Mr. Speaker, I rise to speak to Bill C-44, an act to amend the Canada Transportation Act and the Railway Safety Act, to enact the VIA Rail Canada Act and to make consequential amendments to other acts. I do not think the Liberals, if they tried, could make a title more convoluted or longer. The bill was tabled in the House on March 24, 2005, over six months ago, and the Minister of Transport has shown zero interest in moving it forward since it was tabled. More serious than that, it shows that the Minister of Transport has very poor listening skills.
The Library of Parliament did an extensive analysis of Bill C-44 and stated:
The bill is similar in most aspects to its predecessor bill, C-26, the Transportation Amendment Act, which was introduced in the House of Commons on 23 February 2003.
That is correct. Bill C-44, the new transportation amendment act, is extremely similar to Bill C-26, the old transportation amendment act, which was introduced by the transport minister's predecessor, David Collenette. The fact that Bill C-44 is so similar to Bill C-26 is troubling in a number of ways.
First, on November 12, 2003 the Liberals let the old transportation amendment act die on the order paper when it became apparent that committee witnesses were not in favour of it.
Second, after the mini throne speech of February 2, 2004, the Liberals made no attempt to resuscitate the old transportation amendment act. Presumably the Liberals had learned of the act's flaws and were taking their time to draft much improved legislation.
After the June 28, 2004 election, the member for Outremont was appointed the Minister of Transport in this minority government. In his maiden speech on October 7, 2004 he spoke of his 12 years on the opposition benches and how he had worked hard during that time to restore public faith in elected officials. There was every reason to believe that the new minister, working in a minority government, was interested in seeking consensus and making a difference.
Indeed, on October 15, 2004, when the Conservative member for Niagara Falls stood in the House to debate the transport minister's first bill, he congratulated the minister for introducing legislation that corrected past mistakes. He said:
--[this] bill corrects the mistakes that were made in the last few years by the Liberal government.
I wish all the mistakes that the government has made could be so easily corrected and with so few consequences.
Everyone can imagine our surprise when the new transportation amendment act was tabled embracing virtually all of the old flaws of the old transportation amendment act. Not only was the new transport minister recycling legislation that had been killed by the previous government, he was reintroducing a bill which had been made partially irrelevant by the passage of time.
By way of example, the old transportation amendment act contained provisions that permitted a non-Canadian company to offer domestic air service for “any period of time”. At the time, Air Canada was about to file for protection from its creditors and there were no guarantees that its restructuring would be successful. Indeed, had Air Canada failed, permitting foreign carriers to offer some domestic capacity at least on a temporary basis might have been desirable.
However, the same text exists in the new bill in clause 19. Not only has Air Canada exited from its creditor protection, but WestJet has expanded coast to coast and has started Toronto-Charlottetown non-stop service. The scenario under which a foreign carrier might conceivably be permitted to serve the Canadian domestic market no longer exists. Worse, this clause is present in legislation tabled by the very same Minister of Transport who, in one of his first appearances before the transportation committee, called on members to explore air liberalization.
In fact, at the meeting he handed out a document improbably titled, “Air Liberalization: a Review of Canada's Economic Regulatory Regime as it Affects the Canadian Air Industry”. The transport committee took the minister seriously and conducted hearings into air liberalization, I should mention also at the cost of hundreds of thousands of taxpayer dollars. Given his call for the committee to review Canada's economic and regulatory regime as it affects the Canadian air industry, the committee made recommendations on ways to improve the same regulatory regime for the benefit of the Canadian air industry and Canadian taxpayers.
The recommendations were unanimous and were the result of considerable industry input. The committee called on the government to reduce airport rents by at least 75% and reinvest the money received into airport infrastructure. Other recommendations included the elimination of the air transport security charge and cancelling the obligation of airport authorities to provide free rent to federal agencies.
Finally, there were calls on the federal government to pay for border clearance at airports with regular transborder and/or international services and to fund the cost of implementing federal regulations at small regional airports. The committee's report was tabled on May 19, 2005 and the Minister of Transport replied on September 21. In his response the minister rejected all of the committee's recommendations and justified airport rents as “the result of satisfying the government's real property policy, which is to receive a fair return on public assets that are being leased to private companies or commercialized entities”.
