Mr. Chairman, as always I am sure the finance minister will be pleased to hear the latest suggestion from the hon. member for Toronto--Danforth. He has a reputation for being one of the few policy innovators opposite. It is a well earned reputation.
I am happy to rise on this take note debate. I thank the House for the opportunity to join my colleague if he would agree to yet again press for a flat tax in the Liberal caucus or a single tax as the case may be. I thank the government and all parties for allowing us to bring this matter forward because the airline industry is a central element in our modern economy, especially in a country so huge.
As a Canadian who spends many days and dozens of hours every month on airplanes I have a personal understanding of how central the industry is to the flow of traffic, goods, services and human capital across the country. I do not envy the difficult position the transport minister finds himself in although to a great extent he and the government's policy have created the predicament in which they find themselves.
In terms of the immediate economic consequences of the September 11 tragedy, my colleagues in the official opposition and I support in principle the notion that all our airline companies, not just the principal monopoly of Air Canada but all airline companies, that suffered direct economic harm as a consequence of the shutdown of our airspace and commercial air traffic from September 11 to September 13 ought to be compensated for those losses and any perhaps other provable losses as a consequence of the shutdown.
We have not yet seen, at least in the opposition, what kinds of losses the airlines might have incurred. I understand from published reports that it could be in the neighbourhood of $100 million for Air Canada and several dozen million more for the smaller air carriers.
That seems reasonable because the companies operate on small margins to begin with and their ability to operate is dependent on the government authorizing open air space. For two or three days they did not have that and were unable to operate or generate revenue. Because the shutdown of commercial air traffic was clearly the consequence of a national and continental emergency, I think all parties and all Canadians would support in principle compensation limited to the direct consequences of the shutdown.
We in my party support the idea of an appropriate degree of government fiscal support for additional security imposed on airline companies by way of federal regulation. Clearly all Canadians expect the government to engage in a comprehensive review of airline security. We do not think the government has moved quickly enough in regard to certain obvious measures, certainly not as quickly as the government of the United States.
There will be costs associated with this. In so far as the costs are the result of a federal mandate to protect Canadians and promote public security, my colleagues and I would support limited government fiscal compensation for some of the additional security measures.
I am disturbed to see certain companies, Air Canada in particular, playing the lobbying game, seeking special interests and engaging in rent seeking behaviour. We understand from published reports that Air Canada approached the government prior to the September 11 disaster for a major bailout in the order of $2 billion. Shortly after the September 11 disaster the CEO of Air Canada upped the ante to $3 billion or $4 billion.
This raises the question, was Mr. Milton using the outpouring of public concern and compassion following September 11 as a political lever to squeeze more tax dollars out of the federal government? I think that is an important question. I find it quite troublesome that we would have seen his company seeking corporate welfare before this event and then doubling its ante afterwards.
I believe as my colleague, the member for Port Moody--Coquitlam--Port Coquitlam, has already stated in this debate, we need a strong, vibrant airline industry. We have tens of thousands of people employed in that industry and millions of Canadians served by it. We need to maintain a strong industry.
However let us not be coy about this. We do not have a strong airline industry in this country. As a result of government inaction and government policy, we have a de facto monopoly, a virtual monopoly, in a tightly government regulated industry in the hands of Air Canada. We have predatory pricing practices. We have a company, even though it has a virtual monopoly, that still has managed to lose money, quarter after quarter and month after month, rather than making the difficult management decisions that it needs to make in order to provide the services and make a profit or at least not continue to run quarterly deficits. That is a management requirement. It ought not to be laid at the feet of the taxpayers of Canada.
This is a huge, trillion dollar, complex, free market economy with a number of enormous industries and corporations. If we accept the premise of Air Canada's request for a bailout of some $2 billion, and I think it has gone back down to $2 billion now which really raises the question about on what basis it is making these claims and these requests, we are essentially establishing a precedent that the Government of Canada and the public treasury will be available to backstop and bail out companies in any sector of the economy that find themselves in a period of economic difficulty. That is simply wrong in principle. Every day, unfortunately, dozens if not hundreds of small businesses and entrepreneurs go bankrupt, lose their businesses, have to lay off employees and have to go without incomes themselves because they are struggling to operate in the marketplace.
I think it would be wrong to prejudice the federal government and the taxpayer to subsidize one chosen industry, one chosen monopoly corporation, at the expense of all of those taxpayers, entrepreneurs, small businesses and small and medium-sized enterprises in various sectors, including the transportation sector, which are struggling day by day to make it by, to make their payroll and to make a profit. We need to treat all sectors of the economy with a degree of equity and not prejudice ourselves in favour of any particular one.
We would speak out against any unspecified bailout of any corporation. This is not just with respect to Air Canada. Again, this points to a greater need for a review of government policy in the airline industry to allow for greater competition. I now look forward, in light of September 11, to the government allowing a continental security policy in terms of a common border and a common perimeter so that we can look toward a common transportation policy. I would hope the government would consider allowing American carriers to compete on an equal footing with their Canadian counterparts to give more choices and more services to Canadian consumers.
My colleague, the opposition critic for transport, has addressed a number of security issues that have arisen. I do not need to delve into them. However, I will say in closing that this is a particularly difficult moment. I believe we are moving into a recession. We had negative growth in the last month of the second quarter and the first month of the third quarter. I have no doubt in light of September 11 that we actually are in a domestic and international recession. In fact, the Bank of Nova Scotia is now projecting a $5 billion fiscal deficit for the government in the fiscal year 2002-03.
That means that it is time to make some tough choices. At a time like this we have an urgent imperative to invest more public resources in areas of national security such as national defence, where we spend less than any country in NATO save Luxembourg, or such as CSIS, which has the lowest relative intelligence expenditure of any major western country, or such as the RCMP, which has had major cuts. These are all areas of the highest public importance and we cannot justify unspecified corporate bailouts and corporate welfare at a time like this when public resources must be dedicated to national security. I hope the government will find the right priorities to govern those decisions in the future.