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House of Commons Hansard #24 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

The House proceeded to the consideration of Bill C-4, an act to implement 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 reported from committee without amendment.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11 a.m.

The Speaker

Given that this is a new Parliament with many new members and that this is the first occasion that we are considering report stage motions to amend a bill, I would like to take this opportunity to briefly explain how report stage motions are treated by the Chair.

There are two initial decisions that the Speaker takes on each motion. The first one concerns procedural admissibility. If the motion does not respect the general rules of admissibility it will not be printed on the notice paper and will be returned to the member with a short explanation. This means there is no opportunity to debate such motions.

The second decision concerns whether the report stage motions on the notice paper will be selected for debate.

The Speaker has been rigorously exercising a power of selection since March 21, 2001, following an amendment to the Standing Orders made on that day, as I recall. The purpose of this discretionary power of selection is to ensure that the main opportunity for amending a bill is in committee stage and not later at report stage in the House.

Report stage exists as an opportunity for the House to examine a committee's work on a bill. If report stage either duplicates or replaces committee stage, then its original purpose is lost and the valuable time of the House is wasted.

The Speaker uses the following criteria for selection: report stage motions will not be selected for debate if they were ruled inadmissible in committee; they could have been presented in committee; they were defeated in committee; they were considered and withdrawn in committee; they are repetitive, frivolous or vexatious; or, they would unnecessarily prolong the proceedings at report stage.

Motions may be selected if they further amend an amendment adopted by the committee, make consequential changes to the bill based on an amendment in committee, or delete a clause.

If members believe that their report stage motion is of exceptional significance but does not meet the selection criteria, they should send a letter of explanation to the Speaker. From time to time the Chair may be persuaded to override the selection criteria in the interest of fairness, and this letter should be sent when the report stage motion is submitted to the Journals Branch.

Finally, I would like to urge all chairs of any committee with a bill before it to afford new members of Parliament every opportunity to participate fully. I recognize that this may take a little extra time but better in committee than in the House.

I would also remind all hon. members, experienced and new, that the committee staff are ready to answer any questions that you may have.

For Bill C-4 there are six motions in amendment standing on the notice paper for the report stage.

Motions Nos. 1 to 6 will not be selected by the Chair because they could have been presented in committee. Consequently, the House will proceed to consider the motion to concur in report stage.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:05 a.m.

Barrie Ontario

Liberal

Aileen Carroll Liberalfor the Minister of Transport

moved that the bill be concurred in.

(Motion agreed to)

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:05 a.m.

The Speaker

When shall the bill be read a third time? By leave, now?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:05 a.m.

Some hon. members

Agreed.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:10 a.m.

Barrie Ontario

Liberal

Aileen Carroll Liberalfor the Minister of Transport

moved that the bill be read the third time and passed.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:10 a.m.

Scarborough—Agincourt Ontario

Liberal

Jim Karygiannis LiberalParliamentary Secretary to the Minister of Transport

Mr. Speaker, I am pleased to have the opportunity today to rise and address the House on Bill C-4, the international interest in mobile equipment (aircraft equipment) act.

The bill would permit the implementation of the provisions 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 that are within federal jurisdiction. It incorporates most of the provisions of the convention and protocol by reference and other provisions through amendments to existing legislation.

The convention and protocol will establish an international harmonized framework for the financing of aircraft equipment. Within this framework the value of the aircraft would be used as a security for payment as in the case of a mortgage or a financing lease.

The adoption of the legislation and the eventual ratification of the convention and protocol will help the Canadian airline and aerospace industries compete more effectively in the global economy by providing greater security for creditors.

The proposed amendments to the federal legislation will reduce the financial risk to creditors, allowing them to make greater levels of financing available for aircraft purchasing at more competitive rates. This will translate into lower costs for airlines purchasing or leasing aircraft which in turn will enhance their competitiveness and strengthen the airline and aerospace sectors. The expected result is a direct positive impact on earnings, investment and overall profitability for the Canadian aviation sector.

Canada played a leadership role in the negotiation of a convention and protocol because various groups, including provinces, territories, airlines, industry associations and aircraft manufacturers, supported the objectives of the instruments.

The convention and protocol were negotiated over the period of 1996 to 2000, with the support and participation of various groups. The negotiation process came to fruition in 2001 with the adoption of the instruments at a diplomatic conference in Cape Town, South Africa.