Yet Toronto's Lester B. Pearson International Airport, which handles 33% of Canada's commercial air traffic, will now pay 63% of Ottawa's total revenue from airport rent or airport taxes. Ottawa's greed for airport rent has made Toronto the most expensive place in the world to land an airplane.
Stanley Morais, general manager of El Al's Canadian operation, is on record as saying it costs the airline $12,000 to land a jumbo jet at Pearson international airport in Toronto, compared with $3,000 at Tel Aviv.
When we think of the cost of security at Tel Aviv, the fact that landing fees would be four times higher at Pearson is simply staggering. It is worse when we realize that much of the rent that the Toronto airport pays to Ottawa is for buildings that no longer exist, such as the outdated and recently demolished Terminal 1.
In fact, the blatant unfairness of Toronto's airport rent situation is underscored by the number of unlikely allies that have united their voices in a call to the Minister of Transport and the Liberal government to act. They include: the International Air Transport Association, the Air Transport Association of Canada, the House of Commons Standing Committee on Transport, including all political parties, the Province of Ontario, the Liberal premier of Ontario, the Association of Airline Representatives in Canada, the Toronto Board of Trade, the Canadian Chamber of Commerce, the Greater Toronto Hotel Association, and the Canadian Tourism Association.
Let us not overlook the fact that Toronto's Pearson airport is Air Canada's hub, so it can be argued that extremely high airport taxes at Pearson airport affect the bottom line of the airline that just recently emerged from creditor protection.
Let me repeat that. The Minister of Transport says he is worried about Air Canada's financial health. Air Canada's hub is in Toronto. The fact that airport fees there were the second highest in the world and are now, because of recent changes, the highest in the world is because the Minister of Transport and the Liberal government are taxing that airport into the ground.
Nonetheless, because the minister is concerned about the potential failure of a Canadian carrier, the new Transportation Amendment Act that we are debating today contains the same clauses as the old bill, permitting him to allow a foreign carrier to offer domestic service in Canada under certain conditions.
This would be a huge step backwards. Not only does it ignore the tremendous management-union collaboration in restructuring Air Canada, but it ignores the fact that the problems in Canada's domestic airline industry are not solved by letting foreign carriers fly domestic routes. They are solved by lowering the government charges and fees that hamper the industry. Lowering government charges and fees is consistent with the unanimous recommendations of the House of Commons Standing Committee on Transport, with the suggestions of all experts and with the advice given by virtually every witness, both foreign and Canadian, who has studied the matter.
Moreover, there is a very basic logical flaw in the proposal to let foreign carriers fly domestic routes under certain conditions. The proposal is based on the idea that where a domestic carrier has failed, a foreign carrier might fill the void, at least temporarily. However, this is by no means certain. In fact, on September 20 at the Airports Council International meeting in Toronto, JetBlue founder and president David Neeleman was asked if his low cost airline would consider serving Canada. “No,” he replied, “the bureaucracy and fees would kill us”.
Finally, the idea is 100% opposed to the spirit of what the Minister of Transport said when he appeared before the transport committee on February 21, 2005. He said:
Our objectives are to encourage the creation of new markets and services, to lower costs and increase competition in the interest of Canadians, while at the same time ensuring that the air transport industry remains strong and vital. We can do this by eliminating legislative and regulatory barriers and by changing the economic policies that unduly restrict air transport services.
Since that date, the minister appears to have ignored his own advice and the advice of the transport committee. Granting foreign carriers domestic rights in Canada without first demanding reciprocity would set a dangerous precedent and weaken our bargaining position when it comes time to expand the scope of the Canada-U.S. open skies agreement. This would truly undermine our ability to engage in the open skies negotiations that he says he favours.
I do not want to dwell only on clause 19 of the bill. I hold it up only as an example of how a clause that might have made sense two years ago is difficult, if not impossible, to justify today. Quite frankly, a transport minister who would reintroduce stale, two year old legislation from the last Parliament without updating it is not doing his job.
Canada's economy depends on transport and few industries are more fluid than the airline sector. The situation today is dramatically different from what existed two years ago. The fact that the past legislation was not updated and that the transport committee's recommendations were ignored raises serious questions about the transport minister and his job performance.
