It could not, in effect, control Continental Airlines. Why should we dilute our control and yet allow the U.S. to maintain its 25%? And not just the U.S., but other countries in the world. We must maintain solid Canadian control, effective Canadian control, of our airlines.

When it comes to other issues of competition, we have been held up to some criticism by editorialists who believe that we should allow foreign carriers to come into the country. Again, I have spoken with Canadian carriers, the WestJets, the charter carriers and others, and they believe that they can fill the void.

I noticed in the clippings today from transport statements made by Mr. Kinnear, the president of Canada 3000. I met with him last week and what he said to me privately he said publicly, that is, now that they know what the regime will be they are going to acquire more planes. And not just that charter company, but other charter companies will be doing the same thing.

I think the naysayers in the media and some of these great experts we see who pop up from academia should perhaps wait for 18 months to see what the Canada 3000s, the Air Transats, the Royals and the Sky Services can do. We know that CanJet, the airline being proposed by Mr. Rowe, a prominent businessman from Halifax, is going to get off the ground. He has made public statements in the last few weeks. That will be an exciting development. He wanted to see what kind of bill we were bringing in. He wanted to see what kind of regime he would have to deal with. He wanted to know that the competition commissioner would have real power to deal with Air Canada, which, notwithstanding its protestations about competition, has 80% of the market and naturally would try to push the envelope. I think we have seen evidence of that in the last few weeks. There was so much evidence that members of the committee became quite annoyed at the president of Air Canada and took him to task when he appeared before the committee. As a result, the bill was toughened up.

Now that the bill has gone through the House and will be going to the Senate—and hopefully will receive expeditious approval after full debate in the Senate—companies like CanJet and WestJet and the charters will know the regime and they will want to plan for extra capacity. I am quite excited about the new discount carrier that Mr. Rowe will be basing in Halifax and Toronto because that will provide discount competition from the hub in Toronto. We now have discount competition by WestJet from Hamilton serving eastern Canada.

Western Canada has continued to enjoy the good service of WestJet. There is Conair and some other smaller companies not allied with Air Canada providing good service and price competition. The charters provide that competition. Even before Air Canada and Canadian merged, in the peak season in the summer months Air Transat, Canada 3000 and Royal Airlines provided 25% of the capacity between Toronto and Vancouver. There was choice.

One of the problems is that there is not a choice for the business traveller. It is to be hoped that an airline will come along. I have heard certain things where there will be other entrants into the market whereby there will be real competition, full service competition, not just in the charters, not just for those people who want the cheapest seat possible, but competition for those companies that want some real choice for their executives travelling across the country. That will come.

What makes me so annoyed in this whole debate is that somehow people think we can just flick our fingers after we announced on December 21 the historic deal of putting these airlines together and brought in a bill in February and somehow competition would emerge overnight. As Mr. Kinnear of Canada 3000 said in the newspaper on the weekend, he has four A319s on order to lease but they cannot get into service until next summer. There is a backlog of new aircraft orders around the world.

It is not like flicking our fingers and getting immediate certifications of planes, training crews and having a total competitor to Air Canada overnight. That is why I keep talking about 18 months to two years to give the marketplace time to sort itself out. If it does not, I can tell the House categorically that the government will not hesitate to bring in foreign carriers to compete with Air Canada because ultimately we have to make sure the travelling public has a good deal.

I am not happy with the kinds of prices we have seen in the last 10 years. As I said earlier at report stage, the duopoly of Canadian Airlines and Air Canada was not competition at all. People are lamenting the demise of Canadian Airlines as the end of competition. The fact is there was very little price competition. What they were doing was bashing themselves over the head with extra capacity all around the country with flights departing at the same time.

I remember going down to the Deputy Prime Minister's riding about a year ago. I was booked on an Air Ontario flight to go to Toronto. Then I found out that there was a Canadian regional flight that was leaving a half hour earlier. I had about three minutes to get a ticket and get on it, and I did. I ran to that plane. It was a 19 seat Beachcraft. Do hon. members know how many people were on it? Yours truly. I was the only one on it. Do hon. members know how many people were on the Air Ontario flight? There were six people on a 50 seat Dash-8. That is the kind of ludicrous competition that we had. It was not competition.

Anyway, let us not talk about the past. We are wasting time talking about the past. Let us talk about the future. We have made Air Canada strong. It has new roots. It is now the world's 10th largest airline. It will do battle with the best in the world, British Airways and Cathay Pacific. The U.S. carriers are not even in Air Canada's league. They are not in Canadian Airlines' league. We had two of the best carriers in the world. They won awards for service. Now we will turn them loose as a combined entity under the Air Canada banner right around the world.

New services have been announced. I was present in Toronto a few weeks ago for the new non-stop service by Air Canada to Tokyo. There will be other new markets to Asia, to Australia and to other parts of Europe. This is great for Canada, because we not only have a good product. We have a strategic advantage.

With the open skies agreement with the United States we attract the biggest market in the world to come through the Canadian hubs of Vancouver, Calgary, Toronto, Montreal and Halifax. We will sup up a lot of that traffic which knows that they get a poorer product on U.S. carriers. They will go on Air Canada.

Air Canada will be happy. It will make lots of money. There will be competition on the international routes because if people do not like Air Canada's prices then all those foreign carriers still come into Canada and there is competition on the transborder.

Where we are really concerned is for those people who do not have competition in Canada. That is why the bill is particularly strong with respect to monopoly pricing on routes where there is no competition. Is it likely that we will have competition in some smaller communities in the country? No, it is not. We have to make sure that Air Canada does not gouge the travelling public.

That is why we have amended the Canada Transportation Act, to ensure that the Canadian Transportation Agency has that power. We are giving it on its motion the authority to go after Air Canada and say “Listen, justify your price. Roll it back”. We are not just going to wait for any member of the House or a member of the travelling public to go in there and say “We have a complaint and would you deal with it over the next few months?”

The Canadian Transportation Agency will be monitoring these prices on a daily basis. With modern computers it will be monitoring all the prices, not just the full, economy and business class fares but all the various excursion fares, to make sure that Canadians get the best opportunity.

We clearly share the view that there should be a federal official who can deal with consumer complaints. I believe we have found a formula which will not create a new bureaucracy but will provide for the mediation of complaints where no other remedy exists.

Making the proposed air travel complaints commissioner a member of the Canadian Transportation Agency complements the other complaint handling mechanisms which the agency said it wanted to put in place to gather complaints, including those from persons who want to register their views.

I know members of the committee were a bit frustrated when they gave their report and I gave the government's response because they wanted an ombudsperson. We had some real reluctance in this regard because we did not want to set up yet another bureaucracy to deal with the complaints about service and pricing. On pricing we have the mechanisms in the Canadian Transportation Agency. On predatory behaviour and predatory pricing, we have given new powers to the commissioner.

In putting our heads together over at the department we asked why we could not have this person whom the committee wants to oversee the merger and to make sure that complaints are dealt with. Why do we not give the individual real teeth? That is why we are doing something quite extraordinary. We are naming a new commissioner of the Canadian Transportation Agency. Again this does not seem to be out there in the country.

The Canadian Transportation Agency is the quasi-judicial regulatory body over transportation in the country. If we name a new commissioner who specifically will have the mandate to deal with airline restructuring, that is an extremely powerful individual. It is an individual who can subpoena documents and haul in the executives of Air Canada to ask them what is going on. This individual can demand mediation and use the full powers of the office. If that were not enough, the individual can refer matters to the full commission for adjudication, refer matters to the Competition Bureau for its adjudication, or refer matters to the courts for ultimate arbitration.

I cannot believe that Air Canada would want to run afoul of the Canadian Transportation Agency, the regulatory body. I am sure it will co-operate now. To its credit, Air Canada has named its own ombudsperson. The fact it has done this is an admission of the fact that not everything has gone that well with the merger. By and large, the macro issues have been managed quite well, but a lot of what people may refer to as the smaller issues in terms of consumer-customer complaints have not been handled properly.

I was a customer the other week, along with some members of the Reform Party going back to British Columbia and some colleagues of mine from Winnipeg and Windsor. We saw firsthand some of the problems. We cannot dismiss a small complaint when as a result of a mechanical problem on one plane with a capacity of 135 a larger plane was brought in with a capacity of 180 and the airline tried to squeeze in 230 people on that 180 seat plane. No wonder there was a lot of irate passengers. Plus, there was the fact that the flight from Winnipeg had a mechanical problem and it was three hours late. As well, there were not enough ticket agents on duty because there were some off sick.

These may seem like small things to some. I note that on Bay Street they say that we are not taking note of all the big things that have gone well. The air service exists solely for the Canadian travelling public. It does not exist for the stock market. It does not exist solely for the shareholders of Air Canada. It exists for the benefit of passengers. That is why we have not apologized one whit—neither have the members of the committee, no matter what party in the House—for defending the rights of the Canadian consumer, not the rights of the air carrier.

The modifications we have in this bill are quite strong and they will deal with many of the problems that will have to be addressed as the merger goes on.

Let us take the exit provisions. There were some modifications required because some of the carriers like the charters came to us. WestJet came to us and even Air Canada asked if it was particularly fair going from 60 days to 120 days. We have shown some modification there. We have made it easier for the WestJets of the world to go into a new market and not have to stay there for 120 days and lose their shirt if they are not going to make any money.