For the record, I want to read some notes about what happened.

In 1988 a Canadian delegate to the International Institute for the Unification of Private Law, UNIDROIT, was the first to propose the establishment of an international registry for security interests in aircraft. Since then, the governments and industry worldwide have cooperated in developing the convention and aircraft protocol.

Canada's active involvement in the negotiations, leading up to the adoption of the convention and aircraft protocol, highlighted its commitment to seeking global solutions to global problems, in cooperation with the rest of the international community.

It is evident, with recent events such as September 11, the global economic downturn, high fuel prices, SARS, which was an epidemic in my riding, that the aviation sector is particularly vulnerable to economic shocks and other geopolitical events. The industry needs to harmonize the international legal regime to reduce risk and increase certainty for the aviation creditors and this protocol will do that.

On March 31 Canada became the 28th state to sign the convention and protocol. Other countries with significant airline and aerospace industries, including France, Germany, the United Kingdom and the United States, have also since then signed.

Along with the adoption of the convention and protocol, Bill C-4 provides for targeted amendments to various piece of insolvency legislation and to the Bank Act. There are currently various periods within which creditors are subject to a stay under the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-up and Restructuring Act. There are no existing rules that apply specifically to aircraft and aircraft equipment. This is something that is hamstringing the industry. The industry is asking for a unified solution. The industry is asking that we come forth with specific regulations to the industry, and this is what we are trying to do here today.

Bill C-4 and the convention and protocol that it seeks to bring into force provide for a special remedy for creditors in the case of insolvency. It would impose a maximum stay period of 60 days on creditors with security on aircraft or aircraft equipment. This would give creditors, the financiers and the companies 60 days in which to come to some sort of an agreement or to hash things out. The adoption of this stay period will allow creditors to reclaim aircraft or aircraft equipment after 60 days if the debtor does not incur defaults under the security agreement. This will increase certainty for creditors by reducing their financial risks, resulting in lower financing costs.

Let us go over a couple of other facts. Consumers will benefit too through increased airline services and/or lower fares. Another benefit of facilitating the acquisition of more modern aircraft is that air transportation can become safer and environmentally cleaner.

The adoption of a fixed 60-day period will level the playing field between Canada and the United States, since the United States already benefits from a similar provision under the U.S. bankruptcy code. Stakeholders were consulted and supported the proposed approach.

The adoption of significant amendments to Canada's insolvency laws is expected to have benefits for Canadian aircraft manufacturers, financiers and airlines on the international level.

The convention and protocol would also establish an international registry in which interests in aircraft equipment would be registered.

Currently, in Canada each province and territory maintains its own registry and the federal government maintains a separate registry, as mandated by the Bank Act. We have one central registry for Canada and throughout the provinces other registries, which certainly hamstrings the industry and it presents obstacles for the industry. Bill C-4 would try to smooth things by having one international registry. The establishment of a single worldwide registry would replace the federal and provincial registries and would greatly simplify aircraft registration. We are talking about one registry, world wide.

If people want to see what is happening with the planes, or who owns them or who has liens on certain planes, they can go to the proposed registry 24/7 and see how they can reclaim equipment. The creation of the international registry is viewed by stakeholders, including the legal community, manufacturers and financiers, as providing a considerable advantage in terms of time, cost savings and improved certainty.

The Bank Act special security regime also allows banks in Canada to register security interests on a national basis for certain products listed in the act. The type of products that can be registered under the Bank Act are technically broad enough to include aircraft equipment covered by the new protocol. However, it appears that the Bank Act special security regime is rarely, if ever, used to register aircraft.

By bringing Bill C-4 forward, we would have an international registry. We could register aircraft and people could act upon it. Nonetheless, amendments to the Bank Act would be required to avoid potential overlap with a proposed international registry. The most effective means of doing this would be to remove aircraft equipment from the scope of the Bank Act, as set out in the bill.

Normally, matters relating to security interests fall within provincial jurisdiction. The provinces, through the Department of Justice Advisory Group on Private International Law, identified this initiative as one that we should pursue. As a result, Canada participated in the development and negotiation of the convention and protocol.

