Debates of Oct. 1st, 2001

Export Development Act

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the member for Calgary Southeast continues to espouse these simplistic solutions that the market does everything and that governments are not needed to intervene. He glibly states that he understands that companies may need some insurance and financing to deal with the export markets. How kind of him.

In fact, last year $45 billion in exports were done using trade financing services from EDC. The question is, could the private sector do this? The role of the EDC is to move in when the private sector will not move in and provide the kind of financing or insurance that is needed to compete in those markets. I will give an example.

In my riding of Etobicoke North there is a company that is now doing some major work in the United States. It was not able to get bonding in the Canadian markets because we do not have the diversity, the richness, the size, the breadth and the scope of the markets to step up to some of these challenges. It received performance bonding working with EDC and the Canadian Commercial Corporation. That company is growing in leaps and bounds. It now has a presence in the U.S. market and is growing from strength to strength. It was because of EDC and the Canadian Commercial Corporation that it was able to do the deal.

That is not to say that we should not be holding EDC accountable to its mandate and not to be crowding out the private sector. We are talking here at the margin. We are not talking about a vast generalization which the member opposite tries to portray, that EDC should just get out of the market completely and let the market do the business. If we look at the facts, the reality is that the market does not always respond in the way the member would dream that it could. These are called market failures. It is the role of government to move in when the market is not there.

EDC and the Canadian Commercial Corporation serve this country very well. They perform an outstanding service. I for one would like to support them. I will be supporting the bill. I would encourage the member for Calgary Southeast to get off his ideology and look at the facts because this crown corporation helps Canadian business and helps create jobs in Canada.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I am very pleased with my colleague's intervention because a sure sign of a Liberal losing an argument is when he mischaracterizes his opponent's point of view, as we have just heard. It was either a deliberate effort to mischaracterize my position or he simply was not listening.

I made it amply clear that my colleagues and I believe that there is an appropriate but limited function for certain forms of government assistance when related to our overall international development objectives, as part of our overall strategic objectives. There is some limited role, but those functions now performed by the EDC which could be performed in the private sector ought to be. It is very simple.

Of course whenever a conservative in this country makes an argument of that nature, immediately a Liberal or a socialist jumps up and suggests that we are advocating the elimination of government and the sort of night watchman state, which is an absurd, laughable, ridiculous mischaracterization of our view. Our view is simply that through history, the market in this country and every other jurisdiction in the world by and large consistently produce more wealth and better results at lower costs, raising people's standard of living, than does the state. It is a fundamental principle which cannot be contested.

I simply want to say that we do believe that companies that need financing will be able to find that financing and insurance in the private sector. The member said that $45 billion of exports happened because of government intervention. What nonsense. The member talked about being simplistic. He does not understand the first principles of economics if he really believes that. It is called moral hazard. Any company worth its salt is going to seek government financing for export deals it would execute without that financing.

The question is, what are the opportunity costs? How many companies have spent how many hours and how much time filling out how many forms and changing their export business in order to satisfy the EDC and to get government financing? There is enormous opportunity costs associated with any government granting program of that nature.

I would simply suggest to the member that it is much like the government's Team Canada missions. They go abroad with a big dog and pony show. Companies which are signing up deals anyway are told to initial memoranda of understanding when the Prime Minister is there. Then the government says that the Prime Minister has created $5 billion or $10 billion of new trade with that jurisdiction. That is absolute nonsense. Commerce happens despite the intervention of government, not because of it.

[Deepak Obhrai, Canadian Alliance, Calgary East, AB]

Mr. Speaker, my colleague talked about the recession that is looming on the horizon. He articulated very well the dark clouds that may be coming. With reference to EDC, the global trade system has come under tremendous pressure because of the events that have taken place. As such one does not have to be a rocket scientist to know that trade globalization by itself has suffered to some degree and now EDC is in that market.

Would the member not think that in a short period of time EDC will not be able to fulfill its mandate and as such it is time to review its mandate altogether?

