Mr. Speaker, as I started to say in my remarks late yesterday before the House adjourned its regular business, there is extreme concern in the airport 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.
Yesterday I spoke about how the air transportation industry has had an enormous impact on the Canadian economy. I pointed out that the viability of Canada's air transportation system is threatened and the consequences for Canada are enormous. I also gave reasons why the industry is in crisis today. I said that airports must adjust to the new realities of air travel, reduced frequency and the withdrawal of service. This means airports will have to reduce costs in order to minimize impacts on airlines and air travellers.
I stressed that the federal government too must act to cut costs to airports so these may be passed along to airlines in the form of lower fees and charges, and to air travellers in the form of lower air fares.
Ironically, at a time when the federal government should be reducing the operating costs of airports, the proposed Canada airports act, Bill C-27, does just the opposite. The proposed act, which would effectively re-regulate an economic sector that the government effectively and successfully deregulated 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 small 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 recommended a course of action substantially different from the government's proposed legislation.
I declared my bias and it is called John C. Munro Hamilton International Airport. I quoted from a letter to me from Mr. Tony Battaglia, president and CEO of TradePort International Corporation, operator of Hamilton airport. I read from his letter which said:
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).
Those are the concerns of a smaller airport like Hamilton, but what about larger airports like the Vancouver International Airport authority?
YVR is concerned that Bill C-27 would diminish Canada's reputation as a well respected source for excellent foreign international airport operators such as the Vancouver International Airport authority and its subsidiary YVR Airport Services Limited. It says that the bill would cripple or kill the ability of progressive airport managers, such as YVRAS, to compete in the international arena and provide much needed management and operator expertise to small and medium sized domestic airports. It also would negatively impact on small airports that need the type of management and operational expertise that larger airports can provide through consultant or management services in the manner that YVRAA provides through its subsidiary, YVRAS airports, to places like Kamloops, Cranbrook, Fort St. John and to more medium sized airports such as Moncton and my home town of Hamilton.
YVR says that the bill would reduce or eliminate opportunities and employment for Canadian architects, engineers, lawyers, professional advisors, designers and project managers in the field of overseas management and development of foreign airports.
Foreign governments are particularly attracted to the management skills of well run airports such as Vancouver. The fact that YVRAS has developed to the point that it should be able to stand on its own reputation is clouded by the views of foreign governments. They want the reputation, expertise and backup like an airport like Vancouver International can provide.
Realistically the development of these types of businesses and positive effects that it has on the Canadian economy is based on well run large Canadian airport authorities exporting reputation, expertise, technology and technical services through subsidiary airport operator management corporations and/or joint ventures.
The market for foreign airport privatization is huge. Today, while less than 5% of the world's airports are privatized, the World Bank forecasts that the operation of 150 airports will be transferred from government to the private sector within just the next few years. Several leading companies have identified airport privatization as a new strategic industry for the 21st century. This creates huge opportunities for Canadians that should not be stifled. That is the view of an airport such as Vancouver.
Devolution of airports to local control has been instrumental in the evolution of Canadian airports from money losing government run entities into full cost recovery operations under the principle of user pay. The government's vision document “Straight Ahead” says:
Transportation policy must provide market frameworks that allow carriers and infrastructure providers to adapt, innovate, remain competitive and serve the public.
Yet Bill C-27 creates a static, inflexible governance regime. The devolution of the Hamilton airport, for example, to local ownership and management has been an overwhelming success. By 2002 the local operator, TradePort, had invested over $25 million and attracted another $48 million in private sector investment at our airport.
Hamilton International Airport's economic impact study completed in 2002 found that there were 1,550 direct jobs at the airport, up over 116% since TradePort took over its management.
Hamilton International Airport's direct contribution to GDP is $170 million and that is up 129% since 1996. Its total economic output is $410 million, up 224% over the same period. Taxes paid to three levels of government by the airport community exceed $32 million.
In spite of all these successes, the Canada airports act includes 210 sections to micromanage the country's airports. By way of comparison, the entire Canada Transportation Act, which as we know governs rail, transit, marine and airlines, has only 280 sections.
My fear is that Bill C-27 embeds in legislation that which is normally dealt with through regulation. The bill will go before the Standing Committee on Transport shortly and I for one will be keeping an eye on this legislation.
It is quite obvious that we have a success story since deregulation. According to the airports and the airport authorities that have contacted many of us here in the House, and my particular concern is for Hamilton airport, I think demonstrates that a return from a deregulated industry of the mid-1990s to a re-regulated industry serves no useful purpose.
Again, I look forward to seeing the bill at committee stage when we conclude our second reading debate. I think it will be very important to go clause by clause through the bill and have these witnesses come before us to demonstrate to us why the government should proceed in the way it is proceeding and why we should not do everything we can possible to help the industry, not through re-regulating the industry but through those administrative practices that can encourage them to grow, to continue to grow in the fashion they are growing.