Debates of March 1st, 2007

Opposition Motion—Aerospace Industry

[Sylvie Boucher, Conservative, Parliamentary Secretary to the Prime Minister and Minister for la Francophonie and Official Languages]

Mr. Speaker, I am pleased to take the floor today to discuss this motion by my colleagues.

The motion before us calls on the government to provide fair regional distribution of economic spinoffs for all future contracts.

I am pleased to give the House the assurance that the government intends to provide fair regional economic spinoffs for future contracts, just as it has been doing up to now. And I can say that with confidence because of the rigorous process through which all Canadian industrial spinoffs are developed and approved.

As you know, the government is deeply committed to asserting Canada’s place in the international community. In order to do so, it needs to purchase important defence equipment. In the next few years, we will spend billions of dollars buying helicopters, ships, trucks as well as strategic and tactical aircraft.

These capital expenditures have to follow a very specific procedure. First, the national defence department identifies military needs. When that is done, it informs Industry Canada and Public Works and Government Services Canada that it intends to purchase new equipment.

Industry Canada’s role, after that, is to establish the requirements that are necessary for Canada to benefit from industrial spinoffs under the industrial and regional benefits policy.

This policy provides the framework through which the government levers large defence procurements to generate sound domestic economic activity. We demand that, for each dollar the Government of Canada spends for defence procurements, one dollar be invested in Canadian economic activity. We cooperate with potential suppliers so that Canadians can benefit from sustainable spinoffs based on high quality technology.

The investments do not have to be directly related to the equipment being bought, but we expect they will be linked to a line of products of similar technology or research and development that will improve Canada’s innovative capacity. The government’s role is to make sure all regions in Canada can derive some benefits from these procurements.

Industry Canada works with regional development groups, among others, in order to get advice on expertise and participation in outreach activities in the regions with the industry. We encourage the main contractors to engage in such activities in Canada as a whole, by travelling throughout the country to meet with potential Canadian partners and suppliers.

The final acquisition documents that Public Works and Government Services Canada will make public contain directives intended for potential bidders on the industrial benefit requirements.

When it gets the bids, the government does a three-part evaluation: a technical evaluation done by DND; a financial evaluation done by PWGSC; and an evaluation of industrial benefits done by Industry Canada in collaboration with regional development agencies.

Once the evaluation is completed, the government announces the name of the supplier that was chosen and starts negotiating the final general conditions of the contract. Industry Canada takes part in the negotiations and focuses on the main contractor's industrial benefits plan.

Furthermore, as I have already indicated, Industry Canada officials work closely with regional development agencies. They work directly with Canadian businesses across the country in order to point out existing opportunities and help businesses seeking contracts, in order to emphasize the importance of Canada-wide involvement and highlight the capabilities of these businesses.

The government encourages contractors to establish partnerships that make good market sense because that is how we can help create business relationships which will last long after the benefit requirements have been met. We also evaluate carefully the transactions being considered as benefits. These transactions must meet three criteria for Industry Canada to judge them satisfactory.

First, the work must be associated with the procurement program. Second, the work must be done during the period specified in the contract. Third, the work can be based on existing business relations but only the new work counts towards meeting the conditions.

Our government has tried to improve the spinoff process to integrate it more harmoniously into all procurement programs. In the case of aerospace projects, we now insist not only that the Canadian spinoffs have high value and be in high technology, but we require that at least 30% be in the nine key technologies. That ensures that our industry is getting the maximum benefits from our procurements, now and in the future.

Canadian benefits are a serious contract obligation and Industry Canada requires annual reports, audits and performance guarantees. Every year, contractors must report on what they have done in that regard. Financial penalties can even be imposed in case of non-compliance, but we have never so far had to impose such penalties.

In general, the procurement process is the result of the collective efforts of a number of departments. Industry Canada takes an active part in the process to ensure that aerospace and defence industries are getting the best possible benefits from the procurements.

Our position on defence procurements is clear. All regions of Canada can benefit from the spinoffs. All Canadian aerospace and defence companies have the necessary skills, expertise and capability to act.

We have been working with contractors from the aerospace industry to get the maximum benefits from opportunities in the area. And we will continue to do so.

Our wise strategic approach will allow us to establish lasting long-term trade partnerships that will benefit Canadian businesses and the contractors with which they work.

As can be seen, our government's approach to spinoffs is based on the firm confidence we have in the strengths and the capacity of our aerospace and defence industries. Our approach is fair for all regions of Canada. We will use the same approach in future procurement programs.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, does the member for Beauport—Limoilou admit—and this is my first question—that the aerospace industry in Quebec represents about 60% of this economic market? I say 60% to avoid any quibbling about whether it is 57.5% or 60%. Since she began her speech by talking about fairness—she used the words “fair spinoffs“—, why is it, talking about fair spinoffs, that her government is unable to target, in the case of a contract awarded without any call for tenders, spinoffs across Canada using known figures, such as that of 60% in Quebec? Finally, since she used those words, will she vote in favour of this motion?