I think people will forgive me in the House if I blow the horn of the government. If we do not do it ourselves no one else will do it, certainly not if we read some of the editorialists across the country. We have found through government action by using section 47 last fall a private sector solution. It was a bit messy. It was a bit annoying for some people. Anyone who follows the business world knows that mergers and acquisitions are messy at the best of times. The difference here is that the government instigated the whole process through section 47. We had to adjudicate it in the end and come forward with regulation in parliament, which is what we have done through this legislation.

It is obvious, having done that, we would get knocked around in the process. However there is no one that can convince me that we were not right in bringing this whole matter to a head. If we had not done so, we would have had a failure of the second airline in the country. We brought forward a regime that came forward with a private sector solution.

Some people said that we should have let Canadian Airlines go bankrupt. There were columnists in national newspapers saying that. These guys sit at their typewriters or their computers and do not think about the 16,000 people working at Canadian Airlines. They do not think about the thousands of travellers across the country who would have been inconvenienced. I tell the House that the government was not going to let the travelling public down. We were not going to let the workers of Canadian Airlines down.

When we did the deal on the Tokyo route on December 20, Canadian Airlines had two days cash left. I did not know whether it would meet the payroll for Christmas. All these great observers said that we should let the marketplace find its ultimate way and let these people be out of work. It is government, parliament, members of parliament no matter on what side of the House, who would have had to pick up the pieces. It is all right for people to make great pronouncements, but when men, women and children would have been affected, disrupted, that would have been a tragedy.

There was not the capacity in the country to deal with it. Air Canada could not have picked up the load. U.S. carriers could not have come in here even on temporary permits to pick up the load. The charters could not pick up the load at Christmas. Everyone was stretched.

This was the only solution. Not everyone likes the deal that was negotiated between the commissioner of competition and Air Canada, but in the failing firm scenario he had to deal with it the best he could do. I would like to thank him publicly for the work he and his staff have done in helping all of us bring this new regime forward.

The deal has resulted in the taking of the number one airline in the country, the number two airline in the country, 41,000 people, 350 aircraft serving hundreds of destinations in Canada and around the world. We did not have to put up a nickel of taxpayer money to bail out Canadian Airlines. The taxpayer has not been asked to fork out a nickel. There was no bankruptcy. There was no tragedy. There was no heartache.

There has been some slight disruption, depending on the day. We would not call it slight. I did not call it slight the other day at the Ottawa airport. However, the next day when I came back it was okay and things have improved this week. That is why I asked for time for the airline to get its act together. I asked for time for competition to develop because there will be competition, Canadian competition operated by Canadians. It will give the pricing and the flexibility that Canadians want.

I think the commissioner will be making an announcement today or tomorrow about his negotiations on the sale of Canadian Regional Airlines. He got a very big extraction out of Air Canada as part of the deal. Canadian Regional is not an inconsequential player. It has 53 planes, 28 of them jets, albeit old jets. It flew to many communities across this country and even to a few in the U.S. Under the deal that was negotiated by the commissioner, Canadian Regional Airlines must be offered for sale. That is about to be done.

My friend from the Reform Party was taking me to task the other week in question period about the delay in this airline being offered for sale. However, as I said at the time, it has been very difficult to put a value on Canadian Regional Airlines because it was part of the overall Canadian Airlines International. We did not know what amounts should be assigned for marketing, maintenance, sales and all the rest. That has now been done. A third party is being retained to sell that airline. If it is not sold, Air Canada gets to keep the airline. I cannot believe there are no entrepreneurs out there making an offer for Canadian Regional Airlines. If that is the case, there will be more full service competition to Air Canada in the months ahead.

In looking back at the last nine months, I must say that it has not been easy. It seems that anything I have been involved with in my career as a politician has not been easy. However, it is not all the knocks taken on the way; it is how a certain issue ends up. This is ending up, I think, good for Air Canada and for its shareholders.

Let us not forget that if we were Air Canada shareholders, having bought shares when the Mulroney government privatized it in 1988, watching the stock market go through the roof in the last few years, at $6 a share when all this began last year having been floated at $8, we lost money. Today the shareholders are laughing. The share price is at $16 or $17. It is rumoured to be going even higher. We have done the shareholders of Air Canada a favour, despite all the hand-wringing of last fall about the poor shareholders and how they would be sacrificed. The Air Canada shareholders are happy.

We as Canadians are happy. We are going to have the world's tenth largest airline, an airline that is fully bilingual in the service that it provides to the travelling public, and an airline of outstanding quality, of dedicated employees, of new aircraft, one of the newest fleets in the world, and it will be Canadian. We should all be proud of that.

We have also helped all those employees who would have been thrown out on the street. The people at Canadian Airlines will be protected for two years. Any redundancies have to be provided with full packages. The communities that Canadian Regional was servicing at the time the deal was consummated on December 21 must continue be served by Canadian Regional. Those employees will be needed. They should have no fear if a new owner comes along. The alternative would have put people out of work and put families under pressure at a difficult time of year. We see a positive aspect there.

Communities are protected in the bill. For three years Air Canada has to give service. The same goes for Canadian Regional if it is sold. It is all right for guys like me who come from Toronto because we have service coming out our ears. It is the same for the hon. member from the Reform Party who comes from Vancouver. We are lucky. We have lots of service.

My friend from the NDP comes from Churchill, a small community. There is not much service in that area or in areas like that. My parliamentary secretary, who has done an outstanding job here, is from Thunder Bay, another small community. The Thunder Bays of this world will all be protected in this particular regime.

Canada Transportation ActGovernment Orders

3:35 p.m.


Stan Keyes Liberal Hamilton West, ON

Thank God for Hamilton.

Canada Transportation ActGovernment Orders

3:35 p.m.


David Collenette Liberal Don Valley East, ON

Mr. Speaker, I hear my friend from Hamilton West, the committee chair and the former parliamentary secretary, waxing eloquently about Hamilton. As a Torontonian I am happy that we can finally get those people from Hamilton to keep quiet about their airport because they have air service. They will have scheduled service and more flights will go in there. It is now the biggest cargo operator in all of Canada. Let us not have any more crocodile tears about Hamilton, I say to my colleague from Hamilton West.

We have all these benefits: the communities are protected, the employees are protected and an international airline is growing. The only thing we have not yet been able to do, but which I believe sincerely will be done, is to get the kind of competition forward that will ensure that Air Canada has to really be on its toes. I have told the media that it should not keep on talking about cabotage but that it should call up the executives of the charter carriers, WestJet, Mr. Rowe of CanJet and others and ask them if they want cabotage. They will say “No, my God, no. Please give us a chance to compete”.

I believe in Canadian entrepreneurs. I cannot believe some of the drivel that has been written about the need to bring in the Americans to somehow rescue us from the lack of competition. Nothing can be done overnight but, as we can see from the plans of the charters and others like WestJet, there is new equipment coming on and new entrants will be coming into the market. There will be competition and it will be Canadian competition. It will be competition of which we can all be proud.

Madam Speaker, thank you very much for your rapt attention. If you think that I have been somewhat strong-minded in my views today, you are absolutely right. It is at this stage of the debate that I can actually say what has been on my mind for months. This is an accomplishment not only of this government in its air transportation policy but it is an accomplishment of parliament. It shows how members of all parties can work together for the benefit of Canadians and how all of us can have such a dramatic effect on public policy.

I again thank all my colleagues who took part in the debate: my parliamentary secretary; the chairman of the standing committee, the member for Hamilton West; Senator Bacon, the chair of the Senate committee where the bill will now go; the people at the Competition Bureau; the hard-working staff at Transport Canada who have hardly had a day off since last August; and my own personal staff. It was not an easy task. It was often tough but we did the right thing and it will benefit all Canadians.

Canada Transportation ActGovernment Orders

3:35 p.m.


Val Meredith Reform South Surrey—White Rock—Langley, BC

Madam Speaker, I too am pleased to see the end of this debate today.

It is very important to recognize the contribution by not only the Transport Canada people but by the committee members who sat for hours before Christmas and again just recently. Everyone put a lot of time and effort into finding the best solution to dealing with the reality of a monopoly air carrier.

The government does have a role in this situation. It was interesting to hear the minister talk about what happened and why we reached this situation where we had to deal with the merging of two airlines. It was critical last fall when we found that one of our major air carriers was failing and days away from having to shut down its operations. It was prudent that the government stepped in to try to prevent a bankruptcy from happening. I also believed that the interruption to the lives not only of the employees but of the travelling public would have been incredible had a major airline like Canadian Airlines actually shut down its operations overnight. There was a role for government. It recognized that and stepped to the plate.

The legitimate role for government is in safety, environmental issues, labour and competition issues, more specifically, anti-competitive issues.

I do not believe it is up to the government to get back into regulation; to regulate the prices, the routes and that sort of thing. I am pleased the government has not gone that route. Attempts were made today to put in more regulation, but I am pleased to see the government and parliament has stayed away from that.

The best thing the government can do is encourage competition. I listened to the minister with great interest about his hope that Canadian air carriers will step in and be able to provide that competition. I hope so too but airplanes do not come cheap. It takes a lot of money to run an airline and, as in most things, the capital available in Canada for this kind of investment is limited.

