Debates of April 29th, 2003

Canada Airports Act

[Claude Duplain, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food]

Mr. Speaker, I would like to take this opportunity to begin discussions on implementation of the Canada Airports Act, that is Bill C-27.

We now have more than ten years experience under our belts with the operation of port authorities in Canada. The airport divestiture initiative has been an extremely successful one, and now has unanimous support. No one wants to see a return to a centralized airport administration structure.

Airport authorities have proven that they are capable of linking their management and development strategies with the needs of the communities served by the airports.

There are a number of stakeholders with a direct interest in the safe and efficient operation of these airports. These include the travelling public, the carriers, the communities the airports serve, and the federal government, in its capacity as owner of the airport land and facilities.

These stakeholders are entitled to know whether these valuable assets are being administered efficiently and safely, and are respectful of the environment. This bill attains that objective by stressing the need for an ongoing dialogue between airport administrators and stakeholders.

The bill calls for public access to the strategic planning documents established by each airport authority. These serve as an action plan for the future orientation of the airport. The bill also stresses the necessity to periodically seek public input and pass it on to airport administrators.

Current leases between airport authorities and the federal government already contain provisions encouraging accountability and transparency. With their ten years of experience, however, the stakeholders have indicated that there may be ways of improving one or the other of these.

With the Canada Airports Act, this government is responding positively to those opinions. In some cases, what is different is the nature of the details required in airport authority reports. For example, the proposed legislation now sets out the requirements for the content of a land use plan, a master plan and an environmental management plan for an airport authority. These plans are a lease requirement.

To enhance uniformity and rigour, improvements have been made to the content requirements for the strategic planning documents. There is also a statutory requirement for these plans to be updated. This will guarantee that the documents in question, and the business plans for an airport will be up to date at all times.

Airports must be developed and managed carefully, with consideration for prevailing economic conditions, the health of the airline industry, and the regional community.

Other national strategic issues that are better included in this legislation are incorporated through leases or existing legislation, such as federal identity provisions, the fact that airport authorities must be familiar with Canada's international obligations, the Minister of Transport's right to information on the performance of national airports and the delivery of services in both official languages.

In other sectors, the legislation seeks much greater accountability. This is particularly true with regard to the transparency of fares and pricing methods.

It has been said that some of these measures will result in increased costs for airport operators. Currently the entire airline industry is facing enormous financial challenges.

The leading airport authorities have already realized the advantages of being responsible and transparent non-profit organizations. These authorities are already holding ongoing and open dialogue with their main stakeholders. Consequently, many airport authorities are already meeting the legislative requirements or are taking steps to do so.

For other airport authorities, this legislation will encourage a positive response to the business sector's growing interest in accountability and increased transparency. The statutory requirements merely codify the good business and ethical practices adopted by the business sector.

The Canada Airports Act aims to provide some measure of certainty for Canadians, airport clientele and travellers. This goal can be reached through the provision of important information on airports to all stakeholders. In short, the airport authorities must manage these key public facilities responsibly and transparently.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, how delighted we are that finally a member from the government stood up to defend the bill in the House. We have been raising objections to it all morning and talking about different aspects of the bill that are seriously flawed. I would like to congratulate the member for having the fortitude to come to the House to give his speech even though it was woefully inadequate in answering any of the problems that we have raised.

I would like to therefore be specific. I would like to ask him a question with respect to governance and the appointment of members to the board. The act would require that there be 15 members and there is a breakdown that there must be two from the federal government and one from the provincial government and so on. However, there is no requirement in the bill that some of the board members on the airport authority actually be representative of the airlines. It is incredible that this has been missed.

I would like this member to either say to us that an amendment will be accepted that would require that it be mandatory, that the airlines and the airline industry be represented on this board or I would like him to justify why they are not because those are the only two options.

[Claude Duplain, Liberal, Portneuf, QC]

Mr. Speaker, my answer will be brief. Based on the information I have been given, representatives of the airlines may sit on these boards of directors and take part in decisions.

I do not know where these allegations made by the members opposite come from, but based on the information I have, the airlines can be on the board.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, the bill provides, as I mentioned, two representatives from the federal government and one from the provincial government. It can have three to five from the local municipal government which is good. These are local authorities that are running the individual airports, so to have some representatives on the national airport authority board would really be great.

I wish to indicate here that there can be representation from economic organizations, provincial associations, lawyers, engineers or accountants, community organizations, and I guess the local 4H Club or some unions. There can be three to five members that can come from these different groups. One of those groups represents domestic air carriers. They may come from that but there is not a mandatory requirement.

Compare that to Nav Canada where it is mandated that 5 of the 15 members of that board be representatives from the airline industry. That similar condition is not required by the bill and that is a totally serious oversight or flaw.

I would like to hear from this member, but he probably does not have the authority here because people from the backrooms have not e-mailed him on his Blackberry to say, yes, go for this. But I would like to ask him, at least personally, if an amendment like that were made, would he personally support it because it makes so much sense?

[Claude Duplain, Liberal, Portneuf, QC]

Mr. Speaker, the member will have to prove to me that airline representatives will not be able to sit on the boards, because I have been told that they will be able to.

It is easy, when dealing with new bills, to only point out what is missing. The opposition is against this bill, and all we have heard is what is wrong with it.

Let the members opposite take the time to read the bill, to see the accountability that we want to establish in airports, proper management by those responsible, while noting the challenges to be met and keeping sight of the goal, which is public transparency. That is what this bill stands for, and it is fantastic.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I am not dominating here. I am always looking around to see if anyone else is standing. I would be most willing to concede the time to another member who would like to participate. But I just need to follow up with this.

Here is a member from the Liberal government who has come here to face the music on this bill. As I and my colleagues have said, and one of the other opposition members this morning, here are some flaws which need to be fixed. The role of Parliament is to fix things. If we do not ever accept amendments to improve a bill, we might as well shut this place down because it would not be fulfilling a function.

