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House of Commons Hansard #10 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was transport.

Topics

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:45 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Madam Speaker, we are dealing with a lot of things, be it international competition, Bombardier, or spinoff industries. My colleague talked about 40,000 jobs in Quebec. It is equal in Toronto right now with thousands of jobs in DeHavilland and in Bombardier.

The Minister of Transport and the Minister of Industry have been consulting and a policy is in the works. It will be announced in the upcoming days as we go along.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:45 p.m.

Conservative

Rob Nicholson Conservative Niagara Falls, ON

Madam Speaker, the parliamentary secretary said that this would come into force when provincial legislation was passed. Could the parliamentary secretary let me know how soon he expects to have provincial legislation in place and, in particular, what indication he has from the province of Quebec, which has a huge aeronautical industry within the province, of the timeline for it to pass this? Could he also tell me how many provinces it will take to pass this before it is considered to be in effect after the Canadian Parliament passes it?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:45 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Madam Speaker, the comments that my hon. colleague made, especially about Niagara Falls being the capital of the world--

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:45 p.m.

Conservative

Rob Nicholson Conservative Niagara Falls, ON

The honeymoon capital of the world.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:45 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

The honeymoon capital of the world. I am sure a lot of Canadians, as well as a lot of international people, have flown using Air Canada or other carriers to go to Niagara Falls to see the wonderful delights that my hon. colleague mentioned.

Getting to the gist of the question, which is when will the legislation come into force, it is expected that it will come into force no later than the time when Canada assumes its international obligations under the convention and protocol throughout the act of ratification. Canada would not assume any international obligations until a sufficient number of provinces have also passed implementing legislation covering matters within their jurisdiction.

The federal legislation allows that certain provisions can be proclaimed into force before ratification. The option would only be exercised in respect to provisions that may be implemented outside the framework of the convention on aircraft protocol.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:50 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I am happy to hear that there could be something available in terms of an aerospace policy. It is something that is very important.

We on this side have been very frustrated with the lack of similar action on an auto policy. What we have witnessed in both these sectors is massive subsidization and grants being provided against our own production through the United States.

Does the hon. member believe that this intervention, which I hope actually happens, will be something concrete and accessible and will meet the standards of the industry? Also, will we see an auto one coming next? That is very important. It has been over two years in the making. I have been part of the discussions and it is unbelievable how long it has been taking.

Is this a further admission that the North American free trade agreement that the government signed on to has been a failure?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:50 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Madam Speaker, I want to reassure my hon. colleague from Windsor West that not only is the government working very hard on coming up with an aerospace policy, but I also want to reassure him on something that is in my mandate given to me by my minister regarding the autopact and the auto industry.

There have been extensive discussions going back a few years. The Department of Transport, the Department of Industry, the Department of Finance, the Department of Natural Resources and the Department of the Environment are working together to make sure we come up with a policy as far as the auto industry is concerned. Not only are we going to tell the auto industry this is the way to make cars, we have a responsibility as custodians of the future of the country, as custodians of the global environment. We have a responsibility, not only to the manufacturers and the people who work on the line, but we have an outstanding responsibility to our children.

We cannot continue doing business as we are. We cannot just continue pumping out cars as we know them. We have to pump out cars that are more fuel efficient and more friendly to the environment. If we do not have that policy in place, by the year 2016 our health costs will have ballooned way over $160 billion.

We need to come up with responsible legislation. This is why the departments I mentioned, the parliamentary secretaries and the ministers of the departments, are working hand in hand to make sure we come up with a policy that respects the environment as well as represents the needs of Canadians. I reassure the House that this will be done in due course and very quickly.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:50 p.m.

Conservative

Rob Nicholson Conservative Niagara Falls, ON

Madam Speaker, I am pleased to be able to make a few comments with respect to Bill C-4, an act to implement the convention on international interests in mobile equipment and the protocol to the convention in mobile equipment on matters specific to aircraft equipment. This would provide a continuation of the development of the security law sector. It is a step forward in the right direction. I think it should be viewed by members and Canadians as part of a continuation of the history of providing security.

Hon. members in the House who know or practice law will know that going back a couple of hundred years the only security generally that one could get was the mortgage on one's property or house. It worked very well because lenders were prepared to lend money on the basis that if they were not repaid the house or property could be seized. As a result, the lowest interest rates were always available for mortgages.

However, with the development of trade and other types of assets, it became necessary to find a way to provide security and obtain financing. For the most part, in the 18th and 19th centuries, that was confined to shipping, which was the common way of trade between countries. Over a couple of centuries, a body of law developed, which was referred to as the admiralty law, that contained a whole host of rules and obligations to govern shipping throughout the world. For the most part it worked well because it lent certainty to individuals who were in the business of trade throughout the world. There were consequences to those individuals or countries that did not pay attention to the rules.

A number of instances took place in the 19th century where ships were seized or impounded in various places around the world and in short order a number of individuals and countries discovered that a royal navy gunboat was in the harbour to back up the security.

As the 20th century developed, that style of enforcement of securities did not lend itself as well to modern trade, not only because of the directness of that approach but because there were other types of security. The development of the aircraft industry in the 20th century meant that other types of security would be necessary.

That has been very difficult because if we do not have a way of enforcing security throughout the world, lenders, understandably, become nervous about forwarding money. If one owned an airplane in Canada and the person wanted to fly to various countries around the world, those providing the financing would, understandably, want to know what would happen if the owner could not pay, especially if the plane were in a part of the world with different laws or perhaps no laws at all. As a result, lenders were very reluctant to forward money on that basis because they could not be certain of the security or of being able to realize on their security if the aircraft or other piece of equipment on which financing had been forwarded were in some other part of the world.