I do not see what is wrong with opening the doors and allowing foreign capital to come in to hold up or bolster Canadian airlines. We have done it with other industries and they have been successful. They have offered Canadians good high paying jobs. On more than one occasion I have used the automobile industry as an example. We have tens of thousands of Canadians working in the automobile industry. They have good paying jobs and good working conditions. They are working in Canada under the Canada Labour Code labour relations but the companies are foreign owned. The automobile industry is 100% foreign owned but it provides a lifestyle for tens of thousands of workers that I think is beneficial to our country.

I am not sure that if we can do it for one industry, whether it is the automobile industry, forestry industry or whatever, that it cannot happen in the airline industry where it is a highly capitalized industry.

The government should be concerned about competition and should not be afraid of opening it up. We can have a Canada only airline that is fully owned by foreigners but which still operates in Canada, hires Canadians in good paying jobs and with security, operates under our regulations, buys our gas, pays our taxes and contributes to our Canadian economy. Just because it may not be owned by Canadians does not mean it will not benefit our country. I am not afraid of opening the door to more foreign competition.

The minister made comments about being concerned about the travelling public, the consumer. I would have to say that probably the number one concern of all the committee members was about the Canadian consumer who uses air travel. Because of the size and regional disparity of our country, many people have no choice but to use Canadian air carriers. We were very concerned about making sure that the service to Canadians would be there and that it would be at a price they could afford not at prices out of their reach. We were concerned that the airline, the monopoly carrier, be held to its commitment that it had made to consumers.

However, there are some shareholders of Canadian Airlines who do not see the benefits. The minister was saying that the shareholders of Air Canada have seen great increases in their share prices and that they have benefited from it. The shareholders of Canadian Airlines do not have the same benefit. Basically their shares were taken up at nominal value. Yes, the trade-off was that it it it went bankrupt the shares worth nothing, but some of those shareholders are the employees of Canadian Airlines. Those employees, who gave up 10% of their salary for a number of years to help Canadian Airlines, have taken a real hit in all this.

Part of our concern has to be that government has a role to play in labour relations. We have two labour forces that have to merge. There are some unhappy situations between those two labour forces. I would suggest that maybe one of the legitimate roles of government is to help those two labour forces accommodate that merger.

There are questions about seniority lists which are causing great concern. Maybe the government should take a more active role in trying to resolve some of those disparities between the labour force of the old Canadian Airlines International and Air Canada. I hear from both sides that they are expecting and need some intervention. Perhaps government is the one to do it.

I think the government does have a role to play. With all due respect, it has done the job fairly decently. There is still room for it to move as far as the competition issue is concerned and not be afraid of foreign competition or foreign investment coming in. I for one feel that Canadians can rise to the occasion and that Canadians will step up to the plate to make sure they are in the game. If we really want full competition and consumers to have choices, we need to encourage that competition to happen.

I want to move on to the role of Air Canada, the now monopoly airline company which is offering services to Canadian travellers. I want to tell it that at second reading I agreed with the government that Air Canada needed the transition time, that it was reasonable to give it two years to make the transition. I had assumed that Air Canada would be magnanimous in the way it would deal with this issue. I thought Air Canada would realize that it had a tremendous opportunity to be number 10 in international carriers. I thought it would realize the potential that was there and that it would be a little more gracious about how it handled this transition period.

I am sorry to say that it seems to have chosen a different route. It has chosen to take a hardball, hard-nosed attitude not only toward the travelling public, but toward the system, toward its competition, toward the creditors who had invested and lent money to Canadian Airlines International, and in particular toward its rivals, people who may be the competition, other air carriers in Canada, which the minister is trusting to step up to the plate and become the competition.

Air Canada with its huge monopoly, control and more important, its influence, is sending a message that it does not want to assume the responsibility in a gracious manner and that it is going to play hardball. I am concerned with the way it is treating the competition or people who thought they had a relationship, agreement or understanding with Air Canada prior to the signing of the document. I see that American Airlines may be taking Air Canada to court because of the reneging on a deal it thought it was code sharing.

Service contracts with Canada 3000 have been cancelled with 30 days notice. I am not saying it should be held to contracts which are not profitable or realistic. I am saying that Air Canada should have realized the position it is in, the sensitivity of the airline industry right now. It should have been a little less willing to go in with a heavy hand and should have done some of the negotiating in a more sensitive manner. I have not seen that.

We saw where Air Canada, taking advantage of a situation with its size and ability to add capacity, went after WestJet, another potential competitor that the minister is relying on to develop competition against Air Canada. It was another instance where Air Canada sent a very strong message in a very hard-nosed way that it is not going to tolerate any kind of competition from anyone. After having reduced its capacity on the Toronto-Moncton route, it increased its capacity and lowered the fares to make it impossible for WestJet to establish a market there.

I have concerns. I am sure there is a lot of testosterone in the Air Canada boardroom going into overdose levels. There have been some poor strategic and operational decisions. This has been handled very poorly.

Air Canada has not done a good job in communicating to the travelling public what the expectations should be. It has not told the travelling public that they can expect to wait in long lines, that they can expect airplanes to be cancelled, luggage lost and all the rest of it. Maybe it should not say to the Canadian travelling public that it is not able to meet its requirements and needs. At least it could have explained to Canadians that it is going through a transition period and that there is going to be a period of time when there will be interruptions in services and inconveniences. It could have done a better job in communicating with the people on whom it depends to buy its tickets.

I appreciate the overcapacity issues. Both airlines were not doing as well as they should have been because they were competing nose to nose and were flying half empty planes. I appreciate that. However, I have problems when the first thing Air Canada did was reduce the overcapacity in western Canada by removing aircraft and moving them east. It has sent a message to western Canadians that in the total picture they are not as important as the other people in the country. There may have been a reason that some of it happened, but I have to ask how is it that Air Canada did not feel that there was not a need for some of the aircraft to be relocated in the western area?

I will use an example of a flight from Fort St. John to Prince George which used to take half an hour. This is in northern British Columbia. People who wanted to go to Prince George, a larger centre with better hospital care and the whole bit, used to fly from Fort St. John to Prince George. Now, in order to get to Prince George from Fort St. John, they have to fly from Fort St. John to Vancouver and then turn around and fly from Vancouver back north to Prince George. It now takes six and a half hours on one flight and four and a half hours on the other, when it used to take half an hour. That is the kind of interruption and inconvenience that is being placed on people because of the transfer of the equipment from western Canada to eastern Canada.

The other concern people in the west have is because equipment has been moved it prevents adding on routes or adding on more frequency to destinations during the height of the tourist season. A number of communities depend on convention travel and large conventions. They are having trouble getting bookings now because they cannot get the people who attend these conventions from Vancouver to their location. Whole markets are dissipating because of the change in the flight availability. It is having a detrimental result. Even though it might make economic sense to the air carrier, it has a negative effect on the western region.

I have trouble when I hear that everything is going well and that it is only a matter of time. It will only go well if the corporate entity of Air Canada assumes the responsibility that has been placed with it and it takes on that responsibility in a way that understands the need of Canadians to use air travel. It is not that we want to, it is that we have to. The distances between communities mean for the most part that we depend on air travel.

The government feels that Bill C-26 is the answer. I do not disagree that it is a good step in the right direction. The government's response in giving more powers to the competition commissioner to put in place cease and desist orders so that he can immediately stop predatory behaviour before it has an effect on the competition is a good thing. It is a good thing the minister and his department in their wisdom have recognized the need to have an ombudsman or in this case a commissioner to deal with and investigate complaints from the travelling public and make recommendations as to how they can be resolved. Those are good things.

The most important thing for the Canadian travelling public is choice. If we are going to control prices and service and if we are going to make sure that Air Canada assumes its corporate responsibility, there has to be competition. We have to ensure that Air Canada through its influence does not keep the competition from developing within Canada. We must allow others to come in with their capital and assist Canadian companies to form competition.

The minister mentioned that British Airways will be the competition internationally. That is only if British Airways decides to stay in Canada. The domestic part of its ticket has increased three times. It may be that British Airways and some other international carriers who come to Canada cannot afford to stay. This means that Air Canada not only would have control of the total domestic market, it may be conceivable that unless someone leaves Canada and in my case goes to Seattle, they may not have a choice of using foreign carriers.

The real solution is competition. I would like to think that the government will not stand in the way of looking at how we provide competition if Canadian players are not stepping up to the plate in the near future.

It is a fallacy to think that Americans are bad guys, that Canada is a loser if we use foreign investment money. We do it all the time. Companies do it all the time. They use money from other sources in order to enhance their ability to grow and provide services for people.

I would hope that the government will consider opening up the contributions for foreign investors from 25% to 49%. If put at the 49% level, the company is still considered to be controlled by Canadians. When we have bilateral agreements with other countries, it is important to have a Canada owned airline. Forty-nine percent would ensure that it is a Canadian controlled company and would meet the bilateral agreement requirements.

Not only would we have competition, but the competition would be able to meet the occurring international growth. As the minister explained, Air Canada will become the 10th largest international carrier and I think that is great. Canadians will benefit by having a strong international carrier, a strong Canadian airline. I want to reinforce that the strong carrier should not be able to influence those things that happen in the airline industry outside of the company itself.

In discussions with various witnesses before the committee we heard not only of the difficulties facing WestJet but also the difficulties facing Canada 3000. The implication was that because of Air Canada's volume of flights, because of the 80% to 90% control of the market that Air Canada has and because of its buying power, it has a lot of influence on those who provide services to airlines. I am thinking specifically of airport authorities. When the largest customer is putting pressure on for the best and most of everything, it is pretty hard for the entity to refuse.