In fact, he should have a serious and very frank discussion with Louis Ranger, his deputy minister. Mr. Ranger is very aware of the flaws in the old Bill C-26. The fact that he would have allowed the Minister of Transport to re-table the same flawed bill under a new number makes me question the kind of advice that he is giving the minister in this minority government.
For example, on Tuesday, October 28, 2003, during the transport committee's hearings into the old Bill C-26, Mr. Sean Finn, senior vice-president and legal officer for Canadian National Railway, said:
Regarding clause 40, which deals with the competitive connection rate, this new regulatory provision could bring about re-regulation of the rail industry and, in the longer term, Canadian railways could be treated unfairly. It would provide our U.S. competitors with unfair advantages, which could affect the density of traffic required to sustain the Canadian network, thereby impacting all [Canadian] shippers.
Fundamentally, this provision would allow American railways doing business in Canada to benefit from a regulatory environment that could result in an unfair treatment for Canadian railways.
Essentially, if a shipper can request that we require Canadian railways to offer a rate that would allow him to ship his products all the way to [an] American railway doing business in Canada, we recommend that this provision be applicable only if the American railway is also required to provide the same advantages to CN or CP when they are doing business in the United States. So we are essentially demanding that we ensure a level playing field, in terms of operations and competition, by submitting American railways doing business in Canada to the same requirements that apply to Canadian railways that want to ship Canadian system goods that come from the United States.
Mr. Serge Cantin, general counsel for Canadian National Railway, added that, under the previous system, the competitive connection rate, previously known as the competitive line rate, or CLR, had never been used by a Canadian shipper but only by a U.S. railroad, Burlington Northern, which used it to carry traffic over CP's track and then route it into Burlington Northern's U.S. network.
Given the testimony of how the competitive connection rate would potentially hurt Canadian railways without giving Canadian shippers lower rates, it would have been fair to expect the transport minister to redraft the clause. To my knowledge, the only change that has been made to the former clause 40 is that it is now renumbered as clause 42, but the text and effect are identical.
There are other examples where the new transportation amendment act is actually worse than the old transportation amendment act, despite expert testimony drawing the government's attention to the flaws in the old act. Here we find situations where the government listened to the witnesses at committee and then did precisely the opposite of what was recommended.
For instance, clause 16 of the old bill proposed to regulate the advertising of airline ticket prices. Its stated objective was to combat the sticker shock that happens when a customer sees a low fare advertised but has to pay considerably more when taxes and fees are included. A typical example would be an Ottawa-Vancouver discount fare that is advertised at $398 but costs $534.30 when taxes, fees and charges are included.
To address this situation, clause 16 of the old transportation amendment act would have required any advertisement for an airline ticket that shows the price of the ticket to also show the final price. In our discussion of the old transportation amendment act, we pointed out that the Air Transport Association of Canada had voluntarily agreed to do this before Christmas 2002 and that the sticking point was not the Canadian airline industry but the need to get both Canadian and U.S. carriers to adopt similar advertising strategies for tickets on transborder routes.
As I have observed earlier, roughly two years have passed between the introduction of the old act and the introduction of this new transportation amendment act. In fact, the Air Transport Association of Canada had voluntarily agreed to full price disclosure months before the old act was introduced and ever saw the light of day. Nonetheless, when the new Minister of Transport tabled his new act, he went even further than his predecessor to require a behaviour that the airline industry had already adopted.
Clause 30 of the new bill lets the minister:
--make regulations respecting advertising in all media, including on the Internet, of prices for air services within, or originating in, Canada...requiring a carrier who advertises a price for an area of service to
(a) include in the price all costs to the carrier of providing the service, and
(b) indicate in the advertisement all fees, charges and taxes collected by the carrier....
Not only does the minister want to force airlines to do something they are already doing, but he is trying to regulate the Internet.
Yet in his testimony on May 5, 2003, during the transport committee hearings into the old transportation amendment act, Mr. Warren Everson, who was then the vice-president of policy at the Air Transport Association of Canada, questioned the wisdom of regulating airline advertising. He said:
If tour operators or, say, the United States carriers don't have to abide by this or flout the law, they will be posting prices that are 20% [to] 40% cheaper than those posted in the advertisements in Canada. And if a small carrier in Canada, such as a small charter operation, tells a large tour operator in the United States or a cruise line that this is how they have to do it, that this is how the advertising has to be, it leaves no leverage whatsoever. If he insists on it and they don't care to comply, he'll simply lose the contract. We just don't understand how it's possible for the federal government to assign someone to enforce federal law outside their jurisdiction.