It was difficult for people in the aircraft industry to obtain financing and if they could obtain financing it was very expensive. That really did not work in anyone's interest. It does not work in the interests of those in the aeronautical industry and it does not work, quite frankly, for passengers. Those of us who use airlines want the fares at the lowest possible price but if the aircraft company is having difficulty getting financing that gets passed on the passengers and in turn it is bad for everyone.

I see something like a convention that would include, among other things, as the parliamentary secretary said, aircraft, aircraft engines, helicopters, railway rolling stock which is another type of equipment that moves outside of the country, and, interesting enough, space assets. Presumably we could put security on a satellite.

The good thing about it is that it is one stop shopping. Apparently, it will be available on the Internet so that throughout the world individuals can check to see what the security is on a particular piece of equipment. This would give peace of mind to everyone involved.

Canada has a very important aircraft industry. This will assist it. There has been quite a bit of talk about the struggles within the airline and aircraft industries. If they are able to obtain financing, this will go a long way to helping them. It would benefit everyone.

I asked the parliamentary secretary about the question of provincial jurisdiction and I would like to explore it a little bit further when this matter goes before the transport committee. For the most part contract law is within provincial jurisdiction. Each province has laws and rules that govern contracts. Indeed, the province with which I am most familiar, Ontario, has something similar to that called the personal property security act.

If we obtain financing for an automobile, it gets registered, and it goes into the computer. Anyone interested in buying or otherwise financing our car would be able to quickly find out through a computer station located at registry offices across Ontario what the security interest is in it. The province already has a regime in place, as do other provinces, and it has a huge interest in it.

I, for one, would be very interested to know when other provinces will be ratifying this agreement because we cannot have the federal government ratify something like this when so much of the jurisdiction is with the provinces. In particular, I would be interested in knowing the timeline of the Province of Quebec, which has a huge stake in the particular industry covered by the bill. Indeed, I would be very interested in the comments it may have on this. That is one of the aspects I would like to see addressed in committee and to hear what the provinces have to say.

Be that as it may, I want to assure the House that we believe on this side of the House that the bill should go forward. This is a step in the right direction and I will be interested to hear from all the players in the industry. I think it will be widely accepted and quite frankly, welcomed. Any time we get anything that is 100 pages long, there may be some surprises in it, but let us deal with it at the second reading stage in committee because I definitely think this is a step in the right direction. I look forward to Canada ratifying it, our provinces ratifying it and indeed, all the other countries of the world getting on board with this regime.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1 p.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Madam Speaker, I am pleased to speak to Bill C-4, an act to implement two international agreements, the Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment.

The purpose of the convention is to create an international legal framework to address the order in which creditors are paid and the seller's rights. The basic objective of the convention is the efficient financing of transportation equipment, which will assist in the development of expensive modes of transport using modern technologies, especially related to aeronautics.

The purpose of these agreements is to have the signatory countries standardize their legislation with respect to the security lenders take on mobile equipment such as aircraft, for example. These agreements also allow for the creation of an international aircraft registry that will make it easy for lenders to find out about the state of an aircraft or whether it has been mortgaged, by how much and by whom.

The huge outlays involved in the financing of such equipment make it essential for the creditor to be able to have confidence that if the debtor defaults in payment or other performance the relevant legal regime will respect the creditor's contractual and proprietary rights and provide the creditor with efficient and effective means to enforce those rights.

Normally in the case of conflicting legislation, that of the country where the secured property is located applies. When dealing with immovable property, it is quite simple. However, for mobile equipment constantly moving from one country to another it is more complicated and a costly source of uncertainty both for the lender and the borrower.

If these countries do not standardize their laws, especially with respect to the order in which creditors are paid, endless legal battles can ensue leading to long and expensive delays when the airline company is unable to make payments. Furthermore, contradictory legislation causes a great deal of uncertainty and increases the risk for the lender, who often compensates for this by charging much higher interest.

Hence the need for international legal rules giving the creditors the required level of security and containing measures for the debtor's protection. This would represent a competitive advantage for the airline industry. Since the risks associated with the loans or the lease agreements will be reduced, funding will be easier for the air transportation companies to obtain.

Moreover, a reduction in the costs of borrowing can be expected. All this should help the carriers who want to buy new aircraft and ultimately improve perspectives for the aerospace industry that builds them.

We all know that there is a crisis in the airline industry. The fears generated by the events of September 11, 2001, cut passenger traffic. The creation of the low cost carriers resulted in a reduction in the price of tickets. The increase in oil prices, which represent 16% of the air carriers operating costs, is resulting in higher operating costs. All that reduces the carriers profit margin.

As a result, many airlines are in a state of crisis. Air Canada has filed for protection under the Companies' Creditors Arrangement Act. Sabena and Swissair have declared bankruptcy. Alitalia and American Airlines are having a very difficult time. It is easy to understand that lenders hesitate to provide them with the funds they need to upgrade their fleet, which funds are essential if they want to stay in business. The guarantee that the lender will be able to recover the aircraft in the event of non-payment can only be beneficial.

The goal of these conventions is therefore particularly appropriate and beneficial for both carriers and equipment manufacturers, and that is the reason why the Bloc Québécois supports the principle of Bill C-4 provided, of course, that the committee finds that it is, in all of its details, in compliance with both international conventions.