If we really want competition, be it international or domestic, good service from airports and good locations in airports must be available to the competition. The dominant carrier should not always get the best space.

We heard from a number of potential airline competitors to Air Canada that they are always relegated to the back corners of our international airports. I think that is something that we may have to look at; not to implement regulations, but to have the understanding that the most important thing in our country is ensuring that competition can come in and can grow.

I think this legislation is a good step. It will help Air Canada through this transitional period by ensuring that it understands what is expected of it. The bill will hold Air Canada to the agreement it made with the competition commissioner.

I am hoping that as time progresses—hopefully not too much time—the government will understand that competition, no matter where the money comes from, is healthy and that we should not be afraid of foreign competition, whether it is from the United States, Britain, Holland, Japan or wherever the money might come from. If it can assist our airline industry to be vibrant and to provide choice for consumers, that is the most important thing.

Canadians need to have choice. Canadians need to be able to decide what airlines they want to take. The services from Vancouver to Ottawa have been reduced. The number of direct flights have been reduced. I do not have a choice. Only Air Canada flies direct from Vancouver to Ottawa.

I think it is important that we have choice, that the Canadian flying public have choice. I urge the government to consider removing that barrier to increasing competition. Also, as I mentioned earlier in my debate, the government may want to look at assisting in the labour relations issues of the two companies which are now before Air Canada. Perhaps that is a legitimate role for government to play.

Canada Transportation ActGovernment Orders

4 p.m.


Michel Guimond Bloc Beauport—Montmorency—Orléans, QC

Madam Speaker, I could begin my speech by congratulating the members of the Standing Committee on Transport for working many hours, just before the Christmas holiday. They heard many witnesses.

I could begin by congratulating the public servants at the Department of Transport for having worked hard on this bill.

I will not use that approach for the simple reason that we parliamentarians just did our job. People elected us through a democratic process. Personally, I was re-elected on June 2, 1997 to represent my constituents in parliament and to do the job of a parliamentarian. Part of that job is to pass bills. These bills must be reviewed in committee before finally being passed.

I do not want to boast about having worked hard. We just did our job. Transport Canada's officials just did their job.

I will begin my presentation by having a kind thought for the workers, for those in the airline industry who have been suffering for over 18 months. I am thinking in particular of the employees, pilots, flight attendants, ticket agents and maintenance people at InterCanadian. We are talking about more than 1,000 direct jobs.

Considering that governments, both federal and provincial ones, try to attract industries and create jobs—and I say this very objectively, because we want those whom we represent to have worthwhile jobs—we should have a kind thought for these 1,000 workers, and the members of their families, who lost their jobs. Over 600 of them were in Quebec and the rest in the maritime provinces.

My thoughts are with them and I am sorry that, with the restructuring that is going on, their company has not been able to stay in business.

I could also talk about the Air Montreal workers. This company had to suspend its operations lately. They were to resume on May 15, but it seems that the suspension will be much longer.

My thoughts also go out to Canadian International Airlines employees who have been under stress for years, worrying about the financial survival of their company. They have invested money in the company and they have accepted salary rollbacks to invest in their company and save jobs.

My thoughts go out to Air Canada employees also, who had their share of worries with the Onex takeover proposal. I remember that last fall, when I boarded a plane in Quebec or Montreal, they were wearing a stop Onex button. The situation was stressful for everybody.

I am tempted to say that this bill was expected, and I would add, without any hint of partisanship, that it is the reason why all parties in the House agree to dispose of it quickly.

No party has tabled 930 or 430 motions in amendment this time, although such things can be done in a democracy. Even if we want to deal quickly with a bill, members of parliament have the right to move amendments. Everybody could see that, in this case, we were ready to move this bill swiftly through the House, and that is what we have done.

The Bloc Quebecois has been asking the federal government since 1993 to stop subsidizing Canadian International Airlines at the expense of Air Canada, Quebec and Montreal.

After the elections held on October 25, 1993, the then leader of the Bloc Quebecois, Lucien Bouchard, asked me to be transport critic for our party. I can remember some of the questions I put to Doug Young, the Minister of Transport at the time and now the newest member of the Canadian Alliance, who had a lobbying firm in Toronto and was making big bucks thanks to contracts he got from the Liberal government. I am sure business with the Liberals is not as good since he switched over to the Canadian Alliance.

In any case, Doug Young has not changed. I knew him and I am very glad to be able to call him by his name in this House because he got what he deserved. The people of Acadie—Bathurst got rid of him. The people not only in his old riding but throughout the country do not like anyone who is as arrogant or, as we say back home, “baveux”, as Doug Young was. He was both arrogant and insulting.

Just as arrogant was David Dingwall, who was also defeated. His Nova Scotia constituents sent him packing and now he is doing very well as a lobbyist in Ottawa.

I remember a question I put to Doug Young at the time, when I was criticizing the Liberal government for its lack of fairness in allocating international routes.

I asked the minister why Air Canada, which has its head office in Montreal, could not have access to the growing markets in Hong Kong and Japan. He told us that Canadian was experiencing financial difficulties and we had to help the company, which was normal since a lot of jobs were at stake. That answer was clearly aimed at winning votes. I said at the time and I will say again that, in 1993 and around that time, this government showed incompetence in allocating international routes and discriminated against Air Canada.

That is the reason why the position of the Bloc Quebecois has been clear since 1993. Seven years later, we are finally getting what we were asking for. We, in the Bloc Quebecois, were saying that Canada should have a flag bearing national carrier for international routes, just as Great Britain has British Airways, France has Air France, Greece has Olympic Airways, and I could name many more, except of course for Japan and the United States.

We were in agreement with having a national carrier and real competition on the Canadian domestic market, the trans-border market and the regional market. Seven years later, the bill before us is an answer to the position the Bloc Quebecois has been advocating since 1993.

What we have been asking the federal government since 1993 was to act to put an end to the duopoly that forced regional travellers to pay extravagant prices for service that was totally inadequate. We demanded that the federal government be more open regarding the implementation of the Official Languages Act in air communications.

In August of last year, the federal government undertook to change the rules of the game to allow Onex and American Airlines to take over the two Canadian national carriers, without giving any guarantee about competition.

Here, I have to be critical of my colleague, the Minister of Transport. I recall very well that in August 1999, our party asked that the Standing Committee on Transport be called in as soon as possible, because of preoccupying allegations in the press.

Earlier today, the Minister of Transport showed aggressiveness in his comments about the media and editorials. The minister was drawn and quartered by the media, especially the English language media. The French language media refrained from commenting. I read those editorials and the minister was rather roundly criticised, so I understand that he may have wanted to get even with the anglophone media, in particular those of Toronto, especially as he is the minister responsible for that area. He seized the opportunity to get even with them.

Of course, it is no use to say “If the Minister had done this or if he had done that”, but in the case of this bill which is timely and the passing of which we do not want to delay, if the minister had been more responsive, if he had not listened to the government leader who refused, who played hide and seek with us, who did not want to call the Standing Committee on Transport because he knew that the House would be prorogued, that there was going to be a new speech from the throne, in other words if it had not been for all that hide and seek we were drawn into all summer long, I believe that the situation might have been solved much more rapidly. Who knows, InterCanadian might not have ceased operations on November 28 last. This has to be pointed out. That is where I must criticize the lax attitude of the federal government, especially the transport minister.

I must also tell the minister we know of his ties with his good friend Gerald Schwartz and Onex; the minister cannot deny that Onex president Gerald Schwartz is a generous contributor to the Liberal election fund.

I blame the minister for trying, in the middle of the summer holidays, to pitch us a fast ball, as we would say back home. In baseball terms, he tried to pitch a curve ball outside the home plate, the empire called a strike for a third out in the ninth inning. However, things did not go as planned.

The opposition was keeping a close watch. The four opposition parties formed an ad hoc committee which met here, in the House of Commons. We told the government “You do not want to convene the transport committee, we will form our own committee”. We heard witnesses with the co-operation of the four opposition parties.

The government House leader called it a masquerade, backroom or barroom discussions, but whatever it is called, it gives us an inkling of how he perceives democracy.

Again, if the Minister of Transport had managed to convince the government House leader to convene the committee as soon as possible during the summer, perhaps we would not be here today, on May 15, reviewing this important bill.

One of the points the Bloc Quebecois insisted on, and I believe it is in the bill, but I want to confirm it, was the respect of the 25% foreign ownership limit and the 10% limit on individual share ownership in Air Canada. We indicated to the transport minister that the increase of 10% to 15% of the limit on individual share ownership in Air Canada did not represent a major problem for our party.

In committee as well as through the amendments we put forward at report stage, the parliamentary action of the Bloc members has been to insist that a series of concrete provisions be included in the bill to protect the regions and the small carriers.

Moreover, we were in agreement with the commitment made by Air Canada on December 21 that no layoff would result from the merger between Air Canada and Canadian International. That is reflected in the bill. That is why we cannot criticize it. We insisted that no regional route be abandoned by Air Canada or its subsidiaries for the next three years.

This morning I talked about the consideration of bills. We are members from various political parties, with different interests, coming from different regions and, in my case, with a different language and culture. A bill is basically a tool of compromise. It is like the collective agreement signed at the end of the collective bargaining process, where labour and management have to determine the working conditions for the next three, four or five years. Ultimately, a compromise must be reached.