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, the member raises an excellent point. As I have indicated, the economy both domestically and internationally is an entirely different one than it was even a year ago, even six months ago. I believe we are undoubtedly in a domestic recession and a large international recession. One of the first signs of that has been and will continue to be a reduction in trade, both exports and imports, from Canada and many other jurisdictions. This is a unique opportunity for us to reconsider our trade policy and in particular, the role of EDC.

There have been some times that the government and some of its ministers have been willing to look beyond the status quo, beyond the old way of doing things. I would encourage the government to adopt the attitude of change, of reform, of free markets even though it may not suit its ideology from time to time. This is such an instance.

The government should look at taking the functions of EDC and putting them in the private sector which could be better served that way. That would assist our export companies at this time of uncertainty that we are now encountering at the international level.

[Brian Fitzpatrick, Canadian Alliance, Prince Albert, SK]

Mr. Speaker, in 1979 a couple of teenagers started a company in the U.S. that today is very close to being the largest capitalized company in the world. They basically did it without any support from the government.

I believe that the market has the ability in the long run to sort out winners from losers. I heard my colleague on the other side of the House give a big spiel about how the government can do a crackup job in this area. Where does the government get this extra wisdom to be able to pick winners and losers? I do not share the member's enthusiasm for that, and the more time I spend down here, the less enthusiasm I get for it.

I wonder if my colleague from Calgary could comment on where the government might have some wisdom in picking winners and losers in the marketplace.

[Jason Kenney, Canadian Alliance, Calgary Southeast, AB]

Mr. Speaker, I share my learned friend's skepticism.

The history of government intervention in the market is very clear for all to read. It is not a question of subjective interpretation. We only need look in this country at those regions and those industries which have been most heavily subsidized and what has happened to their economic prospects. We only need look at those countries abroad which have the highest degree of government intervention and what has happened to their growth and standard of living. It is an empirical fact that freedom and free markets create a more efficient allocation of resources to raise people's standard of living than governments and bureaucrats taking that power upon themselves.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question

[The Deputy Speaker]

The question is on the main motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it. And more than five members having risen :

[The Deputy Speaker]

Call in the members.

And the bells having rung:

[The Deputy Speaker]

A recorded division is deferred to the end of the period provided for government orders on Tuesday, October 2.

Courts Administration Service Act

[Hedy Fry, Liberal, for the Minister of Justice]

moved that Bill C-30, an act to establish a body that provides administrative services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court and the Tax Court of Canada, to amend the Federal Court Act, the Tax Court of Canada Act and the Judges Act, and to make related and consequential amendments to other acts, be read the second time and referred to a committee.

[Stephen Owen, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, I am pleased to begin second rebating debate on Bill C-30, an act to establish a body that provides administrative services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court and the Tax Court of Canada.

The principal objective of the bill is to improve the efficiency and effectiveness of the administration of the Federal Court of Canada and the Tax Court of Canada through certain structural modifications to these courts. As important, these amendments are designed to respect fully the courts' independence and to ensure the continued provision of the high quality of justice that Canadians have come to expect from these courts.

Our constitution establishes that responsibility and powers for courts administration is shared between the judiciary and the government. On the one hand, it is the responsibility of the government to provide and be publicly accountable for the provision of the necessary resources required to support the courts' functions.

Chief justices on the other hand are responsible and accountable for the effective administration of the courts as it relates to the judicial function. It is a constitutional requirement that the courts enjoy an established level of institutional or administrative independence.

In the seminal case on judicial independence, Valente v. the Queen, the Supreme Court of Canada indicated that an institutional independence requires that the judiciary remain in control of all matters bearing directly on the judicial function.

I am confident that the administrative structure proposed in Bill C-30 creates the appropriate balance between judicial independence and financial accountability for the use of public funds in a manner that meets or surpasses the test in Valente. I would add that the courts have agreed that the proposed structure satisfies the constitutional test for institutional independence.

I would like to emphasize, however, that it was not solely the constitutional imperative but, as important, the practical realities of shared responsibility for courts administration, that led to the proposed structure of the courts administrative service. Between the two poles of their respective authority and accountability, there is a large operational and policy area in which both government and the judiciary have an interest and a role.