[Sylvie Boucher, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, I thank my friend from the Bloc.

Contrary to the Bloc, the Conservatives recognize the existence of a wide aerospace market. It always makes me smile when members from the Bloc hold forth and get all worked up, when they are the first to protest against any military spending. You do not want any. Maybe you should read your own party stand on military spending before criticizing a government which Quebeckers are proud to be part of. We are in power to make decisions, something that you will never be able to do.

[The Acting Speaker, Conservative, Andrew Scheer]

I would just remind the hon. parliamentary secretary to address her comments to the Chair and not directly to colleagues.

Questions and comments, the hon. member for Shefford.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, there are two points that I would like to address.

The minister was saying that he would not intrude by giving contracts to Quebec.

I would ask the member for Beauport—Limoilou to explain to me how it is that the Minister of Industry can say just anything, that government contracts are not private contracts. In the government, it is up to the minister to decide that these contracts are not private contracts. The minister can do whatever he wants. He can give the contracts to anybody he wants and he can tell Boning where to do its work.

The minister took his point to ridiculous extreme by saying that requiring spinoffs in Quebec would be tantamount to showing favouritism. That does not make any sense. He knows that we have 60% and that this is what we want. We are not asking for charity.

I also heard the member say that the Bloc Québécois is getting all worked up. She has direct evidence that this is the case. Indeed, the reason why we are here in Ottawa is to defend the interests of Quebec and we will defend them right to the end. We want to have 60% of the economic spinoffs. That is what we want.

I refute the arguments that the minister cannot ensure economic spinoffs and tell Boeing where to make its investments.

[Sylvie Boucher, Conservative, Beauport—Limoilou, QC]

Mr. Speaker, in response to my colleague from the Bloc, I would remind him that as recently as last June 29, the national defence critic for the Bloc said that the purchase of four heavy lift aircraft was a waste of $5 billion.

Now, he wants the benefits of these military purchases that the Bloc members are not interested in anyway. Could the member explain to me then why the Bloc is saying that we are not doing anything on this side of the House? We are doing everything for Quebec and for Canada, to ensure fairness throughout the country, because we are defending Quebec in a united Canada.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I listened carefully to the comments made by the Parliamentary Secretary to the Prime Minister and Minister for la Francophonie and Official Languages. I will be happy to explain fully to her the mysteries of life concerning the contracts we are talking about today.

First, I am very pleased that the Bloc Québécois has moved this motion, because I have been personally interested in this file for about eight months. I am also pleased that the Bloc Québécois has moved a motion in the Committee on National Defence to study the procurement process, and pleased as well that it is defending its territory, that is Quebec.

In this regard, I want to remind my colleagues—and I said so in committee—that only the Bloc Québécois will be defending Quebec here today.

The Parliamentary Secretary talked only about Canada. That is the problem with Canada, the problem with federal, federalist political parties: they are forced to defend the territory as a whole.

Liberals say this is an injustice for the Canadian industry, but why are they saying that? Because some of their members come from other regions, such as Winnipeg and British Columbia, where Boeing has facilities, and they are unable to say that they must defend Quebec, because 60% of the spinoffs should go to it. They say that it is not so bad if it does not get them. They use all the Canadian arguments: there must be Canadian spinoffs.

So I wanted to make it clear that only the Bloc Québécois is speaking up for Quebec's aerospace industry. I have heard no one else on this subject. Everyone is talking about Canadian spinoffs. We have nothing against that, as long as Quebec's share of the Canadian market, that is 60%, is taken into account.

I would also like to tell the House about the secret nature of all this. I was going on vacation in July when I turned on my computer. All the employees had left on vacation. That was when I saw on the Public Works and Government Services Canada website the Boeing bid submission for strategic aircraft, for the Chinook helicopters that also come from Boeing, and for tactical aircraft that come from Lockheed Martin. That is a lot of money. It was posted on the MERX site during the holidays, from July 5 to August 4.

So I phoned the big companies in Quebec. When we say that 60% of the aerospace industry is concentrated in Quebec, it is not small companies: Bell Helicopter, L3 Communications, Pratt & Whitney Canada, Bombardier, CMC Electronics, Rolls-Royce Canada, not to mention all the small and medium sized companies with aerospace connections. These are big players, and 60% of them are in Quebec.

I called them, therefore, and asked whether they had seen what was on the MERX site. They said that they had not seen anything. It was not only during the holidays but also during the Farnborough Air Show in Great Britain, a show like Le Bourget where the entire aerospace industry is present.