Of course the bill can deal only with matters under federal jurisdiction. Issues related to loan guarantees come under civil law, which is an area of provincial jurisdiction. The implementation of the protocol and treaty will only be possible if the provinces amend their own legislation.

That is one more example of why Quebec and the provinces need to be closely involved in negotiating and reaching international accords. In addition to allowing them to defend the interests of their fellow citizens, such involvement would make implementation of international treaties much easier.

That being said, Bill C-4 is a step in the right direction. However, it does not solve the real problem in the aerospace industry, which is the lack of an aerospace policy. It is a good thing that Canada is taking the lead in signing this treaty, but it must do a lot more and put in place a real aerospace policy.

The situation is more urgent than ever as witness the events of last week, when we heard that Bombardier was being courted by three American states wanting the company to locate its facilities on their territory to build 100 and 115 seat planes. It would appear that they each are offering more than the $700 million Bombardier is seeking from the federal government.

Ottawa is procrastinating. Support for research and development is anemic. Technology Partnerships Canada is underfunded. Export contracts supported by Export Development Canada are far too few.

The federal government must act quickly, otherwise a whole sector of a flourishing industry might suffer.

Quebec's aerospace industry, which has sales of $14 billion and which employs more than 40,000 people, accounts for close to half of high-tech jobs in Canada. Of the 250 companies in this sector, 240 are SMEs, which act as suppliers to big business. Together, those 240 SMEs represent 10% of the total sales of Canada's aerospace industry.

Those SMEs could do much more. Indeed, foreign companies represent roughly two thirds of suppliers to Quebec's aerospace industry. This indicates the potential for growth of Quebec's SMEs if they succeeded in taking over part of this market. To do it, though, they need help.

To be certified as supplier in the aerospace industry, a SME must meet a series of very strict criteria set by the contactor. It must be able to be associated with the development of any new product, from the beginning of its design and through its finalization. In addition, it must meet the particularly strict demands of the contractor in terms of quality and competency of its workforce. All these demands are very costly, sometimes too costly for an SME to assume alone.

The federal government must support those companies which would be ready to move from the status of small business with precarious finances to that of a medium-sized business able to take the market head on, if given the means to do so.

We also know that two of the main employers in Quebec's aerospace industry are Bombardier and Pratt & Whitney. The latter has facilities in Longueuil in my riding. Both of these jewels of Quebec's industry have condemned the insufficient federal support for an industry which is facing strong competition. If the federal government does not act, the United States or Great Britain will move in.

Endangering these two jewels of the aerospace industry would not only threaten 40,000 jobs; it would also be a hard blow to numerous small and medium-sized enterprises serving that sector.

As the present Minister for Transport was saying, the aerospace industry is to Quebec what the automobile industry is to Ontario. I want to say to the Minister of Transport that he should stop condemning a situation that we all know only too well, and move quickly to implement a real aerospace policy. Ontario has been benefiting for decades, in terms of federal support, from special regulations, substantial grants and even special trade agreements like the Auto Pact.

Ratification of international agreements is one thing, and the Bloc Québécois supports Bill C-4 in principle. However, we also must act swiftly on the domestic scene. Besides, Canada has nothing to be proud of, since it is practically the only developed country which has no clear and consistent policy in this area.

Everywhere else in the world, it has been acknowledged that this sector must have the support of high technology research and development before it can design its final product. In other words, huge investments must precede marketing. Therefore, this industry is highly research and development intensive. Other countries have understood that, but Canada still has not.

This is why the Bloc Québécois has for years been calling for an aeronautics and aerospace policy which should include several elements.

Let us take industrial research support, for instance. Developing a high technology product, whether it is a drug or an airplane, takes a lot of time and money.This is a stage where government funding is crucial.

As Mr. Louis Chênevert, President of Pratt & Whitney Canada, so aptly put it:

Pratt & Whitney Canada is a leader internationally because it has acquired a unique technology through its investments in research and development over the last 20 years.

He added this:

Because the federal government has contributed to this effort through its Technology Partnerships Canada Program, it will reap the benefits...Indeed, it pays to invest in research and development.

Through the Technology Partnerships Canada Program, Ottawa invests in product research and development and gets its payback in royalties. As you can well understand, it is a win-win situation.

However, while spending on industrial research is increasing by approximately 8% per year, the amounts invested by the government in the program remain more or less constant. This poses a serious threat to the aerospace industry, which, as I have already noted, is one of the shining lights of Quebec industry. It exports 89% of its production and must be in a position to stand up to competitors, which get much more support. In that sense, the program, created 8 years ago, is now significantly underfunded.

In the United States, for example, the Pentagon is investing US$45 billion in research and development, of which some $6.5 billion is going directly to Boeing, Raytheon and United Technologies.

Bombardier recently announced the elimination of 2,000 jobs in Montreal, and the worst might well be yet to come, if Canada continues to drag its feet and Bombardier accepts the American offer.

It is for all these reasons that the Bloc Québécois is asking for a substantial increase in the federal investments in the Technology Partnerships Canada program.

It is also important to promote export. As the Canadian aerospace market is limited, our companies can amortize development costs only by investing in the international market. The aerospace sector exports 89% of its production. However, since Ottawa is not promoting exports nearly as much as many other countries do, our companies have a hard time remaining competitive.