A recognition of the need for government-judicial partnership in this area was the starting point in developing the reforms reflected in the bill. The objective of these reforms was not to alter the role of the chief justices in the administration of their courts. Rather the proposed structural reforms would build on the current strengths in order to achieve improved efficiencies through a consolidated administrative service at the direction of a single experienced senior official.

The proposed courts administration service was developed partly in response to efficiency concerns that had been raised by the former auditor general in 1997 with respect to the administration of the federal court and tax court.

The government and courts jointly recognized that there was an opportunity to be responsive to the auditor general's concerns, without undermining either the requisite institutional independence of the courts or the high quality of justice they are committed to delivering. Designing an administrative structure with the input and collaboration of the judiciary was seen as a key to ensuring its viability and ultimate success.

It is for that reason that the proposed model was developed in close collaboration with the Federal Court, the Tax Court and the Court Martial Appeal Court. The advice and views of the chief justices were sought throughout the process on both the overall structure and its technical implementation.

I am therefore pleased to be able to advise hon. members today that the proposed new courts administrative service enjoys the full support and commitment of the courts. I am equally pleased to advise that the former auditor general also expressed his satisfaction and support for the proposed reforms.

I should point out that the former auditor general had recommended the complete merger of the federal court and the Tax Court of Canada as a means to address the administrative in efficiencies he identified. However, after serious consideration of all of the former auditor general's recommendations, the government has decided against wholesale merger of the courts and opted instead for consolidation of the administrations only.

Both the Federal Court and Tax Court are established and respected national institutions that separately and ably perform important necessary functions. The government is satisfied that the overall structure of the two courts is essentially sound and that the proposed consolidated courts administration service would achieve the auditor general's objectives for improved co-ordination and overall efficiencies.

I am pleased to advise that following introduction of former Bill C-40, the predecessor of Bill C-30, the then auditor general indicated his support for this approach.

In a letter to the Minister of Justice dated June 26, 2000, the former auditor general wrote:

We are pleased that the proposed legislation reflects the key recommendations of our April 1997 report to the Minister of Justice.... With proper implementation, the proposed measures should significantly improve the efficiency and accountability and the administrative services provided to the courts while maintaining the independence of the judicial function.

We are confident that the new courts administration service will provide the strong and cohesive administrative framework necessary to ensure the effective and efficient use of public resources.

In addition to the consolidation of the current administrative services of the two courts into a single courts administration service, Bill C-30 includes two other important structural reforms: first, the creation of a separate Federal Court of Appeal; and second, a change in the status of the tax court to that of a superior court. I would like to first provide more details on the courts administration proposals and then explain the objective of the two latter proposals.

As I have indicated, the most significant structural modification in the bill is the consolidation of the current administrative services of the two courts into a single service. The service would serve the administrative needs of the Federal Court, the Tax Court and the Court Martial Appeal Court. This would entail common management of all aspects of administration, including court facilities, registries and related real property and common corporate services.

The bill provides that the courts administration service would be headed by a chief administrator. This experienced senior official, appointed by governor in council, would be responsible and accountable to parliament for all matters of administration relating to the courts. The bill expressly provides that the judiciary would continue to be responsible for all matters relating to judicial functions.

As I have indicated, this structure contemplates regular and ongoing collaboration between the chief justices and the chief administrator in their areas of shared interest and responsibility. Regular consultations with individual chief justices and their associates will no doubt be a regular mode of operation. It is noteworthy that the bill expressly requires that the chief administrator consult with the chief justices when making decisions concerning the establishment and operation of registries and when preparing budgetary submissions.

While it is expected that the judiciary and the chief administrator will work toward consensus with respect to all important decisions relating to the effective operation of the courts, there may be occasions in which their respective views differ sufficiently that a definitive decision needs to be taken. To provide for such occasions, which we expect would be rare, the bill provides statutory authority for chief justices to give binding written directions to the chief administrator on any matter within the authority of the chief administrator.

I want to pause here to make what may appear to be an obvious point. The proposed courts administration service and all matters of courts administration would remain subject to the same legal and statutory framework as other federal government institutions, including the estimates process, the Financial Administration Act and the applicable public service employment statutes. Any directions that may be provided by a chief justice to the chief administrator under this proposal would have to be consistent with that framework.