I am putting the member on the spot and he ought to be because he is here as the official spokesperson for the government. I will repeat this question again.

It is clear in the legislation that, of the airport authority directors, there can be from 11 to 15 members, that 3 to 5 of them can come from 2 of the following groups, and those groups are listed. One of those groups is the domestic air carriers association. However, there are four other groups in that listing. We could easily get three members from those four other groups. It is feasible that there might be zero representation from the airline industry. It is not mandated. That is my issue.

I is mandated at Nav Canada. It is required that four of the representatives be representatives from the airlines industry and one from general aviation, so that we would have 5 out of 15. It is mandated in the act.

In this bill, it simply says that here are five groups, some of them may come from here but they do not have to. Will he support a compulsory amendment to the bill which would require airline representation?

[Claude Duplain, Liberal, Portneuf, QC]

Mr. Speaker, I will repeat it once again, the airlines will be able to sit on the boards. What is important is the transparency that we want to establish in this management system with ten years of experience when it comes to transparency and good management.

Sometimes the opposition complains that someone is missing, that someone else should be sitting on the board. However, the people who are appointed from the public to head these boards of directors are intelligent people. They represent society, they have been working for years and they know the sector.

Does the member really think that these boards want to boycott or prevent the airlines from using the airports? That is completely ridiculous. They are there to look after Canada's transportation needs. A board of directors would never do anything that would interfere in or prevent the airlines from providing transportation to Canada's regions. That is completely impossible. Come on.

[Andy Burton, Canadian Alliance, Skeena, BC]

Mr. Speaker, to follow up on my colleague's line of questioning, we still do not have an answer. What is the problem with mandating? Mandating representatives from the airline industry to sit on a board is as important as this board would be to that industry.

Yes, they can sit on that board; they can be appointed. The question is, would they be appointed? I want to know why the government would be so reluctant to assure that the representatives from the airline industry would be appointed to that board? I would like to hear an answer on that.

[Claude Duplain, Liberal, Portneuf, QC]

Mr. Speaker, this bill has all the flexibility needed. If the member could prove to me that representatives of the airlines were not able to sit on the boards, then I might agree. However, in my opinion, thanks to the bill's flexibility, they can be a part of the boards.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I had another question but the member will now escape from our questioning and we will not get an answer.

However, with respect to the appointment of the airport authorities, I will simply say that I sincerely hope the Liberals will support the amendment. The member says over and over that they may be there, and that is true. I am not questioning or arguing that. That is in fact what the bill says and that is what we find particularly problematic. I do not see them applying that same criteria to the appointment from the government.

The bill mandates that the airport authority directors will include two representatives from the federal government. There it is. It is mandated. Why do the Liberals not just say that they may be from the federal government if they are happy with that? They think it is so important that there be two members from the federal government that they put it in the bill. One director must be from the provincial government in the province in which the airport is located. It is mandated that between three and five of the directors must be from the municipality.

I am very disappointed in the lack of a positive response from the Liberal member who just spoke. If those are important, and I agree they are, it says in the legislation that the board will contain members from these different groups, then why suddenly make it optional for the airline industry itself? Can anyone imagine the airport authorities not having this input? It is a distinct possibility because the word is that they may be there. They do not have to be.

I and probably most of my colleagues would argue very strongly that it is absolutely mandatory. In fact, I would go so far as to say that to have the airline industry represented on these authority boards is actually more important than to have a federal representative. It is more important than to have a provincial representative. It is just a very bad error in the bill.

Of course, I expect my colleague, the member for Port Moody--Coquitlam--Port Coquitlam, will be bringing forward in committee some amendments to that effect, but we are here today debating in principle this bill. That is what second reading is all about. In principle we cannot even accept the bill if it has these very serious flaws. It is flawed in principle if it does not include mandatory representation from the airline industry or general aviation, as is required on the board of NAV Canada.

We have the precedent. There is no reason why these mighty, numerous Liberals cannot support such an amendment. I guess I am putting forward here the initial argument that it would be worth their while. It would be a good thing for them to support such an amendment.

Now we all know the way the parliamentary dysfunctional system works here, and that is that even if we were able to persuade the members of the committee to support such an amendment, lo and behold, we would find ourselves in the House at report stage and, undoubtedly, the government would put in amendments at report stage that would undo the amendments accepted at committee. We have seen that over and over again. It is one of the great frustrations.

I will digress and speak generally for a few moments about this whole process. I think this is fundamentally where we need to change this place. Our job is to produce good legislation. In fact, unbeknownst to the public, before the doors are opened and before the cameras are switched on every day we have a prayer in the House of Commons. We pray for divine guidance and ask for help to make good laws and wise decisions.

We want to make good laws but we cannot do that if there is no practical mechanism for implementing amendments derived from the collective wisdom of members of Parliament in the House and in the committee dealing with the legislation.

I am presuming that the second reading of Bill C-27 will pass. There will be no dissenting vote to speak of from the Liberal side. If there is any dissent it means that one or two members have chosen to absent themselves from the vote because they did not want to incur the wrath of the Liberal Party whip. They will all vote for it in sufficient numbers that it will pass.

How then have we fulfilled our mandate, having been sent here by the people of Canada to produce a good law, if we cannot improve and revise such an obvious huge flaw?

A bunch of Liberals over there are supporting the member for LaSalle--Émard who has been going around the country telling people that he will reform Parliament. Big deal. He is saying that now in order to get elected. That is what the Liberals did when they were seeking election in 1993. At that time they said they would have an independent ethics counsellor. Ten years later we have a totally dependent ethics counsellor. The former finance minister is now saying that he will make Parliament more accountable and individual MPs more responsible. We have heard that story before and, frankly, I do not believe it.

When we propose amendments to the bill we may be able to, because of the current internal party conflict, persuade members of the committee to vote in favour of those amendments. That has happened before. However they will come back here and all the work will be undone. The bill will be passed in its flawed form rather than its improved form. I cannot understand that.

