Mr. Speaker, first let me thank my colleagues from Sackville—Musquodoboit Valley—Eastern Shore and Saint John who are giving me this opportunity to speak. I rise on behalf of my constituents in Hamilton West to address second reading of Bill C-27, the Canada airports act.
There is extreme concern in the airports community that Bill C-27, if not amended, would cripple an airport's ability to continue to work in what is clearly a very competitive international market. It is no secret that the air transportation industry has an enormous impact on the Canadian economy. It creates over 300,000 jobs, accounts for over $34 billion in economic outputs, and provides nearly $4 billion in tax benefits to all levels of government.
Today, the viability of Canada's air transportation system is threatened and the consequences for Canada are enormous. It is a well known fact that the airline industry is in crisis. The impacts of 9/11, the war on terrorism, the war in Iraq and SARS have led to a 20% reduction in air traffic. Air Canada's restructuring will have a dramatic impact on smaller airport communities where Air Canada is the dominant and/or sole air carrier.
Airports must adjust to the new realities of air travel. Reduced frequency and withdrawal of service mean airports will have to reduce costs in order to minimize impacts on airlines and of course air travellers.
The federal government too must act to cut costs to airports so that these may be passed along to airlines in the form of lower fees and charges, and to air travellers in the form of lower airfares. Ironically, at a time when the federal government should be reducing the operating costs of airports the proposed Canada airports act does just the opposite. The act, which effectively re-regulates an economic sector which the government effectively and successfully de-regulated eight years ago, piles one administrative redundancy upon another and introduces over 40 areas in which the minister may pass regulations adding to the administrative burden of Canada's smaller airports.
The government is introducing these drastic measures without a single overarching public demand for change and without having conducted a single regulatory impact or cost benefit analysis. In fact, a number of independent and government commissioned studies have recommended a course of action substantially different from the government's proposed legislation. These include: first, a moratorium leading to a reduction and eventual elimination of airport rents; second, removal of industry specific security surcharges--no other type of traveller is required to pay directly for security and policing services--third, full funding for ACAP and making these capital funds available to all level two airports; and fourth, substantial reduction of regulatory burdens.
I declare my bias and it is called John C. Munro Hamilton International Airport. According to Mr. Tony F. Battaglia, President and CEO of TradePort International Corporation, and operator of the Hamilton airport:
The act will have a profound impact on the growth of John C. Munro Hamilton International Airport. The act's one size fits all approach to airport government conflicts with Hamilton's unique and award winning public private partnership between the city of Hamilton and TradePort International, a private company operating the airport under terms of a 40 year lease. The act impedes the ability of the private operator to innovate and adapt to changing market conditions and customer needs in order to improve service and reduce costs. The act significantly erodes local control by the community--a founding principle of the Canada Airports Policy (1995).
The John C. Munro Hamilton International Airport is unique in Canada; between 1999 and 2002 passenger volumes have grown exponentially--from 23,000 in 1999 to 846,000 in 2002. In the next five years passenger volumes will grow sixfold--to about five million passengers annually--and HIA will become the fifth or sixth largest airport in Canada. Under the act, the ability of HIA to attain this growth is substantially impaired. Growth of this magnitude requires a significant investment in airport infrastructure--over $100 million must be raised in the capital markets.
By adding to the airport's cost structure and impeding its ability to set fees and charges to match revenues with expenses, the act imposes an element of risk that private sector lenders may be unwilling to accept. Blindly advancing this gratuitous legislation may bring irreparable harm to Canada's smaller airports; there are other alternatives. We suggest the following:
Phased implementation of the act with Canada's Schedule II airports exempt from its provisions until three years after its proclamation.
Schedule II airports would have three years to file with the Minister of Transport an operating model that satisfies the act's governing principles of transparency and accountability.
As operators of the John C. Munro Hamilton International Airport, we stand willing to work with the federal government and parliamentarians to find solutions that meet the needs of the government, the aviation industry, and air travellers.
It is signed by Tony F. Battaglia, President and CEO.
I could go on because the problem also impacts larger airports such as Vancouver airport. I do not know if it is appropriate, Mr. Speaker, but given the time, may I ask for the unanimous consent of the House to complete my remarks which would take no more than five minutes?