The courts administration service will be at arm's length from the government, thus reinforcing an appropriate degree of independence. However, the bill also provides for improved accountability, particularly before parliament, for both administrative effectiveness and probity in the use of public resources.

The chief administrator would be required to report annually to parliament on the administration of the court and would appear before parliamentary committees to answer questions on the courts' estimates. In fulfilling his or her duty to account for all aspects of court administration, the chief administrator would have the discretion to publish in the annual report any written directions from the chief justices. In addition, the chief administrator could use the written directions in the context of any appearances before parliamentary committees.

These are the main elements of the proposed courts administration service. The proposed structure has the support of all the affected courts as well as the former auditor general.

The second element of the proposed reform in the bill would alter the structural relationship between the Federal Court Trial Division and the Federal Court of Appeal. The objective of this reform is to clarify the respective roles of the chief justices of the trial court and the court of appeal, and to ensure the most efficient judicial management of each court.

Currently, the court of appeal and the trial court are two divisions of the same court with the chief justice responsible for the overall management of the court. The bill would create two separate courts. The current chief justice would continue as chief justice of the Federal Court with responsibility for judicial management of the court of appeal. The current associate chief justice of the trial division would become the chief justice of the separate trial court with overall management responsibility for that court. This structure is the norm in most provincial superior courts.

The final key reform element would confer on the Tax Court of Canada the status of superior court. This change of status is intended to recognize the Tax Court as a well respected institution that provides an exemplary service to Canadians. Superior court status would also establish the Tax Court as a full equal partner with the other three courts in the newly consolidated administration.

I would like to point out that this change of status would not result in either enhanced remuneration or jurisdiction for the judges of the Tax Court. The judges of the Tax Court already receive salaries and benefits at the level equivalent to superior court judges. Moreover, superior court status for the Tax Court is intended to support and reinforce the administrative objectives of the structural changes. The court does not seek through these reforms to effect any substantive change to the current jurisdiction and remedial powers of the tax court.

I am confident that these reforms will receive widespread support from all those served by the Federal Court and Tax Court. By creating a single administrative framework, as I have just described, the opportunities for administrative improvements and efficiencies will be effectively realized and the high quality of justice that Canadians expect from these important national institutions will be maintained.

The government puts forward the bill and I commend it to parliament for consideration.

[Brian Fitzpatrick, Canadian Alliance, Prince Albert, SK]

Mr. Speaker, what is the purpose of Bill C-30? It is a very simple bill consisting of 94 pages in length. The bill would establish a body that provides administrative services to the Federal Court of Appeal, the Federal Court, the Court Martial Appeal Court and the Tax Court of Canada.

What is the benefit of Bill C-30? The auditor general said one benefit might be some cost savings if the bill were passed. The member referred to the independence of the administrative side of the court system as one rationale for this. I am not sure what that has to do with the independence of the judiciary.

A third benefit we should look at is a greater efficiency of the court system, although the other side of it has a cost factor attached to it. Presumably there will be cost savings by bringing this administrative regime into being. However will people be laid off now that we are consolidating all the courts into one administrative system? If one administration system is to be instituted, will there be some labour savings from it?

Will there be empty government spaces as a result of the consolidation? Will paperwork be reduced? Who will manage this change and who will measure whether we get the results the government says we will get out of it? I do not know how clerks and other people who work in the court system have anything to do with the question of greater independence of the judiciary. Who will measure it to see whether it is worth all the time and trouble to do it?

In the name of saving some dollars and bringing greater efficiencies, there are 54 pieces of legislation affected by this one little change. How much time did lawyers in the justice department spend to find out which 54 pieces of legislation will be affected by this one minor change? How many hours did they work on it? How many hours will it take to fully implement the legislation?

If there were 1,000 copies of a piece of legislation that the government needs to carry out its duties affecting 54 pieces of legislation in both official languages plus the regulations that go with it, it could work out to something like two million pieces of paper. Yet the government says that it is for the environment and that it will not waste resources and so on.

Who will check the quality of this administrative system? We went through all the trouble of tinkering with the bill. Is there anyone in charge to see whether we will get any quality improvements from our judicial system?