Our conclusion, which will come as no surprise, is that we find this proposed section to be very poorly designed. We find it deceptive as to its intent and likely to cause significant difficulties for the airlines, and we ask the committee to strike it from the bill.
He could not have been more clear. He showed the inherent unfairness of the idea, identified difficulties of enforcement and recommended that the idea be rejected.
While it is true that the text has been rewritten substantially in the new transportation amendment act, the intent remains the same and the obvious difficulties of trying to enforce federal regulations on the Internet or in other countries remain true.
The Liberals want the advertised price to include all of those taxes, charges and fees, but we disagree. When we buy a stereo the price does not include the GST and PST and thus the consumer receives the sticker shock when he or she goes to pay. The Liberals opposite used this example to win the 1993 election with a promise to “kill, scrap, abolish” the GST. They recognized the potential electoral rage that sticker shock could provoke.
On this side of the House, we want Canadians to be much better informed about the government's insatiable appetite for taxes. If paying $136.30 in taxes and fees on a $398 airline ticket encourages consumer outrage against a greedy government with a massive $10 billion surplus, we are all for it. In fact, if gas stations advertised gasoline at 75.3¢ a litre and then told motorists that the real price was $1.10 when they paid at the pump, because of taxes, we would see the kind of public outcry that usually marks the impending downfall of a scandal-plagued government.
There are, of course, a few areas where the new transportation amendment act slightly improves the old act. Clause 27 of the former bill required the Minister of Transport to designate the Air Travel Complaints Commissioner to hold office for not more than two consecutive one year terms. Clause 28 of the bill deletes the position. Transport Canada explains the change in policy as follows:
[The] position of the Air Travel Complaints Commissioner was established as a temporary measure in 2000, following the acquisition by Air Canada of Canadian Airlines, to address potential consumer abuses regarding the quality of service during the transition period. Since then, the market has changed substantially. Air Canada is no longer the single dominant carrier and no longer the main target of complaints, reflecting the fact that there is competition on most major routes in Canada.
Clause 28 of the new bill is perhaps the only concrete example of where the minister has witnessed the evolution of the transport sector over the past two years and updated his legislation to reflect that evolution. Had he truly updated the bill in light of the progress of the last two years and the testimony of witnesses during the committee hearings into the old bill, he could have given the transport committee a bill worthy of serious and full consideration.
Finally, I must turn my attention to part 3 of Bill C-44. In clause 74, the Liberal government proposes to take the private corporation known as VIA Rail Inc. and make it into a crown corporation. The clause is identical to clause 67 of the old Bill C-26. Curiously, when the transport minister's office contacted us before the tabling of Bill C-44, we informed it that in the interest of having a proper discussion of the bill's merits, the clause dealing with VIA Rail should not be included but rather should be introduced later as a separate bill.
That has not been done and I am aware of members of various parties who are calling for it. The fact that the minister, in a minority government, would ignore such a basic request from people from all parties, knowing that members of his own caucus support this position, clearly puzzles me and the House. In any event, my party is 100% opposed to part 3 of Bill C-44 and on this ground alone we will be opposing Bill C-44.
When the Liberal government appointed the Canadian transportation act review panel and it tabled its report, “Vision and Balance” in June 2001, it made two recommendations about VIA Rail.
In recommendation 11.5, the panel recommended “a full cost recovery policy for Quebec City-Windsor corridor rail and its commercialization. As a first step, corridor operations as a whole should be separated organizationally from VIA Rail's other services” and management should be changed. Recommendation 11.6 made a second recommendation regarding VIA Rail and corridor services for commercial purposes having “the freedom required to become and remain self-sufficient”.
Part 3 of Bill C-44 ignores those recommendations, just as the minister has ignored the witnesses and the transport committee itself. Because he has ignored all of this and the information that has been prepared for him and for his department on Bill C-44, I urge members of the transport committee to ignore the bill if and when the House shows the judgment of sending it to them.
The bill should be divided and put into its proper context. There should be more thoughtful and thorough debate and the transport minister should do his homework before putting an omnibus bill before a Parliament that is about to die and show a little bit more respect for the transportation industry.