The compromise we have before us is not completely satisfactory to me. Many things in life may not be completely satisfactory; as much as I strive towards sainthood and would like to get canonized as a saint at the end of my life on earth, I do not always behave accordingly. When I take stock of my life, I will say that it has not been fully and completely satisfactory.

There is one aspect where I would like the government to show a bit more open-mindedness, even if the minister has told this House that more restrictive measures had been adopted, and it is the enforcement of the Official Languages Act. I raise it again because this is the last opportunity I will have to do so in debate.

I would like the minister to know that the air transportation workers intend to pursue the issue with the Senate. Do not forget that Senator Joyal defended the air transportation workers 25 years ago, and it is very likely they would testify before the Committee.

I think that Air Canada could improve its record as far as the use of the French language is concerned. Once again, I call upon Air Canada president Milton. He is a serious, reasonable person. He is not an adventurer. I believe that he has displayed tact in the debate over the restructuring and merging of Canadian International and Air Canada. He has proven himself to be a good manager, and I would like to congratulate him on that.

I would like him to put his foot down and make a much stronger commitment to increasing the number of French-speaking employees in all groups of employment at Air Canada. This company, as well as others, is considered as a stronghold of Canadian unity.

We have seen Via Rail change its logo. Trains now have a great big maple leaf on the front. There is also a maple leaf on the tail of all Air Canada planes. This is to tell all Canadians “This is your country. Whether you speak French or English, wherever you live, this is your country”. In principle that sounds fine and dandy, but I would like to see it applied in real life.

Among the 1,258 pilots at Canadian Airlines, is it normal or acceptable that, as of today, only 71 of them speak French? With francophones representing 24.8% of the overall population in Canada, is it normal or acceptable that only 17% of all Air Canada employees speak French? Is it normal or acceptable that only 15.8% of Air Canada pilots speak French?

Given all his power and business acumen, surely Mr. Milton can summon the vice-president of human resources and tell him “Look, with 24.8% of the population of Canada speaking French, since we now are a dominant national carrier, the tenth biggest company in the world, we must hire francophone workers”. By the way, these French speaking employees are all bilingual. I do not think there is one French speaking employee at Air Canada who is not bilingual. We have to remember that we are talking about bilingual francophones.

Such a commitment from Mr. Milton would give hope to young men and women who are currently studying at the CEGEP in Chicoutimi. Hon. members will probably wonder why I am suddenly talking about the CEGEP in Chicoutimi. Let me point out that the CEGEP in Chicoutimi is the only CEGEP to have a flying training school.

There are young people from every region in Quebec and even from elsewhere who come to the Chicoutimi CEGEP flying training school. It costs $100,000 a year to train a pilot at the school. Is it normal and acceptable, considering the strong demand on the aviation market, that 22% of graduates from the Chicoutimi CEGEP flying training school do not succeed in finding a job as a pilot? There must be something wrong. I do not want to start saying things because people will send me letters, faxes or e-mails to tell me that I am crying murder and expressing that mistreated francophone feeling again.

It has nothing to do with that. It is a matter of respect. If people say to us francophones that they love us, as they certainly will three days before the next referendum, “we love you and we do not want to lose you”, like the theme of the Centennial campaign in 1967 that said “Canada, stand together; understand together”, then they should prove it.

I would like to add that I think Air Canada should make an effort to hire InterCanadian pilots who were laid off.

The Minister of Transport is listening carefully so I would like to ask him the following question: Does he know how many pilots of InterCanadian have been hired by Air Canada recently? There were many pilots. Of the 1,100 employees, I believe that there were between 325 and 400 pilots. Only three InterCanadian pilots were hired. Most of InterCanadian's pilots were francophones. With a bit of good will, Air Canada could encourage the hiring of InterCanadian's francophone pilots who are competent but presently out of work.

In terms of the Official Languages Act I would like, before concluding, to draw a comparison between the percentage of francophone employees at VIA Rail and the percentage of francophone employees at Canada Post.

VIA Rail is a transportation company that operates from Halifax to Vancouver—it provides rail transportation while the other one provides air transportation—and has to provide its service through the different provinces. Air Canada should know that the percentage of francophones at VIA Rail is 39.3%. VIA Rail is a crown corporation. Of course, the government has never heard us complaining that there were too many francophones at VIA Rail. Their percentage is 39.9% and at Canada Post it is 23.8%, which is equitable proportionally speaking. When I say that francophones account for only 17% of employees at Air Canada, it shows there is room for improvement.

Let us have a look at complaints under the Official Languages Act. In 1998, there were three complaints against VIA Rail compared to 98 against Canada Post. The same year, there were 251 complaints against Air Canada. This shows that if the Official Languages Act were applied more rigorously to Air Canada, this carrier might be forced to abide by the act. There were three complaints against VIA Rail in 1998 compared to 251 against Air Canada. This is totally unacceptable.

Another aspect I would like to point out to the House is the merger of seniority lists. The minister, and we, as parliamentarians, may be powerless in this regard.

My colleague of the Canadian Alliance spoke about this earlier. I think there should be a little more good will or good faith among parties, and Air Canada management should show leadership and say “Wait a minute. Is it normal and acceptable that a Canadian Airlines International pilot with 22 years of experience should be placed at the bottom of the seniority list of Air Canada pilots?”

I would like to salute the determination of my friends, the regional pilots, mainly those of Air Alliance, now Air Nova, who believed for many years in the one employer theory. They thought in good faith that they could be included at their seniority rank on the list of Air Canada pilots.

Unfortunately, a decision was made, confirming the opposite. I greatly sympathize with regional pilots, especially those of Air Alliance and Air Nova, who thought it was legitimate for them to think they would fly other planes than a Dash-8 or a Beechcraft 1900, and I do not intend here to discredit the reliability of these aircraft.

I am not a pilot, but apparently, when you are a pilot, you expect to start flying small bush airplanes, then bigger aircraft and, perhaps, after 28, 30 or 32 years in your career, a Boeing 767 or 747 or an Airbus 330. It is perfectly legitimate for a young pilot to think about flying a bigger plane one day.

There is no way we can force those who chose to continue flying Beavers or Piper Aztecs to fly bigger planes, but I think that regional pilots simply wanted respect and recognition.

I call once again on the goodwill of the management of Air Canada to try to resolve this issue of the amalgamation of seniority lists. I call on the management of Air Canada and Mr. Milton to give serious thought to giving the new Bombardier regional jets, 50-seaters, to the unified regional carrier that will be born of the amalgamation of Air Ontario, Air British Columbia and Air Nova. Mr. Randell said before the committee that there would be a new amalgamated unit with a new name. I would like Air Canada management to give serious thought to allocating the RJs to Air Canada's regional pilots.

I realize that Bill C-26 will require Air Canada to provide independent regional carriers with the same services it provides its subsidiaries to enable them to serve the regions.

I also recognize, on behalf of my party, that this bill gives new powers to the competition commissioner and the Canadian Transport Agency to prevent Air Canada or any other carrier from using anti-competitive practices or from imposing unfair prices.

This is provided in the law, but we must keep an eye on how the dominant carrier will apply the law. We wanted an ombudsman, as the minister said, and the government responded by providing a complaints commissioner. Let us say that it is a borderline situation.

I would like to respond to one thing the minister said earlier in his speech. Perhaps this is the advantage of speaking after someone else: I can criticize what he said, but he cannot criticize what I say because there is no questions and comments period.

The minister said that an ombudsman was too bureaucratic and complicated a structure. I am disappointed in the minister. He went through all the problems of the armed forces when he was the Minister of National Defence, and the government's response to these numerous problems was to appoint André Marin as armed forces ombudsman, the person to whom soldiers could take their complaints. I have never heard members of the armed forces complaining about the bureaucracy of the ombudsman. On the contrary, he has a role to play.

If the minister had wished, he could have agreed to what all members of the committee, except the Liberal majority, agreed—the creation of an ombudsman. Once again, I do not wish to criticize for the sake of criticizing. I wish to be constructive. The minister has responded by creating a complaints commissioner. This is very interesting.

In passing, I wish to congratulate Air Canada on appointing an ombudsman. Air Canada's management probably knew that the committee was pushing for this. It is interesting to see that our concerns as parliamentarians were noted by the dominant carrier. Air Canada decided to appoint an ombudsman.

In conclusion, we will have to keep a close eye on how this legislation is actually enforced, on a daily basis. I repeat that the Bloc Quebecois will be voting in favour of Bill C-26 at third reading, so that it can be passed quickly and real competition made possible, so that small local and regional carriers are protected as quickly as possible.

We realize that we must pass this bill as quickly as possible, once again in order to protect the regions, regional users and companies with regional operations.

Canada Transportation ActGovernment Orders

4:35 p.m.


Bev Desjarlais NDP Churchill, MB

Madam Speaker, it is inherent that at least someone takes the time to remind the House and Canadians why we are in the position today of dealing with legislation to address a monopoly air carrier in Canada. Quite frankly we got here as a direct result of deregulation within the air industry in Canada.

I agreed with numerous witnesses, as was done many times in the past when deregulation came up, that it was not the answer. I want to read a couple of statements made by some of those who appeared before committee. This one is from the Federation of Canadian Municipalities which stated:

When the air transportation system was deregulated in 1987, Canadians expected the introduction of new and special service operators to the marketplace, which would increase competition and bring better and less expensive 1993 the industry was dominated by two major airlines competing for market share on every major route. This cutthroat competition undermined the financial stability of both airlines—

The Canadian Labour Congress stated:

The unregulated market has hurt Canada's two airlines without delivering efficiency or higher quality service.