There are many people outside the judicial system who have tons of complaints about the system and the lack of response to their needs when they required justice. Is there anything in the bill that measures quality improvements in the delivery of our judicial services?

Liberals believe that if there is a problem out there all they have to do is have the justice department manufacture another law and order a result. I am sure in the government's mind it could get cats to bark if it got the justice department to work on it. All the cats in Canada would be barking the minute the government passed it through the House, got it through the Senate and made it law.

This is the problem I have with the bill. It is a knee-jerk reaction to consolidate administrative services under one roof, with the assumption that all these pluses will come out of it. I am very skeptical that any real results will come out of it.

The government has a tendency to believe that if things can be centralized and consolidated they will get better. For 125 years it has managed native and aboriginal services in the country from coast to coast out of one centralized department in Ottawa. Do we have anything positive to show for that? We have welfare dependency, poverty, and a lot of problems that we do not like. That is the government's way of dealing with it.

The government said it would be a good thing if it ran our pension system to guarantee pension benefits for Canadians. What do we find after 30 years of it operating our pension system? We have a very dismal type of benefit package in relation to what people have contributed to it. We have a huge contingent liability. We are imposing huge surcharges and extra charges on other people to deliver those things.

I like the fisheries department. The government has been running the fisheries department for a long time. If I look at the fisheries correctly, the Atlantic Canada fisheries are almost dead. The B.C. fisheries are close to that. There are probably more people working in the fisheries department than there are fishermen in the country.

The Liberals have a lot of belief in that sort of thing: if they could build a few more stories on top of the justice department and pass a few more pieces of legislation then everything would look up.

With all the changes to 54 pieces of legislation how much time will it take the government to retrain all its administrative people so they can learn all the new changes that will take place? Will it be holding a whole series of meetings over the next six months to retrain people on the great changes it has introduced under Bill C-30?

That brings me to the area of whether we will get any real benefits from consolidation. At one time there was a supreme court trial division, provincial courts of appeal and the Supreme Court of Canada. We did not have the Federal Court of Canada. For over 100 years the country got along without the federal court system.

The Liberals thought they needed another court system, a federal trial division and a federal appeal level, even though we already had those in existence in the provinces with our provincial courts of appeal and trial divisions of the superior courts. The Liberals appointed those judges and set their salaries, but we had to have another layer of judges.

It is very confusing in a jurisdictional sense. It is very complex and difficult to decide where an action or proceeding should take place, whether it should go through the provincial or federal court system. However when it gets to the Supreme Court of Canada it all ends up in the same place.

If the government really wanted to consolidate things and bring some real clarity, accountability and savings in terms of tax dollars, it would consolidate the federal system with the provincial court system.

It would eliminate 200 judges and save $4 million a year at the bare minimum without even getting into all the clerical help and everything else. That is an area in which we could benefit from some consolidation, but the Liberal government does not do things that way. It does not want to downsize the empire it helped to build. A lot of its pals in the legal community would lose potential esteem by being appointed to one of these courts.

There were some comments made by a colleague about the independence of the judiciary. I have a lot of problems with that argument.

Our system is based on the British system we have inherited and refined. In the final analysis the 301 people who came to the House of Commons, providing that public sentiment is with us, should have the final say on the laws of Canada.

It is not the courts. They are not elected and not directly accountable to anybody. They are there for life or until they retire. They do not have to face the media or parliamentarians. If we say something that is not quite right for some of them, we can be held in contempt of court by them. They have a lot of power. I am disturbed at how much power we have transferred to the courts.

If we look at the Ressam case that we dealt with in the House, one of the problems with Ressam and our immigration refugee system was the courts. They decided that we did not make the rules in the House, that they did, and that if they did not like someone being sent back to some country like Algeria they would not send him back.

I do not agree with transferring power from a democratic institution to an institution that is not democratic, and then transferring more and more power. I do not know how the secretaries, the clerks and the administrative people in the court system have anything to do with judicial independence and the separation of powers of the judiciary in the court system.

It is another tendency where we are transferring fiscal power from the House of Commons, from the finance minister and so on, to the courts. They are making court decisions that are imposing huge financial burdens on Canada and on the taxpayer.