In the past three years, Export Development Canada, or EDC, the federal agency financing all export contracts, has financed an average of 41% of all Bombardier regional aircraft sales. By comparison, in the same period, the Brazil Development Bank financed over 80% of Embraer sales.

Worse yet, EDC's support dropped to 37% in 2003. The majority of the funds released were for existing contracts, while Embraer received the support of the Brazilian government for almost all its financing needs.

The Bloc Québécois is thus calling on the government to increase its participation in the financing of export contracts to the levels our foreign competitors might be granted.

There are a variety of steps the federal government could take if it really wanted to help the aerospace industry. Today, the consideration of Bill C-4 is a step in the right direction, but the fact remains that the government must implement as soon as possible a real policy for the aerospace industry.

Besides, with a surplus of $9.1 billion for 2003-04, money is certainly not an issue, especially since, as I tried to demonstrate, investments in that sector generate substantial economic spinoffs. I hope that the Minister of Transport and the Minister of Industry realize that. With such a return on investment, it is profitable for the federal government and also for the public as a whole.

Investing today will ensure the viability of a critical sector of our economy in Quebec.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:15 p.m.

Liberal

Ken Boshcoff Liberal Thunder Bay—Rainy River, ON

Madam Speaker, I will be splitting my time with the hon. member for Ancaster--Dundas--Flamborough--Westdale.

I am pleased to have this opportunity to discuss the consultation process surrounding the international interests in mobile equipment act. A crucial element in the development and adoption of any legislation in Canada is consultation with and the support of affected stakeholders and other relevant parties. Canada played a leadership role in the negotiation of the convention and protocol because various groups, including provinces, territories, airlines such as Air Canada, industry associations such as the Air Transport Association of Canada, and aircraft manufacturers such as Bombardier and Pratt & Whitney Canada, have supported the objectives of the convention and protocol.

On March 31, Canada signed the convention on international interests and mobile equipment and the protocol to the convention on international interests and mobile equipment on matters specific to aircraft equipment. Justice Canada officials regularly consulted with the provinces and territories throughout the negotiations leading to the adoption of the convention and protocol.

The provinces and territories continue to be consulted through the Uniform Law Conference of Canada and through the Department of Justice advisory group on private international law. They have consistently demonstrated their interest and support for these instruments.

Canadian airlines, aircraft manufacturers and financiers have also been consulted throughout the process. All have expressed strong support for the convention and protocol. They foresee that the implementation of the convention and the protocol will provide creditors with an increased certainty and improved ability to realize on their security, thus reducing their financial risk. Consultations have also indicated that the Canadian aviation finance bar and insolvency stakeholders support the implementation in Canada of the convention and protocol.

Ratification of the convention and protocol would be premised on implementation by a sufficient number of provinces and territories. A uniform act to implement the convention and protocol throughout Canada was developed by the Uniform Law Conference of Canada with the participation of provincial and territorial representatives.

Based on this uniform act, Ontario and Nova Scotia have already passed implementing legislation that would enter into force when the instruments take effect in Canada. It could also be expected that other provinces and territories will also pass implementing legislation, especially those provinces with significant aviation interests.

Adoption of this bill would encourage the remaining provinces and territories to pass their own legislation to implement the terms of the agreements that fall within their jurisdiction. This would facilitate Canada's eventual ratification of the convention and protocol. The Government of Canada has worked cooperatively with the provinces and territories throughout this initiative. This bill is an important step in this regard. Finally, early implementation of the convention and protocol in Canada would reaffirm Canada's leadership role in international civil aviation.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:20 p.m.

Liberal

Russ Powers Liberal Ancaster—Dundas—Flamborough—Westdale, ON

Madam Speaker, I am pleased to expand upon the introductory comments made by the Parliamentary Secretary to the Minister of Transport. I will take this opportunity to outline some of the anticipated benefits of adopting the proposed act on international interests in mobile equipment, that is, aircraft equipment, known as Bill C-4.

I believe we all agree that a strong, competitive aviation industry is an important component of Canada's economy in the 21st century. Adopting this bill will help the Canadian airline and aerospace industries compete more effectively in the global economy by facilitating their access to capital markets.

On March 31 of this year Canada signed the convention on international interests in mobile equipment and the protocol to the convention on international interests in mobile equipment on matters specific to aircraft equipment. The convention and protocol will establish an international framework for the financing of aircraft equipment. Within this framework, the value of the aircraft would be used as security for payment, like a mortgage or a lease.

Adopting legislation to implement the convention and protocol will reduce the financial risk to creditors, allowing them to access greater levels of financing available for aircraft purchasing. This would translate into lower costs for airlines purchasing or leasing aircraft, which would enhance their competitiveness and strengthen the airline and aerospace sectors. The expected result is a direct positive impact on airline earnings, investment and overall profitability.

Among the benefits of implementation are: greater security for creditors; an increase in the global competitiveness of the Canadian aerospace and airline industries; maintaining jobs in Canada; and spinoff effects for various regions within Canada. If Canada ratifies the convention and protocol and adopts implementing legislation in a timely manner, Canadian purchasers will be able to benefit from reduced exposure fees.

For example, in the United States, the U.S. Export-Import Bank is offering a one-third reduction in its exposure fee to companies whose home states have signed, ratified and implemented the convention and protocol before September 30, 2005. This offer recognizes that reducing uncertainty translates into lower costs. This kind of advantage would contribute to the industry's competitiveness. As the Canadian aviation industry becomes more cost competitive, the benefits could be passed on to consumers through increased airline service and lower fares.