Once again I would like to state the work that was done by individuals throughout the whole process. A Canadian came out with it about 16 years ago. He said that we had to have this. A delegate to the International Institute of Unification of Private Law, UNIDROIT, was the first to propose the establishment of an international registry for security in aircraft. This is something of which we, as Canadians, can be proud. This is something that puts Canadians ahead and is an example for the rest of the world to follow.

Provinces were regularly consulted and showed support throughout the process leading to the adoption of the instruments. As an side, I hope we have such cooperation with the provinces in all the work that we do in the House. Provinces to date continue to be consulted through the Department of Justice Advisory Group on Private International Law and the Uniform Law Conference of Canada and consistently demonstrate interest and support for the convention and protocol.

Some provincial implementation legislation will be required before the convention and protocol can take effect in respect of Canada. With this in mind, the provinces developed a uniform implementing act at the Uniform Law Conference of Canada. Since then, Ontario and Nova Scotia have passed implementing legislation that will enter into force when the instruments take effect in Canada. We are working with other provinces and territories to ensure that what Ontario and Nova Scotia have piloted and brought to table will be followed. Adoption of the bill will encourage the remaining provinces, especially those with significant aviation interests, to pass their own implementing legislation.

I reach out to members across the way, as well as members on this side of the House, members who represent those provinces which have a significant aviation industry, to talk to their provincial colleagues and say to them that it is time we do this, that we should get on with it to ensure that Bill C-4 is a unified bill in Canada and that Canada is one of the first which is unanimously there.

This is an important step toward eventual ratification of the convention and protocol which would confer significant benefits to Canada's airline and aerospace industries and to the Canadian economy more broadly. I look forward to the passage of Bill C-4 and encourage all my colleagues to support it.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:20 a.m.

Conservative

Paul Forseth Conservative New Westminster—Coquitlam, BC

Mr. Speaker, I appreciate the member's comments, but I wonder if he could advise the House on how the bill relates to the international list of countries. How does it relate to the relationship to the United States and the European Union? Perhaps he could also talk about countries outside the European Union like the Soviet Union, Belarus and other countries. We have aircraft that go back and forth from these countries. However, the ability to have financial claims is a concern. Canadian investors have a great concern in investing in Russia because of the way it treats the discharge of debts.

Could he comment on how the bill relates to other countries on the list? Does that stand us in good stead? Are we ahead or behind or are we just following along?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:25 a.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, Canada is a leading contender in trading with other nations besides our biggest trading partner the United States. Our third biggest trading partner is China followed by the work we are doing with the European Union, another large trading block of ours. If memory serves me correct, there are over 68 countries and more countries have been invited to sign the protocol.

We are constantly reaching out to member countries that have an aerospace industry, countries that we fly to and that fly into Canada. I encourage them to sign on. The United States was one of the first countries to sign the protocol. European countries have been at the table.

We are looking forward to working with all members in the House of Commons as well as with our international contacts to ensure that this is an international registry and to ensure that the rule of law applies uniformly throughout the world. In countries where the rule of law does not exist, we will at least be there and ensure that leases and mortgages for aircraft are there for people to answer that concern.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:25 a.m.

Conservative

Rob Nicholson Conservative Niagara Falls, ON

Mr. Speaker, the parliamentary secretary indicated quite correctly to the House that it was going to take more provincial governments signing on and implementing this protocol before it takes effect. He pointed out that both Ontario and Nova Scotia have already signed on.

Earlier in his speech he indicated that the department is in continuous consultation with the provinces with regard to this matter, along with other branches of the federal government. Toward the end of his comments he urged hon. members to contact their provincial counterparts. However, I think he would agree with me, as important as it is to contact our provincial counterparts regarding this important piece of legislation, that leadership will still have to come from the department and the government.

In that regard, is the parliamentary secretary aware of how far down the road we are on this? Can he give us some sort of prediction that we could rely on as to when this is going to be fully implemented? In as much as his department and the Government of Canada are in constant communication with the provinces, how soon is this going to be implemented?

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:25 a.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, my hon. colleague is fully aware that, although we set out timelines, little glitches might take us back a couple of days or a couple of weeks.

On March 31, 2004, Canada signed the convention and aircraft protocol. We are currently in negotiations with the provinces. The Department of Justice is working on this as well as the Department of Transport. We hope to have it ratified sooner rather than later. If I were to guesstimate, I would say that this should be in place sometime in early or mid-2005. Should the bill go through here today and through the Senate, that would lead the way in ensuring that ratification of the protocol goes through the provinces quickly.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:25 a.m.