It is a mark of pride and arrogance to say that my first try at anything is right and good and I will not change it. Every other week I write letters to people in my riding and those letters are published in my local newspapers. I hardly ever send my first draft. I should not say never because occasionally I do. I get on a roll and I usually get it pretty good the first time. However usually it is edited and revised before I send it. We need to be able to do that here. We need to be able to tell Canadians that the first draft came out this way but we, being the diligent politicians that we are, detected some flaws and corrected the flaws before the bill was passed into law. That is our duty. I hope Liberal members will carry out that duty. I hope they will do their duty and support the required amendments.

It is also interesting to note that in this particular instance the committee presented a report to the House of Commons. However, when all is said and done, there will be substantial changes made to the report in terms of the government's response to it.

I want to say a few other things about the bill we are dealing with today, Bill C-27. It seems to me that taxpayers are being royally ripped off. In general I agree that it is a good plan to privatize the airports. Airports generally are being administered as well or better by the local authorities than they were by the federal government. That is a generalization. There would be some exceptions to that statement.

The poor taxpayers are caught in this because, first, we built all these airports through our taxes. Now that we have built them they have been given over to the local authorities. I would hasten to add that in every instance that I know of they were given over at well below market value. I do not think any local authority paid anywhere near the market value of the land and the improvements of the airports which they took over. Now in every instance we as taxpayers get to pay rent on the land that we originally bought and improved.

Mr. Speaker, I do not think you or I would do that. I cannot imagine building an apartment block and then selling it to some entrepreneur for about one-tenth of the price, and then turning around and going back there to live and paying one and a half times as much rent as I would pay normally anywhere else.

Yet we know that many of these local authorities are paying rent to the federal government far in excess of what the federal government is doing. Basically they own the airport property and they are paying this rent but the fact of the matter is that it is the taxpayer who paid for the property and the improvements in the first place. Now it is the taxpayers, through their local governments, and the people flying and paying the airport taxes who end up paying again.

This is how it always is with the Liberal government. We pay once and then we pay again and again. The government almost has a fetish for collecting taxes over and over. We still have the GST which it promised to kill and to scrap. The GST is actually charged on fees and taxes. We pay a fee, we pay a tax and then on top of that, when the bill is all added up, another 7% is added and it is called the GST.

Therefore much of the tax that we pay is actually a tax on the tax. This happens over and over in our country. The government says that it is such a wise fiscal manager that it no longer has increasing debt. I commend the government for that. It could hardly help it with the way the economy has been rolling due to free trade, which has had the greatest impact.

Free trade was another thing the government said it would scrap. It was against free trade. Now it is the beneficiary of it and telling the Canadian people that it is no longer borrowing and no longer in deficit because it is such a great financial manager.

I guess I would concede to the degree that the government is a good enough manager to not undo the good that was done before it got here. I commend the government for that. I thank the government for keeping the free trade growing instead of scrapping it, for not keeping that particular election promise, otherwise we would be in real deep trouble economically in this country.

I would also like to mention the government's fetish to get into micro-managing. There are two areas in the bill. I have mentioned them before in debate and in questions and comments with previous speakers. However I am truly one upset guy about this. The government cannot put into the bill that it is mandatory that there be airline representatives on the board but it can put into the bill that it is mandatory to fly a Canadian flag.

I have a particular soft spot in my heart for this issue. As you know, Mr. Speaker, as do many other members and maybe some others watching on television, I became part of the so-called flag debate here about seven or eight years ago with members of the Bloc, God love them. There are wonderful members of the Bloc. I like them as individuals. They are fine, respectable people but I disagree with their political philosophy. They want to separate from Canada and I strongly disagree with that. We need to stay together and be a large, strong and happy family. A Bloc member at that time objected to the fact that I had a little flag on my desk. I got into trouble and I apologized for it at the time because it was considered a prop.

A Canadian flag in our own House of Commons is considered a prop, an offensive symbol. It is quite inconsistent, Mr. Speaker, since you have one right beside you and it is most appropriate that it should be there. However for me to have a little one here was considered offensive.

When a Bloc member, a separatist member, demanded from the Speaker that I remove it, I had a short regression to the rebellion of my youth, that type of response. I said “Ain't no Bloc member gonna tell me not to fly my flag” and so I flew it. I did not remove it. Like I said, I subsequently apologized for defying the authority of the Speaker in the House when I was asked to remove it. That part was wrong. However it was much more wrong for a member of the separatist party to tell me that I could not have it there.

What a reversal. Now we have the government putting into this legislation that airport authorities must display the Canadian flag at airports. It is mandatory. There is something fundamentally wrong here. If the government has to mandate the flying of the flag, it loses a lot of its value in my view. I think people should display our Canadian flag proudly. It can only have meaning if it is done voluntarily. When Canadians fly the flag voluntarily, I believe it represents the feelings in their hearts. Why should we reduce it to merely an act of obedience to a law of the land? It diminishes the act.

I noticed with some interest a couple of years ago when this was going on that there was a farmer in my riding driving up and down his field harvesting his crop. Lo and behold he had a flagpole on his combine with the Canadian flag flying as he went around his field. I felt very good about that. Here was a farmer who said he loved his country and he was not ashamed to fly the flag at the place where he worked. As I drove by and observed this I remember thinking “I want to be a farmer. He has the freedom to fly his flag at his place of work but I do not have the freedom to fly my flag at the place where I work, notwithstanding that it is the Parliament of Canada”.

In the bill there is the mandated requirement that local authorities which operate airports display the Canadian flag. I think they will anyway. That requirement should be out of there for two reasons. One, I do not think the federal government in this kind of legislation has any business whatsoever getting into the micromanagement, the day to day operations of the individual boards and their airports to that degree. My second reason for saying that this should not be there is, as I have indicated before, it diminishes the worth, the value of the act when the government says one must do it as opposed to making it truly voluntary.

