House of Commons Hansard #153 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was budget.
Randy White Canadian Alliance Langley—Abbotsford, BC
Mr. Speaker, I rise on a point of order. I am trying to recall the standing orders, but I do not believe the minister can raise this motion on a point of order. I would like to ask the Chair whether or not my understanding of that is right.
Budget Implementation Act, 2001Government Orders
The Deputy Speaker
I thank the hon. member for his intervention. Having consulted with our Table officers, in fact the proceedings are consistent with our practices in the House at this moment. Members will recall that on the previous Friday that we sat, the minister gave notice that the government would proceed accordingly. We are in government orders and of course on Monday routine proceedings will come later, after question period, so in fact we are well within the spirit and the letter of our proceedings.
Pursuant to Standing Order 67, there will now be a 30 minute question period. I am given to understand from the government that the Secretary of State for International Financial Institutions will be taking the questions.
If the Chair could have some indication as to the number of members who possibly could be participating in this 30 minute period, given the interest on the subject matter, I would hope with the co-operation of members to give as many members as possible the opportunity to participate.
We will proceed in the following fashion. In the first round, recognizing one member from each of the official opposition parties, I will allow two minutes for the question and subsequently a maximum of two minutes for the reply from the government side from the secretary of state.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Mr. Speaker, I rise on a point of order. Your Honour has indicated that pursuant to Standing Order 67.1(1)(a) there will be a 30 minute period for questions. You have indicated that the government will be represented by the hon. Secretary of State for International Financial Institutions. I would refer Your Honour to Standing Order 67.1(1)(a), which states:
When a motion has been proposed pursuant to Standing Order 57 or 78(3), there shall be a period of not more than thirty minutes during which time Members may put brief questions to the Minister responsible for the item which has been subject to the motion--
Mr. Speaker, Bill C-49 is presented in the name of the hon. Minister of Finance, not the Secretary of State for International Financial Institutions. This arrangement violates the standing orders. I, on behalf of this party, would request that Your Honour suspend this question period until the minister responsible appears in the House and is available for questioning.
Budget Implementation Act, 2001Government Orders
The Deputy Speaker
I think I will be repeating something I just heard across the floor of the House, but for the sake of everyone who did not hear that exchange, in that same citation under 67.1(1)(a), the member for Calgary Southeast raises the prospect that the government should only be able to put the question:
--to the Minister responsible for the item which has been subject to the motion pursuant to Standing Order 57 or 78(3)--
Then I follow with:
--or to the Minister acting on behalf of the Minister sponsoring the item, and the said Minister may make a corresponding reply.
Again I think that in fact we are well within the confines of our rules.
Randy White Canadian Alliance Langley—Abbotsford, BC
Mr. Speaker, I rise on a different point of order. I do not wish to challenge the Chair on your two minute ruling, but surely at this stage of the House of Commons in this session we are able to ask questions and get answers in a little shorter time than two minutes. Might I suggest one minute to allow more members more questions?
Budget Implementation Act, 2001Government Orders
The Deputy Speaker
Certainly what I put forward is not a rule. It is simply a guideline. If members want to act accordingly and take a little less time, I fully concur with the member for Langley--Abbotsford that it would give more members an opportunity to participate. The Chair would be only too happy to facilitate that exchange during the next 30 minute period. I will begin with the hon. member for Calgary Southeast.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Mr. Speaker, first let me say at the outset that I am disappointed that the Minister of Finance never appears in the House to defend his bills. That is not the convention--
Budget Implementation Act, 2001Government Orders
The Deputy Speaker
Order, please. I know that the member for Calgary Southeast is a very experienced member of the House. I am sure he will recognize that it is not consistent with the practice of the House to reflect on the absence of any one member at any time.
Jason Kenney Canadian Alliance Calgary Southeast, AB
Mr. Speaker, let me put it this way. In the mother parliament, Westminster, the chancellor of the exchequer is present in the house of commons to represent his position on bills before that house. It is unfortunate that we have lost that convention here.
It is doubly unfortunate because in fact the bill and the provisions which we will be focusing on overwhelmingly concern the Department of Transport, and the Minister of Transport has basically admitted in public that his recommendations on the bill were overridden by the Department of Finance.
The $24 return flat tax on air travel will have a devastating effect on air travel, particularly for short haul, low cost airlines. We received testimony from eight witnesses at committee and every single one opposed the $24 round trip tax, including the Canadian air transportation agency, the Canadian pilots' association, WestJet and the unions representing the industry, all of them saying that the impact of this could be devastating.