They wanted to put a fast one over on us. August 4 was the closing date. So I invited the companies and met with them on July 31. They told me then that something was wrong because they had not been informed that this was coming, they did not know anything about it, and their CEOs were all in Great Britain at the air show. They said that it was absolutely essential for me to defend the industry. In the middle of the summer, I sent out press releases saying that the industry was very concerned.

So now our fears are confirmed. They are saying that the benefits will be distributed all across Canada and no special consideration will be given to Quebec.

I wonder, though, what Ontario would say if there were an incredible tender from the federal government in the automobile industry and it wanted to give a large part of it to Quebec.

Everybody here would up in arms, saying that since most of the automobile industry—the critical mass, 70% of the Canadian automobile market—is located in Ontario, it should get 70% of the contracts. It is strange that this should still be the rule in the automobile industry, but when it comes to Quebec, another set of rules apply.

They are also starting to talk about dividing it up across Canada. The term in English is regional investment benefits, but now they have been talking for some time about Canadian investment benefits.

It is not regional anymore, it has become Canadian and that is an excuse to do anything.

Let us look at the way those contracts develop. I looked at the process. First, supposedly because of a defence policy, National Defence says what it needs to conform to that policy. Usually, before giving contracts, the department is supposed to produce a defence capability plan. If the government is satisfied with that plan, it buys the equipment needed to ensure the success of that plan.

But it is not how things went. The Liberals adopted a defence policy in 2005 and the Conservatives just extended it. All of a sudden, without any defence capability plan, the government spends an incredible $20 billion. Consideration must be given to the fact that parliamentarians are the true advocates of taxpayers but we have been completely excluded from the process. I will come back to that later.

When the Department of National Defence draws up its specifications or requirements list, it can get the aircraft it wants. It only has to say that it needs a plane that can lift 100,000 kg of cargo, knowing full well that only one plane can do that. With this requirement, it has eliminated all other planes.

Do the taxpayers get enough for their money when the Department of National Defence set its requirements according to the plane it wants? There is a first filter at that level and it has been applied. We can see that the department wants the C-17 and the Chinook by Boeing. In fact, the first contract has been signed.

Then, another department enters the game: Public Works Canada. That department has its own way of awarding contracts. As I saw last summer and as is being confirmed now, the department produces a draft contract award notice. That means that it wants a specific plane and a specific company to negotiate with, a specific company to service the plane and a specific company from which to buy the plane. That company name is written in the contract. That closes the door to all others.

This morning, the Auditor General appeared before the committee. She told us that she had already spoken out about the government's approach of using ACANs, which stands for advanced contract award notifications. The taxpayers are not getting their money's worth with that system.

All of a sudden, they choose just one plane. I will repeat the story I told in committee about buying my first car. The first car I wanted was a Camaro. I told my dad that was what I wanted and he said that was fine and that he would go along with me to see what kind of a deal I could negotiate. When I got to the place, I told the salesman that I wanted the car that was in the show room, that one and none other.

That is just like the ACAN I referred to.

The salesman agreed and asked if I wanted to know the price. Of course I did. He told me the price and I replied that I was prepared to take it. My father then told me that was not how things were done and that he would show me the ropes as soon as we left the show room.

[An hon. member]

A Firebird.

[Claude Bachand, Bloc, Saint-Jean, QC]

The hon. member is familiar with the story. It does end with a Firebird. So, we leave the show room. My dad tells me that is not how to do things. When a person has a particular car in mind, he absolutely must not say so, because that will mean he will not get a good deal. He has to visit all the dealers and look at comparable cars, then come back to the first and look at another car before coming back to the first one. That puts you in a position to negotiate, and that is what I did. I did not buy the Camaro. I got a Firebird. It was just as nice and I got a good deal. I paid a lot less because I told the salesman that if he did not offer me a certain price, the other dealer might.

The same thing goes for the planes. It is the same thing in the contract clauses we have before us. They are talking about an aircraft. The minute a company like Boeing is told we want only them, and that after-sale maintenance will also be done only by them, there is no bargaining power left. That is what I think.

In fact, I wrote an article about this lately in the Frontline Magazine. To me, the way this is done is not acceptable. Canadian taxpayers do not get their money's worth when people act this way.

I explained the first step of the selection process, the first filter, when the Department of National Defence defines its specifications. Then, the Department of Public Works gives out the contracts the way I just mentioned. Finally, to top it all, the Minister of Industry comes in with his disappointing approach for Quebec.

Everybody thought: “Our Minister of Industry comes from Quebec. Our Minister of Public Works is also from Quebec.” He sits somewhere else—I cannot mention where— in the other place. People thought: “They will speak up for us.” But suddenly, we learn that, although we have 60% of the aerospace industry, things will not happen this way. The free market prevails. Since when do they have to play by the free market rules when they are the ones signing the cheques? Since when can the car salesman say: “That is not the car I want to sell you, I want you to buy another one”? I would tell him: “I am the one signing the cheque, so I get to decide what I am buying”.