Another thing that is rather interesting is the mandating of signs. It is silly to force the local authority that is running the airport to put up a sign that says “Hear ye, hear ye, all ye who pass by: We want you to know that this airport is owned by the Government of Canada”. I think it should make people feel good because they can say to themselves “We are the taxpayers who send trainloads of money to Ottawa and it is our money that has bought this airport”. There is nothing wrong with a sign like that, but again, to put that into a bill and to make it mandatory is micromanaging. It is a misplaced priority. As I have said, the other things which should be compulsory in the bill have been passed over. There the government did not see the reason to have a mandated statement.

I regret that my time has elapsed. Perhaps some members will see fit to ask me some questions and I will be very glad to defend the positions I have taken.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, I want to start off by complimenting the member from the Alliance. He is one of the best storytellers I have heard in the 10 years I have been here. It never ceases to me amaze that on any bill or any situation he has a wonderful story to tell. Good for him.

I was amazed how he went from one issue to the other. He talked about the GST. He talked about flags at airports and the incident on his desk. I commend him for that.

When we bring legislation to the House, we know very well that no legislation is ever perfect. That is why legislation is always reviewed and that is why this legislation is also being reviewed. Something we brought forward five years ago does not necessarily apply today.

When he talks about mandating today, perhaps five or eight years ago we did not have to use that word. He talked about the flag on his desk. He knows very well the dynamics of our country and what we are dealing with. The flag beside you, Mr. Speaker, speaks on behalf of all of us.

I want to talk a little about the GST. He said it is tax on tax on tax. Australia for example charges 12%. In Europe it is 18% and higher. There is a price for civility and it is called tax. It is sad and he might not want to accept it, but we need revenue to put into our health system, social programs, et cetera. If he is saying we should eliminate tax altogether, then I would like him to stand up and tell his constituents there is no more money for pensions, no more money for social programs, no more money for health care, no more money for roads, nothing, nothing, nothing. I would like him to clarify that.

I also want to comment on the amendments that he talked about. Of course if amendments make sense and are brought to committee, any reasonable person will look at the amendments, compromise and make a step forward. No one says they accept them or turn them down.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, the member has given me enough grist for another 20 minute speech and I probably will not have that much time.

With respect to taxes, many people in my riding and in other parts of the country have said that they are totally willing to pay taxes and so am I. We were relatively poor when I was a young fellow growing up on a farm in Saskatchewan. My dad always said it was a privilege to pay taxes because it showed we were earning some money, which was sort of a rare thing. He was happy to pay taxes.

The problem has become that we pay taxes at exorbitant levels, higher than most of the G-7 countries, on our income. The government takes a slice of all of our incomes. Then with the money that we have left it takes another slice. For example, and I have mentioned this many times, when we buy fuel for our cars and calculate the amount of taxation as a fraction of the amount of money that is actually attributed to purchasing the product, the taxation rate is around 100%. That is ridiculous. We pay as much tax as for the product.

The same is true for airline tickets. Someone could buy a ticket worth $79 for a short haul somewhere. By the time the Nav Canada fees and rent on the airport are paid, which is buying back an airport that is already paid for, as well as the totally miscalculated security tax, and all these things are added up, in many cases air travellers end up paying between 100% and 120% of taxes with money they have already paid income tax on. That is what I am talking about.

I am talking about excessive and unfair taxation. I will not change my message on that. That is what drove me to become a member of Parliament way back in 1993. It was one of the prime motivators. I am not going to stop on that.

For the member to misrepresent what I say as advocating no taxes at all is unfair because we all value these programs. I think of health care. I think of the fact that in Canada people who reach retirement age actually get a minimum of income directly from their pensions, which is a return on the taxes we pay over the years. That is a wonderful part of our country. There is no way I would advocate reducing or relieving that.

As a matter of fact, when I talk to seniors I hear over and over again that they are having an increasing amount of trouble making ends meet. Instead of taxing them to death over and over and taxing poor people with excessive EI premiums, $5 billion a year more than it needs, I think it is time the Liberals started acting responsibly to the people in our society who are in need. It is time the government stopped taxing them to death. Let them keep some of their money so they can pay their bills, which are increasingly on the rise.

[Stockwell Day, Canadian Alliance, Okanagan—Coquihalla, BC]

Mr. Speaker, I am pleased to address this legislation. I want to compliment the government for attempting to tackle some of the problems with the airline industry. That will be the extent of my compliments today because first we need to address an attitudinal problem.

We are here as opposition members bringing forward ideas on how to improve legislation to make life better for Canadians. There is this constant attitude by the government of resistance to that. We have some ideas. We have worked on these things. We have consulted our constituents. What we would like to see is a little openness from the government. We do not expect it to have 100% perfection every time it brings forward legislation. That is not the anticipated process. The process is to get input from a variety of members of Parliament and see a much improved bill. I wish the government would cease to resist this reflexively and be a little more open. After all, opposition MPs are not from the government but we are here to help. We would like to see an attitude change.

The bill itself has some serious flaws. Clause 12 gives the minister the power to make directions in such a way that these directions would be final and not subject to appeal or review.

Mr. Speaker, I will be splitting my time with my colleague from Grand Prairie who will also add some detail and some innovative ideas of his own on this.

It is dangerous to allow a minister that kind of discretionary power to make directions that are not subject to appeal or review. If there are some security matters that should be so above question, then tell us what those are so that we can see why a minister would possibly want this sweeping power to make decisions that are not subject to appeal or review.

In the area of governance itself, the bill in terms of suggesting how airport authorities and their directors should look and how those boards should be comprised, it is fascinating that the government is not requiring that there be somebody from the airline industry on those boards. This particular piece of governance gives to the authority the power to impose airport fees, the power to seize aircraft, the power to do all kinds of things related to passenger fees yet to not have a representative from the industry on a board like that is virtually unheard of. Anywhere this type of governance structure is required there are always representatives of the industry or the professions and occupations on the board. Workers compensation boards in every province have a set number of representatives from labour, from industry and from the public at large. The bill is deficient in not having that. Nav Canada is certainly required to have that. It should also be in this bill.

