Madam Speaker, I find it interesting that I would agree with my colleague from Churchill when she said that one of the things which is lacking is any kind of vision from the Liberal government as to where transportation and certainly airline restructuring should be going. I must say I do disagree heartily with where she would want the Liberal government to go.
The issue is why the Liberals did not implement this policy 18 months ago when we were looking at airline restructuring under Bill C-26. In early 2000 the transport committee looked at restructuring the airline industry. Bill C-26 put in a provision to raise domestic ownership from 10% to 15%. I introduced an amendment to the bill at committee in March 2000, suggesting that the government completely get rid of any kind of limitation to domestic ownership. It is interesting that the Liberals who sat around that table, most of whom are here today, voted against that amendment, yet they will support the government's removing that same issue which my amendment dealt with when the government puts it on the floor for a vote.
The big question is what is the difference of doing it now as opposed to having done it 18 months ago? The big difference is that the timing of the Liberals is really off the mark. Eighteen months ago someone may have been interested in picking up a greater degree of ownership in Air Canada. Unfortunately, today there are not too many people around who are that excited about owning airlines. The market is not in a position where there is the same kind of interest that there was 18 months ago. The Liberals really missed the boat in that 18 months ago this would have had a much more meaningful impact on the airline industry than it will have now.
When the Liberals brought in this restriction originally it was to allow for wider distribution of shares so that not any one organization or any one person could control what used to be a national airline. Although it sounded good at the time, when we were looking at Bill C-26, we heard that in essence the restriction allowed the board of managers who owned at that time, and I understand it is not much different now, around 3% of the company's shares to make decisions that were not necessarily the best decisions for the airline.
It allowed that board of management to get into predatory practices or to make decisions to run out the competition. At that time the competition was Canadian Airlines. Today it would seem to be Canada 3000 and WestJet. It allowed the board of directors to have that kind of control over the directions the airline was taking.
Rather than determining that there was a place for Air Canada and making that place in the Canadian airline industry strong and effective, it seemed that the decisions were to get rid of the competition. Well, they succeeded. Canada 3000 is the latest victim to go under. Canadian Airlines of course was bought up by Air Canada over a year ago. A week and a half ago Canada 3000 literally ceased operations.
It is a question of, is that all the bill is going to do is allow new management? I would suggest it is a very ineffective way of dealing with that. That in itself is not going to have any meaningful impact. Once again a combination of things must happen.
The Liberal government refuses to deal with an issue which it had an opportunity to address before and has an opportunity to do so now and that is foreign ownership limits. The foreign ownership limits remain at 25%. If we were to ask the minister why that is so, he would say it is because that is the American limit. Raising the foreign ownership limit to 49% and getting rid of the domestic ownership restrictions would allow a greater pool of capital to be put into Air Canada and to help it restructure. The minister, and I would assume the government behind him, is refusing to even address the issue of raising the foreign ownership limit.
When we talk about foreign ownership limits the reason we talk about 49% is because the bilateral agreements that Canada has with other countries require that part of that bilateral agreement is that a Canadian air carrier has this agreement with another country. If we were to raise the foreign ownership component to more than 49% we would have a harder time convincing people that it was actually a Canadian air carrier.
Therefore 49% still allows Canada to have an air carrier that is a Canadian air carrier but with a greater opportunity for foreign ownership component.
I suggest that now is the time to allow Air Canada the flexibility of not only domestic ownership requirements being removed but upping that foreign ownership component.
When the committee studied the bill we were told that over 75% of the debt that is held by Air Canada is foreign owned. By not upping the foreign ownership we are also removing the ability of Air Canada to restructure its debt by transferring or converting it into equity.
If we were to up the foreign ownership we would allow that foreign debt to be converted into an equity in the airline and allow Air Canada an opportunity to look at a different way of restructuring and give it more flexibility.
I would not argue to any great degree with the NDP's attitude that Air Canada is the national carrier and is the flagship of Canada. We all accept that. However for the impression to be left that Air Canada can only function if the government takes equity and more control in the airline is a fallacy. History will show that governments do not do business well. Governments have a history of messing up some very good industries that could have operated on a profitable basis and made sure that customers were served but it was through government interference and government ownership that things were messed up, in some instances to a very large degree.
I would even go so far as to say that part of Air Canada's problem is that it was a government airline and the culture it has tends to be a government type bureaucratic culture. It is at a disadvantage when it has to work in a competitive marketplace with other air carriers. It is only when Air Canada learns how to do that, that it will survive in the international community.
I would suggest that the worst thing that could possibly happen would be for the government to get back into the ownership of Air Canada. I would think that by giving Air Canada more flexibility, which would certainly be a first step but by no means the last step, the government is allowing Air Canada a bit more flexibility in how it can restructure itself and compete in the international community.
When we start talking about government subsidization and governments throwing money into companies, I can give a couple of examples from my province of British Columbia but I will only give one. The NDP government put $380 million of taxpayer money into Skeena Cellulose Inc. to keep it operating and keep people working. All that does is defers reality. It defers the time when the company realizes that it cannot stay afloat because of bad management, where it needs to restructure and it needs to become more competitive.
Skeena Cellulose closed the doors once again. There goes 380 million taxpayer dollars that the government has no ability to collect from Skeena Cellulose.
Government subsidization or government getting back into the ownership is certainly not the way to go.
Yes, there is a role for government and that is very clear in the Canada Transportation Act. Government is there to make sure the safety of air transportation is there for consumers. It is there to make sure Air Canada does not run out all the competition. The competition bureau and the competition commissioner is there but unfortunately under the act they need more teeth. They need to have a greater ability to enforce the restrictions that are put on companies such as Air Canada when it holds a monopoly.
The issue is not whether or not we support the bill. We do support removing the limit on domestic ownership. However the bill should also have provided for an increase in foreign ownership which could be done by order in council of cabinet. I would strongly urge the Liberal government to consider doing that sooner than later. It should have learned by this example that it has to be bold and step out in a strong manner when the time is right. If it does not, it does not help to step out in a timid and weak fashion years later.
The government should be bold and increase foreign ownership along with removing the domestic ownership in Air Canada. It also should look at other opportunities to allow competition in Canadian airspace.
When it studied Bill C-26, the committee looked at things like a Canada only air carrier which could be foreign owned by British Airways or another airline. However it would operate solely in Canada so it would not need any kind of bilateral agreement. It would use Canadian crews, Canadian fuel, pay Canadian taxes and produce Canadian jobs. That is something the government should be considering.
We talked about other things when we looked at air restructuring and Bill C-26. It is appropriate to bring some of those issues back on the table. The Government of Canada should be looking at other things that could provide more competition in the airline industry and give better service to air travelling consumers. There is no reason that we cannot get into that debate and look at creative new ways of providing air service to Canadians.
What we need to do is convince, cajole and push the government into seeing the big picture on how the Government of Canada can fulfill its obligations to ensure safety and environmental issues are considered and to ensure labour and competition matters are considered without getting back into really serious ownership issues or conditional type issues.
I encourage the government to look to a much broader perspective and to be a little more creative. Hopefully we will see something in the near future that shows it is going in a direction that is for the good of all Canadians.