A healthy aviation industry will of course translate into more jobs for Canadians. As airlines become more competitive and grow, they will expand their workforce. This has associated spinoff benefits for the aircraft manufacturing sector also. The airline and aerospace manufacturing industries generate many highly paid, specialized jobs. The importance of such jobs and their spinoff effects on the economy cannot be ignored.

Alberta and western Canada will benefit from WestJet's increased competitiveness. As the home of Air Canada, Jetsgo, Pratt & Whitney Canada and Bombardier, Quebec will no doubt enjoy a boost in its economy, and the presence of CanJet and Pratt & Whitney Canada in eastern Canada will provide a positive economic impact for these provinces.

Smaller airlines across the country will also enjoy the benefits created by the convention and protocol. In addition, aircraft manufacturers and their numerous subcontractors throughout Canada will be positively affected by the increased certainty that the convention and protocol will generate.

In short, adopting this bill will be an important step toward strengthening Canada's aviation industry, which will generate competitive and other spinoff benefits across this country.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:25 p.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Madam Speaker, I have listened carefully to what my hon. colleague said, and I have questions, of course. As I said earlier, we support the principle of the bill. But I would like to hear what he thinks. I assume he is on the government's side.

What kind of pressure is he putting not only on the Minister of Transport but also on the Minister of Industry to ensure that there is a national or Canadian aerospace policy in Canada?

Concretely, what can be done to ensure that there will be a follow-up on this bill, which is worthwhile of course, but is only part of the solution, because it does not solve any of the problems currently facing the industry, an industry which, as he indicated, is very important to Quebec?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:25 p.m.

Liberal

Russ Powers Liberal Ancaster—Dundas—Flamborough—Westdale, ON

Madam Speaker, clearly, the answer I will provide will not totally satisfy her. However, the Minister of Transport, his parliamentary secretary and various other ministries are working aggressively to ensure that we develop a very positive and proactive national strategy for our aviation industry, to provide new jobs and to ensure that there is safety of not only our assets, but also for the travellers. We will keep all members of the House advised as the information plays out.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:25 p.m.

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, one concern articulated in the previous question was whether this would lead to something else.

I want to revisit a little history. The auto industry, similar to the aeronautic industry, has had intense competition from other governments that have used subsidization and other practices, whether it be for infrastructure, for workers or for wages. These different types of strategies have cost us jobs. In fact Quebec has been hurt because there has not been an auto policy for the last decade. We have witnessed promise after promise.

In particular, the government set up the Canadian auto partnerships council. It has been two and a half years since the original meeting was held in Toronto, in which I participated. We expect to have some recommendations coming forward with in the next month. We have been anticipating this for a long time.

What other assurance can the member give us that we will not see two years pass before we get some substance or before something else happens? The government's pattern of behaviour has not been to introduce real meaningful changes. This industry cannot wait for that.

Jobs are very important in this industry, not only for the regions but across the country. They are well paying jobs that contribute high taxes. As well, they provide significant returns to everything from charitable donations to the United Way because people have good paying jobs. Also, auto jobs lead to six other jobs in Ontario, one in seven in Canada and one in four in Windsor. It is the same situation for the aeronautical industry.

Will the government recognize that it has been dragging its feet on the automobile industry? We still have nothing today. I want the government to make sure it does not do the same thing with aerospace. Those jobs will be gone and all that will be left is complacent Liberals.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:30 p.m.

Liberal

Russ Powers Liberal Ancaster—Dundas—Flamborough—Westdale, ON

Madam Speaker, although it is not applicable to the bill before us, the member's concern is very valid. My riding is currently under duress as a result of the steel industry, which indirectly affects his industry and the Auto Pact area. Clearly, our desire to introduce this legislation early shows that we have an extreme concern about the aviation industry.

I ask the member to be assured that our interest of ensuring that the automotive industry, the steel industry and everything else which is important to the industrialized communities in our country will be looked after in an expeditious manner. All ministries are working expeditiously to ensure the legislation is brought forward.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Madam Speaker, it is an honour for me to speak to Bill C-4 on behalf of the constituents I represent in the riding of Winnipeg Centre. Our critic, the member for Churchill, has done a lot of comprehensive work with respect to the legislation. The NDP can see benefits in Bill C-4 and is broadly in favour of the bill as it currently stands.

The aerospace industry is a critical industry for Winnipeg generally and for Winnipeg Centre specifically. People in my riding are interested in any initiative that may stimulate manufacturing in the aerospace industry and add to the stability of the critically important jobs that people there enjoy.

Members of the NDP have commented frequently on the aerospace industry in the House of Commons. I have spoken about the health and stability of that industry in a number of contexts. I am reminded of one specific issue that came to light in the twilight days of the 37th Parliament. That was the rather alarming use, or one might say misuse or abuse, of a program called technology partnership loans to keep the aerospace industry solvent and healthy in Canada. We see Bill C-4 as an effort to stimulate the aerospace industry and a positive light toward helping to develop markets for the manufactured products of our Canadian industry as opposed to technology partnership loans which we see as a scandal of equal proportion and dimension as the sponsorship scandal, if not more. Billions of dollars were involved in technology partnership loans and not millions of dollars as in the sponsorship scandal.

It is really a misnomer to call technology partnership loans, loans. A loan is not a loan when it is not paid back. It then becomes something else altogether. Of the technology partnership loans, 2% have been paid back, 98% have not been. This includes $480 million to Bombardier and millions of dollars to Pratt & Whitney and other aerospace manufacturing companies.