NDP

Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I was of the impression from committee meetings that the signing on by other provinces was not necessary for this process to take place. As long as the provinces that had signed on wanted to be involved it could still happen. I was of the impression that it was not absolutely necessary for each and every province to sign on and that they could do it at any given time. I wonder if the member would care to comment on that.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:25 a.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, we want to encourage the provinces to join in and we are working to that effect. Two provinces that have great aircraft and aerospace technology have signed on. We hope that other provinces will sign on so we will be able to speak as one voice and when we do go to the international registry, the whole thing, as one would say, would hum on all four cylinders. We are all working in order to make that happen.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:30 a.m.

Conservative

Rob Nicholson Conservative Niagara Falls, ON

Mr. Speaker, Bill C-4 is called an act to implement 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. That is quite a mouthful. Bill C-4 would establish an international registry whereby creditors and debtors could register interests in what is referred to as mobile equipment. Mobile equipment is more specific than that generic term. It includes aircraft, helicopters, and could even include satellites.

What can be reasonably said about this is that there has been unanimous consent and support for this legislation, and I think that is appropriate. The matter was referred to the Standing Committee on Transport after a reasonably short debate in the House and it was interesting to me that we did not have one objection to this piece of legislation. We had, on one afternoon, representatives of the aircraft industry and they made generally very supportive comments. I was a little surprised that right at the final minute of the testimony it was suggested to us that a couple of minor amendments could be made to the implementing legislation.

As you know, Mr. Speaker, you ruled earlier today that those amendments will not be entertained. The Senate has a role in our parliamentary system, and part of that role is to have another look at those things that are done by this chamber. I would hope that the Senate would have a look at those amendments.

I believe that they are technical in nature. Indeed, one of them is very technical. One of the amendments is to remove one of the zeds that describes one of the subparagraphs. I am sure there will be many controversial matters before the 38th Parliament. Removing one z from the English translation of this is not something that will be objected to, I am quite sure. I hope that the Senate would have a look at that.

The representatives of the industry also pointed out a number of things in relation to the definition of a creditor. They indicated that the definition of a creditor in English common law is somewhat dissimilar to that for instance in the civil code. They were concerned that any definitions that were used in the bill would coincide with the different types of law so that there would be some certainty. Indeed, that is what this bill is all about, it is to establish some certainty in this particular area.

That is a good thing, and not something that is unusual. We have a couple of different systems of law in the world. When Canada drafts legislation, we must be cognizant of the fact that one of the provinces of Canada has a civil code and nine of the provinces have English common law. Throughout the world, it is split basically between the two systems of law.

I always remember a colleague of mine who was trying to get some evidence entered into a court case in Sweden. He had his client prepare what we refer to as an affidavit in common law. The affidavit is a statement by an individual that is then sworn out by a notary public or a commissioner of oaths and affidavits. My colleague sent this to Sweden with the appropriate translation. I asked him some time later how it went and he said that the authorities had no knowledge of what we were talking about in regard to affidavits. Because one swears to a statement as being true does not make it any more or less true within the system of law as it is applied in Sweden. So, again we see the two systems of law coming together.

When it was brought to our attention in this particular legislation that we should have another look at the definition of creditor, and that we should clarify the provisions with respect to bankruptcy, one of the areas of federal jurisdiction, it seemed to me to make sense.

I am hoping that those matters will be taken up by the other chamber. If they are brought back here as an amendment, I think we can be reasonably certain that the House will accept them.

Again, the bill itself went through very smoothly. I want to thank my colleagues in the Conservative Party who have taken an interest in the bill. They all had a part in ensuring and satisfying themselves that this was good legislation. I particularly want to thank my colleague, the member for Regina—Qu'Appelle. He realizes that a healthy airline industry in this country is not only good for his province but good for Canada. I appreciate his support in this as I do indeed of all my colleagues. I congratulate the members from the other parties as well.

I think this is a great step forward. In the debate on second reading I pointed out to the House that for a couple of centuries there has been a great deal of certainty in the shipping industry when it comes to security interests. Indeed, the laws as they pertain to all sea going transportation have been relied upon by most of the countries of the world because people want certainty above all else.