There is also an approach to airports themselves and even airlines, but specifically to airports which suggests a one size fits all approach by the government. That is a very serious flaw. All airports are not of the same order of magnitude.

In the Okanagan—Coquihalla region the Penticton airport handles something in the area of 45,000 flights a year and over 80,000 passengers. We can compare that with Toronto which serves over 28 million travellers in a year. That is 80,000 in Penticton and 28 million in Toronto. The approach should not be the same.

I am not talking about varying safety regulations. Certainly those should all meet the standards. I can assure people who are thinking about flying into Okanagan—Coquihalla that the Penticton airport has a wonderful safety record and a wonderful record of service I might add. However the one size fits all approach is not going to deal with some of the unique problems in certain areas.

The bill also misses the opportunity to fix some problems. There is a policy where Ottawa will often increase the rents on airports as the airport operators seek to improve their services or in fact to improve their facilities. An airport and its board or managers that decide to improve the airport should not be punished simply by being hit with a higher tax just because they want to have an improved facility. The bill misses the opportunity to deal with that punitive approach to improvements.

On the flip side of that, on the rental increase if they want to improve their facility, there are certain requirements for airports that are often imposed which have nothing to do with safety, nothing to do with service and have more to do with opulence in the view of some people than to do with serviceability.

Therefore, in many cases smaller airports are forced to integrate into their designs some things that have nothing to do with safety or service. They do that at some cost and then are taxed at a higher rate because these things are called improvements. This is an area that needs to be fixed in the bill.

Again, directly related to the Penticton airport, it is the airport in the interior of British Columbia that is closest to the United States border. It serves as a critical transportation component of the visitor and convention business, economic development and community events. It is a very vital air link into the Okanagan--Coquihalla region from the United States and other destinations.

Immediately following September 11, Canada customs clearance at the airport was temporarily withdrawn. We were told that it was for security reasons and I think there was a level of understanding about that. Those services were not resumed until February 22, 2002, after many people, including me, had intervened and asked for those services to be resumed.

However, in the resumption of services they were put in place from only 8:30 a.m. to 4:30 p.m. Monday to Friday. Weekends are not covered, holidays are not covered and extended hours into the evenings are not covered as they were before. We appealed that and Canada customs came back and said that the after hours service would be put back but at a charge of $30,000 per quarter. That is a considerable burden for an airport of this size. We feel that it is unjustified.

I am asking the minister, either through the process of this bill or just to get his attention while he is here today, hopefully, to look at this and put back that Canada customs service as it was before, without implementing that very burdensome charge. For the airport to have to consider taking on that charge has a real impact on people flying in on weekends and in the evening. We would like that to be looked at and reconsidered and in fact have the extra charge removed.

That brings me to the point about the security personnel at the Penticton Regional Airport. They are professional people and they are diligent and expeditious. However, Mr. Speaker, when you come to visit in Okanagan--Coquihalla, as I know you want to, and as I know Canadians around the nation want to come to the Okanagan to see what a beautiful place it is, in regard to going through the security clearance, without the electronic equipment there bags have to be checked individually and it slows things down. The personnel doing this are very considerate and it is not offensive, but it does slow things down considerably. We are asking that an x-ray machine be put in there.

The x-ray machine we are asking for and these extra security provisions are some things that we are paying for anyway. Let me illustrate this. Here is where there was an opportunity for the bill to address the area of extra charges that air travellers pay. Just as an example, I will talk about the airport in Kelowna. A regular flight with WestJet from Kelowna to Calgary is about $77; these figures can be rounded off up or down a dollar as I go through them. It costs $77 to fly from Kelowna to Calgary. Within that $77, a passenger will pay $6 in GST and approximately $22 for an airport security fee, which a passenger also has to pay in Penticton but none of which is being used, and could be, for the extra security equipment required in Penticton. As well within that $77, there is an airport improvement fee of $12 in Calgary and a Nav Canada fee of $5 on top of that. That is roughly $45 on a $77 flight. Let us just think of the costs. We know that there are going to be some costs and some charges, but if we took them away it would be $32 to fly from Kelowna to Calgary.

The bill misses the opportunity to address some of these charges in a vigorous way. It also seems to reflect a built-in bias, a bias against smaller communities and a bias against entrepreneurial operations. WestJet, as an example, is an exciting company. It is very entrepreneurial in nature, meeting all the safety, service and hospitality requirements of the industry, and yet it appears that the government, through its legislation and through allowing competing airlines to have predatory pricing policies on different routes, is biased against those who would invest, those who would be entrepreneurial in nature in terms of delivering a service to Canadians.

Therefore, I am asking that the specifics of the bill be addressed. Also, when I talk about one airline over another, WestJet vis-à-vis Air Canada, for instance, I am not talking about the employees themselves, the staff. Employees at both airlines and in fact in most of the travel and tourist industry in Canada, and especially in the Okanagan, are very service oriented and people oriented.

These are some of the areas that need to be corrected in the bill. They could be if the government had a mind to do so. We would ask the government to give them fair consideration.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, first let me thank the member for Okanagan—Coquihalla, who really stuck to the issue and got to the guts of some constructive points.

I was quite intrigued when he talked about the Canada customs services and the extra $30,000 that now will be needed. I just want ask the member to clarify whether that service was there before and there was no charge. Or is that charge a new charge that would be added? Could the member clarify that? As members of the transport committee, we are trying to seek ways, means and ideas as to how we can overcome some of these difficulties at different airports.

I do agree with him on one issue. He said that one package does not serve all. There are different needs, different airports, different sizes and different volumes. He is absolutely correct.

