Madam Chairman, I am pleased to participate in this debate tonight to provide a few ideas, I hope, which the minister said he was looking for when he spoke earlier this evening. I trust he is paying careful attention to the ideas that have been brought up.
It has been said that many industries are affected by this, not just the airlines. There are the aircraft manufacturers, hotels and tourism outfits. It is all true. Of course, people ask how can we provide money when so many industries are affected and how do we deal with it? The reality is that it all evolves from the airline industry.
When the airlines do not take passengers and do not travel, they downsize which affects aircraft manufacturers and all their various suppliers. It affects hotels because there are no passengers travelling, and it goes on and on.
We can address a lot of the industry wide problems that have been created by this terrorist attack in September by dealing first and foremost and decisively with the problems in the airline industry.
The first thing we need to do to try to get airlines back on their feet is to regain the confidence of passengers that it is safe to travel and that we are taking prudent measures to ensure their flying safety.
I remember years ago when I flew out of Castlegar, there used to be scrambled seating on the 737s. I happened to like to fly in the front seat because I found it much more comfortable. However everybody scrambled on ahead of me and those seats were always taken until somewhere in the world there was an airline accident. Then invariably the investigators talked about how it was so much safer at the back of the plane. For the next several weeks or perhaps months, I had no problem getting my front seat.
We have the same thing happening right now. People have heard about this and they envision it occurring even in the smallest little communities from which they may fly out. They suddenly have this fear that flying is very dangerous. That is the first step the government needs to take. It needs to look at airport security. We have heard tales already tonight of how one in five attempts to smuggle fake weapons of one type or another through security have been successful. That is pretty scary in light of what happened and in light of passenger confidence. That needs to be cracked down on.
We have also heard some people, particularly on the government side, talk about reforming a crown corporation with Air Canada. For heaven's sake, if we have learned anything in the past, we should have learned that the airlines cannot be run by a government agency. The minister squanders enough money on VIA Rail, and that is small potatoes beside Air Canada. We do not need him dabbling in ongoing and permanent subsidies to Air Canada as well.
He might consider taking airport security back under the wing of the federal government, instead of having all the various airlines provide the security with minimum priced help, with unsupervised training and obviously not very good training. If one in five attempts to smuggle fake weapons through are successful, then obviously a much better job needs to be done.
If we could regain the confidence of the flying public and get the passenger count up, that helps not only the airlines, but it helps many of the other industries and of course their employees. We have heard quite a bit spoken tonight about the tremendous number of people who are becoming unemployed as a result of this.
The government has made a lot of mistakes in the past and not necessarily this government, because I do not want to pin everything on it. However governments in the past, this one and others, have made a lot of mistakes. When Air Canada was privatized, most of its debt was written off by the government.
I congratulate the Liberal government. When it privatized CN, it did not make that same mistake. I was on the transport committee at the time and I argued very loudly against doing that. The government to its credit listened and got a much better result in the privatization of CN than it did with the privatization of Air Canada.
I do not blame Air Canada. It was a private corporation now responsible for making money. It suddenly found itself out in the marketplace with a competitor, CP Air that had a heavy debt load. It did not have any debt load so it could go after CP and become the carrier of Canada. That is where the problems of the airline industry in the country really started.
The foreign ownership rules that restricted the amount of shares that could be held by non-Canadians ultimately was part of the downfall of Canadian Airlines. Canadian Airlines had partners outside Canada willing to make further investment and they were not allowed to. That was one of the roadblocks that ultimately brought Canadian Airlines to its end.
Another one was the foreign ownership rule for Air Canada. Air Canada, unlike the Onex deal, used its own internal funds and financing abilities to take over a troubled airline. There was no new capital. It was all just Air Canada taking on a lot of the debt of Canadian Airlines.
The Onex deal involved bringing a lot of new capital to the table. If it had been allowed to go through, in the end it would have been a much better operation for all those employees and for the travelling public. What finally brought down Canadian Airlines was the government's unwillingness to change the 10% ownership rule that any one shareholder could not own more than 10% of Air Canada. That was the final bring down of Canadian Airlines.
Air Canada was operating with tremendous debt structure and in severe financial problems before the September 11 crisis. There have been some changes since then. There have been changes to the layoff rules. In all honesty, the structure with regard to job guarantees that Air Canada went in with, while reassuring, was hardly practical. In my own home airport the employees of both airlines all stand behind the counter now and unfortunately, they did not see fit to get expanded counter space. There are so many of them they have to take turns standing up at the counter. It is very frustrating for the manager of the company in Castlegar to deal with that and still try to be responsible in terms of the bottom line.
Then there is the big issue of fuel taxes. I trust the minister is paying close attention to this one because this is one very fast way he could bring some relief to the air industry in Canada. When the GST was brought in by another government, the airlines were promised in return for imposing on their passengers this tremendous cost of an extra 7% on all tickets, that the government would get rid of all the other taxes that they had to pay. The airlines were promised that.
Madam Chairman, because it was not the government that is here now, I think can say that that government lied to the airlines. They did not take away all those taxes. They left a fuel tax. For this year alone Air Canada budgeted $46.7 million for excise tax on jet fuel, taxes that are largely not paid by its foreign competitors. That puts Air Canada at a severe disadvantage.
There has been talk of loan guarantees. For the record I would say that if loan guarantees are being considered, they should be only that amount that is necessary to ensure that Air Canada maintains the credit rating it had prior to this occurring. Those loan guarantees should be available to its competitors as well.
There should be no discount airline startups until all those guaranteed loans are paid. Then if it still wishes to go ahead with that discount airline, there should be an audit provided by the government that ensures there is no cross-subsidization of that discount airline from Air Canada. Otherwise all it is is a fancy name to do predatory action against the other airlines in Canada without having any accountability for it.
There should be, as some people have suggested, although not tonight, but I hear it brought up quite frequently, no unilateral action toward cabotage in Canada. Cabotage is where a foreign carrier can fly from point to point inside the country. There should be no unilateral declaration of that. If the United States wants to allow Air Canada to fly freely from point to point inside the United States, that is fine. However, it should not be done unilaterally in Canada. In the end that would kill Air Canada and it would not help the flying public in this country.
The government needs to move fairly quickly, but it needs to do it with prudence, if it has a good plan which it has brought to the House and which has been approved by the House. The government should not confuse prudence with vacillation. This problem cannot go on for a long period of time.
Sky marshals have also been mentioned. That is something the government needs to look at. In the United States people are being hired from the street, but they are soundly screened for both psychological profile and ability to do the job.
Perhaps the government might even consider asking some high frequency travellers if they would be interested in going through the screening and training process. Those people travel anyway. They would be authorized under the same provisions of a hired sky marshal. It might be a way to bring the numbers up without cost.
As far as reimbursing Air Canada, it should only be for the exact cost that it can prove occurred as a direct result of the September 11 events. I have many more ideas but I realize other members wish to speak.