I saw an article that talked about some transactions between Japan and Chile. Those two countries, for the purposes of their transactions, adapted certain elements of British admiralty law. Why? It was not because they had to. It was because it made sense that if there was one law, one set of rules governing the shipping industry in the world, then they were better off because it was easier to do business.

It seems to me that this too is a step forward in the right direction. If we have an international registry where creditors, lenders and debtors can look to one place and see whether there is a security interest then we are all better off. This is why it is not a surprise to me that everyone in the airline industry supports this, as well as the lenders. If people are in the position of lenders and trying to finance an airplane, they want to have some certainty that if something goes wrong with the transaction, they will be able to reclaim their security item.

If people are asked if this is a problem, it certainly can be a problem. In the testimony that the committee heard we were told of one example of a plane that a Canadian lender was trying to repossess because of non-payment and he ended up paying off everyone. Apparently everyone had a claim on this plane that was in Mexico. I believe the last person to be paid off was the wife of the airport manager.

This is exactly what we do not want to happen. We are all better off if there is some certainty because the airline industry then can obtain financing at a lower cost and a lower interest because of the security it is able to give. Lenders are more willing to invest in the industry knowing that they can realize on their security if that becomes necessary.

Bill C-4 is a step in the right direction. I have indicated to the parliamentary secretary in my question to him that this is not the end of the debate. Even if the bill is amended by the Senate and it comes back to the House and those amendments are concurred in, work has to be done with the provinces and the sooner the better. Other countries will have a look at what is being done by Canada. If these countries see that Canada has passed this legislation and implemented this protocol and convention, it seems to me it is an encouragement for them as well.

The sooner we have one system in place in the world, one registry where these security interests are registered, the better off Canada will be. I think that will be a tremendous step forward for the airline industry. Members of the official opposition support this because it is good legislation. The sooner it is implemented the better.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

November 15th, 2004 / 11:40 a.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Mr. Speaker, I want to say from the outset that the Bloc Québécois supports Bill C-4, as we said when the bill was at second reading.

As we know, this bill seeks to implement two international agreements, namely 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.

Of course, this was aptly mentioned by some hon. members previously, but these two agreements, negotiated under the International Institute for the Unification of Private Law, in cooperation with the International Civil Aviation Organization, ICAO, whose head office is in Montreal, were adopted during a meeting of participating countries held in Cape Town, South Africa, in the fall of 2001.

Currently, 32 countries have signed or ratified the convention and the protocol. While the European Union intends to do so, Canada signed these agreements in March 2004. The purpose of these agreements is to have signatory countries standardize their legislation with respect to the security—or mortgage, in layman's language—lenders take on mobile equipment such as aircraft or trains.

These agreements also provide 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.

At the present time, there is a great deal of confusion. A carrier can be subject to the law of one country, have loans from lenders in two different countries, owe money to an aircraft engine manufacturer in a fourth country, who has placed a security on one engine in the event of non-payment. Worse still, when lenders decide to execute a seizure, the good itself could be located in a fifth country.

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 higher interest. Moreover, currently every country keeps its own aircraft registry using its own criteria, which might create a great deal of confusion.

Passing this bill and other similar legislation in other parts of the world will help end the confusion, reduce risks to lenders and, thus, costs to borrowers. It will help improve the capacity of airlines to purchase aircraft. In turn, this will help the aerospace industry which sells the aircraft, not to mention that it will be easier for companies in the industry to deliver the aircraft under lease, if their assets are better protected.

Before ratifying the convention and the related protocol, Canada must first adapt a number of its laws. It has to abolish its national aircraft registry and replace it with the international registry. It also has to amend its Bank Act, Bankruptcy and Insolvency Act, Companies' Creditors Arrangement Act, and Winding-Up and Restructuring Act. That is the purpose of Bill C-4.

Of course, this legislation can deal only with matters of federal jurisdiction. Matters relating to loan guarantees are more matters of civil law, which comes under provincial jurisdiction. Therefore, the implementation of the convention and protocol will be possible only if Quebec and the provinces also amend their own legislation.

All the more reason to involve the provinces closely in any negotiations and in the signing of international agreements. In addition to allowing them to defend the interests of their citizens, such involvement would make the implementation of international treaties much easier.

Let there be no mistake. I hope the government realizes that, while Bill C-4 is a step in the right direction, it does not solve the real problem in the aerospace industry, which is the lack of an aerospace policy.