They are two very different groups with the same perspective. All those great promises of deregulation just did not work.

Deregulation has been a public policy failure for consumers, shareholders and workers. The consequences of deregulation have been a crisis in 1992-93, in 1996, in 1999, and now in 2000. We are still dealing with it. We are dealing with layoffs, job insecurity. We saw poor working conditions, wage freezes and cuts, chronic overcapacity in the domestic market and massive cost increases. The overall cost of flying went up 76% since 1992. Gosh, we have to love that deregulation.

Ticket prices outpaced increases in the consumer price index even with seat sales factored in, declining levels of services particularly in small communities and poor investment returns for both the airlines. Competition at any cost without modern regulations was not the answer.

Deregulation was the root cause of the crisis in the airline industry. The solution could have been effective modern regulation, not overregulation and too many price controls, aimed at protecting the public interest and ensuring that Canada's airlines could coexist and compete effectively in the global market. Modern regulations could have seen a flexible approach and the use of government powers selectively to ensure that airlines compete fairly and live up to the public trust.

Profitable high traffic routes such as Toronto, Montreal and Ottawa will naturally attract competition among carriers. These routes do not need government regulation to ensure adequate service. The government needs to play the role of referee to ensure fair competition and prevent damaging anti-competitive behaviour such as the predatory pricing in excessive capacity.

On the other hand, low traffic routes between smaller communities are not guaranteed to attract service. In these cases effective regulations would have been essential because reasonable and affordable service is a social and economic necessity. The government has many tools at its disposal to address this point. Will the bill accomplish that? I do not think so.

Deregulation and unhealthy competition have led to the monopoly situation. What do we do to make sure the monopoly air carrier does not go crazy on us? What can we do? First, we need to recognize that the bill can only work in areas where it does not contravene the agreement made between Air Canada and the competition commissioner and okayed by the transport minister. In essence, it will not address all the difficulties and all the problems that numerous people have talked about and brought before committee.

The bill gives the force of law to Air Canada's commitment in this agreement. However, everybody has acknowledged that Air Canada has been acting irresponsibly and is worried sick over what Air Canada will do. Were there any efforts by the government or the official opposition party to put anything concrete in the bill? Heavens no. We do not want to interfere with the entrepreneurial spirit. We do not want to interfere with the opportunity for Air Canada to make a buck.

Meanwhile the comments made by my colleague from the alliance party shocked me. I think it is the first time she said it. I listened to her talk about protecting workers, protecting small communities and maintaining service, but she supported nothing in the legislation that would have done those things. I actually heard that colleague make a statement that will probably go down in Canada's history. She said that we have to deal with more than the economic issue. Quite frankly, I think she said it just for the sake of saying it because she wants to put it in a householder or a ten percenter that will head out west where they will lose a pile of jobs and where Canadian regional employees will not get the same benefits as other employees.

The bottom line is that Canada's airline industry is vital to the economic and social well-being of hundreds of communities across Canada. That reality goes beyond the concerns of airline shareholders who focus mainly on the bottom line.

There certainly are some things in the bill with which I agree. There is no question. There is no question that we need to have legislation in place, especially in the situation with a monopoly carrier.

I have one area of concern with regard to new carriers coming into business. We extended the length of time that carriers would have to give notice. We okayed it as a committee to go to 120 days. There was concern that it would hinder new entrants. Nobody argued with the fact that we did not want to hinder new entrants. The NDP does not want to hinder new entrants coming in. We recognize that when we want to try out markets we need some time. The additional changes that went into the legislation now before us such as the 120 day extension to apply to new carriers is an excellent move. It will give some opportunity for competition.

I was pleased to see something happen in the area of an ombudsman; however, I am not thrilled with the fact that it is termed a temporary complaints commissioner. For the benefit of the minister, I have to admit that I am pleased the position will fall under the auspices of the Canadian Transportation Agency. However, I wonder about the credibility of how that person will be seen when it is termed a temporary complaints commissioner.

The complaints we were hearing were not minor little complaints; people had serious concerns about the way they were being treated within the airline industry in Canada. I do not consider them to be temporary little complaints. Quite frankly, it would be great if the complaints would end and we had a system that operated smoothly. My guess is that we will probably just leave it all to the monopoly carrier appointed ombudsman to look after all of the little complaints and we will shuffle them off.

The bottom line is that it would be great if it were operating so efficiently that the temporary airlines commissioner would not be needed. That would be wonderful. However, I am not convinced that the complaints will end, especially if the indication we have as to how things will operate is what Mr. Milton has been indicating.

My committee colleagues are great. To the benefit of them all, the majority of them spent a lot of time on committee matters. They listened to witnesses. They asked good questions of the witnesses. Quite frankly, the comments I heard from my colleagues were not the same as the bottom line that came down on paper. There were concerns about the labour issues, the ombudsman and price gouging. What was the final result? Let us give it six months and see if we need to review it.

There was this horrible person we have been dealing with. Let us face it, there is one thing we can credit Mr. Milton for. A survey was done a number of years ago that asked Canadians who they least trusted. Lawyers and politicians were at the top of the list. The only one who is probably least trusted now is Robert Milton, so we should give him credit for that at least. Through all the discussion on the airline merger he made promises that no workers would lose their jobs. I heard him promise Canadian Airlines employees that everything would come together and there would be a smooth transition. Everything would be done for them. What we have listened to is nothing but problems with Robert Milton.

What will we do with this legislation? We will hit him with a wet noodle. That is all this legislation will do to Robert Milton. If I am wrong, so be it. I hope I am. I hope and pray that something in this legislation, between the CTA and the Competition Bureau, will come together, but it does not appear that way.

We were worried about price gouging. Everybody complained. We heard of a situation on the Hamilton-Moncton route. It was just horrible what he had done. My goodness, the legislation is not even there yet. He does not even have the full rein and already he is doing these things. Will nobody bother to put in place something to stop him? We will wait six months and review it. That is disappointing.

I honestly had hoped that my colleague from Winnipeg—Transcona would be around to hear this. Prior to question period we were having a discussion on some of the amendments, one of which concerned the 25% foreign ownership limit. We agreed that we did not want to delay the bill. We were not necessarily happy as a caucus allowing things to pass on division, but we accepted the reasonableness. We did not want to delay the bill. We want to get things moving.

My colleague from Winnipeg—Transcona said that the Minister of Transport really is committed to the 25% foreign ownership limit. The minister stood here and said that absolutely we are not going to increase it. Had my colleague from Winnipeg—Transcona been able just a short while after question period to listen to the minister's comments, he would have heard him say that if we do not get competition we will raise it. It did not take all of two hours before it happened.

I am not convinced that there is a real commitment not to raise the foreign ownership regulation. Again, this would be one of those times when I would be happy to say “This is great. It worked. It is not going to happen”, but I am not totally convinced.

It is important to note the things that are not in the legislation. As I mentioned, the legislation deals only with particular things and not necessarily everything that came up as a concern. The committee heard the concerns of the labour force. The legislation was not able to address any of the labour related issues. The legislation does not deal with how to bring the two working groups together. Again, we had thought that Mr. Milton would be very magnanimous. Quite frankly, we know that is not the case. I would hope that we would go beyond all the talk in committee and make sure that something is put in place so that we see the swift resolve of the labour issues. Otherwise we will be dealing with an airline industry in constant crisis.

If the labour issue is related to seniority, which everyone recognizes is the key issue to be dealt with, that is not being dealt with. Even if agreements have been reached, the issue of seniority has not been dealt with. It will be left to negotiations a couple of years down the road. As far as I am concerned, that does not address the problem, which is a result of this legislation and a result of a monopoly. It is being delayed for someone else. That is what is happening with that issue.

I would hope that we could assure the employees of Canadian Airlines and Air Canada, and any others who might be affected, that if there are issues as a result of this merger they will be given consideration and that there are persons within the Canadian Industrial Relations Board designated to deal with this swiftly so that it does not become a continuing crisis in the airline industry.

There is nothing in the bill to address the very serious issue related to this monopoly carrier and the merger; that is, the issue related to employees. None of us wanted to see either side, whether it be Canadian Airlines or Air Canada, lose out. I would hope that no one on the committee saw one side or the other as having enough, even though Air Canada ended up being the owner. I would hope no one saw that. It certainly was not what was indicated to us by Mr. Milton or any other parties involved. There was an acceptance that these two companies would come together and the workers would be protected on equal terms.

I do not think the bill gives protection to small and medium size communities. There will be rules in place for a couple of years, which could be extended, but I do not plan to leave my small community in three years. I do not know how many other Canadians do. There are a lot of Canadians who want to know that they will have service for quite a long time. They want there to be some obligation for a carrier which is given a monopoly route, or other companies which have advantages to fly within Canada, to provide services to those communities. The bill certainly falls short of doing that.

The other area which is notably missing concerns a passengers bill of rights. I recognize that falls outside the scope of the bill and would probably be best dealt with another way, but I want to make a point of mentioning it because it was an issue put forward by witnesses at committee on numerous occasions. The key players in our airline industry, the passengers, are the forgotten ones. It is like the airlines are saying “We just want your money. Go ahead and complain, but we do not necessarily want you to have the right to some of these things”.