The last thing I want to ask him about is the x-ray machines. Were there x-ray machines there before this request? People do travel. Everyone has mobility. Given what has happened over the past little while, I cannot see any airport not having some kind of security system for baggage, et cetera. If he could comment on that, I would appreciate it.

[Stockwell Day, Canadian Alliance, Okanagan—Coquihalla, BC]

Mr. Speaker, first let me compliment the member for his openness to receiving these suggestions. It is a good attitude for government members to have. I appreciate it.

To clarify, in fact the customs service was provided in totality before. Following February 22, this charge of $30,000 per quarter will be extra. As the member would know, I am sure, that is quite a burden on an airport of this magnitude.

The x-ray machine was not there before. That was not a service that was removed. The airport authority, the airport management and those of us who as travellers use that airport are asking that one be put in place. Beforehand the argument was that if an airport had a certain amount of passenger traffic per annum it would qualify for one of these electronic machines. Air traffic through the Penticton airport continues to grow and we feel the costs are now being provided through this added security fee, which is now imposed on all travellers. We feel that the costs could be taken from it. I thank the member from the transport committee for being willing to look at that.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I appreciate the opportunity to rise today and speak on this bill, one that certainly affects an airport in my riding in the city of Grande Prairie.

I believe that the bill is actually a bill of missed opportunities and attempts to solve problems that do not really exist. When one looks at the state of Canada's airline industry and realizes that the Standing Committee on Transport is looking into the continued viability of the airline industry, one has to wonder why the government is choosing this time to introduce legislation dealing with airports, and specifically this type of legislation.

Based upon e-mails, phone calls and letters that my office receives, there is no real sense of urgency to fix the airport situation except for three specific areas that I am going to discuss today and which really are not addressed in this bill at all. In fact, most Canadians are reasonably happy with the status quo. When we compare Canadian airports, both large and small, with similarly sized airports in other countries, Canada's airports stand up rather well. So the question is, if the system is not broken, why are we trying to fix it?

What I believe is happening is that this really is about a missed opportunity to fix three specific problems that are not addressed in the bill. The real problem facing Canada's airline sector is not the way airports are run, because they largely have been turned over to airport authorities and down to a level of community involvement that I think is much better than it was before. The real question is about the way rents are charged by the federal government to these airport authorities and how that cost is passed on to the airlines.

This issue was raised and dealt with in the transport committee hearings over the past few weeks. As a result, on April 11, in its report, the committee recommended unanimously that “the federal government suspend rental payments by airports for a two year period” and that “the airports shall pass these rental savings on to air carriers”. We know that air carriers are experiencing some difficulty during this time. Further study is not needed. It is time to act.

However, we will not find any discussion of airport rents in the Canada airports act, Bill C-27. In fact, the Standing Committee on Transport made another unanimous recommendation: to eliminate the air travellers security charge. This was connected to transferring responsibility from airport security to a multi-modal agency that would be fully publicly funded.

The airport security issue is an important one, but we do not charge other people in our society for the cost of security, specifically those sectors. If we look to the model of why this was put in to begin with, on September 11 in the United States there were more people killed on the ground than there were in airplanes and specifically in airports. Security is a huge issue but it should be one that is taken out of general revenue.

Here again, understanding the nature of security at small airports is helpful. Just as a bank has a better security system than a Kool-Aid stand, large airports have better security than smaller airports. In fact, I was in New Zealand just recently and people who travel within the country of New Zealand have no screening at all. Only if they have connections to international flights are they subject to screening. Some cities like Winnipeg have been trying that model, and I think it is a model that would help save some money here in Canada.

The reason I am here today to speak to this bill is that I have a vested interest. I have to confess that quite frankly. My vested interest is that I have an airport in my riding. The airport is in Grande Prairie, Alberta and it is very concerned about the cost the federal government is imposing upon it through what is commonly known as CARs.

This is a situation whereby the federal government is now imposing on smaller airports a five minute emergency response time. One might ask what is wrong with that, but the fact of the matter is that about five or six years ago, when the federal government decided it wanted to offload the airports onto the municipalities and airport authorities, it told those same airports that they would not need to have firefighting units at the airports themselves. They could have them within about a 7 minute to 10 minute timeframe in a nearby city such as Grande Prairie. The airport is almost a suburb of the city of Grande Prairie. So the firefighting department at the airport was closed down. There were considerable savings, which were transferred to the city when it agreed to take over the airport authority as a result of that. That was one of the enticing factors that the federal government used with small airports, quite frankly, to convince the airport authorities to start managing them themselves.

Why has it decided to go back into this business of having these firefighting units right at the airport? Because there was an incident, I think it was in Moncton, a few years ago. Quite frankly I do not believe that even a firefighting unit at that airport would have resolved that problem. However because there was some negative publicity, all of a sudden the federal government reneged on its promises to the airport authorities and told them that they had to go back to this. All the savings that were realized, that were part of the deal that the government offered to take over this airport, now had to be paid for themselves.

I do not think that is fair to small airports such as Fort St. John, Grande Prairie and Fort McMurray. I think a number of airport managers are coming to Ottawa shortly to make this case themselves to the transport minister. If the Minister of Transport wants that kind of response time at the airport and if they are going to have to put in these capital expenditures again after it was all dismantled as a result of the minister convincing these small airport authorities to do just that, then I suggest he and the Government of Canada better pay those costs.

I personally do not believe a five minute response time is necessary in a city like Grande Prairie where the airport is located just on the outskirts of the city. The response time there for firefighting is about a seven minute but that is not good enough for the federal government. There is a huge cost of roughly $500,000 a year which that airport authority will have to incur.

There is an issue of fairness here. This is the government that convinced these people, like the airport authority of the city of Grande Prairie, that it should take over the airport. It was downloaded from the Minister of Transport because government was trying to save some money at a time when there was a cost cutting necessity. I have no objection to that but do not impose rules that change the conditions of that transaction which happened only a very short time ago. That is not fair. That changes the rules and puts airports in a position where they cannot operate effectively. If they have to put this capital expenditure in, companies like WestJet will be charged additional fees.