In case this government has forgotten, especially because of its lack of action, 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. It is urgent that the government put in place a real aerospace policy.

The aerospace industry exports 89% of its production and must be competitors, which get much more support.

We know that two of the main employers in Quebec's aerospace industry are Bombardier and Pratt & Whitney. They have 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 or some other country 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 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 that it is time to take action 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 been calling for an aeronautics and aerospace policy for years now.

As far as Bill C-4 is concerned, the convention has a number of advantages for the transportation industry. By clarifying and harmonizing the rules concerning securities and inaugurating a single and readily accessible register, the convention lessens the risks for lenders and for lessors. If the contract is less risky, financing will become easier for airlines to obtain, and the cost of borrowing, that is the interest rate, is also likely to decrease. All of this ought to make things easier for airlines wishing to acquire new aircraft as well as improving prospects for the aircraft construction industry.

The purpose of Bill C-4 is to adapt federal legislation to the requirements of the convention, Among other things, it includes the abolition of the Canadian registry of aircraft and transfer to the international register; amendments to the Bank Act, to replace the references to the national registry with references to the international registry; amendments to the Bankruptcy and Insolvency Act to harmonize the payment order lists for the secured creditors, and amendments to the Companies' Creditors Arrangement Act to ensure that a company cannot give as a guarantee something that is already used as an international guarantee, and to the Winding-up and Restructuring Act for the same purpose.

For all these reasons the Bloc Québécois will be supporting Bill C-4.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:50 a.m.

Bloc

Mario Laframboise Bloc Argenteuil—Mirabel, QC

Mr. Speaker, first I would like to congratulate my colleague on her learned remarks as well as on her appointment as our party's transport critic. This is the file that I was dealing with during the last Parliament. Now my past is catching up with me. I am thus the critic for infrastructure and communities, which encompasses municipalities, of course.

My colleague summarized Bill C-4 quite well, but also gave details on the future of the aerospace industry in Canada. My question will focus on that. The Minister of Transport quoted Jean Chrétien, when he was the Prime Minister, saying, “The aerospace industry is to Quebec what the automobile industry is to Ontario”. It is good to repeat this, and it was dramatic for us in Quebec.

They closed the GM plant in Boisbriand. Before the election, they invested $500 million in an automobile industry recovery program in Ontario. However, there is still no money for the aerospace industry, which is concentrated to a large extent in Quebec.

It is on this issue that I ask myself the following question. Yes, it is good to introduce a bill such as Bill C-4, which promotes bank interests in aircraft. The problem in the aerospace industry at this time is that no bank wants to lend money for aircraft. If we established a national register, it would be good when the industry recovers. However, in the meantime, we need major assistance for the industry.

I would like my colleague to elaborate a little further on this assistance that might be provided by the government, whether in loan guarantees, or simply in aid to develop new aircraft, as Bombardier is asking, and also Bell Helicopter for its helicopters.

Consequently, there should be a real policy on the development of the aerospace industry in Canada. I would ask my colleague to elaborate a little on this.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:50 a.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Mr. Speaker, I thank my colleague for his question. It is a bit strange that it has been put to me. The government should be asked this question.

We have been waiting for years for an aerospace policy. The Liberals have been in power for a very long time, for too long, actually, and have never introduced any sort of aerospace policy. We have been experiencing problems.

When my colleague was the transport critic, I know he worked on this issue. Since the government does not seem to be doing anything, the Bloc Québécois will soon present an aerospace policy. This government is slowing us down. Is it short of ideas because the aerospace industry is an issue that concerns Quebec? If Ontario had been concerned, would the government have moved more swiftly? I am really wondering.

As to my colleague's question, I think we should invest more in industrial research and research and development. This is a very important foundation. We should also support the industry at the international level. We do know that other companies in the world are subsidized much more heavily than Canadian companies.

We will have to invest through the technology partnerships Canada program. This would be a way to help the industry. We should also encourage exports. This market is essentially an international market, and not necessarily a Canadian market. We should support the industry.

We could discuss this at length, but, personally, I would expect the government to propose something. If it had any leadership and initiative, and if it was the least bit interested, it would come up with concrete measures. But, given this lack of leadership, it is probably the Bloc Québécois that will present an aerospace policy which will meet the industry's needs.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:50 a.m.