Indirectly they are now getting to a position where they can start deciding who in the public service comes within the ambit of judicial independence. They will have the final say on the benefits package, the salary benefits that are paid out to these employees. I find this disturbing.

I would have thought that based on experience the government would realize the tendency to move in this direction is wrong and that we will have to back off in a lot of areas. The Americans will make us back off in a lot of areas, as will the United Nations with its conventions on deportation of refugees. We will have to back off, get off our high horses and use some common sense.

I am disturbed the government would be giving more power to our court system. The courts have plenty of power and do not need any more than they already have.

We are kind of reluctant supporters of the bill. It is a very timid type of bill. If the government had some courage it would be looking at a serious consolidation of our judicial system and at some of the big time savings we could have on a year by year basis.

I doubt whether the bill will save anything. By the time we are finished implementing it, changing all these laws and retraining everyone, we will be in the hole for a long time. My Liberal friends figure that if they pass a law, bingo, everything will be okay, that tomorrow the law will be in place and everything will fall into place.

It is not the way things are managed in the world. If we want results we manage those results; we do not order them or command them. The government has to learn that. It is very poor at that and it is time it started looking at a whole different way of doing public administration.

[Michel Bellehumeur, Bloc, Berthier—Montcalm, QC]

Mr. Speaker, it is a good thing I do not have much time to talk on this bill, because I do not have much to say on such a bill, except that we support its passage.

No one in this House can oppose the desire to modernize the major federal courts and bring them together into a single administrative body.

For those not watching earlier, the aim of this legislation is to combine the administrative services of the Federal Court of Canada, the Court Martial Appeal Court and the Tax Court of Canada. Clearly then, the Federal Court Act and the Tax Court of Canada Act will be amended.

The aim is a worthy one. It is somewhat like what the Government of Quebec did for the administrative tribunals. The aim was to help people find their way around in the statutes and in the courts that had any bearing on taxpayers' rights. The federal government is doing the same thing for three of its courts.

When we examine Bill C-30, we realize that the objective of the bill is to be found in clause 2. This is usual. There was no effort to have a preamble that contained nothing but empty wishes, as has been the case with some government bills in the House, including the Young Offenders Act. It had a fine preamble that was practically meaningless, and the courts interpreted it that way.

In this bill, instead of being included in a preamble, the aim of it appears in clause 2. It should always be this way.

Clause 2 provides:

1. The purposes of this Act are to

(a) facilitate coordination and co-operation among the Federal Court of Appeal—

I do not think anyone can oppose that. The bill also is intended to:

(b) enhance judicial independence—

Here again, I do not think that anyone in this House can object. I would have preferred it if the government had gone even further. If it wants the courts to be totally independent, it should perhaps change the way federal justices are appointed, which is very archaic. The appointment continues to be made by one or two people in cabinet.

The bill also has as an objective:

(c) enhance accountability for the use of public money in support of court administration—

I believe that grouping together all the resources and putting these three courts under the same administrative umbrella will ensure greater efficiency.

What I object to, but this is to be expected from a Liberal government, is that it is always a little hard for the government not to engage in politics and partisanship, particularly after being in office for years. There are many friends to reward. For example, the appointment of the chief administrator will be purely and simply a partisan appointment. Sure, the government will consult judges of the Federal Court of Appeal, the Tax Court of Canada and the Court Martial Appeal Court of Canada, but the final decision will be made by the governor in council.

For all intents and purposes, the process with the chief administrator will be exactly the same as with the judges of the federal court, supreme court and superior court. It will simply be an appointment by the government.

If we want to achieve the laudable objective of enhancing judicial independence, we should begin with the appointment process. We should begin with the appointment of the chief administrator, if we really want to be consistent with the purpose of this legislation, which is not the case right now.

What I really like in this bill is that the chief administrator will report to parliament.

Clause 12 states:

1. (1) The Chief Administrator shall, within six months after the end of each fiscal year, send to the Minister of Justice a report on the activities of the Service for that year.

(2) The Minister of Justice shall have a copy of the report laid before each House of Parliament on any of the first 15 days on which that House is sitting after the day on which the Minister receives the report.