WestJet flies to Edmonton. It is about a half an hour flight by jet. It is a four hour drive. All of a sudden the cost starts to go up. Airport improvement fees, the security tax that the federal government is still imposing on airlines, now there is the added cost of CARs and pretty soon it does not become economical for companies like WestJet to fly to Grande Prairie. What happens is a substantial sector of the economy that makes it very attractive for business people to come to Grande Prairie by jet is killed. Business people will have to charter a plane or a scheduled flight that does not utilize jet traffic because these companies will have been priced out of business.

The government charges such as the airport security tax, airport improvement fees and all the other taxes represent a higher cost than the actual cost of the ticket itself from a company like WestJet. That is not acceptable, particularly when it was this government that told the airport authorities that if they took over the airports, they would not have to have these five minute firefighting response times with facilities right at the airport. They were told they could have it in the city, a short distance away. Now it is changing the rules and that is not fair.

This should be rejected. I know the Canadian Alliance will vote against it and I personally urge other members in the House to do just that because this issue is really an issue of fairness and the government is not living up to its responsibilities.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I greatly appreciate the input from my colleague. He raised that other issue, which is another Liberal broken promise. The government pulls people into this type of thing, it lays out the conditions and then before they know it, the conditions are changed. It really is a broken promise.

I would like to ask the member whether this is anticipated to have an effect in small airports like the ones that he mentioned in Grande Prairie. Is it anticipated that this will actually result in some airports having to shut down because they will not be able to meet that requirement of the response time?

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I would like to thank my colleague for his important question. There are airports, and I am not sure that Grande Prairie is one of them, whose passenger levels are such that by increasing the fees to such an extent, they have to compete with passengers driving to Edmonton, for example.

If fees become too high, whether it is an airport improvement fee, a security charge, this new CARs regulation, at some point it does not make it economical for people to fly to a place such as Edmonton. They will drive instead. Therefore the viability of the airport is in question.

The government has to take a look at this. It has to have some kind of realistic proposals. How is it that the response time in 1997, when the airports were turned over to the airport authorities, was good enough? Then all of a sudden it is being changed and it is no longer good enough. It now has to be a five minute response time.

I would challenge the Minister of Transport to tell the House the last time there was a tragedy or any event at an airport that involved the need to have that kind of response time to the airport. I do not believe Moncton was one of those, the very event that caused the government to react as a result of the incident which occurred there. I do not believe it is.

The answer to my colleague's question is, yes, viability in airports does come into question as a result of government loading more and more fees onto airport authorities.

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I recognize my colleague's point and acknowledge the fact that, yes, the Government of Canada made a certain statement prior to turning over the airport authority, suggesting that there would be some funding through capital programs but that there would not be changes to the fire regulations and then did make changes.

Does the member feel the safety of the passengers in those planes is important enough to make the changes? What really should happen is the Government of Canada should be offsetting the costs to ensure that those airports can operate.

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I thank the member for Churchill for her question. I think there are instances where there may not be a proper response time from a nearby facility. Therefore they will have to have facilities at airports.

If the conditions of the agreement, which was reached in 1997, are changing and the federal government is requiring them to go to a response time that it said was not required five years ago, then I believe it is the responsibility of the government to pay those costs. It is really in neglect of the agreement that was reached between the government and that airport authority at the time it was turned over.

In the cases where response time is an issue, it is unfair of the federal government to require the airport authorities to assume that cost. That was not part of the agreement when those agreements were reached.

[Howard Hilstrom, Canadian Alliance, Selkirk—Interlake, MB]

Mr. Speaker, my question is with regard to the Winnipeg airport authority. It has been asking for rent reductions from the federal government. I see a part of the bill deals with the government's control over the appointment of boards of directors and airport authorities.

Is the government putting these airport authorities in a no win situation where, if they complain, they stand the chance of having new people placed on the board who will do what the government bids?

[Charlie Penson, Canadian Alliance, Peace River, AB]

Mr. Speaker, I do not know. However I would think that there is always that possibility of political influence or interference. We have seen it many times in the past from this government.

The government has put people on boards of directors who seem to have the same philosophy as the government. Is it not strange that the government would do that? It certainly has a way of directing and punishing those airport authorities that do not comply. Just the threat of appointing directors who are friends of the Liberal government is enough to cause concern from airport authorities.

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Speaker, I am pleased to engage in the debate on the Canada airports bill. As members know, I am the chairman of the public accounts committee. I am looking at chapter 10 of the Auditor General's report of October 2000. I will be quoting fairly extensively from the report and also the 21st report of the Standing Committee on Public Accounts. The committee tabled its report based on the hearings and so on that we had on the Auditor General's chapter.

I listened to my colleague from Port Moody--Coquitlam--Port Coquitlam who spoke this morning. He said that under this minister's watch eight airlines had gone belly up and that the minister's track record was anything but good.

I thought I should do a bit of research so I took a look at some of the sidebars in the report tabled by the Auditor General in October 2000 on how the department managed or failed to manage the airports. On page 10/7-8, it states:

Airport authorities pay Transport Canada nothing up front for either the use of the airports or the rights to attendant business opportunities--which include the power to set their own user fees.

We have found that the airports have been granted authority under this lease with Transport Canada and they lease out space to businesses that then charge them rent as a sublessee. However nothing flows back to the government. It is a poor manager.

I will be splitting my time, Mr. Speaker, with the member for Kootenay--Columbia.

Going through this report I found a litany of problems, and I will give the House a few more quotes.

On page 10-26, it states that the lack of information on fair market value and the business cases supporting the transfers had serious implications because they did not do a fair market analysis when they transferred these airports to airport authorities.

The government gave them away and said that it did not care what they were worth and it signed the leases. Normally when someone signs a lease an amount of money is paid so the property, equipment or so on can be used. That is the normal way things work.