The key things which passengers had concerns about were flights being cancelled without notice; people getting to the airport only to find they were on a totally different plane; or getting on the plane after waiting an hour, perhaps due to a delay, which we can all accept happens due to mechanical reasons or the weather. Passengers can accept that, but they want to know as soon as possible how long the delay will be and when they will be able to get going. Often they want to know what the delay is for, for their own comfort.

How many times have members of the House boarded a plane after waiting an hour or an hour and a half and no sooner does the plane back away from the gate we are left waiting another hour on the tarmac? We are hostages on the plane. We cannot go back. That is a serious concern for passengers. Those are just some of the issues that come up.

Even though it seems as if this should be something we could deal with in the bill, I want Canadians to know that I recognize it is outside the scope of the bill. We have had discussions with the people who wrote the legislation. We have to look at other ways of addressing those concerns and go at it from a different angle.

We should have ensured that there would be protection for all regions of Canada and that service would be provided. I am not convinced that will happen. Again, this may play out one way or the other in the end.

I felt that Air Canada having to divest itself of Canadian Regional was not a good thing. I know that in a lot of those smaller and medium size communities Canadian Regional was often the other carrier, but Canadian Regional was often the only jet. I am not convinced that any carrier buying in will be able to continue service. I am greatly concerned that those communities will have no jet service.

The Minister of Transport reflected on the fact that small and medium size communities do not have the best choice of service. He mentioned the Churchill area. I would hate to think that air carriers in my riding are giving the perception that there is no service.

I live in Thompson and I know that we have better opportunities than some other areas. We are one of the larger centres in the Churchill riding. The carriers that go into that area, Canadian and Conair, as well as a lot of smaller carriers, have been excellent. Those carriers are not making huge profits. I would not want to risk that service simply because something cannot be worked out with another carrier.

On that note I will end. Again, I am not convinced that the bill will do the job.

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May 15th, 2000 / 4:55 p.m.

Thunder Bay—Atikokan Ontario


Stan Dromisky LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, the member for Churchill has made a very thought provoking presentation. There is no doubt that we could continue for a very lengthy period of time helping her to have a better understanding of many of the issues she presented.

For the clarification of the listening public, there are a lot of problems that we have to deal with in this transition period. We have a major airline dealing with over 2,000 flights per day. Naturally, it will meet and have to deal with a great number of problems.

The latest news is that there was a 30% jump in the number of people travelling by air in the month of April. That kind of sudden increase or surge in the number of passengers normally happens in June, which is another problem that this new dominant carrier has to deal with.

It is really puzzling. We have a representative in the House of Commons who strongly believes in supporting the labour factor in our country. The government, with its agencies, did everything in its power and did the right things to save 16,000 jobs at one of the major carriers, but not once has a word been mentioned about the salvation of those jobs by the measures which this government implemented.

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5 p.m.


Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I do not think there is any question that jobs were not supposed to be lost. Promises were made that no jobs would be lost. Nobody would lose their job for two years. Everything would be hunky dory. However, we have not seen this all play out yet. If they do not lose their jobs that is great.

I also want to point out that had there been some regulation in the area of capacity some time ago, we would not have gone through crisis after crisis in the airline industry. It happened because we were afraid of the word regulation.

I will be the first to admit that nobody wants over-regulation. We recognize that we have capacity regulations on international routes. We have a very profitable international service. Why would we not think that by having some regulation in the area of capacity we would not have saved these jobs anyway? The hon. member will have to forgive me for not thanking him for saving the jobs that would probably have been lost as a direct result of the deregulation that the government put in place.

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5 p.m.

Progressive Conservative

Bill Casey Progressive Conservative Cumberland—Colchester, NS

Mr. Speaker, I want to say that this has been ongoing now for some months. I really feel fortunate to have been involved with this because it has been an extremely interesting process.

We were thrown into the middle of this airline merger when Canadian Airlines was presented a proposal to be bought out and then merged with another airline. It was an interesting process and we met some incredibly interesting people. We dealt with some complex issues. As a committee we went into the process truly amateurs with very little knowledge about the background of the industry, the participants or the issues. However, we were educated by dozens and dozens of people from corporations and groups who made presentations to our committee. Every presentation was beneficial and taught us something. By the time the committee process was done we actually had a pretty good handle on it. We were able to participate and add something to the debate and to the legislation.

The dynamics of the committee were really interesting in that I do not think I have ever been on a committee where, although there was some partisanship, everybody took a sincere interest in trying to find answers to the problems. The government committee members were just as aggressive as anybody in grilling the witnesses. The chair was certainly aggressive in his treatment of the issue. He knew what he was talking about. He took the time to understand it.

Although the member for Hamilton West is very humble and would be embarrassed to hear me say this, he actually did a good job in running the committee. I do not think we could call him a good friend to anyone on the committee, but he ran the committee hard. He kept it focused, on track and did a good job, which is what the chairman is supposed to do.

I will take a little interpretive licence here. The minister was caught off guard when this whole issue unfolded and evolved before his very eyes. A lot of us were watching to see how he would handle it and to see if he could find a way out of the mess that really was not of his doing. He had limited tools to work with because there are only certain things the government, a minister or the department can do. If the companies at the centre of this issue were not prepared to invest money or make these decisions, and if the shareholders would not back up the decisions, then the minister was limited in what he could do. It was interesting to watch those dynamics.

It was interesting to meet Kevin Benson, Robert Milton and even Gerry Schwartz who came before the committee. They all did a great job considering that their job was to represent their shareholders. Their job was not to represent the public interest. That was our job. I learned a lot from each and every one of them. I will never forget the experience as we went through this process.

We had a puzzle to deal with, at least I found it to be a puzzle. Where does the Canadian Transportation Agency fit? Where does the Transportation Safety Board fit? Where does the Department of Transport fit? Where does the Competition Bureau fit? We had to learn about all these issues and try to fit each one into a slot where they could be effective and produce the desired results. Of course, there were surprises because every day something would change. It was almost like the politics in our party, it changes every day.

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5:05 p.m.

Progressive Conservative

Rick Borotsik Progressive Conservative Brandon—Souris, MB

Always for the better.

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5:05 p.m.

Progressive Conservative

Bill Casey Progressive Conservative Cumberland—Colchester, NS

Absolutely always for the better. There is still ongoing changes. There are some fundamentally profound changes even as we speak.

If I remember correctly, just a short time ago both Air Canada and the minister were opposed to the idea of an ombudsman. Now the minister has come back with a very strong ombudsman, a complaints commissioner, which, in my interpretation of it, has teeth. Last week Air Canada announced it was going to have an ombudsman. Two weeks ago it wrote me saying that it was not in favour of that. We can see how this whole process is still changing as we speak and will continue to change as problems develop and challenges arise.

There is no question that we are in a transition period which has caused a lot of problems for consumers and for all of us when we travel. I understand that we are in a transition. I know that the Air Canada and Canadian Airlines merger is faced with problems. I can only imagine the problems Air Canada has to deal with in trying to reorganize and reschedule 2,000 flights a day, negotiate contracts with its unions, negotiate the sale of the Canadian regionals, arrange for all new schedules and accommodate the communities and politicians.

There is no question that Air Canada has underestimated the impact this would have on consumers. I think it is getting that message very clearly, as evidenced by the announcement late last week that it was going to establish an ombudsman in addition to the Canadian Transportation Agency complaints commissioner.

We have all seen and heard about the overbooking, the delays in scheduling, the line-ups and all that sort of thing. We have all experienced them ourselves. I am hopeful that these are transition issues that will soon be resolved. I believe Air Canada has the will to resolve them.

Our job, the minister's job and the department's job, was to come up with legislation to manage this merger even though we could not really tell the shareholders of Air Canada or Canadian Airlines what they had to do. We could not tell them to invest money here. We could not tell them to do certain things, nor could the Department of Transport.

I believe this bill is the best reflection of what we can do. We have all had a crack at making amendments in order to improve or change it. It is not exactly what I wanted but overall it is not a bad compromise. I think we have all had a chance to influence it. Even then, it has to remain flexible because of the ongoing changes and the fact that it is a work in progress that will continue to change.

The Conservative Party's view is that the government's role should be to create an atmosphere that will encourage competition and encourage the incredible entrepreneurial instinct that we saw at committee from so many people who were anxious to get into aviation business and expand it. If there was one thing that surprised me, it was the number of small aviation companies in Canada that wanted to become big ones. Our job was to create an atmosphere where they could develop and grow and not be squashed by the dominant carrier before they even had chance to start. I think we have done that. We have given the appropriate agencies the power to protect those new companies and the existing companies in expanding into new routes and regions.

At the same time as encouraging competition and the entrepreneurs in the industry, we also had to protect consumers. Consumers have no protection if they have no place to go. If the line-up is too long and the dominant carrier does not want to do anything about it, too bad. If there is overbooking and the dominant carrier does not want to do anything about it, too bad. We cannot go to plan B or another airline until some of those smaller airlines are big enough to really present themselves as competitors. So, we have this legislation.

I believe the job of the government—and the committee saw it as a responsibility—is to create protection for consumers. We have done that. A dominant carrier left unleashed could do a lot of damage to consumers, competitors and regional airports if it wanted to. Without the legislation that we have before us today, a lot of the things we have come to take for granted in the aviation industry would be trampled and disappear very quickly.

