Debates of Jan. 31st, 2002

Broadcasting Act

[The Acting Speaker (Ms. Bakopanos)]

Pursuant to order made earlier today the recorded division stands deferred until Tuesday, February 5 at the expiry of the time provided for government orders.

Is it agreed that we see the clock as 6:30?

[Some hon. members]

Agreed.

A motion to adjourn the House under Standing Order 38 deemed to have been moved

[Val Meredith, Canadian Alliance, South Surrey—White Rock—Langley, BC]

Madam Speaker, when Canada 3000 ceased operation suddenly last November a number of people were caught off guard and quite honestly I think the transport minister was one of them.

When Canada 3000's financial problems became common knowledge two months earlier, the minister attempted to maintain a level of confidence in that airline, including the $75 million loan guarantee. I do not think the minister was wrong to offer the loan guarantee to Canada 3000, nor was he wrong to encourage Canadians to keep flying on Canada 3000.

However, the minister kept telling Canadians that everything was okay until 12 hours before the airline shut down. The government must accept some of the responsibility for the losses that some Canadians incurred and suffered from. When a company goes bankrupt there is a legislative pecking order in which creditors have access to the company's assets. The government and the banks are at the top of that pecking order and consumers and customers are on the bottom.

When I asked this question back in November, the minister said that most consumers were protected, including people who had booked with travel agents or who had used credit cards, because travel agents in most of the provinces offered some protection to those individuals, particularly those who did use credit cards.

The minister did acknowledge at that time that there would be some individuals who might be out of pocket, but not too many. I think the minister misunderstood or underestimated the number of Canadians who would be affected by the loss of the value of their tickets and who ended up out of pocket for the money they had spent for the travel. This is especially true of thousands of individuals who ended up travelling and flew Canada 3000 on the outbound portion of the ticket but ended up stranded and had to find other means to get home.

In order to assist those individuals who found themselves unable to recoup any of their losses, I asked the minister if the government would reimburse those individuals for the taxes and fees that were included on the tickets for which they never received any of the services. It is one thing to have a private company go bankrupt without being able to recoup losses. It is quite another not to be reimbursed by the government for the taxes and fees that were part of the ticket when the customer not provided with the service. When I asked this question in November the Minister of Transport did not address the issue of reimbursing federal taxes and fees to those individuals who received no other compensation.

I ask the parliamentary secretary to address this issue. Will the government reimburse the federal taxes and fees for those passengers who were left holding worthless Canada 3000 tickets?

[André Harvey, Liberal, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, I thank my colleague from South Surrey--White Rock--Langley. It is always a pleasure to work with her on the Standing Committee on Transport and Government Operations.

Concerning the question she raised, I want to confirm that, as she said, the minister did co-operate for a long time with Canada 3000 before it went out of business.

As concerns her more specific question on the reimbursement of taxes, namely the GST and the HST, it is obvious that these taxes are levied at the point of sale, when a provider offers a certain service to a customer. Normally, that is when the tax is paid.

Consumers can get a GST or HST refund from the provider, if the provider also reimbursed the payment he or she received for services not rendered. But if the whole payment is not reimbursed, there is no specific transaction that allows the reimbursement of taxes paid on a service that was supposed to be provided.

In the case of insolvency, particularly the bankruptcy of Canada 3000, the taxes collected are part of the assets and liabilities, that fall under the Bankruptcy and Insolvency Act. It is quite clear that all creditors then have a right of recourse. It is useful to point out to them that they can apply for the services of PricewaterhouseCoopers, trustee in bankruptcy for the airlines. Since December 4, very relevant information is updated every day on their website to help all creditors have access to recourses as fast as possible.

On this site, all creditors will find precise information on how to submit a claim as well as a frequently asked questions section. There is also—and I am announcing it officially—a toll free number for all creditors, which is 1-877-973-3000; this number gives people direct access.

It is clear that the claims processing procedure could be long and complex. Patience will certainly be needed, but normally, in the case of bankruptcies such as this one, it is the common procedure to have access to the trustee in bankruptcy in order to at least recover part of the taxes collected when consumers bought services they were entitled to receive.

Unfortunately, this is the situation we are facing now. I thank the hon. member for her question.

[Val Meredith, Canadian Alliance, South Surrey—White Rock—Langley, BC]

Madam Speaker, I appreciate the response of the parliamentary secretary but he is still not dealing with the issue that this is not just any company. A major portion of an airline ticket is federal taxes and fees, Nav Can fees and all kinds of other fees that are incorporated in the taxes added on to the purchase price of the ticket.

It is one thing for a consumer to try to get money from a company that has gone bankrupt, and I appreciate there are methods of getting that through bankruptcy acts and whatnot. However we are talking about people who paid taxes or fees to the federal government for services they did not receive. They paid taxes when they should not have. The federal government has a responsibility to reimburse consumers and travellers who have paid considerable dollars for taxes and fees on their airline tickets.

I am asking the parliamentary secretary if the government or the Minister of Transport has looked at--

[The Acting Speaker (Ms. Bakopanos)]

The hon. Parliamentary Secretary to the Minister of Transport.

[André Harvey, Liberal, Chicoutimi—Le Fjord, QC]

Madam Speaker, I once again congratulate the hon. member on her persistence. I think the Minister of Transport did the impossible concerning the loan guarantee that was put on the table for Canada 3000. He did the impossible to save the operations of that airline. Unfortunately, it is a daily occurrence to see businesses going bankrupt after making commercial transactions involving the payment of taxes. It would be extremely hard to guarantee the reimbursement of taxes.

In the case of Canada 3000, I think we should turn to the trustee in bankruptcy, which will be in a position to assume the responsibility for paying back the creditors who, unfortunately, were caught off guard by this huge bankruptcy. Therefore, I would urge creditors to submit their refund claim to the officially appointed creditor.

[The Acting Speaker (Ms. Bakopanos)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6:20 p.m.)