That is all well and fine that there is a report to parliament, but since the chief administrator reports to parliament, why is it not parliament that appoints the chief administrator?

I see the government House leader is saying no. I understand, because that would mean they could not appoint their friends to these positions. Yet, of course this would enhance independence.

Yes, it is fine for the chief administrator to report to the House, but the appointment needs to be reconsidered.

Not only is there the chief administrator, there is also a series of judicial administrators. This bill's weakness, in my opinion, is the series of appointments and this government's approach.

Once again, the objective is laudable. It is similar to the Quebec national government's approach to its administrative tribunals. The federal government is taking up their idea. That is fine. These days we have to streamline and group administrations together. This is what the federal government is doing.

[The Deputy Speaker]

Pursuant to order made Thursday, September 27, 2001, the House shall now resolve itself into committee of the whole to consider the difficulties experienced by the Canadian airline industry.

(House in committee of the whole on Government Business No. 13—Mr. Milliken in the chair. )

Canadian Airline Industry

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, I am pleased to rise tonight to address this very important issue.

I wish to deal with the impact of September 11 on the air transport industry from two perspectives: security and safety and the financial viability of the industry.

Obviously on September 11 a total review of safety and security measures was instituted and that is ongoing. Before planes returned to the sky after September 11 Transport Canada instituted tougher, more rigorous standards which were developed in consultation with the FAA.

It is important Canadians understand that we have instituted tougher security measures at airports, both for screening of passengers and employees but also on planes. It is also important to impart this information because the country needs to have people go back to the skies. We must encourage people to fly because flying is safe, especially with the new security measures.

Some of the measures have included: limited access to restricted areas at airports; security controls and screening checkpoints have been tightened; increased police presence at major airports; increased passenger screening; enhanced baggage security measures; measures to prohibit small knives and knife-like objects on board aircraft; the requirement for cockpit doors on all Canadian airline passenger flights, domestic and international, to be locked for the full duration of the flights; the purchase of advance explosive detection systems for a number of Canadian airports; and the active pursuit with the FAA, European authorities and others of security improvements to cockpits, including fortifying cockpit doors. We are in the process of implementing further enhancements to passenger screening and additional security measures with respect to cargo shipments.

My strategy since the tragic events have unfolded is to announce initiatives as they are ready to be implemented, not to stand and make some big speech for public consumption but to announce them either in question period as I did with cockpit doors, in scrums or in other venues, and be available in the House of Commons every day since parliament has opened to answer questions from hon. members on a daily basis.

There has been a lot made of the announcements of Mr. Bush. I do not take those announcements lightly. Except for the issue of federal marshals on board planes, Canada's new security measures mirror or complement initiatives taken in the U.S. In some cases the U.S. mirrors our own regulations.

While allowing armed sky marshals on flights is not a direction in which Transport Canada is actively going at the moment, we will carefully consider all practical means to improve security. A comprehensive sky marshal program would have serious practical and financial implications which would need to be considered in co-operation with other departments and agencies, including the RCMP.

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

moved

That this Committee take note of the difficulties experienced in the Canadian airline industry.

With respect to the U.S. measure on funding of $500 million for cockpit modifications, we are now discussing similar modifications with the industry. With respect to the measure to restrict the opening of the cockpit doors, I announced that prior to the U.S. announcement. With respect to the fortifying of cockpit doors to deny access from the cabin to the pilots in the cockpit, together with funding for cockpit modifications, we are pursuing these issues with the FAA and European authorities because any new regulations really have to affect Boeing in the U.S., Airbus in Europe and Bombardier. Those funding issues are now being discussed with the industry.

Another measure the U.S. is bringing forward is that of alerting the cockpit crew to activity in the cabin and ensuring continuous operation of the aircraft transponder in the event the crew faces an emergency. Again, we are working with the FAA and others to make the best use of new technology to enhance aircraft security.

We are part of this effort. It is a transborder, it is an international effort.

The U.S. announced the establishment of new standards for security operations. We already play a strong role in the management and oversight of airport security services. Our current role includes setting standards for the training and performance of screening personnel. Transport Canada employs inspectors across the country at all major airports to oversee the test and performance of screening procedures. Our inspection and testing procedures have been increased since September 11. We have retained additional personnel, many of them with experience in security and other technical areas, former Transport Canada employees. We will be building on that as the weeks go ahead. In this case the new U.S. measures bring them more into line with Canadian practice.