To get one's mind around this rate of payback, let us look at another loan program operated by the Canadian government, and that is the Canada student loan program. Of all student loads, 96% are paid back, but the government hounds the remaining 4% to their graves. No stone is left unturned to recover every penny loaned to Canadian students for their post-secondary education. The government has threatened to garnish their wages, to kick in their doors and seize their property, for heaven's sake. Yet it knowingly and willingly ignored, at last count, $3 billion of outstanding technology partnership loans, the overwhelming majority of which did not go to struggling start-up companies in need of R and D development so they could market products. They went to the aerospace industry and to IBM.

Why in God's name did the Canadian government give technology partnership loans to IBM? Is it a struggling start-up company? Is it a Canadian company? No. Did it ever pay the money back? No. I am sorry to deviate a bit from the subject of Bill C-4, but it brings to my mind one of the shortcomings in the treatment of our support for the aerospace industry. It warrants drawing that comparison.

The NDP is in favour of the idea of the Cape Town convention and protocol which we understand would reduce the risks and costs of selling aircraft internationally. We support the intention of the protocol, which is to reduce the costs of purchasing aircraft for developing countries. We are sympathetic to the plight of developing countries. We are also sympathetic to the difficulty developing countries have in getting capital or finding lending agencies willing to provide the level of capital necessary to purchase large ticket items like aircraft. They pay ridiculous premiums on the international borrowing marketplace for capital of that nature. We understand the protocol is designed in such away to accommodate.

I have been negligent, Madam Speaker, in pointing out that am splitting my time with the member for Hamilton Centre.

I know the member Hamilton Centre has been following this issue with great interest and care because of the area he represents and the jobs associated with this type of industry sector. He is eager to share his views with the House today as well.

One of things that strikes me is that there is more than one way for us to promote the aerospace industry in the country, be it in Montreal, Winnipeg, Vancouver or anywhere where we have aerospace industry workers and plants. One is to try to enhance the marketplace as per the Cape Town convention and Bill C-4. Another is to provide stimulus or assistance to that industry so it can retool and stay current with the market demands that have been improved. Another is education and training and ensuring that there is an adequately skilled source of workers coming up through the labour market training system. We should address that in the House of Commons in the context of the health and well-being of aerospace industry.

We have seen a complete abandonment of any commitment to labour market training by the Liberal government. It has devolved that to the provinces in a very haphazard and less than satisfactory way. It has signed nine individual labour market training agreements with nine individual provinces, with no particular national standards and with a patchwork quilt of training.

The aerospace industry is one industry sector that has received very short shrift in any of the interprovincial or intergovernmental training strategies. One of the problems with that is it leaves the industry vulnerable. If we do not have a human resources strategy associated with an industry sector, we will be vulnerable and subject to raid within the industry sector for skilled people, one company raiding skilled people from the other. It does not build any kind of cohesive plan which will give us confidence that the sector will be stable and well served.

I would like to use my remaining moments to compliment and feature one such program in the city of Winnipeg, run by Tec-Voc School, initiated by the acting deputy minister of education, Dwight Botting. It has partnered with the aerospace industry, not at the community college level, not at the post-secondary education level, at the high school level to do an integrated work and learn program to groom young employees for the aerospace program. It is an overwhelming success. We have met an industry need with a sensible approach that keeps kids in school, gives them hope and optimism that they can go into well paying jobs. It also provides the stability and confidence for the manufacturers in the riding, knowing there is a pool of adequately skilled young people coming up through the ranks. The employees training is geared specifically to the manufacturing plants. That match will be a recipe for growth in the industry.

Therefore, there is more than one type of program to help our aerospace industry remain healthy. One is to help it develop international markets by supporting the Cape Town convention and Bill C-4. Another, which is equally important, is a suitably skilled workforce.

This is one thing we can expand on with vision. If the House of Commons chose to, we could give direction to the government to expand the role of the EI program to bring it back to one of its former designated uses and that is labour market training on a national comprehensive scale. The EI fund is showing a surplus of $500 million a month, not per year, but per month.

Income maintenance has always been the primary role for the EI program, but in the designated uses of the of the EI Act, there are also labour market training, apprenticeship, et cetera. We have devolved all that to the provinces without the financial backing to keep those programs solvent.

You are indicating, Madam Speaker, that I am out of time.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:40 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Madam Speaker, I rise for the first time as the newly elected member for Hamilton Centre. I want to first thank my constituents and say what an incredible honour it is to stand here at this moment and address the House of Commons of our nation.

I am joined by colleagues who were in the class of 1990 at Queen's Park in the Ontario legislature, the hon. members for Sault Ste. Marie, Dufferin—Caledon and Halton. The four of us were together at Queen's Park for 13 years and we now find ourselves fortunate enough to be here in the House of Commons. Prior to that, I had an opportunity to service on Hamilton city council.

I came here elected with the NDP caucus to address a number of issues that are important to this nation, not the least of which is the missile defence star wars, which is about to be thrust upon the people of Canada if the government and certainly the Prime Minister have their way. There are many areas of interest to me, such as environmental protection, health care, education and social services. There is a whole litany of such areas, but there are a couple of them that are of particular interest to me.

One of them is the future of cities across Canada. One of the key things we talk about in virtually every bill is money and the lack of it at every level of government. There is not a study that I am aware of in Canada which says anything other than that the future of our economic growth from coast to coast to coast is focused on the ability to have successful cities and local regional economies.