There are a number of airports that are paying negative rent. The landlord is paying the tenant for the right to use the property and the equipment. I have never heard of that before. That is a perfect recipe for Liberal governance or going bankrupt. It is one of the two. It is a perfect recipe for the way this Liberal government manages the resources of the taxpayer of Canada. The government is asking airports to run the operations on its behalf and it will pay them some money to do so. That is scandalous.

On page 10-27 the report states that Transport Canada had yet to determine and update how airport transfers has affected the government's fiscal framework. The government does not have a clue.

On page 10-32 it states, “A key weakness in the renegotiation process was the absence of any independent review and challenge of the final agreements before they were signed”. The deals were significantly different than what Treasury Board had authorized.

This is supposed to be the government. This is supposed to be the Minister of Transport's department and we have heard all day about how he has failed Canadians. He does not even follow Treasury Board guidelines far less anybody else's.

There is a litany of stuff in this report. It is incredible when we read it all.

Another quote reads:

It is disconcerting that Transport Canada has yet to establish a proper framework to evaluate and report on the overall financial impact of the airport transfers at any time after transfer over the life of the 60-year leases.

We are signing 60 year leases with these people and we do not have a clue what we are signing. Is that how we should be running the place? Unlike fair market value, book value is what was used, it does not reflect the real worth of the growing concern with its potential to generate substantial revenues. I am sorry but it is just awful.

What I am trying to say is that the management of the airports by that department is downright scandalous. At the public accounts committee we had a Mr. Louis Ranger, the assistant deputy minister of the department. He told us that the regime had borrowed $5 billion from the private sector without the government having to put a penny into it. What he figured was success was that the airports went out and got $5 billion worth of debt. By the way, this is why the government made these airports not for profit organizations. Let us remember back to the nineties. When we had a fiscal problem the government demonstrated that little sleight of hand thing. It created another organization and gave it borrowing power so there would be a $5 billion debt over there that would not show on the public accounts of Canada's books. The government tells us that it is doing a great job and yet the debt is showing up elsewhere.

The government practises sleight of hand accounting, which should not be tolerated, and then brags about fiscal responsibility when the debts are all over the place.

We dealt with the Department of National Defence in public accounts. It created another not for profit, no share capital organization. There were no profits and no share capital and yet, because it had guaranteed cashflow from the Government of Canada, it borrowed $742 million from the private sector and we are on the hook for that too. That does not show on the public accounts of Canada.

The department said that it had to renegotiate some of the 60 year leases. Because department officials were the good guys that week, they renegotiated four leases at a cost to the government of $474 million in foregone rent. We gave the rent back to them after we collected it. How are we supposed to run a business this way? I just do not know how we can run a business this way.

Continuing on with the report from the public accounts, the most important weakness identified by the audit was Transport Canada's failure to determine the fair market value of the assets and business opportunities that it was transferring. It just threw them away. The policy framework for the transfers, including a requirement that the airport value be determined on the basis of fair market value, should have been set up before the negotiations were started, but that was too complex. It would have required some brainpower, some management, some decisions and some professionalism. It did not have any of that so it gave up on that and gave the stuff away. It only looked at some cashflow, the net cashflow and the present cashflow.

In the meantime it gave the airport authority the opportunity to set up stores, businesses and all kinds of other spinoff type revenues and left it at that. By the way, airports are not taxable. They do not pay corporate tax, income tax or any kind of tax. They just collect tax, as we all know.

Just one comment here that we heard in the public accounts. Despite the complexity involved in the turnover in departmental staff responsible for the negotiations, the department did not document how the components of the policy framework were applied to the leases. They did not even write it down. Exceptions to transfer principles also were not documented.

Mr. Ranger accepted that mistake, admitting that he did not think the department would ever have the full picture of how the lease negotiations evolved. He does not know. He did not know and we will never know. That is a serious indictment of the Minister of Transport and his department. He has let things get totally and completely out of hand. This Parliament should not be standing for that.

I hope the committee roasts that guy and the department as it goes through the hearings on the bill.

[Howard Hilstrom, Canadian Alliance, Selkirk—Interlake, MB]

Mr. Speaker, the member raised the issue of rents. Rents are of particular importance to the operation of an airport because if they are too high the airport will go broke, and of course they cannot pay rent on nothing.

I have to stand up for the city of Winnipeg and for the Winnipeg airport authority because the member for Charleswood—St. James—Assiniboia does not seem to be speaking out on behalf of our airport in Winnipeg. The rent there has been a major concern because it will drive that airport authority to the brink of bankruptcy if it proceeds as planned by the government.

I note that in 1997, when our airport authority in Winnipeg took over, the rent was around the $900,000 mark. Now the government wants to drive it up to around the $7 million mark. Just like any tenant, if I am charged more rent that the apartment is worth or what I would pay some place else, I will move and the landlord will have nothing.

What does the member think about the government charging rents that are so onerous that in fact it makes it impossible for one of these airport authorities to continue serving the public and the city that it resides in?

[John Williams, Canadian Alliance, St. Albert, AB]

Mr. Speaker, the answer to that question is obvious. Tenants should not be paying rent beyond what is practical and what is appropriate. I wish the government could understand some simple little concept like that, because, getting back to the Auditor General's report at page 10-21, it states, “From 1992 to 1999”--presumably based on overcharging, as the member pointed out--“Transport Canada turned back or offset a total of some $246 million to fund shortfalls in revenues of transferred airports”.

The airports just about went broke and had to hand them back. Is that how we should run a country? No. In talking about airports, the Auditor General also pointed out on the same page that “the Calgary, Pearson and Vancouver airports accounted for over 95 percent of Transport Canada's total revenues...in 1998”. He also said, I believe, that the government could not charge nothing.

What is the government doing? It is paying the tenants to use the property. It is negative rent. I have never heard of such a scandal.