With respect to the supervising of the passenger baggage security at 420 commercial passenger airports in the U.S., we already play a strong role in the management and oversight of airport security services. This includes setting the standards for training and performance of screening personnel. The U.S. is following Canada in becoming more involved in security oversight. The government's assuming direct management and operation, which of course was the practice a few years ago, is something that has been advocated by many in the House. We are not closing the door on anything, but I would like to have the views of hon. members on this.

Last, the president of the United States talked about extensive background checks and test screeners and security personnel. We are already doing this. We are working with the RCMP and CSIS conducting background and security checks of anyone requiring a permanent restricted area access pass, including screeners and airside workers. Steps are already under way to further improve the clearance program. In fact, again the U.S. is adopting practices which are already in place in Canada.

That is not to say that we have all the wisdom. We are learning from the FAA. We are working together. Canadians have to know that there will be a seamless security regime in North America. It does not mean to say that we cannot do things our own way, implement our own measures as we did on September 11. Of course the FAA was comfortable with the measures that we instituted on September 11, as we were comfortable with theirs.

In the remaining minutes I want to talk about the viability of the Canadian airline industry because there has been a lot of discussion on that in the last few days. Certainly the House provided leadership in the restructuring of the airlines because we ensured that the interest of the general public, travellers, employees and small communities were protected. Despite the difficult problems of merging operations of the two carriers in the last 18 months or so, and there have been many bumps as we know and we all have our own little tales to tell, frankly Air Canada has done a very good job on a macro level of merging the two carriers. In recent months it was turning its attention to improved customer service and plans for the future when the business environment began to change.

Bill C-26 was designed to protect and enhance competition and express confidence in the ability of the industry to meet the needs of the travelling public. That competition was there before September 11. The market share domestically of Air Canada declined from about 82% to 65%. Even before the events of September 11 the combination of an economic slowdown, a rise in fuel prices and a major drop in the level of business travel began to take a bite out of the airline industry worldwide. Canadian carriers, including Air Canada, announced plans to adjust its operations to the new realities.

The terrible events of September 11 and the major cost of the shutdown period have pushed the airline industry, already suffering from the beginnings of an economic downturn, into a tailspin. The losses threaten the financial viability of some carriers.

The situation has been made worse because many travellers choose not to fly or use alternative modes for travel. Forward bookings are down.

In response to the changed conditions, airlines all over the world have announced painful restructuring programs to deal with the crisis. Air carriers have announced layoffs, capacity cuts and aircraft withdrawals. Within two weeks, over 125,000 jobs worldwide have been lost, including in Canada.

Stock prices of major carriers around the world have declined dramatically in the aftermath of September 11. Carriers have experienced problems in raising loans as the perceived risk of investing or lending to air carriers has increased. The cost of the shutdown, the drop in revenues from declining air travel and the inability to borrow money has placed a great strain on the cashflow of most Canadian carriers.

The crisis in the airline industry has wider impacts beyond the industry itself. The drop in airline travel has affected a broad range of related industries, NavCanada, airport service providers, aerospace and tourism to name but a few.

I would like to reassure Canadians that the government will take firm action to maintain the viability of the Canadian airline industry throughout this crisis. I want to hear the views of members of the House tonight before the government moves forward. I must remind my colleagues that the government has already acted in some areas, such as in providing 90 day indemnity for third party war and terrorism liability for essential aviation service operators in Canada. I think that since September 11 we have shown that we want to act and we are prepared to act.

Everyone has a view on the future of the airline industry. However, I can say categorically that the government is committed to the continued viability of all of the air carriers in the industry and especially our nation's flag carrier, Air Canada, which is the world's 11th largest airline. We are committed to that.

The shape and the form of Air Canada as we go forward in the months ahead is something for debate in this House and is something to be determined. I believe that when this is all done, Air Canada and the other companies affected will come out of this crisis stronger and renewed to provide Canadians with the kind of air service that they want and deserve.