We have heard a lot of promises from this Prime Minister and this government. I have been fortunate enough to be assigned the cities portfolio as critic and, as I see it, one of my roles is in large part to ensure that the government, at the very least, enacts the minimum promises it made to cities. To that degree, we have already seen the government backing away somewhat, with certainly nowhere near the kind of investment we in the NDP believe needs to be made in our cities.

The other issue is the steel industry. That of course is very germane to Bill C-4, because the bill speaks to the aircraft industry internationally but obviously nationally, too, and it is important to us for a whole host of reasons, not the least of which is, for a member from Hamilton, the steel industry. As my friend from Ancaster—Dundas—Flamborough—Westdale mentioned, a thriving, growing aircraft industry in Canada is good for the steel industry. We, along with my good friend from Sault Ste. Marie and a number of other communities, are the steel capital of Canada. That is not to mention all the support jobs generated by the parts industry in supplying both the steel industry and the aircraft industry and, by extension, the auto industry, which was also mentioned earlier.

This bill should, if enacted in the right way, provide us with a more thriving aircraft industry. Why does that matter to us beyond the obvious? It creates jobs, of course, but what really matters is the kinds of jobs that are created. We are talking about value added jobs. That is where we win. Canada cannot win by underbidding the rest of the world, whether it is in wages, occupational health and safety or environmental laws. We cannot win that game. There will always be someone who is forced, and often exploited, to work at wages that are well below what we would ever ask of any Canadian. So we win here in Canada by the fact that we have a healthy, educated, motivated workforce. We cannot create that through tax cuts or by watering down protection for workers or protection for the environment.

An industry like the aircraft industry is hugely important to us in terms of our future and our ability to provide well-paid, challenging jobs for our children and grandchildren. If this bill at the end of the day is going to make for a stronger aircraft industry, then that is going to create a stronger steel industry and auto industry, because of the availability of disposable income from the people who have these hopefully decently paid jobs with the disposable income that allows them to buy a car and allows them to buy the other things that keep our economy going.

I will wrap up my first time on my feet here--and I am so glad I remembered to do this because it is really important--by paying my respects to and complimenting my predecessor, the Hon. Stan Keyes. Stan served in this place for 16 years with great honour and distinction. He is well respected in our community. Losing an election can happen for a lot of reasons, as those of us who have been in politics for a long time all know, and one ought not to take it personally.

In this case, I want to underscore that this was nothing to do with Stan as an individual. It was the politics of the day and I ran a pretty good campaign to boot, but Stan is someone who is held in a great deal of respect in the city of Hamilton. I am honoured to follow in his footsteps. I will do the best I can to be the kind of representative for Hamilton Centre that I know Stan was in the past and that he would have been had he been here in my place.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:45 p.m.

Bloc

Mario Laframboise Bloc Argenteuil—Mirabel, QC

Madam Speaker, I listened with interest to my NDP colleague's speech. However, I might give some background about aerospace in Canada.

When I was elected in 2000, 62% of jobs in the aerospace industry were in Quebec. As a matter of fact, Canada's Prime Minister at the time, Mr. Jean Chrétien, had said that aerospace was to Quebec what the auto industry was to Ontario. He proved it to us: he closed the GM plant in Boisbriand. Of course, since that time, as members will have realize, we no longer have an auto industry in Quebec. According to the last industry figures, the percentage of jobs in aerospace manufacturing in Quebec is 55%. So we went from 62% to 55%.

Many Quebeckers will say that the best way for Quebec to create its own jobs would be of course to have its own country.

However, I ask my NDP colleague if, frankly, it would not be time for the federal government to invest the funds necessary to support the aerospace industry in Canada, which is one of the main employers in Quebec. Would it not be time for the government to show its true colours and for all parties in the House to support tremendous capital infusion in the aerospace industry throughout Canada?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:50 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

I would say very directly, Madam Speaker, yes, we do support major investment in our aeronautical and aircraft industry, for the simple reason that if we look around the world, we will see that the most successful aircraft assembly, and quite frankly the only successful aircraft assembly, is in nations where the government is playing a major role. There might be the odd exception or two, but all the major players have significant investment in partnership with at least their national levels of government and sometimes other levels of government too.

As for us somehow believing that magically jobs are going to come here to Canada, I do not know why, or for whatever reason; they might think people just want to be nice to Canada. But that is not the way it is going to happen. There has to be R and D investment. That is why Bill C-4 is important, because it speaks to the marketing end of it.

There is the whole continuum of aircraft development, the research and development, the assembly, the parts assembly, the final assembly, the sale and the maintenance. All these big jobs are big money. I am certainly not going to get into a tussle over whether or not these jobs and investments should go to the member's province or mine. We will deal with that specifically as things come up one-off, but the question the member asked was, do we support in principle the philosophical argument that in order to have a thriving aircraft industry in Canada there needs to be major investment by and a role for the national government? The answer to that unequivocally is oui.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:50 p.m.

Bloc

Marcel Gagnon Bloc Saint-Maurice—Champlain, QC

Madam Speaker, I have listened to the speeches made so far on this extremely important bill for Quebec. My colleague from Argenteuil—Papineau—Mirabel just highlighted how very important it is for Quebec. The industry is shrinking and it should not be allowed to shrink any further. I see the Minister for Transport coming in; he himself mentioned that the aerospace industry is to Quebec what the automotive industry is to Ontario.