Does the secretary of state not recognize that a flat $24 fee levied on a short haul, low cost carrier for an airfare from Vancouver to Victoria, where the base ticket price may be $60, is all out of proportion to a $24 charge assessed for a business class ticket from Victoria to St. John's, Newfoundland on a $4,500 full fare ticket?
Does the secretary of state not understand that his government may be responsible for putting out of business low cost, short haul air carriers such as WestJet and smaller companies and that it would destroy whatever vestiges of air competition we have in the country?
John McCallum LiberalSecretary of State (International Financial Institutions)
Mr. Speaker, there are two answers to the question. First, the $12 charge has the virtue of simplicity. Second, it is fair in the sense that the cost of the additional security is not a function of the cost of the ticket. It is not a function of the distance travelled. The security cost to fly from Victoria to Vancouver is the same as the security cost to fly from Victoria to St. John's. In that sense it is fair.
That having been said, the government is committed to a full review of the program in the fall, at which point the legislation mandates the government to reduce the charge if circumstances warrant. In addition to that, the government will even be open to representations from interested parties that might want to recommend an alternative structure.
Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC
Mr. Speaker, I agree with the hon. member. One wonders why the government is so anxious to quickly pass this bill, when it is so controversial. The more we talk about this legislation, the more issues are raised.
WestJet was mentioned, but the whole tourism industry is affected. Witnesses appeared before the Standing Committee on Finance to condemn Bill C-49 and the air transportation tax.They all said that it will have a disastrous impact on their industry. It is the same thing for regional carriers and small airports.
I have a question for the secretary of state. When he told us about the impact of that new tax, how could he state that it will have no or only insignificant effects and that our questions regarding this new transportation tax were totally ridiculous, as he did not have any impact study on the implementation of such a tax?
How can he be so sure when his comments are not based on anything?
John McCallum Liberal Markham, ON
Mr. Speaker, we want to proceed quickly, because we experienced a real crisis on September 11. The airline industry suffered huge losses. It is absolutely critical to have the confidence of those who fly.
Long delays mean that the new agency cannot begin to improve security. The more the legislation is delayed, the more the implementation of these security measures is delayed.
Following the September 11 events, these security measures have become absolutely essential to restore traveller confidence and ensure Canadians' security. This is the responsible thing to do and this is why we are doing it.
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Mr. Speaker, the minister is a relatively new member of the House and the cabinet so I want to ask him two questions. One concerns reforming this place. The other one is on the substantive issue itself.
The all party committee agreed to one of my amendments, which was to put labour representation on the new board of directors of the security authority, the new crown corporation that is created. We had an amendment saying that the labour unions, representing the security workers themselves, would be sitting at the boardroom table. That was an amendment accepted by the all party committee with support from some members of every party in the House.
In terms of the independence of the finance committee, as the member was a member of the finance committee at one time I would like him to comment on whether he is happy with the government's decision, which I assume is directly from the PMO, to override what the committee recommended in terms of having labour trade union representation on the board of directors.
This was a committee decision and it came to the House as a bill that was amended to include representatives from the trade union movement, two representatives, in fact. The idea was put forward by the national director of the United Steelworkers of America, Lawrence McBrearty, and it was very well received by the committee. The amendment was accepted, voted on, carried and became part of the legislation. Why do we have a committee system in the House and spend all kinds of money on that committee system if the government can override what the committee decides? That is fundamental parliamentary democracy. I am concerned about that and I hope that the minister across the way, as a very new member of the cabinet, would get up and express the same kind of concern.
Then substantively I would ask him, what has he against putting in legislation a guarantee that the people who are the frontline workers, the security workers in the airports in this country, have some representation at the boardroom table?
John McCallum Liberal Markham, ON
Mr. Speaker, I would think that the fundamental principle of democracy is that the House of Commons makes the ultimate decision, not the committees, and that is indeed what is happening in this case.
That having been said, I did promise to the hon. member that I would convey his desire for labour representatives to the Minister of Transport, which I have done. It is really a decision for the Minister of Transport and the new agency to make, not the Department of Finance.
Scott Brison Progressive Conservative Kings—Hants, NS
Mr. Speaker, it is unfortunate the government is again using time allocation to railroad legislation through the House of Commons at a time when there is not an active legislative agenda for the government. There should be no rush. We could describe it as an anemic legislative agenda.
Why was there no impact analysis whatsoever of the impact of a $2.2 billion tax on the regions of Canada, on discount and short haul carriers that are so important and necessary for air competition, and on struggling airports? Why was no impact analysis done?
