Mr. Speaker, it is a pleasure for me to speak on Bill C-28, the Budget Implementation Act, 2003.
For the benefit of those listening, when we talk about adopting a budget, clearly, we expect to have a budget that contains measures to resolve obvious problems.
I am going to talk about one of these problems. I do not think there is a single Quebecker or Canadian who is unaware of the serious problem facing the Canadian airline industry. We all know that this situation is the result of the horrific events of September 11, 2001.
These events were in no way the fault of the airline industry, the men and women who are the brains behind this industry. It was the terrorists, who chose to use an airplane as a missile, who inevitably shook the airline industry worldwide.
Canada has suffered and is still suffering. Then came SARS, severe acute respiratory syndrome, which has been another blow to the airline industry.
All the industry stakeholders, not simply those in the aeronautics or aviation industry, but the entire travel and leisure industry has told the government, “Look, you are preparing a budget. You chose, in budget 2002, not to help the airline industry”. That is what happened. Despite requests at the time by Air Canada, which had immediately asked for $2 billion in assistance, the government chose to ignore this request and even withdrew the loan guarantees it had intended to announce, since Canada 3000 had declared bankruptcy. So, the government chose not to provide any assistance.
The only assistance the federal government provided was compensation to pay insurance premiums. Naturally, after September 11, the insurance premiums of airlines, particularly liability premiums, have practically quadrupled.
So, the government, like other governments around the world, decided to provide assistance as far as insurance was concerned. That is the only international initiative that the Canadian government decided to copy. The United States implemented an airline assistance program. The only thing Canada chose to copy was to compensate airlines for insurance rate increases.
Of course, the government thought that things would get back to normal. For those who are listening to us, this also gives us the opportunity to make a short analysis of the issue of Air Canada, which was asking for a $2 billion assistance right from the beginning. The federal government decided not to help it.
What the government realized was that Air Canada could dig into some cash flow, that is that the company decided to do some accounting, to sell its aircraft and to rent them, which allowed it to get more than $2 billion in cash flow.
Of course, once again, I believe this was the beginning of the end for the company. From the beginning, it had well targeted its $2 billion needs, considering the events of September 11 and the problems that it knew the industry would face during the following months. So it decided to dig into its own accounts. It sold its aircraft and rented them, getting some cash flow from the sales. In this way, it was able to survive for more than a year on its reserves.
Except that the airline industry did not recover. In the budget of 2002, which was adopted in December 2001, as members will remember, the government decided to impose an air security tax to be able, once again, to gain some revenues.
It did not help the industry, or not much; $180 million was set aside to compensate for higher insurance premiums; in addition, the industry was penalized with a supplementary tax of $24, which brought in nearly $400 million to the government.
When it was all added up, with the security tax, Canada's airline industry was paying nearly $280 million more after the events of September 11 than it was before. This problem is not limited to Canada. It is the worst disaster in any industry of any sort, across Canada. The result of the 2002 budget was that the government's revenues increased by nearly $280 million, leaving out the compensation paid to the airlines for insurance premiums. Thus, we are increasing our revenues on the backs of the airline industry. That is Canada.
In 2003, the entire airline sector, all the workers in it, this concentration of brain power that works to design the airline industry, expected that the 2003 budget would correct this error. The industry expected that the airport security tax would be withdrawn. What happened was a decision to cut the tax by half and thus collect about $200 million. That will just about cover the government's spending of $180 million to compensate the airlines for increased insurance premiums.
Two years later, with the industry as unhealthy as ever and affected by other crises such as SARS, the government is still getting the same level of revenue from this industry as before the events of September 11, 2001. Now I know why we are getting close to using extraordinary measures. It is because of such measures that a company such as Air Canada has had to resort to bankruptcy protection. We can blame Air Canada for many things, for making bad decisions in 1997-98, but it is not the fault of Air Canada employees or those of any other airline that terrorists decided to use their aircraft as missiles on September 11.
This is what makes this budget difficult to swallow, and this is why the Bloc Quebecois will vote against it. Why? Because we had a real problem. It is one example, but there are others, and my colleagues told the House about some of the other problems with the 2003 budget.
There is a serious problem, which has been affecting the airline industry as well as the tourism and recreation industry because of the events of September 11, 2001, and also because of the severe acute respiratory syndrome, also known as atypical pneumonia.
The airline industry is going through a crisis because of all these events, and this budget will provide no help. As I was explaining earlier, in 2002, the industry was hit with a $220 million tax. This budget reduces the tax by 50% and brings the revenues from the airline industry back to where they were before September 11, 2001, and the industry is still going though a crisis.
Men and women with various skills who are internationally known for their qualities as workers in the airline industry have lost their jobs in the last few weeks or will lose them in the next few weeks. Why? Because the federal government has simply decided to keep its money and not to help the airline industry. This is probably one of the most serious problems in this budget, the fact that the government will keep collecting a security tax of $12 per passenger that is harmful to the industry.