Scarborough—Agincourt Ontario

Liberal

Jim Karygiannis LiberalParliamentary Secretary to the Minister of Transport

Mr. Speaker, I want to thank my hon. colleague and the members of her party for their support in committee and in the House in order to make sure that Bill C-4 has swift passage. However, when the hon. member says we are not forward looking in helping the aerospace industry in Quebec and there is no leadership, I beg to differ. Not only is the aerospace industry important to Quebec, it is important to the rest of Canada.

I want to point out to my hon. colleague that just last week I went to Cyclone Manufacturing, a manufacturing facility located in the riding of my hon. colleague behind me. It is located at Rapistan Court, Mississauga. It has been in business for 40 years. Its president, Andrew Sochaj, held a celebration for the company's 40th year in business. Industry Canada was there. We are helping the company and working with it. Infrastructure support has been provided by Industry Canada. This is an industry that started 40 years ago by providing small things to the City of Toronto and has suddenly grown to be a leading industry in the world, providing aircraft parts around the world.

That is why I am wondering about my hon. colleague saying that this government has not taken any action. I want to point out to my hon. colleague that this is not the case. There is active participation on the file. The Minister of Industry and the Minister of Transport are working diligently. This government has provided leadership in order to make sure that the aerospace industry is leading edge, and the auto file is also something that we are working on. Making statements that this government has absolutely done nothing is something that I think my hon. colleague might want to examine.

The Government of Canada and its ministers are supportive of the aerospace industry and of the auto file in Ontario. We are working diligently with all members of the House to make sure that we have leading edge technology that will make us leaders for the 21st century, especially in the aerospace industry.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:55 a.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Mr. Speaker, I know that I might have offended the parliamentary secretary when I talked about the realities that we have to face in Quebec, particularly regarding this non-existent aerospace policy at the federal level.

He might have found his little visit interesting, but I also invite him to go and meet the people from Bombardier or Pratt & Whitney who face problems daily.

We know that the Brazilian government has financed an average of 80% of Embraer sales. And what is our federal government doing? I think we are now at 37%. We are far from meeting the needs.

We know that investment in the area of industrial research is essentially increasing by about 8% every year, while the money invested by the federal government stays more or less at the same level. There is no increase while the needs are growing.

If the member feels threatened, he can talk to his Minister of Transport, or to the Minister of Industry, to ensure that this government will have some sort of aerospace policy to propose tomorrow. However, as far as I am concerned, this government is not at all giving Pratt & Whitney and Bombardier the help that the industry needs.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:55 a.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, I want to point out that Cyclone is located in the riding of my hon. colleague, the member for Mississauga—Streetsville.

My hon. colleague across the way said that we have not engaged Bombardier and have not been talking to them. I do have to differ. There are ongoing conversations and ongoing negotiations. Members of Parliament from all parties are encouraged to participate in the file, to talk on the file and to engage us. I am looking forward to the member's party coming forward with some innovative ideas. We are looking forward to working with that party to make sure that the aerospace industry is leading edge in Canada. Certainly the participation in this Parliament has to be there.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:55 a.m.

Bloc

Caroline St-Hilaire Bloc Longueuil, QC

Mr. Speaker, this is what I call lack of leadership. This government should be the one to propose concrete ground-breaking measures, but it is the opposition that will have to do it since the government seems to lack imagination, but that will come.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

11:55 a.m.

NDP

Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I want to acknowledge the number of comments made here this morning on this legislation. It is quite apparent that the legislation seems to have overwhelming support among the different parties.

To briefly comment on it, because I do not want to rehash everything that has already been said, the New Democratic Party broadly supports the bill and the Cape Town convention on mobile equipment. The ratification of the protocol could be a positive development for Canadian industry and Canadian workers as well as support for international development. The convention could also promote the use of newer, cleaner and more environmentally friendly aircraft, and actually that is one point that is not brought out here. Again, this is a bill that could give those countries that do not have a lot of dollars to work with an opportunity to purchase new rather than second-hand or used aircraft that other countries or airlines put up for sale.

Just to make it very simple for the Canadian public, because we all acknowledged at committee that this was very much a technical bill, our biggest challenge was in making sure we were not missing something just in case there was some underlying sneak attack on us that we did not want to miss. As committee members, we acknowledged that the legislation is very technical. In checking with people involved in the industry, we found that it was broadly supported so it certainly was not our intent to hold it up.