Why have the government, the Minister of Finance and the Department of Finance priced the air traveller tax so high? The U.S. equivalent is $2.50. In Canada it would be $12. Arguably the Liberal plan in the long term to devalue the Canadian dollar would help equalize it in time, but in the short term is security a premium?
Finance officials have stated publicly that they based the fee on questionable data which significantly underestimates Canadian air travel over the next year. Based on current air traveller traffic the government would take in over $1 billion more with the tax than it would spend on implementing security measures.
The government is trying to profit on the back of Canada's most vulnerable industry, the airline industry. It is exploiting the September 11 tragedy in many ways to raise revenue for Liberal spending.
The government and the minister have stated that they would reduce the tax if they discovered after the first year that it took in more revenue than was required. Why will the government not amend the legislation to ensure the tax would be reduced if it took in more revenue than was required to implement the security measures all Canadians agree are necessary?
John McCallum Liberal Markham, ON
Mr. Speaker, 20-20 hindsight is wonderful. However I will take the hon. member back to September 11.
There was a sense of crisis, a sense that Canadians demanded action to improve security at airports. It was not a time for more studies. It was a time for resolute action and leadership to provide security to air travellers and restore the confidence of Canadians in air travel. That is precisely why the government has taken this firm action rather than requiring months of studies as the opposition seems to demand. The time was for action, not studies.
That having been said, in the fall we are committed. The legislation would give the government the right through order in council to reduce the charge. As we have said many times, this is precisely what we would do in the event the revenues appeared to exceed the expenditures.
Charlie Penson Canadian Alliance Peace River, AB
Mr. Speaker, the Secretary of State for International Financial Institutions seems to suggest there is a such a hurry that we can go down the wrong road if need be to apply security fees.
Security in Canada should not be based on a user fee process. We do not charge user fees at our ports where there are security issues with the containers coming in. We do not charge user fees in our cities where there are problems with bikers who pose a security risk. It is a general concept that security in Canada is paid for by all taxpayers. The concept should be recognized in the case of airport security as well.
The system the government is proposing would cause companies like WestJet to withdraw from my hometown of Grande Prairie, Alberta on flights to Calgary and Edmonton because they would be competing against people who drive. The added cost of an airport security fee would be a big expense to WestJet. It would cause the loss of a carrier.
There is a need for more security at airports. That was evident after September 11. I agree with the secretary of state. However let us not get it wrong. Let us get the process right. The fee should come out of the general revenue. The government must recognize this. It is a concept we use all the time. If there are a lot of speeders on a highway who pose a security risk the RCMP does not tax the people along the highway. It comes out of the general revenue.
We must think in terms of a broader approach. I ask the secretary of state to reconsider the whole concept.
John McCallum Liberal Markham, ON
Mr. Speaker, the great bulk of the additional security costs the government has implemented come out of the general revenue. The measures announced in the budget to improve security would total $7.7 billion. All that would come out of the general revenue except for the $2.2 billion, about 30% of the total, that would be applied to air travel.
The government believes it is fair and reasonable in the case of air travel that a user charge or the equivalent of a user charge be borne by those who are the principal beneficiaries and users of the system. It is not an unreasonable position. WestJet has recently bought new airplanes and issued new dividends to its shareholders. It is not about to go bankrupt. In any event, as I have said several times, the whole program will be reviewed in the fall.
Ken Epp Canadian Alliance Elk Island, AB
Mr. Speaker, I cannot tell the House how incensed I am that the government is not listening.
I was on the finance committee. Every witness said this was wrong because it would kill service to small communities. Yet the government is invoking time allocation to speed through a process of collecting a tax. It has nothing to do with increased security. Security would be there anyway. We are told in any case that no new measures would be in place until the fall.
The government is invoking time allocation to collect a new tax which would be punitive to small carriers, detrimental to our economy and way beyond what is necessary. It is incredible that we want to jam it through parliament when the committee asked for studies and the studies have not been done.
The secretary of state talked about 20:20 hindsight. He is projecting that the government will use hindsight. It will wait until the carriers are pushed under. Next fall it will look back to see how many of them went belly up. Then it will change the tax. I say big deal. Why do we not look ahead and say this is the anticipated result?
The secretary of state is an economist. He is supposed to be a specialist in projecting the future, not simply looking back. It is time the government listened and did the right thing. Why should we jam the bill through, do it incorrectly and kill the industry?
Before September 11 the airlines were in trouble because our economy was going down. September 11 made it much worse. Invoking time allocation on the bill would hasten the demise of our small air carriers. That is what the government has as its priority.
Can the secretary of state tell us why there is a big hurry when the facts are not even in? We should be looking at the facts of the case and not blindly following an agenda.