This is completely illogical. We said to Boeing: “You can do it where you want, when you want and the way you want.” I will explain later how I see this.

I cannot fathom that ministers from Quebec went to Trenton to sign a contract that was so unfair to Quebec, their native land. This is why we, sovereigntists, consider that the system is not working. This is why I say that the Quebec industry is better served by the Bloc Québécois, not by the Liberal Party nor the Conservative Party, who are stuck with a pan-Canadian vision and must satisfy people from British Columbia and Alberta.

We are having the wool pulled over our eyes. And the industry also told me that on July 31. The purchase is 100% aerospace product, but it is to have only 60% aerospace content. Why? What about the rest of the 100%, the missing 40%? Are we going to sell them northern spruce, or Atlantic salmon, to make high tech airplanes? We should have had 100% aerospace spinoffs, as the industry told me. Not only should we have had 100% aerospace for Quebec, but the geographic distribution of the industry in Canada, and the concentration of the industry in Quebec, should have been taken into account.

I went to the Ritz-Carlton when Boeing decided to go on a cross-Canada tour to decide whom it would be doing business with. Naturally, the president of Boeing Canada took me to the royal suite at the Ritz-Carlton to introduce me to the people from Seattle who are in charge of economic spinoffs. I told him: “We are not satisfied with it being only 60% aerospace, in terms of your obligation. Sixty per cent of the industry is in Quebec.” So by my calculations, 60% of 60% would give us at least 36% of the contracts in Quebec. But that was not quite the case.

Looking a little farther, in my research, I learned that they have operations in Winnipeg and British Columbia, very close to Seattle where Boeing is located. So they probably said to themselves: “There is no point in doing business in Quebec, it is too far away for us.” The company's interests came well ahead of geographic distribution, with the government's approval, which is even worse.

The government could have said: “We are the ones signing the cheque, so we are going to tell you exactly whom you will do business with. You are going to take Quebec into account, where 60% of the industry is. You are going to give them their rightful share.” But it did not happen that way and it seems that the same will be true for the rest of the contracts.

Our two ministers from Quebec went to sign the contract in Trenton, and $3.4 billion went up in smoke—$3.4 billion in Quebec and Canadian taxpayers' dollars that is going to the United States, with no guarantee of spinoffs in Canada and Quebec.

There are other contracts planned for the Chinook helicopters, also from Boeing, also awarded by untendered contract. This means losing bargaining leverage. The contract is for $4.7 billion. There is another contract for $4.9 billion for tactical aircraft, from Lockheed Martin, in the United States.

There is a $3 billion contract for search and rescue planes, as well. All this is in the works. Meanwhile, the minister steps into the lobby and tells the press that things are going to work just as they did for the first contract. Boeing is told, “do whatever you want, wherever you want, whenever you want”. I would also like to explain that. Why did I say “wherever, whenever and however you want”?

With regards to “however you want”, there is a program in the United States called ITAR, International Traffic in Arms Regulation. The United States is telling Canadian companies they cannot fill production, support or service positions with anyone who comes from a list of 25 countries. These people cannot come anywhere near these machines.

Our response to these American companies is that we will tell our companies that if they have employees who come from Pakistan or Afghanistan, they will have to move them to another department because they cannot come into contact with the plane, even if they are accepted as Canadian citizens.

Thus, the expression “however you want” is exactly what Boeing is doing. As for “whenever you want,” any delay in delivery is supposed to incur penalties. A few weeks ago, Sikorski, the company tasked with building the maritime helicopter that will replace the Sea King, said that because of a strike in one of its plants in the United States, they will be five and a half weeks late. The penalty, however, is $100,000 per day the company is late. What did the government have to say about that? It said it was not serious and that it would turn a blind eye.

What signal does that send Boeing? “Whenever you want.” This means that if they are late and the contract provides for penalties for delays, Boeing will say that it does not matter since Sikorski was late and did not pay any penalty. So no more penalties will be paid. And then it told Boeing “wherever you want”. This is the equivalent of writing a cheque for $3.4 billion to Boeing and telling it to do whatever it wants. I do not understand this. I am a sovereignist. I have said so and explained why earlier. This type of issue reinforces my political position. Sovereignty is not just in Quebec. There is also Canadian sovereignty.

How can we give our aerospace future away to the Americans and tell them to do whatever they want, wherever they want, whenever they want and however they want? How can we say that this is right? This is what makes us think there was probably some political interference. There were probably some top-level agreements and of course no one wants to tell us about it. Maybe some matters were settled in exchange for purchases of planes, boats or trucks.