I am going to try to simplify it as briefly as possible. The bill makes it easier and more orderly for people who lend money to an airline for purchase of a new aircraft to repossess that aircraft in the event that the borrower stops paying off the loan.

The international registry will keep track of every aircraft, listing who owns it and/or who owes what on it. This will facilitate the return of the aircraft to the lender in the event that the borrower stops paying. In theory, the result should be somewhat lower financing costs for countries where the credit risk is perceived to be too high, especially in developing countries, but the new mechanism will apply to all aircraft purchases.

An international mechanism is necessary because of the big differences between countries in terms of their respective bankruptcy laws and because of the ability to move aircraft, unlike tangible assets that are used in collateral loans. There is a potential benefit for the Canadian aerospace industry.

As has already been stated by my colleague from the Bloc, loans are under provincial jurisdiction and, for this reason, it is necessary for the provinces to come on side and enact their own legislation to work concurrently with this piece of legislation.

To try to clear up what happened at committee, I want to make a comment related to the amendments that were supposed to be put forth on this bill but were not. I acknowledge the Speaker's comments today and I think we take them as justifiable comments. As a committee, we were hearing from witnesses. Right toward the end of the witnesses' presentations, they mentioned that we needed amendments in the bill to acknowledge the differences in language.

My colleague from the Conservatives has mentioned this as well: the differences in language between different countries and how things are perceived. Within this legislation there were two terms that we would see as maybe having the same meaning, but which would not necessarily be seen that way elsewhere. So we know that we have a piece of legislation before us which we need to vote on, but as committee members we think--and certainly other members of Parliament now know--there is something missing in the legislation, which is going to make it hard to deal with. I am not totally sure about how the government is looking at addressing that.

It has been mentioned that the government has been dealing with this convention for a number of years, but had the government come forth with a complete bill with those changes it would have had support. It is certainly not our intention to hold up the legislation or to make it unworkable. It will be interesting to see how we deal with this, because this is actually one time where we do have agreement. The government, by not getting the job done properly, has created a problem for the industry and it is going to take up a bit more of Parliament's time to deal with it.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

Noon

Scarborough—Agincourt Ontario

Liberal

Jim Karygiannis LiberalParliamentary Secretary to the Minister of Transport

Mr. Speaker, I thank my hon. colleague for her comments and her party for its support for this bill. However, I do want to set the record straight. The government has done due diligence. It has reached out to all stakeholders.

My hon. colleague was there when the industry stakeholders said they would like to have a last minute change. They said they would like to have some last minute amendments. My hon. colleague was right there at that point. She could not not have seen this. She was right there. It was visible. Automatically, as soon as the committee left, officials from the Department of Transport and the Department of Justice sat right there, and we proceeded to make sure that the amendments they were suggesting were something that we worked on. It is not that the government did not do due diligence. It is not that this government did not do what it must. It is just that the industry said this at the very last moment. All of the industry has been consulted. It has been asked. We sat down at the table with the industry. At the very last moment, industry said, “We would like to add these too”.

I am sure my hon. colleague will agree with me that automatically we jumped at the opportunity to make sure that happened. Saying that this government has not done due diligence and is asleep at the switch is certainly a little far fetched, I think. If my hon. colleague would clarify for the record that this was done, I certainly would be very appreciative.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:05 p.m.

NDP

Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I certainly agree with how my colleague, the parliamentary secretary, has portrayed what took place at committee. Quite frankly, that is exactly what I was saying; I said “the witnesses” and he said “the industry”. I was trying to be more tactful and suggest that it was not the industry that prepared the legislation but the government. I guess the parliamentary secretary has made it quite clear who actually prepared the legislation and where the fault was in the legislation.

International Interests in Mobile Equipment (aircraft equipment) ActGovernment Orders

12:05 p.m.

Liberal

Jim Karygiannis Liberal Scarborough—Agincourt, ON

Mr. Speaker, I do want to thank my hon. colleague, but there is a need for clarification. It is not the industry that came forward with this legislation. It was the government that came forward, reacting to the industry's request. It was the government that took the initiative, and when the stakeholders of the industry came forward and said they would like us to add a few things, it was the government that did. As for stretching it this way or that way, I think we are all supportive of this bill. My hon. colleague and her party are supportive. All the parties are supportive. I will let it go at that, but I just wanted to set the record straight.