John McCallum Liberal Markham, ON
Mr. Speaker, it is the Liberal government that is forward looking. It is the Canadian Alliance that is mired in the old fashioned ideas of the 1950s and 1850s.
The hon. member displays his usual lamentable ignorance about the facts of the matter. The essential need is to establish the new Canadian Air Transport Security Authority. The intent is to have it established by April 1. We can then move as fast as possible to bring in the enhanced security measures. Every day of delay beyond April 1 is a delay in bringing in the enhanced security measures Canadians need for security and to restore confidence. That is the essential reason for the need for speed.
Val Meredith Canadian Alliance South Surrey—White Rock—Langley, BC
Mr. Speaker, I find it interesting that all the questions concern an airport security tax when this is a budget implementation bill. It should show the government the seriousness and concern all members of the House have regarding one part of the budget implementation bill.
This is the same government that collects billions of dollars in employment insurance premiums to the tune that it has three times the amount of money that people who deal with these things say is required for future downturns in the economy.
This is an opportunity for the government to do the right thing. The parliamentary committee on transportation studied the issue for three months. It went into great detail and recommended to the government that the costs of airline security be borne across the board by taxpayers, industry and consumers. The government has decided to ignore the recommendations of the committee and implement the airline security tax.
There is another issue I will ask about. The government gave security equipment to an association to maintain and look after it. Will the government use this money to pay for the equipment it bought and then gave away? Will it double pay for something that belonged to it in the first place?
The government is not only ignoring the recommendation of the committee, which is an abuse of parliament. It is paying twice for something Canadian taxpayers have already paid for. Will the government get the equipment back without paying for it?
John McCallum Liberal Markham, ON
Mr. Speaker, the government is not in the business of double paying. Apart from that I did not hear any question in the hon. member's statement.
Lorne Nystrom NDP Regina—Qu'Appelle, SK
Mr. Speaker, I will ask the secretary of state for financial institutions about the amendment carried by the finance committee that would allow trade unions representing security workers to sit on boards of directors of new crown corporations. He said it was democratic because parliament would decide.
I remind the secretary of state that a committee of the House is also parliament. It is part of parliament. It is not a committee of the whole where the Prime Minister's Office can override what parliamentary committees have decided. Parliamentary committees have more expertise on issues than parliament as a whole because people from all five parties who sit on the committees are responsible to know and study the issues, hear and question witnesses, and consider seriously all the amendments put forward.
The finance committee in its wisdom decided to support the amendment. Members from all political parties voted yes. Is the secretary of state comfortable with the role the Prime Minister's Office has played by overriding, through the Minister of Transport, the wisdom of the finance committee?
Surely to goodness we could have some independence from the secretary of state across the way. Surely he or some other minister could say he was uncomfortable with the interference of the Prime Minister's Office in overriding the wishes of the committee. If not, why do we have committees? Why do we waste our time going to committees? Why do we put all the time into the issue if the Prime Minister's Office can come in here and say it does not matter anyway? Why do we put in the time if the PMO can override the witnesses, disregard the wisdom of all the Liberal and opposition members of parliament and ignore what the committee is saying?
John McCallum Liberal Markham, ON
Mr. Speaker, I am very comfortable with the role the Prime Minister's Office has been playing in the matter. The government takes seriously the recommendations of committees, but committee recommendations are not necessarily the final word because ultimately in a democracy a government has a responsibility to govern. In the relatively few cases where the government disagrees with a committee's recommendations it is entirely appropriate for the government to govern in the House of Commons, as is happening in this case.
James Moore Canadian Alliance Port Moody—Coquitlam—Port Coquitlam, BC
Mr. Speaker, last year the pre-screening of passengers cost $1.10 per passenger. Under Bill C-49 the government would charge passengers $12 a head. Can the secretary of state tell the House if Canadians could expect tenfold the security measures they experienced last year? Precisely what would they get for ten times the amount of money?
Last year the Air Transport Association of Canada estimated that 43 million people walked through airport security checkpoints in Canada, and last year was the worst on record for commercial air traffic. The government's tax and its revenue is based on an estimated 36 million passengers. How did the government arrive at such a low number of 36 million given that WestJet last week bought two brand new 767s, Air Canada has rehired staff and its March traffic is equal to last year's prior to September 11?
If this year's traffic matches last year's of 43 million people, which again was the worst year on record, we could raise the $430 million the finance minister needs this year by asking each passenger to pay $9.14 rather than $12. Why is the government proposing to charge $12 if $9.14, given the traffic of last year which was the lowest ever, would give it the same revenue? Why is it overtaxing?