There are $20 billion worth. This file is completely backwards. Not only is the process not being respected, but the Canadian and Quebec taxpayers are being had, the Quebec industry is being had and, for some reason that is hard to explain, everyone is a loser in this file.

The Standing Committee on National Defence is currently working on breaking into the process. There is a select club. A group of individuals from National Defence and other departments have reached an agreement among themselves and parliamentarians are excluded from this group, which does not want anything to do with them. The Standing Committee on National Defence is currently working on this issue and will continue to do so, because such injustices are unacceptable to Canadian taxpayers and, in our opinion, the injustices for the Quebec industry are even less acceptable. I repeat, and will conclude on this, only the Bloc Québécois is currently defending the Quebec industry and it is proud to be doing so. This confirms us in our sovereignist position.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, there was so much misinformation in that speech it is hard to know where to start, so I am just going to pick on a couple of points.

The Bloc is fixated on 60% and that is fine. CAE, which is the largest simulator company in the world, does about 10% of the aerospace business in the province of Quebec with about 10% of the employees. We are not buying simulators. A simulator is not needed with the C-17. Does that mean the other 10% could not possibly be spent in Quebec? Should it automatically go to some other sector in Quebec?

The C-17 contract is but the first of several contracts. The Bloc does not approve defence spending in general because of its ideology. Fine. But it is very happy to get involved when there is money going around.

I would like to point out a couple of things to people and I know my hon. friend will comment.

If it were up to the Bloc, there would not be any regional distribution of contracts because there would not be any military contracts. Under the concept of a sovereign Quebec, I would be interested to know what Quebec's defence spending would be and what industrial benefits that would generate. A lot of companies would very likely not stay in a sovereign Quebec because there would be no defence spending and there would be no business. Therefore, there would be no benefits for the people of Quebec like there will be under this government because we are rebuilding the Canadian Forces to the benefit of Canadians, and that includes the people and the companies in Quebec.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, first I must say to the member that, according to an article that I read, CAE will probably get about $20 to $30 million in spinoffs from Boeing.

Boeing is not only about aircraft. It also needs simulators. Granted, it is a large company. It is a large company and one of the largest aerospace multinationals in the world. Certainly applications made in Quebec could get into the Boeing constellation to bring about these contracts. Currently, Quebec companies are not given the opportunity to do so.

As for the alarmist talk that head offices and all aerospace companies will move out of Quebec following a “yes” vote, I think that this is false and I will explain why. One of Canada's best aerospace workforce is in Quebec. This is why the aerospace industry is concentrated in Quebec. In Quebec, there is the Canadian Space Agency, the Higher School of Technology and the Aerospace School in Saint-Hubert. Moreover, the aerospace critical mass is concentrated in the Montreal area.

It is not true that overnight these people will say that, since Quebec has become sovereign, they will move to China. Some are trying to settle in China and they have regrets, especially when they need a highly skilled workforce. I am quite indifferent to the alarmist talk of the hon. member. I do not think that this will happen. Quebec's critical mass must be respected. It is too bad that the Conservative government does not recognize this.

[Robert Thibault, Liberal, West Nova, NS]

Mr. Speaker, I thank my colleague for taking part in this debate.

He talked about the aerospace industry in Quebec. We all admit it is a great industry. The aerospace industry is also present in other regions outside Quebec. Although Nova Scotia's economy is modest, this province also has an aerospace industry. We have IMP, General Dynamics and a company that is part of EADS. For these companies to be able to participate, they need the economic spinoffs. They have been able to grow thanks to important Canadians investments over the last 10 or 15 years. Part of the projects was supposed to go to the regions. Technology Partnerships Canada has greatly helped the aerospace industry in Quebec and in other regions.

I would like to hear the member's comments. Does he recognize that these Canada-wide investments have had important economic spinoffs for Quebec and for the development of companies working in the aerospace sector?

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I would tell my colleague that we are both saying more or less the same thing. It is not because 60% of the Canadian industry is located in Quebec that we want to have 100% of the contracts. On the contrary, we are only asking for our fair share.

I do agree that other regions in Canada, like Winnipeg, British Columbia and the region that my colleague was talking about, have small aerospace or military concentrations. We are not trying to get all the contracts and leave nothing for the others. Not at all. The problem is that we have the largest part of this industry, but they do not want to give us our fare share. If we do not get it, it will go somewhere else in the country. This is why I am saying that the federal parties have a problem. They are unable to adequately defend Quebec's interests and to say that they care about Quebec because it has 60% of the contracts. Why? Because, the less we have, the more the other regions in Canada will have. I would suggest that we should consider the percentage of the aerospace industry that each region has and give every one of them their fare share, which would mean 60% for Quebec. If there is an aerospace industry in Nova Scotia, then its share should be proportional to the size of its aerospace industry in the Canadian economy. It is simple and it would be fair and honest for all parts of the industry.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I have a question for my colleague. I thank him, by the way, because he made an excellent speech, which is not surprising for him.

