Mr. Speaker, in December 1999 the transport committee tabled its report, Restructuring Canada's Airline Industry, which recommended a number of measures to ensure competition. The following spring when the government introduced its airline restructuring legislation, Bill C-26, it chose to ignore most of the committee's recommendations, especially those concerning competition in the industry.
Since Bill C-26 was introduced, four major airlines, Canadian Airlines International, Royal Aviation, CanJet and last month the number two airline, Canada 3000, have disappeared from the country's aviation scene.
There is even worse news. Our national carrier, Air Canada, which controls almost 80% of the market is in financial difficulty and there are fears that it may not survive without a government bailout.
The Minister of Transport on the other hand believes that Air Canada controls too much of this industry and is prepared to regulate the industry to reduce Air Canada's share of the market.
The government believes that Air Canada has participated in anti-competitive behaviour and has introduced amendments to the Competition Act that would severely punish predatory behaviour in the airline industry.
However this is not the end of the soap opera in Canada's aviation industry. On Monday the finance minister introduced a new tax on air travellers under the guise of user fees for aviation security. Under the government's plan, every domestic air traveller will have to pay a $24 security fee for a round trip. For international travellers the round trip cost will be $48.
For some travellers, for example passengers travelling on WestJet between Edmonton and Calgary or Vancouver and Kelowna, the $24 security fee will increase the cost of the ticket by 22%. When people fly from Vancouver to Seattle they can get a one-way ticket for as low as $110, but they will now have to pay an additional $24 for security; again a 22% increase in the total cost of the ticket. If those individuals fly from Seattle to Vancouver, they will have to pay an American security fee as well. That fee will be $2.50. That is correct. Under the American legislation, the aviation and transportation security act, the security fee is $5 for a round trip flight.
Why are Americans charged $5 for a round trip flight and Canadians charged $24 for a round trip flight? It is certainly not because Canada will receive a higher level of aviation security than the United States. No, it is because this government has never met a tax that it does not like and if it can be hidden as a stealth tax, so much the better.
What are these high security fees going to do to the struggling airline industry? The transport minister says that these fees will increase traffic flow because people will feel more secure.
I think it is clear that Canadians would have felt far more secure with a fee in the American range of $2.50 per flight; not $12. This fee is just another example of how the government and the minister have missed the boat on bringing real competition to the airline.
The minister quickly rejected Air Canada's suggestion of modified sixth freedom, instead claiming that he would regulate the industry. That should kill off the entire industry right away.
Therefore I ask the parliamentary secretary this. Why has the government ignored such committee recommendations as higher foreign ownership limits and Canada only carriers, and instead is planning to reregulate the industry?