In the same vein as what was said earlier, is it not true that it is extremely important to have an aerospace policy that would truly help the industry in view of the fact that, for the most part, this industry is located in Quebec—we can say it is a Quebec industry—and that 240 out of 250 aerospace companies are SMEs? They are the way to the future. To have big corporations, you need SMEs. SMEs as a whole employ 40,000 workers in Quebec. I would encourage the minister to invest in that area.

Would the member, who talked about training, not agree that training is done in part by SMEs? For instance, I know that in Trois-Rivières there are plants that manufacture airplane parts, renovate airplanes, painting them in particular. Their workers are competent and would like nothing better than to hone their skills and become experts in their field. I am wondering if this is what he meant when he talked about getting students to specialize in that area.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:50 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Madam Speaker, in response to the hon. member, I think I did mention in my remarks that one of the benefits of the aerospace industry was the value added jobs. It is hard to have highly skilled workers if there is no decent education system in a country. It is harder to have highly skilled workers if they are hungry or sick. Canada already has a huge built in advantage. We need to build on that advantage.

If I understand the member's question correctly, he is asking about training specifically in the aerospace industry and whether or not we should be focusing some special attention in that area. The member is nodding to me that I do understand his question. I would say yes. How can we possibly have value added, which comes from the skills, education and talents that individual workers have, if we are not investing in the training that results in those kinds of skilled workers?

When we debate down the road, assuming things go the way they are supposed to today, about where the money for EI should go, perhaps we ought to be talking about training with that money. The Liberals seem to have found lots of uses for it. Maybe we should be finding strategic uses for the money which indeed could include highly skilled training, particularly in the aerospace industry.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:55 p.m.

Liberal

Marc Godbout Liberal Ottawa—Orléans, ON

Madam Speaker, let me congratulate you on your appointment to this position. This is the first opportunity I have had to do this.

I am pleased to be able to provide some information on the background and history of the Convention on International Interests in Mobile Equipment and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment.

As evidenced by recent events such as September 11, the global economic downturn, and SARS, the aviation sector is particularly vulnerable to economic shocks and other geopolitical events.

This industry would benefit greatly from a harmonized international legal regime to increase certainty for those providing credit to airlines and aircraft manufacturers.

It was a Canadian delegate to the International Institute for the Unification of Private Law, or UNIDROIT, who first proposed the establishment of an international registry for security interests in aircraft in 1988. More than 15 years later, this initiative has finally become a reality. It is strongly supported by both the airline and manufacturing elements of the aviation industry, as well as by those providing financing.

In the mid-90s, it was decided that the convention and protocol would be developed as a joint project co-sponsored by Rome-based UNIDROIT and the Montreal-based International Civil Aviation Organization or ICAO.

UNIDROIT has 59 member states. It is a leading international organization in the harmonization of private law and the preparation of uniform rules of private law for adoption by states. The ICAO, of which 188 states are members, is the specialized agency of the United Nations for matters relating to international civil aviation, including the recognition of rights in aircraft. Its membership is, therefore, virtually universal.

Canada played a leadership role in the negotiation of the convention and protocol, which are designed to facilitate the financing of aircraft equipment--airframes, aircraft engines and helicopters. There was--

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

1:55 p.m.

The Acting Speaker (Hon. Jean Augustine)

I am sorry to interrupt the hon. member for Ottawa--Orléans. He will have seven minutes remaining.

We will now go to statements by members.

CitizenshipStatements By Members

1:55 p.m.

Liberal

Borys Wrzesnewskyj Liberal Etobicoke Centre, ON

Madam Speaker, two generations ago my grandparents arrived in Canada as refugees. What they found was a land of opportunity and freedom where they could lay down roots and prosper. In time, they started a small business and named it “Future” because they could look forward to their future in this new country.

Today it is an honour to represent Etobicoke Centre, a community that is reflective of Canada's multiculturalism. During Canada's Citizenship Week, let us reflect on the responsibilities of belonging to a proud, strong and multicultural society. This year's celebration centres on the theme of cultivating one's commitment to Canada. Who more can appreciate a commitment to Canada than those who worked so hard to receive citizenship, and who in Canada have found a new home and new opportunities.

I join members of this distinguished House in congratulating the new citizens of our country, firm in the conviction that with each new citizen we are deepening the human diversity and adding to the cultural mosaic that makes this country so remarkable.

Gasoline TaxesStatements By Members

October 18th, 2004 / 2 p.m.

Conservative

Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON

Madam Speaker, it gives me great pleasure to support a motion recently passed unanimously by Renfrew County Council.

The council states that since rural Canadians are not well served by public transit to commute to jobs, attend health appointments or access recreational opportunities, it is necessary to own and maintain personal motor vehicles to seek employment, attend at health care centres and ferry family members to recreational centres.

Excise taxes on petroleum products such as gasoline and diesel fuel have become a financial burden on many Canadians who own and operate personal motor vehicles because public transit is not available to them. The federal government has imposed excise taxes on gasoline of 10¢ a litre, 4¢ a litre on diesel fuel and charges GST of 7% of the total price, and collects royalty taxes at the extraction stage of manufacturing.

Renfrew County Council is calling upon the Prime Minister to immediately roll back the excise taxes on gasoline by 5¢ a litre and on diesel fuel by 2¢ a litre.

Thanks to Reeve Bill Croshaw and Mayor Vance Gutzman for moving and seconding that motion.