The Minister of Industry and the Minister of Public Works and Government Services keep saying that establishing economic spinoff targets would be tantamount to interference.

I checked the definition of “interference” in the dictionary. It means intrusion. And an intruder is someone who forces himself on others without proper permission.

In this case, it is a government's duty to ensure the economic development of its territory. On the contrary, that is not interference. In my opinion, it is its business.

Consequently, I am asking my colleague to agree that what we are hearing repeatedly here is in fact the ideology of the Conservatives.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I thank my colleague for her compliment.

I totally share her opinion. Whoever signs the cheque should be able to put conditions.

When you push the free market idea as the Conservative Party is doing, to the point where you tell a company like Boeing to invest where, when and how it pleases, in my opinion, you are shirking your responsibilities. Its the law of the jungle and we never believed in it.

A government does not have to control the economy entirely, but for ethical reasons and to ensure an equitable distribution, for example, it must make sure that things are done properly. Right now, it is not the case.

At the same time, I am pointing at the Quebec Liberals, not only at the ones in the House of Commons. Where are the Quebec Liberals? They will loose billions of dollars in contracts, but they are letting this government get away with it.

Most likely, the Liberal government of Quebec has the same ideology. The Premier and the Prime Minister have been bedmates for a while. Friends do not attack each other. However, they allow decisions that are unfair to taxpayers. In my view, this is also unacceptable.

[The Acting Speaker, Conservative, Andrew Scheer]

There is enough time remaining for a very short question.

The hon. member for Lévis—Bellechasse.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, our government has done one thing that previous governments never did and that the Bloc Québécois could never do: we asked that $1 be committed for each dollar invested. That means that each dollar invested in a defence contract is a dollar invested in the Canadian economy and in high tech sectors.

My question is simple and is directed at the hon. member who sits with me on the national defence committee.

People are standing up and saying that we finally have a government that does not create rivalries between regions, does not make taxpayers the victims of domestic policy and does not make us pay more for the products we buy.

How can the hon. member explain the fact that we are paying more for a product that we are buying with taxpayers' money, although our first responsibility is to make sure that taxpayers' money is well managed?

[The Acting Speaker, Conservative, Andrew Scheer]

The hon. member for Saint-Jean can give a short answer if he wishes.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, currently, the money is managed very badly. The Conservative Party is spending it badly.

I explained the loss of bargaining leverage with these companies. The government will pay these aircraft a much higher price, because it could not negotiate properly.

That government must ensure that critical masses where businesses are located are being respected. Earlier, I gave the example of the auto industry in Ontario. Ontarians would certainly rise up if a large contract was given to the automobile industry and Quebec took a major portion of it at Ontario's expense.

We have been the victims of an injustice, and the Bloc Québécois intends to fight for justice.

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. Speaker, I will be splitting my time with the member for Thunder Bay—Rainy River.

I am very pleased to rise today to speak on this important motion from the Bloc Québécois. The aerospace industry is something that I have always been very keen on and I actually have been the representative in Manitoba who represents those interests I think the best.

First, along with my colleagues in this party and with probably every Quebec colleague from all parties, we are all very proud of the aerospace industry in Quebec and elsewhere in Canada. I do not think there is one of us here in this Parliament who has not travelled to Asia or other parts of the world and heard about the success stories of Bombardier, for instance, and Bristol Aerospace or Standard Aero. We have been very proud of those enterprises. I would also like to say that specifically for Manitoba I will be speaking on those in particular, but I am also very proud of that industry and we will talk about its importance for the Manitoba economy.

I am also very proud of the previous government's investment in this industry and of the support we provided this industry. This is not a coincidence. I am sure that this support has played an enormous role in making our aerospace industry the fourth largest in the world.

Before I speak on the aerospace industry in Manitoba, I would like to express my frustration over the whole C-17 purchase and how the government basically sold out Canadians on this deal. It is important for Canadians to realize exactly what happened behind the scenes.

That party always talk about being the party of accountability, but I do not think this is what Canadians are seeing. They are seeing exactly the opposite: the Minister of Industry flying to Washington and making side deals with the Bush administration. If we are going to talk about transparency, this kind of thing just cannot happen. The results of those dealings in Washington certainly were not to the benefit of the Canadian taxpayer.