Even the travel agents who made presentations to our committee made a good case in pointing out how powerful the dominant carrier is. They sell something like 80% of the tickets. If there is only one airline, that airline could determine how it will treat the independent travel agents. We have addressed that in the bill and it is a good way to address it. Their problems and concerns have been met and they will find themselves in a good position to deal with many of their issues. They have to do it but we have given them the infrastructure and the tools to get there.

One concern I had, coming from the Atlantic region, was the future of small regional airports. We have a convergence of two government policies. One is the divestiture process and the other is the merger process of the airlines. They have come together to create some problems for small airports.

Some of the smaller regional airports have an extremely hard time making ends meet simply because they do not have access to alternative revenues. The major airports with hundreds of thousands or millions of passengers travelling through the airports every year can have all kinds of alternative sources for revenue, such as liquor stores, lobster shops, rent-a-cars, you name it. They can have an entire business community and shopping mall with a captive market. The small airports with 200,000 passengers or less do not have the traffic to sustain those shops and businesses that would generate alternative revenue.

Regional airports are already having a hard time making ends meet. What will happen when we merge the airlines and the number of flights are reduced? The smaller airports depend entirely on landing fees and terminal fees for their revenue. They were having a hard time even with revenues from two airlines. When the two airlines merged, the number of flights in some airports were reduced dramatically and their revenue was reduced dramatically.

We have the divestiture process, where the airports were turned over to the communities, and we have the merger process which has made their situation even more difficult. I believe the Department of Transport and the minister at committee acknowledged that smaller airports were having a hard time making ends meet and that this problem would have to be revisited.

Our challenge was to arrive at a balance between regulation or re-regulation and private enterprise and protecting consumers. I think we have done that with a minimum of re-regulation and a maximum of flexibility in the system.

The Canadian Transportation Agency, the minister and the department have put some flexibility into the situation so that we can address the work in progress as it unfolds and as we get more surprises, which we will continue to get. I believe we have the right balance and I am well pleased with it.

As new issues come up, these departments have to be able to address them. By locking them in too tightly and not knowing what the future holds would be a mistake at this time because we are all still learning and it is an evolving situation.

I am also quite excited about competition. From my view I see a lot of exciting competition in the business. I do not think Air Canada will have a cakewalk. I think it will face competition faster than it thinks, faster from the chartered airlines, the WestJets, the CanJets that will be starting up and the smaller airlines that are already in the planning stages. There may be start-ups that we do not even know about it yet.

I believe there will be competition, especially on the main lines. The challenge will be on the regional routes and the feeder routes. Even on those, I believe competition will filter down and Air Canada will have more competition than it has bargained for. Eventually I do not think it will have the monopoly that it thought it would have or that some of us thought in the beginning it would have.

I sense a tremendous entrepreneurial spirit out there that is anxious to get into the business, to take a crack at this and to provide service to the regions and the main lines. This looks very promising to me.

One of the controls the dominant carrier will have is access, access to airports, access to slots, access to counters and things like that. That had to be addressed because it is definitely a problem which already has raised its ugly head since the airline merger. Some new airlines have been stalled, delayed or redirected because the dominant carrier perhaps used more powers than it should have. We have put protection for that into the legislation. We have also put into the legislation new powers for the Competition Bureau and the Canadian Transportation Agency. All of these issues can be dealt with on an ongoing basis.

Recently Air Canada lowered its rates; as soon as WestJet started flying from Moncton to Hamilton, Air Canada reduced its rates from Moncton to Toronto. Right away the process was put in place to object to that. Hopefully that will be resolved in a satisfactory way for everybody. We could not outline every single possible permutation and combination in the initial legislation. The flexibility is there to adapt as things change.

We have come up with many avenues for consumers to file complaints. I do not recall the exact number but the Canadian Transportation Agency had something like 70 or 80 complaints last year. My office has received 70 or 80 complaints in the last month, so there is something wrong with the access people have to complain about airline service.

If the minister's complaint commissioner under the CTA is well publicized and if people are made aware of the process, that will be the answer. People need access to a complaint system and a conflict resolution system and that will be the complaints commissioner.

Also Air Canada has committed to establishing an ombudsman and working with members and the public to make sure it deals with the complaints as fast as it can. In my experience, when there is a complaint at the senior level at least, it is dealt with and the problem is solved in a sincere manner. However, when there is a 1-800 line with 10 recordings and people have to push two for this and four for that, they get so frustrated they do not file a complaint. I am confident that will be resolved and people will have a way to make sure their complaints are filed.

Consumers have the CTA. The transport department will deal with certain issues. There is the complaints commissioner, the Air Canada ombudsman and the Competition Bureau. Among those avenues surely consumer complaints will be dealt with in a timely fashion. If not, we can bring this back to committee and take another crack at it. I do believe consumers now will have the tools they need to work with.

As far as ownership rules go, I agree with the legislation. In the former legislation the maximum amount of Air Canada that could be held was 10%. The committee recommended 20%. I recommended 15% and the minister went with my recommendation, for which I am honoured and flattered. He did go with 15% which is a good compromise and a balance that satisfies most everybody.

The foreign ownership limit is to remain at 25%. Again, flexibility is built into the system. If things change and evolve and if change is necessary, there is flexibility for the minister and the government to change the 25% maximum foreign ownership. That is appropriate. It should not be locked in at any amount. The flexibility should be there and as things change, it can be addressed.

In all, the Conservative Party will be supporting the bill. We are grateful for the opportunity to participate in it actually. It has been a very interesting experience for me. I very much appreciate the opportunities I have had to meet the people involved and hear the problems and issues.

I believe we have come up with a balance for consumer protection and incentives for competition to provide the entrepreneurial instinct with lots of nourishment. Certainly things will continue to evolve and we will continue to have to adapt but all in all, it is a fair resolution considering we do not have all the tools. The minister and the department probably do not have all the tools they would like to have to control this.

The bill provides a guideline for the companies involved to follow. It also provides penalties if they do not follow the rules. It provides lots of rules which the airline industry has to follow to protect consumers.

I appreciated being at the committee on this issue. It was extremely interesting, very industrious, serious and focused. We will be voting in favour of this bill as it stands.

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5:20 p.m.


Derrek Konrad Reform Prince Albert, SK

Madam Speaker, the member and members of the committee seemed to put a lot of confidence in the airline ombudsman who will deal with the difficulties and questions that arise as a result of the consolidation that has taken place in the airline industry in Canada.

A while back the official opposition tried to institute another ombudsman, the first nations ombudsman, to try to bring some accountability to first nations undertakings. The House deemed that such an officer would not really be effective or necessary in relation to aboriginal affairs.

I note that the office of ombudsman for the airlines was not a creation of the airline executives or I am sure we never would have had it. Yet the minister of Indian affairs seems to think it has to be the chiefs who create an office of ombudsman if ever there were to be such a thing with Indian affairs. It occurred to me that there was quite a bit of hypocrisy evident in such a position.

Moving on, I would like my hon. colleague's comments on another aspect of competition. It concerns not prices, not frequency or anything like that but that little word innovation which often comes to light when people are in competition with one another. In other words, how can we attract customers? How can we best serve customers? How can we make things happen?

One of the things I was interested in as a business traveller was that Canadian Airlines made provision for computer plug-ins. It seems a small thing but when we are on a long flight and we want to do some work we end up doing work somewhere between Toronto and Winnipeg. That is not necessarily the full extent of a lot of our trips. That is just one small example of innovation.

Despite the Competition Act, I wonder what my hon. colleague thinks is now going to drive innovation. We know that business class subsidizes seat sales and will continue to do so, but how is that going to work with respect to innovation in airline travel? Will we see many changes in the future or are we going to be stuck with what we have?

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5:20 p.m.

Progressive Conservative

Bill Casey Progressive Conservative Cumberland—Colchester, NS

Madam Speaker, I appreciate the intervention. There are going to be two ombudsmen. One is the Canadian Transportation Agency's complaints commissioner. That is a unique position because he has the power to demand documents, demand testimony and hear witnesses. It is almost a quasi-judicial body. He has the power to get the information which is probably more than most ombudsmen have. He also has the power to make his reports public. He will report to parliament through the minister and he also has the ability to go public.

In this case the airlines are consumer driven companies. Bad PR from an ombudsman is not something they will want to get. If the ombudsman is successful and effective and he makes a report in the media that an airline is not doing something right, I am of the opinion the airline will act very fast to correct it.

Air Canada announced last week that it is going to establish its own ombudsman. I believe it is going to try to intervene even before consumers get to the official government complaints commissioner. It is going to try to get the complaints first so it can deal with them. I am confident that one or other of those programs is going to work.

I believe we are going to see more innovation than ever. The best example is WestJet, one of the newcomers to the industry. WestJet has an innovative pay plan. It has innovative policies as far as its employees are concerned. It has a uniform airplane plan which is simple but really works. This makes WestJet one of the most profitable airlines in North America based on its capacity.

Instead of having two giant airlines that are struggling, we are going to have many smaller airlines doing exactly what the member is asking about. They will be using their entrepreneurial instincts to innovate, to come up with new ideas and ways to get a market share from the dominant carrier. We are going to see a lot more innovation than we ever did before. I am optimistic that the small companies and entrepreneurs are going to come alive under this umbrella.