Mr. Chairman, I will begin by complimenting the minister on his attending and giving us an opportunity to share with him some of our thoughts on where the government should be going with regard to the crisis in which the airline industry finds itself.
There is no question that the world of aviation changed on September 11 but not all the problems that are being faced, particularly by Air Canada, began September 11.
Some of the problems, quite frankly, are decisions that the government made in responding to the last crisis in the airline industry. I think Canadians would agree, some more so than others, that there is a financial responsibility that the Government of Canada has in regard to the airline industry.
It is quite clear that Canadians accept the fact that the Canadian government should be responsible for the direct costs that Canada's airlines have incurred since September 11. There might be different ways of dealing with that direct cost. It could be money up front and then, after audited statements, additional support given months down the road. It could also be credit assurances or whatever. Canadians will accept the fact that the direct costs incurred should be covered.
Many of my colleagues this evening have spoken about the security issues. I think Canadians want the federal government to take back control of security at all airports in Canada.
There are only three countries in the world that the government does not control airport security: Canada, the United States and Bermuda. Canadians want the security of knowing that it is the Canadian government that is looking after the security at airports and making sure that the security agents are well trained and paid well so they do not end up rotating because of cheap labour.
I think Canadians are comfortable with that but what September 11 showed us is that it is not just airline pilots that have to be concerned. Those airplanes were used as a tool of destruction. Many innocent people who merely went to work in an office building ended up losing their lives. So it is not just airline passengers for whom security is required.
I think Canadians would also acknowledge that the government has a role to play in insuring airports and airlines for terrorist activities if that insurance cannot be found at a reasonable cost in the private sector. I believe Canadians would be comfortable with the government making sure that airlines and airports are properly insured for events such as the one that occurred.
Where we get into greater concern is when we start talking about the loss of revenue that airline companies may be looking forward to or not looking forward to. This is more of a controversial subject.
Air Canada has made its claims based strictly on the numbers used in the American legislation. The American legislation does permit subsidizing the loss of business but it is very specific. It is for a period of time from September 11 to December 31. It is not for the ongoing loss of revenue for days, months or years ahead. The response from government has to keep that in mind.
The question we must ask is whether Canada is obligated to follow the U.S. numbers. We certainly do not in the agricultural industry. We do not subsidize our agricultural industry to the degree that the Americans subsidize their agricultural industry. One has to question the premise that because the U.S. government is subsidizing to this tune that Canada must do the same.
If Air Canada is competing with an American airline for a flight from say Toronto to New York and the American airline is being subsidized for that flight, would it be fair that Air Canada or the other Canadian airline is not subsidized? There is an argument that there is some support that would be required. The question is how we give that support. If it is given through insurance, through direct costs, through taking away the security measures and other things, then there are ways of helping the airlines to compete.
I certainly think that Air Canada and all officials who are concerned about this issue must have the right to appear before the transport committee to give their case so that all the evidence and all the information is done in a public way. If decisions are being made and having to be supported by the Canadian people then they have the right to have exposure to the information that is being laid on the table.
If the government does decide to subsidize--and I am not convinced that is the decision it should come to other than the direct costs and other measures that I have put on the table--conditions need to be placed on the table at the same time. The unions have to agree to waive the no layoff provision. Every airline company around the world is dealing with restructuring. It is not right that a Canadian airline feels it does not have to deal with that whole restructuring as well.
I sympathize with all the employees. I would wager that there is not any other constituency in the House that has as many airline employees as my constituency. A lot of people will be directly affected by any kind of layoffs. However I have to ask the government how it could possibly pick out one industry and protect that one industry from layoffs when it would have to consider the trucking industry, automotive industry and every other industry that has been or would be affected by the events of September 11.
Fourteen thousand British Columbians have been laid off from their jobs because of the duties placed on softwood lumber. Communities have been devastated because of these layoffs. Do these 14,000 British Columbians not deserve the same consideration that the government might be giving to the airline workers?
The other concern I have, which I have raised before, is how the government could subsidize an air carrier that is in direct competition with another existing air carrier in Canada. That would be subsidizing one business to provide competition to another. It is very hard to find any rationale to support that. I do not see any indication on the part of Air Canada to change its direction on that issue.
Limitations would have to be placed on compensating high income employees or officers of the company if the government decided to subsidize the company. The government would need to examine the recent stock market dealings of major Air Canada shareholders, including its largest shareholder, Caisse de Dépot et Placement which apparently made a large profit for selling short on Air Canada stocks. In other words, profiting from the decline of Air Canada stocks.
In looking at the comparison between Air Canada's quoted market value and WestJet's quoted market value, I cannot understand how the major airline in Canada, the flagship in Canada with almost a monopoly on a lot of air travel, is worth one-third of what a small, low cost carrier can be. The management issues there have to be questioned if the government is planning on any kind of subsidization.
I mentioned earlier that not all of Air Canada's problems relate to September 11. From a high of $17.50 in November 2000, Air Canada shares had dropped to $6 before September 11. After September 11 they dropped an additional $2.50, just a small portion of that initial $11.50 drop.
Air Canada's current market valuation is $270 million. I would suggest to the government that puts Air Canada in a position where the private sector could very easily manage to adjust the management of the company. The private sector is in a position where it could come in and take over the company and do a restructuring.
When we contrast that with WestJet, we really have to wonder if that is not what needs to happen here.
In conclusion, the federal government should not take an equity position in Air Canada, but rather should eliminate the restrictions on private, domestic ownership to allow more capital into the company. The private sector solution is the best solution and it is available.
I am a little concerned that we should not even be having this debate. Had we allowed the private sector more ability without that limitation, perhaps it would have looked after itself over the years. However that was a decision that was made a couple of years ago and now we need to make sure that we do not make another decision that prevents Air Canada and all Canadian airlines from being viable, well run airlines that compete and are solvent companies that give good, solid, long term employment to their employees whom they treat fairly. I think that can happen with private sector involvement. I would urge the government not to get involved in any kind of equity share in Air Canada.