For instance, the Conservatives did not ensure that the Canadian industry received the equivalent of 100% value of purchase and maintenance, which has become a standard in the world. My understanding is that the purchase price of these planes will be approximately $1.8 billion. The maintenance contract, over a 20 year period, is somewhere around $1.6 billion. But in fact, the return we are getting is $1.1 billion. It should be $3.7 million or $3.8 million. It is extremely frustrating that again for the sake of expediency we are leaving a lot of money on the table in the U.S., a lot of money that could benefit our Canadian industries.

Conservatives also neglected a small thing called our sovereignty, which is very frustrating. Canadians who come from certain countries will not be able to work on some of these contracts here in Canada. As has been said quite often in the House, one of my colleagues, who can be a member of Parliament, would not be allowed to work on one of these contracts because of the contract the government signed with Boeing. It is absolutely unconscionable.

The Conservative government also purchased the strategic airlift planes against the better judgment of General Hillier, who was asking for tactical airlift. I guess the government thought it knew better. All these decisions the Conservatives are making one after the other, against all common sense, have certainly hurt the Canadian taxpayer.

After the Conservatives ignored General Hillier, they moved on and manipulated the requirements of the procurement process. Basically it ended up being a sole sourcing of the planes. Anyone who knows anything about the bidding process will tell us that sole sourcing does not lead to better prices. It would normally lead to higher costs. I think everyone in the House would agree with that. All of this is from a party that has bragged about its tough accountability law and how procurement would be a lot more competitive in the future. It is actually laughable.

The Conservative government also announced its military spending without having a defence capability plan and without the input of Parliament. When we are spending $3.7 billion, when we are making that kind of investment, it would seem to me that Parliament should have input on this kind of decision.

Probably the most hideous thing the Conservatives have done is to not guarantee the regional economic spinoffs. Governments have a responsibility to set industrial policy and not to leave this to foreign private sector firms. As noted by some of my colleagues and by some people in the industry whom I have talked to, other countries are certainly looking after their companies. They have policies in place to protect and support their industries. Canada should be absolutely no different on that basis. Other countries also ensure there is a fair balance of work in their countries.

Everything the government does is politically motivated. The Conservatives are not concerned about the well-being of Canadians. They are concerned about how to get these planes here as soon as possible because they promised that in their election campaign. That is not governing.

I would like to speak briefly about Manitoba. We have heard a lot about the Quebec aerospace industry, but I would like to tell everyone that Manitoba has a very substantial aerospace industry, one that I am very proud of. I know that our Quebec colleagues from all parties are proud of their industry, but I have worked very closely with these people and Manitoba has the third largest cluster of aerospace firms in Canada. I have had the pleasure of working with representatives of these firms. They are very innovative and very practical. They are progressive people. Their industry has become indispensable to our province's economy.

This is a growing industry in Manitoba. We do not want it to stop growing. We want it to thrive. For it to do that, we need to be able to obtain our fair share of the contracts. I think that is what everybody is saying here. Let us ensure that the procurement contracts are distributed fairly. Let us not allow Boeing or a foreign company to make those decisions for us.

I want to tell the House about four companies that are world class players in the industry and that have changed the landscape of Manitoba in terms of technology. They have really added to our economy.

The first is Standard Aero. For people who do not know about this company, it is the world's largest independent small turbine engine repair and overhaul company. It is a huge company. I have visited the plant on several occasions. Its facility is one of the most modern in the world. The Winnipeg plant people have actually helped other people design their plants because of the phenomenal job that was done in Winnipeg. It is based in Winnipeg and also operates facilities in the U.S., Europe and Asia.

Bristol Aerospace is the largest of the Magellan Aerospace Corporation group of companies and is the only western Canadian company manufacturing space systems. Magellan actually has a satellite right now that apparently was supposed to die a couple years ago and is still going strong. The company is hoping it will last another couple of years. It is working on second and third generation satellites. I believe the company is the only one to do that in western Canada. We are very proud of those accomplishments.

Again, the company always talks to us about the importance of supporting its industry and making sure we are there.When it is competing against other countries like Germany or France for the satellite business, for instance, as those countries protect their industry, it is important for us to be there for our industry as well.

Boeing Canada has one of the most modern facilities in the country and provides parts for the new Boeing Dreamliner 787, plus the 777 and 747. It also is an amazing plant. Again, we are very proud of Boeing. These people have been second to none in terms of partnerships with the province, with the private sector and with our educational facilities.

Boeing also has the largest composite manufacturing facility in Canada. For those who know anything about composites, they will know that composites are the future in the airline industry. The materials are lighter and stronger, which obviously will lead to certain fuel efficiencies. What Boeing Canada is doing in Winnipeg is very important .

Air Canada Technical Services is huge in Winnipeg and employs a large number of people who provide maintenance not only to its own airline but also to many other airlines that fly their planes into Winnipeg under contract to Air Canada. Again, we are very proud of this firm.

These are the big players in Manitoba, but it is also very important to note that there are 20 regional and national firms in Winnipeg. They are a fair size and they and are growing. There are also some amazing training centres in Portage la Prairie. We funded that a couple of years ago. I think this is the largest in Canada, once again doing an amazing job.

The whole aerospace industry in our province is just blossoming. We cannot abandon it. We have to be behind it.

One of those smaller firms is Cormer Group Industries. It is important to note this, because a lot of these smaller firms have a hard time competing for these huge contracts. When we are talking about a $3.7 billion contract, in a lot of cases governments do not want to break it down to contracts of $5 million or $10 million. Cormer now can handle contracts of $100 million to $200 million. It is absolutely amazing.

We are very proud of our industry. I will wrap up by saying that it provides an amazing boost to our economy in terms of education and training. Ninety per cent of the people employed in that industry are trained in Winnipeg. I am very proud of the industry there.

I think the government has been very lax in not supporting this industry. This was a bad deal. I think that for once everyone here is in agreement. The government has made a very bad move in purchasing these planes.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Mr. Speaker, I listened with interest to my colleague's speech and will point out one thing. The technology transfer provisions under ITAR have always been there.

The fact is that under the previous government and the disastrous relations we had with our biggest trading partner, ally and friend, the United States, Canada got no breaks. Canada had always had breaks before. I am happy to say that tremendous progress has been made in that area. Canada is once more becoming a more favoured partner, with the fine efforts of the Minister of Foreign Affairs and others, because of our responsible approach to our position in the world.

A little over a year ago I asked the Chief of the Defence Staff a question at the Conference of Defence Associations meeting at the Chateau Laurier. I asked whether he would like to have the C-17. It was a very simple question. His very simple answer was, “Sir, you bring us the money and we would love to have them”. If we did not bring the money, he would have preferred to have the C-130. The fact is that he is not used to a government that gives enough money to rebuild the forces as required.

The fact is that he is thrilled to have the C-17. The fact is that we are getting them early because it is a requirement of the Canadian Forces and a requirement of the people of Canada. I would like to ask my hon. colleague if he has spoken to the CDS lately about the C-17. Does he understand the benefits that the C-17 will bring to Canadians, not just for military purposes but for purposes like fighting floods in the province of Manitoba?

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. Speaker, my response to that question is that every expert I have spoken with seems to have very clearly indicated that the C-17 we have purchased will not be utilized to its fullest. A lot of them are saying that probably three out of the four will be parked on the tarmac most of the time. That is absolutely what I have been hearing in Winnipeg. I have spoken with some of our military experts there.

From all indications, people are telling us that we would have been better off leasing these planes. For some reason, the Conservatives have a problem with that. If it makes fiscal sense, it seems to me that we should have considered that option. If the military is moving troops once every month or once every three months and is paying a certain amount of money, maybe we should have considered leasing these planes instead of making this $3.7 billion purchase, with a huge underutilization of this asset for Canada.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I want to thank my colleague from Saint Boniface for representing very ably the views of people in the west and of the people of Manitoba regarding the C-17 contract.

I am old enough to remember the scandal surrounding the CF-18, at which time Winnipeg was the low bidder on the CF-18 maintenance contract. Brian Mulroney's government gave it to Quebec for purely political reasons even though Winnipeg was the low bid.

I serve notice right now and right here that we will never tolerate an insult like that again.We threw out Brian Mulroney. We rejected his entire government based on that. It became the turning point in western Canadian politics for a generation to come. We will not tolerate the humiliation and the insult that contract represented.

Now we are faced with the C-17. Reason seems to be prevailing that Manitoba will get its fair share of the maintenance of these aircraft. If we see this reason turning or shifting for pure political reasons to give this as a gift to Quebec yet again, a bribe or blackmail or whatever it is called, we will not tolerate it. We serve notice that we will rise up in the west just as they did during the 1990s and we will denounce the government if it weakens in its resolve. We demand our fair share of those jobs as determined by the industry and we insist on that--

[The Acting Speaker, Conservative, Andrew Scheer]

The hon. member for Saint Boniface.

[Raymond Simard, Liberal, Saint Boniface, MB]

Mr. Speaker, I am not sure if there was a question, but I understand my hon. colleague's frustration. People in western Canada are still talking about the CF-18. That is quite obvious. Once again, that was a politically motivated decision. It was very dangerous. We have seen the results. Western Canadians have felt alienated, if I can use that word, since that time.

However, at the same time, it is important for us not to mix up the two. Politically motivated decisions to move certain contracts specifically into certain areas are absolutely not allowable. That is an absolute no-no. At the same time, to have a policy where we allow industrial regional benefits is a different thing. It is very important for us to make sure there is a fair distribution of the work across the country. That is exactly what this Conservative government has not done.